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Enerfax Daily
NORTH AMERICA'S FREE POWER AND GAS INFORMATION SOURCE
              Tuesday, February 5 2002 No. 927
Visit: http://www.enerfax.com to view our web version or for Oil Prices &
News http://www.enerfaxgold.com

PHYSICAL NATURAL GAS PRICES
Gulf/Eastern Region
| Agua Dulce              | 2.04  |
| ANR SE                  | 2.12  |
| Carthage TG             | 2.11  |
| Chicago Citygate        | 2.17  |
| Columbia Gulf Onshore   | 2.17  |
| Dominion South Point    | 2.37  |
| Henry Hub               | 2.18  |
| Houston Ship Channel    | 2.16  |
| Katy Hub                | 2.10  |
| NGPL LA Pool            | 2.12  |
| NGPL - Midcontinent     | 2.05  |
| NGPL STX                | 2.07  |
| NGPL TX/OK              | 2.09  |
| NNG Demarc.             | 2.12  |
| Niagara                 | 2.41  |
| Sonat Tier 1            | 2.13  |
| TCO IPP Pool            | 2.28  |
| Tetco ELa               | 2.13  |
| Tetco M-3               | 2.64  |
| Tetco STX               | 2.07  |
| TGP Zone 0              | 2.06  |
| TGP Zone 1 (500 Leg)    | 2.13  |
| TGT Zone SL             | 2.16  |
| New York Citygate       | 2.93  |
| Transco Station 65      | 2.21  |
| Transco Zone 6 (NY)     | 2.92  |
| Trunk ELa               | 2.11  |
| Western Region
| California Border       | 2.17  |
| El Paso Keystone        | 2.04  |
| El Paso San Juan-Blanco | 2.05  |
| Waha Hub                | 2.06  |
| Canadian/Rockies Region
| Nova/Aeco (C$/gig)      | 2.84  |
| Dawn Hub/Union          | 2.28  |
| Northwest Stanfield     | 2.00  |
| Wyoming Pool            | 1.90  |
| Opal                    | 1.90  |
| PGT-Malin               | 2.09  |
| Sumas                   | 1.97  |
          Flow Date 2/5
-------------------------------------------------------------

NATURAL GAS FUTURES
Henry Hub
12 Month Strip  2.5016  -0.0140
18 Month Strip  2.6023  -0.0098
| Month | High  |  Low  | Close | Change |
| MAR   | 2.150 | 2.080 | 2.117 | -0.021 |
| APR   | 2.215 | 2.150 | 2.184 | -0.014 |
| MAY   | 2.270 | 2.220 | 2.252 | -0.014 |
| JUN   | 2.330 | 2.296 | 2.317 | -0.014 |
| JUL   | 2.400 | 2.365 | 2.377 | -0.014 |
| AUG   | 2.450 | 2.420 | 2.432 | -0.014 |
| SEP   | 2.450 | 2.420 | 2.432 | -0.014 |
| OCT   | 2.475 | 2.440 | 2.459 | -0.011 |
| NOV   | 2.700 | 2.670 | 2.679 | -0.016 |
| DEC   | 2.900 | 2.870 | 2.879 | -0.015 |
| JAN   | 2.980 | 2.960 | 2.969 | -0.012 |
| FEB   | 2.930 | 2.910 | 2.922 | -0.009 |
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Natural Gas Futures End Choppy Day Down

     Natural gas for March delivery on the NYMEX ended down $0.021
yesterday at $2.117 per MMBtu. The April contract slipped $0.014 to $2.184
per MMBtu. The market opened lower, but bounced off $2.08. However, it
could not get higher than $2.15, and failed to trigger anticipated buy
stops above $2.17. Every rally is hit with a wave of selling. Look for the
market to open lower again this morning. The AGA reports last week's
storage information tomorrow afternoon. Expect a withdrawal of about 120
Bcf - 130 Bcf. Last week, 111 Bcf was withdrawn leaving 2.294 Tcf in
storage. The nation's storage facilities are still 70% full compared to
38% full a year ago. Natural gas for next day delivery across the US and
Canada was generally flat to plus or minus $0.05 yesterday. Physical
prices jumped higher in the Northeast. Utilities reportedly nominated
base-loads for every day for February, intending to use the spot market
only as weather dictates. Cash prices held as much as $0.08 - $0.09 above
the NYMEX. Natural gas for next day delivery at the Henry hub ended flat
at $2.18 per MMBtu.
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Today's Power Bulletins
 * Otter Tail Says 4th Quarter Operating Income Up 21%
 * AEP Hires Schroder Salomon Smith Barney and ABN Amro for UK and
Australia Sales
 * PricewaterhouseCoopers Says Enron Europe Has Billions of Dollars of
Liabilities
 * JP Morgan Chase Advises Investors to 'Ooverweight' Calpine Bonds
 * AFL-CIO Asks SEC to Bar Enron Directors from Boards
 * Chairman of Russian Giant Unified Energy Systems Seeks Linking Grid
with Europe
 * Sempra Energy Trading Completes Acquisition of Enron Metals Limited for
$145 Million in Cash
 * Bush Administration Proposes 19% Increase in Spending for Salmon
Recovery in the Northwest
 * Alliant Energy Resources Completes Exchange Offer for $300 Million of
7% Senior Notes Due 2011
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WSJ Says Enron Officials Knew About Chewco Partnership

     Top Enron executives, including Chairman Lay and former CEO Jeffrey
Skilling, knew about the controversial partnerships, according to the Wall
Street Journal, citing minutes from a November 5, 1997 meeting. Former CFO
Andrew Fastow and several board members including external director
Herbert Winokur Jr were also at the meeting that discussed Enron's
partnership Chewco, named for the Star Wars character Chewbacca. Chewco,
which was supposed to be completely independent, but was run and partly
owned by Enron executive Michael Kopper, who also attended the meeting.
Federal investigators and private litigants are trying to find out who
knew what about Chewco and when. An attorney for Winokur says the
executive committee was told that Chewco was a special-purpose vehicle not
affiliated with the company. The board never waived the
conflict-of-interest policy for Kopper nor was the board told that Kopper
was involved with Chewco.
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-------------------------------------------------------------
Natural Gas NYMEX Volume
02MAR   28,386
02APR    6,782
02MAY    2,853
02JUN    1,156
02JLY    1,787
02AUG    1,270
02SEP    1,360
02OCT    2,160
02NOV    1,238
02DEC    1,213
03JAN    1,710
03FEB    1,558
03MAR      130
03APR       57
03MAY       36
03JUN      179
03JLY       54
03AUG      827
03SEP      203
03OCT       62
03NOV      125
03DEC       84
04JAN       19
04FEB       52
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Lay Breaks Date with Congress After Report Issued


    Enron attempted to systematically manipulate its financial results and
deceive shareholders as top executives made personal gains of millions of
dollars, according to William Powers, dean of the University of Texas Law
School in testimony to be delivered before Congress yesterday. There was
also failures in the performance of Enron's outside advisors. And there
was a fundamental default of leadership and management, starting with
former CEO Ken Lay and reaching to the board and senior managers. As
Congress begins a week of hearings, the House Financial Services capital
markets subcommittee also heard from SEC Chairman Harvey Pitt. Powers
joined the Enron board to investigate events leading up to the company
filing for bankruptcy on December 2nd. He has issued a 218-page report
that found Enron fattened its profits by almost $1 billion through a web
of financial partnerships used to hide losses, while top managers made
millions of dollars they should never have received. He laid some of the
blame for on Lay and of Jeffrey Skilling. Powers said former ex-Enron CFO
Andrew Fastow made at least $30 million, while former senior executive
Michael Kopper made at least $10 million through their involvement in
off-the-books partnerships. Enron's board of directors failed in its duty
to provide leadership and oversight and in the end, the tragedy could and
should have been avoided, Powers said. After the report was released, Lay
canceled plans to testify before a Senate committee and before the capital
markets subcommittee.
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PHYSICAL POWER PRICES
|            | High  |  Low  | Average |
|            | $/MWh | $/MWh |  $/MWh  |
| Cinergy    | 24.00 | 20.15 |  21.90  |
| ECAR       | 23.00 | 19.00 |  20.40  |
| ERCOT      | 21.00 | 18.50 |  19.10  |
| Entergy    | 21.05 | 20.00 |  20.50  |
| TVA        | 24.00 | 21.00 |  22.55  |
| ComEd      | 23.50 | 21.50 |  22.60  |
| Nepool     | 30.80 | 29.80 |  30.15  |
| PJM West   | 22.75 | 21.75 |  22.00  |
| Main       | 23.25 | 20.00 |  22.15  |
| MAPP       | 23.75 | 20.25 |  22.30  |
| Palo Verde | 24.00 | 23.00 |  23.75  |
| Mid C      | 21.00 | 19.00 |  19.60  |
| COB        | 24.00 | 22.00 |  22.60  |
| 4 Corners  | 24.25 | 23.25 |  23.90  |
| Mead       | 25.75 | 24.00 |  24.95  |
| NP 15      | 25.25 | 23.50 |  24.25  |
| SP 15      | 25.25 | 23.50 |  24.45  |
-------------------------------------------------------------
AEP May Sell Some Foreign Assets


    American Electric Power may sell Seeboard, which serves 2 million
power and natural gas users in the UK, and CitiPower, an Australian retail
and distribution unit, to lower debt as it switches its focus to wholesale
markets and away from household power supply. Like Reliant and Mirant, AEP
is selling foreign assets to protect its credit ratings. Enron's
bankruptcy has caused many energy companies to slash capital spending and
sell assets to lower debt. AEP has $2.6 billion in debt maturing in the
next 2 years. Seeboard is valued at about $2.1 billion and CitiPower at as
much as $760 million. AEP, which acquired Seeboard in a $10 billion buyout
of C&SW, said will consider all potential options for Seeboard. AEP's 4th
quarter earnings fell 41% due to mild weather. It is selling common stock
and convertible preferred shares to raise cash and shore up its balance
sheet. Last year, AEP sold Yorkshire Power in the UK and purchased 2 power
stations. AEP has also been expanding its energy trading business after
Enrons collapse. It bought Enron's Scandinavian businesses and hired 22
coal traders from Enron. Seeboard is likely to fetch a good price since it
is the only supply business for sale in the UK. E.ON, Electricite de
France and Scottish & Southern Energy have been named as likely bidders
for Seeboard. CitiPowers sale will probably happen in the 3rd quarter,
according to AEP. Possible buyers could be Australian Gas Light, United
Energy and Origin Energy. AEP bought the retail and distribution company
for $1.1 billion in 1998.
-------------------------------------------------------------
OPEN SEASON

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-------------------------------------------------------------
Todays Gas Bulletins
 * Ken Lay Quits Enron Board as Congress Investigates
 * Maritimes Seeks FERC Approval of $250 Million Pipeline Expansion Into
Northeast
 * World Natural Gas Producers Discuss Joint Ventures at Algeria Meeting
 * Three Hearings Scheduled for Today; One Involves Enron Board Member
William Powers Who Will Testify Before House Energy and Commerce
Committee's Oversight Subcommittee
 * Dynegy Says It Did Not Cause Enron's Bankruptcy; Says Enron Has Only
Itself to Blame
 * Internal Enron Report Could Aid Prosecutors
 * Justice Department Says Enron Special Counsel Not Needed
 * Raymond James and Associates Boosts Natural Gas Price Estimate for 2nd
Half of Year in Anticipation of Robust Demand Recovery
 * Enbridge Buys Texas Natural Gas Gathering and Processing Assets from
Sulfur River Gathering for $178 Million
 * Williams Communications Posts Loss; Banks Warn of Default
 * Ex-Enron CEO Skilling Still Plans to Testify
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-------------------------------------------------------------
Williams May Sell Midwest Oil Products Pipeline


    Williams may sell its 8,000-mile Midwest oil products pipeline and
storage depots for between $500 million and $1.5 billion, to help defray
costs from possible exposure to $2.4 billion from Williams Communications.
Last week, Williams postponed the release of 4th quarter results to review
costs associated with Williams Communications Group, which was spun off in
April. Williams said that those costs will be included in the 4th quarter
earnings report. Williams Energy Partners which is 60% owned by Williams
has been mentioned as a likely buyer for the pipeline. Williams has sold
securities and cut capital spending to shore up its balance sheet amid
heavier scrutiny by credit rating agencies following Enron's bankruptcy.
Williams' 7.5% coupon bonds maturing in 2031 were down about $44 to $879
per $1,000 face value from $923 last week, with the spread above US
Treasuries climbing to 330 basis points from 285. None of the rating
agencies has downgraded Williams debt yet, but S&P has says it may lower
Williams' ratings because of concern about the company's finances. S&P
rates Williams 'BBB+', Moody's rates it 'Baa2' and Fitch rates it as
'BBB', all investment grade. Williams is aiming complete the Midwest
pipeline sale by the end of the 2nd quarter. Net income for Williams
Energy Partners more climbed to $21.7 million from $3 million a year ago.
It also  raised quarterly payment to unit holders by 12% to $0.59. The
possible purchase of the Midwest pipeline could be financed through a
combination of debt and equity, Williams Energy Partners said. The
partnership has $140 million in private debt. Williams said its 4th
quarter loss had widened and its banks have warned that the it may be in
default of their credit agreements. Williams' stock dropped 13.9%
yesterday, down 2.64 to 16.36.
-------------------------------------------------------------
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-------------------------------------------------------------
POWER FUTURES
| Month |   COB   | Change |   PV    | Change |
| MAR   |  19.25  | +0.00  |  21.35  | +0.10  |
| APR   |  19.75  | +0.00  |  22.25  | -0.25  |
| MAY   |  19.50  | +0.00  |  23.75  | -0.75  |
| JUN   |  20.00  | +0.00  |  26.75  | -0.75  |
| JUL   |  26.50  | +0.00  |  37.25  | -0.25  |
| AUG   |  38.00  | +0.00  |  42.50  | +0.00  |
| SEP   |  26.00  | +0.00  |  33.00  | +0.50  |
| OCT   |  24.00  | +0.00  |  28.00  | -1.00  |
| NOV   |  24.50  | +0.00  |  27.00  | -0.50  |
| DEC   |  26.00  | +0.00  |  27.50  | -1.00  |
| JAN   |  30.00  | +0.00  |  28.25  | -0.25  |
| FEB   |  27.50  | +0.00  |  28.00  | +0.25  |
| Month | Entergy | Change | Cinergy | Change |
| MAR   |  19.80  | -0.20  |  20.90  | -0.40  |
| APR   |  19.80  | -0.20  |  21.25  | -0.25  |
| MAY   |  22.25  | -0.25  |  24.50  | +0.00  |
| JUN   |  27.10  | +0.00  |  29.75  | -0.05  |
| JUL   |  34.60  | -0.05  |  38.00  | -0.40  |
| AUG   |  35.25  | +0.60  |  38.00  | -0.40  |
| SEP   |  31.65  | +0.00  |  22.85  | -0.25  |
| OCT   |  22.00  | +0.05  |  22.90  | -0.10  |
| NOV   |  22.00  | +0.05  |  22.90  | -0.10  |
| DEC   |  22.00  | +0.05  |  22.90  | -0.10  |
| JAN   |  24.15  | -0.10  |  25.50  | -0.50  |
| FEB   |  24.15  | -0.10  |  25.50  | -0.50  |
-------------------------------------------------------------
Power Futures
| Month |  PJM  | Change |
| MAR   | 24.70 | -0.40  |
| APR   | 25.20 | +0.10  |
| MAY   | 28.25 | -0.30  |
| JUN   | 34.75 | -0.50  |
| JUL   | 46.10 | -0.25  |
| AUG   | 27.05 | +0.00  |
| SEP   | 27.05 | -0.05  |
| OCT   | 26.05 | -0.05  |
| NOV   | 26.05 | -0.05  |
| DEC   | 26.05 | -0.05  |
| JAN   | 30.25 | +0.00  |
| FEB   | 30.25 | +0.00  |
-------------------------------------------------------------
Nymex Natural Gas Option Volatility
Supplied by "The Daily Hedger"
      Futures	               Implied
Month	Settlement	Days Left  Volatility
Mar	 $2.117	       21	    67.7%
Apr	 $2.184	       49	    57.7%
May	 $2.252	       80	    51.4%
Jun	 $2.317	      113	    47.3%
Jul	 $2.377	      141	    53.4%
Aug	 $2.432	      172	    48.8%
Sep	 $2.432	      204	    49.0%
Oct	 $2.459	      233	    54.9%
Nov	 $2.679	      266	    46.9%
Dec	 $2.879	      294	    57.6%
-------------------------------------------------------------
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--------------------------------------------------------------------------------------------------------------------------

Lay Makes Himself Scarce


    A congressional committee trying to serve a subpoena on former Enron
Chairman Ken Lay can not seem to locate him. His personal attorney does
not know where he is and would not accept the subpoena. The House of
Representatives Financial Services Committee finds the whole situation
quiet puzzling. Lay's attorney says he is ill and has no idea where Lay
is. Lay resigned from Enron's board yesterday as two congressional
committees vowed to force him to come before them to testify or take the
5th Amendment. He had been scheduled to appear before a House Financial
Services subcommittee, but backed out over the weekend. It had hoped to
compel him to appear today. Lay had also been scheduled to appear before a
Senate committee, but canceled that date also.
-------------------------------------------------------------

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-------------------------------------------------------------
TRADERS DEBATE SHORT SIDE OF MARKET

   Although Monday's price action on the New York Mercantile Exchange is
perhaps best described as lackadaisical, some traders see inspiration to
take the short side of the market where others are focusing on a longer
term trend higher.  "When the March contract expired (January 29), it got
as low as $1.97 and developed a modest countertrend higher. As long as the
market was able to continue trading above the previous day's low, that
advance worked well," noted Dean Hazelcorn, trader with Coquest, Dallas.
"Today looks like a sell signal. The high of the March contract did not
exceed Friday's high and today's low was lower. That sets up a trade down
to $1.97. I look for a slow deteriorating front end of the board," he
noted.  "I'm back in a bearish mode, and I think we're headed below $2.00.
I believe that there is a 99% probability the market will work lower, but
it may take 3 months to do it," he cautioned.  Other traders are more
optimistic.  "Longer term I'm bullish," says John Beaver, President
Private Futures Group, Oklahoma City.  "It's more difficult to be bullish
on the front of the board, but looking at the charts it suggests that
prices may be set to rise.  There's a gap on the weekly chart between
$2.17 and $2.20 on the weekly chart (week ending January 18, and January
25). and if prices could fill that gap, it would be a positive sign that
prices were set to move higher," he said.  A gap is a pattern on the price
charts followed by market technicians. The idea is that the gap may act as
a barrier to (in this case) further price advances. Once the gap is
"filled", however, a potential limitation to price advances has been
removed and prices would be empowered to move higher.  "I don't have any
interest in being short the market at the $2.00 level. I don't want to be
in a trade that may only make 10 or 15 cents and have to worry about it,"
he said.  "If you are a commercial trader are you going to get short at
$1.85? What is your board of directors going to say?"
More observations and market forecasts in GasTrader Newsletter. Go to
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FINANCIAL SUMMARY
The TSE 300 dropped 99.44 points to 7591.07
The CRB Index dipped 0.21 points to 189.30
The US Dollar decreased 0.88 points to 118.91
The Dow declined 220.10 points to 9687.09
The S&P 500 lost 27.76 points to 1094.44
The Nasdaq was down 55.71 points to 1855.53
March NYMEX Crude Oil fell 0.31 to 20.07
Canadian-US Exchange rose 0.0008 to 1.5915
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