Enron talking points....


Factors Leading to Higher Natural Gas Prices this Winter

? Demand for natural gas has increased mainly due to consumption in the power 
generation market and strength of the manufacturing sector in a booming 
economy.

? Natural gas production and drilling has fallen off since 1998 due to low 
prices that reached far below $2 per MMBtu.  In 2000, deliverability 
utilization will be over 95 percent.

? While drilling activity has risen sharply (as much as 50% from last year), 
the production from this increased drilling activity typically is not 
available for several months.  According to the AGA, supply production 
continues to run 16% below last year's levels.

? The past three winters have been "warmer than normal" winters in the 
Midwest and much of the United States and Canada, artificially masking the 
usual consumption of natural gas under "normal" weather situations. 

? Very warm weather during this summer has caused a significant demand 
increase for natural gas in the electricity generation sector thereby 
competing for gas storage injections in the marketplace and driving prices 
upward.

? U.S. storage inventory levels are lower than historical average levels from 
the past six years, according to the AGA.  The cost of storage inventory at 
this summer's strong prices could eliminate the price advantage traditionally 
experienced in the winter.

? Other heating fuels like propane and heating oil are also showing 
significantly higher prices and potentially lower stocks this winter than 
last.