Hi Kevin,

I have looked into your VaR question and, I don't think that your Var incerase is related to your Gulf Area Basis positions.  

Between the 13th and the 16th of July you bought about (484) fixed price contracts.   You went approx 4bcf shorter NYMEX, which increased your Var from about $500,000 to about $1,500,000 ($1 mm increase from one day to the next).  Between the above mentioned days the NYMEX prompt price fell approx 17 cents.  Yesterday you again seemed to have added about (3) bcf of NYMEX shorts on a down move of 14 cents in the prompt. MERC Prompot Vols are about 60%.....

So that's my take.......
I will look further into the problem if you still want me to.

Hope that helps

Thanks

Bharat



 -----Original Message-----
From: 	Ruscitti, Kevin  
Sent:	Friday, July 20, 2001 10:44 AM
To:	Khanna, Bharat
Cc:	Hayden, Frank
Subject:	Var Calc

Bharat,

I feel that my var has been overstated recently due to my recent purchasing
of gulf area basis.  As I've bought, my var has continued to increase dramatically.
I'm not sure of the reason, but typically gulf area basis rarely moves.  A $0.005
move is a rather dramatic move for example.  I spoke to Frank and he recommended
that I contact you so that you can do some investigation.  Below I've listed some of
the points I'm concerned with.  Please let me know your findings as soon as you can or
stop down (3233C) if you have any questions.  Thanks for your help.

NGPL/LA
ANR/LA
TRUNKLINE/LA
NGPL/TXOK



Kevin Ruscitti x3-6320