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Enerfax Daily NORTH AMERICA'S FREE POWER AND GAS INFORMATION SOURCE Tuesday, January 29 2002 No. 922 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 | 1.91 | | ANR SE | 1.98 | | Carthage TG | 1.96 | | Chicago Citygate | 2.04 | | Columbia Gulf Onshore | 2.00 | | Dominion South Point | 2.10 | | Henry Hub | 2.02 | | Houston Ship Channel | 2.02 | | Katy Hub | 1.96 | | NGPL LA Pool | 1.95 | | NGPL - Midcontinent | 1.92 | | NGPL STX | 1.93 | | NGPL TX/OK | 1.94 | | NNG Demarc. | 2.02 | | Niagara | 2.19 | | Sonat Tier 1 | 1.99 | | TCO IPP Pool | 2.11 | | Tetco ELa | 1.99 | | Tetco M-3 | 2.25 | | Tetco STX | 1.93 | | TGP Zone 0 | 1.93 | | TGP Zone 1 (500 Leg) | 1.97 | | TGT Zone SL | 2.00 | | New York Citygate | 2.28 | | Transco Station 65 | 2.05 | | Transco Zone 6 (NY) | 2.28 | | Trunk ELa | 1.99 | | Western Region | California Border | 2.08 | | El Paso Keystone | 1.94 | | El Paso San Juan-Blanco | 1.95 | | Waha Hub | 1.94 | | Canadian/Rockies Region | Nova/Aeco (C$/gig) | 2.83 | | Dawn Hub/Union | 2.15 | | Northwest Stanfield | 2.05 | | Wyoming Pool | 1.88 | | Opal | 1.88 | | PGT-Malin | 2.09 | | Sumas | 2.05 | Flow Date 1/29 ------------------------------------------------------------- NATURAL GAS FUTURES Henry Hub 12 Month Strip 2.3724 -0.0866 18 Month Strip 2.5266 -0.0760 | Month | High | Low | Close | Change | | FEB | 2.025 | 1.850 | 1.908 | -0.129 | | MAR | 2.090 | 1.960 | 1.984 | -0.120 | | APR | 2.180 | 2.060 | 2.079 | -0.101 | | MAY | 2.270 | 2.160 | 2.175 | -0.094 | | JUN | 2.340 | 2.255 | 2.255 | -0.087 | | JUL | 2.410 | 2.320 | 2.330 | -0.084 | | AUG | 2.465 | 2.380 | 2.390 | -0.077 | | SEP | 2.475 | 2.375 | 2.399 | -0.077 | | OCT | 2.500 | 2.410 | 2.429 | -0.074 | | NOV | 2.720 | 2.664 | 2.664 | -0.069 | | DEC | 2.955 | 2.879 | 2.879 | -0.066 | | JAN | 3.040 | 2.977 | 2.977 | -0.061 | ------------------------------------------------------------- - RISK MANAGEMENT Across the Energy Enterprise e-Acumen, Inc., is uniquely positioned to help you manage risk and increase value. That's because our analytics, data and applications cover all strategic aspects of the energy enterprise, from short-term forecasting to comprehensive risk analysis and portfolio optimization, to asset valuation and weather risk management. Dedicated to the needs of energy and trading companies in a dynamic and competitive world, our approach combines best-in-class physical fundamentals with industry-leading statistical methodologies. e-Acumen is a venture-backed company founded in January, 1997. Since then we have listened attentively to the market and assembled a stellar cast of seasoned energy industry professionals and Silicon Valley technologists. Join us as we help the industry continue its path toward liquidity and profitable, risk-managed growth in the exciting years ahead! Click here to find out more about current special offers, or go to http://www.e-acumen.com ------------------------------------------------------------- Natural Gas Futures Tumble Below $2 Natural gas futures for February delivery on the NYMEX tumbled 6.3% yesterday, falling $0.129 to $1.908 per MMBtu. The March contract lost $0.12 to $1.984 per MMBtu. The market opened lower yesterday morning and soon dropped below $2. It was the lowest price seen since last September's $1.83 per MMBtu expiration for the October contract. In afternoon trading prices dipped as low as $1.85 on a bearish weather forecast, but quickly recovered to finish the session on an up-tick. Physical prices were kept up by cooler weather in the Mid-continent region. Cold weather in the West also pushed up cash prices there, but only marginally. The AGA report to be released tomorrow afternoon is expected to show a withdrawal of about 110 - 120 Bcf. Look for the cash market to follow the NYMEX downward today, although weather concerns in the nation's midsection reflect a slight bullishness. Natural gas for next day delivery across the US and Canada was generally flat to down $0.05 yesterday. Natural gas for next day delivery at the Henry hub lost $0.01 to $2.02 per MMBtu. ------------------------------------------------------------- Exploit the enterprise-wide transaction management power deployed by the big names in gas. NUCLEUS Software ZAINET Gasmaster The most comprehensive, totally-integrated natural gas information system available today. Ask about out limited-time offer competitive upgrade program. CAMINUS Your Competitive Edge in Energy. Call Caminus at (212)515-3700 or visit the website at http://www.caminus.com ------------------------------------------------------------- Today's Power Bulletins * Head of the National Association of Regulatory and Utility Commissioners Tells Senate Committee Today Federal Regulations Needed to Reform Power Market to Restore Public Confidence and Protect Consumers from Potential Financial Disasters * Salomon Report Says Merchant Power and Natural Gas Sector Outlook Solid * Midwest ISO, PJM and Southwest Power Pool Announce Single Market Design Forum * Enron Employees Band Together to File Lawsuit Against Retirement Plan Custodians and Enron Directors ------------------------------------------------------------- DO YOU JUST SEE TREES? WE SEE A FOREST! See the forest with NewEnergy MarketPower by efficiently obtaining information for critical market-based investment decisions and mitigate your risk. Use MarketPower to determine the effects of transmission congestion, fuel costs, generator availability and load growth on market prices to better execute your company's strategic direction. Designed specifically for today's energy industry, MarketPower is accurate and easy-to-use, so you can plan for tomorrow...today! New Ideas...New Solutions...NewEnergy. For a free 30-day trial visit us at http://www.NewEnergyAssoc.com/justdownloadit or call us at 770 779 2957 for more information ------------------------------------------------------------- Enron's Due on Enron Wind Sale Bids for Enron Wind were due yesterday, as the profitable company is expected to soon be sold to European owners. Five companies are in the running, so it is likely to take Enron several weeks to announce a buyer. The purchase price is likely to be about $500 million. Enron Wind is making money and is not included in Enron's bankruptcy filing. Its revenues jumped from about $50 million when it was acquired by Enron in 1997 to $750 million in 2001. Last year was by far the best year in the company's history. The bankruptcy court will have to provide some kind of oversight for the sale of any Enron material assets. Likely bidders are Denmark's Vestas Wind Systems, German-Danish wind turbine maker Nordex AG, General Electric and some financial groups from Europe. Enron Wind will likely end up bought by the Europeans, who have a stronger presence in the wind energy sector. The top 5 wind turbine manufacturers are three Danish, one Spanish, and one German. Vestas plans to set up a blade and assembly plant in the US if the tax credit is extended, and NEG Micon already has an assembly plant here. More than 1,000 MW of projects have been put on hold in the US because the tax credit has yet to be renewed. About $5 billion of new wind power was installed worldwide last year, bringing the total over $20 billion. ------------------------------------------------------------- FAST. FLEXIBLE. PROVEN. The AURORA(TM) electric market model helps you deal with the challenges and risks of today's energy marketplace. Exceptionally fast and easy to learn, AURORA(TM) reflects fundamental market drivers and gives power marketers, resource developers and portfolio managers a better way to manage against market uncertainty and price volatility. AURORA delivers - ? Price forecasts - hourly, daily, weekly, monthly, yearly ? On-peak, off-peak pricing ? Resource valuation and net power costs ? Portfolio analyses ? Capacity expansion analyses ? Effects of emissions ? And much more . . . AURORA's comprehensive databases cover all electricity markets throughout the U.S. and Canada. The model also handles storage, congestion pricing, and offers detailed reporting and data export capabilities. It can be used as a stand-alone tool or be integrated with your other business tools. Visit us at http://ww.epis.com or call (503) 722-2023. EPIS, Inc. Market Information Solutions for the Electric Power Marketplace ------------------------------------------------------------- Natural Gas NYMEX Volume 02FEB 37,198 02MAR 17,837 02APR 5,622 02MAY 2,416 02JUN 2,495 02JLY 9,143 02AUG 8,440 02SEP 975 02OCT 4,860 02NOV 1,882 02DEC 953 03JAN 1,922 03FEB 447 03MAR 699 03APR 713 03MAY 215 03JUN 414 03JLY 161 03AUG 201 03SEP 15 03OCT 62 03NOV 395 03DEC 650 04JAN 93 ------------------------------------------------------------- GET REAL about energy risk management with KWI In today's fast moving energy markets you need to be able to manage risk in real time. That means knowing before you hit a risk problem, not afterwards when it may be too late to prevent big losses spreading right through your enterprise. With kW3000(tm), our multi-commodity, integrated front to back office software, you can monitor your Profit At Risk(tm), counterparty risk and mark-to-market all in real time. Keep alert to risk. Do it in real time. Call KWI -Americas: +1-281-681-3301 / Europe: +44 (0) 20-7386-2700 / Asia Pacific: +61(0) 2-9976-6111 http://www.kwi.com -------------------------------------------------------------- PanCanadian and Alberta Energy Merge PanCanadian Energy and Alberta Energy have reached an agreement to merge, forming one of the top independent oil and natural gas company in the world in terms of proved reserves, production and value. The share swap deal will create a C$27 billion exploration and production company with operations in the US, the North Sea and Ecuador and major Canadian-based operations. The newly merged company will be called EnCana Corporation. The top executives of each company plan to enhance the market value and prevent a takeover of either firm. Canadian energy companies have historically experienced a lower stock market value than US rivals in terms of multiples of projected cash flow per share, used to measure the value of companies. Some say that pension funds looking to invest in North America exploration would not have considered the companies before because they were too small, but the new company is large enough to attract institutional investors. It has been estimated that EnCana could eventually have a multiple of 7.75 to 8.75 times cash flow, suggesting a target price of C$44.50 to C$52.00. Competitors Anadarko and Burlington Resources currently trade at 9.7 times and 8.7 times respectively. As part of the deal, AEC stockholders will receive 1.472 PanCanadian shares for each of their shares, which values AEC at about C$9 billion. PanCanadian had been mentioned as a takeover target when it was spun off from Canadian Pacific last fall. The deal carries a C$350 million break up fee for either firm should it cause the merger to fall through. ------------------------------------------------------------- ENERGY. @ENERGY(r), FEA's Complete Suite of Energy Products, BUILT FOR THE FUTURE. *Manage all your energy risks. *Build and Price deals. *Value physical assets (generation, storage, etc.) *Report and reduce your energy risks FEA FINANCIAL ENGINEERING ASSOCIATES Inc. http://www.fea.com/?cId=17 main phone number: 1 510-548-6200 email address: info@fea.com ------------------------------------------------------------- PHYSICAL POWER PRICES | | High | Low | Average | | | $/MWh | $/MWh | $/MWh | | Cinergy | 18.60 | 16.00 | 17.75 | | ECAR | 22.00 | 16.00 | 19.20 | | ERCOT | 17.50 | 17.10 | 17.35 | | Entergy | 18.00 | 17.20 | 17.80 | | TVA | 19.90 | 19.45 | 19.85 | | ComEd | 20.00 | 19.25 | 19.65 | | Nepool | 28.00 | 27.00 | 27.55 | | PJM West | 22.50 | 21.00 | 21.50 | | Main | 22.00 | 21.00 | 21.50 | | MAPP | 22.00 | 19.00 | 20.00 | | Palo Verde | 24.75 | 22.00 | 24.10 | | Mid C | 20.50 | 18.80 | 19.95 | | COB | 22.25 | 22.00 | 22.20 | | 4 Corners | 23.50 | 22.00 | 22.75 | | Mead | 27.00 | 23.25 | 25.05 | | NP 15 | 25.00 | 23.50 | 24.40 | | SP 15 | 25.25 | 23.75 | 24.60 | Power Delivered 1/29 ------------------------------------------------------------- Enron Collapse May Have Ripple Effect The ripple effect caused by the collapse of Enron may have harmed securities across a broad range of asset classes. Revelations about Enron's murky financial statements have generally cast doubt on corporate accounting practices. Some say that the stock market now carries a higher equity risk premium because of Enron's collapse. In some cases, investors who lose money in one market unwound their exposure in others, leading to a spiral of forced selling. Even companies with no Enron exposure are experiencing investor risk aversion equal to those that had direct financial dealings with the company. For example, Kmart would likely not have been vulnerable to energy sector risks in the past. But Kmart claimed that insurers had raised premiums for surety bonds, which Kmart needed to cover certain contingent liabilities. Enron's collapse also worried investors about other energy companies, like Calpine, El Paso and Mirant, forcing them to adjust their balance sheets. The fallout from Enron likely led to a downturn in outstanding commercial and industrial loans over the past month. Another sign of potential contagion effects is a $266 million outflow from high yield bond funds last week was attributed by to fears aroused by the Enron and Kmart bankruptcies. Each new Enron disclosure fuels fears that the economy is threatened by the fallout. And, whether actual contagion exists or not, fear of it seems to led many companies' to distance themselves from the energy trader. ------------------------------------------------------------- Allegheny Energy Supply Company, Salt River Project (SRP) and Sempra Energy Resources announce Open Season for proposed Desert Crossing Gas Storage and Transportation System. Open Season for customers interested in capacity begins Jan. 10, 2002 and extends through Feb. 8, 2002. For information, visit http://www.desert-crossing.com ------------------------------------------------------------- Todays Gas Bulletins * Senate Energy Committee Begins Hearings on Enron Collapse; Witnesses Scheduled Include FERC Chairman Pat Wood, CFTC Chairman James Newsome, NYMEX Head Vincent Viola * Moody's Investors Service Places Alberta Energy's Senior Unsecured Ratings Under Review for Possible Upgrade and 'A3' Senior Unsecured Ratings of PanCanadian Under Review for Possible Downgrade * AGL Resources CEO Expects Georgia Legislature to Pass Bill to Reform State's Deregulated Natural Gas Market * Wife of Ex-Enron CEO Ken Lay Says Family Lost Fortune When Company Collapsed; Says Husband Has Done Absolutely Nothing Dishonest * JP Morgan Raises Dynegy Bonds to 'Overweight' from 'Neutral' * Anadarko Announces 'Modeling' Conference Call February 6th * Morgan Stanley to Buy Ex-Texaco World Headquarters in Northern Suburb of New York City for Undisclosed Amount ------------------------------------------------------------ California PUC Urged to Shift Power Choice Date An administrative law judge to the California PUC has urged the regulators to amend a ruling that jettisoned the right of customers to choose their electricity provider. The ALJ says the ruling needed to be changed because it unfairly shifted almost $2 billion of costs to utility customers. To avoid penalizing the customers, the ALJ recommends that the PUC set July 1st as the cutoff date for energy users to sign new direct access contracts to buy electricity from independent companies. The CPUC voted last September to cancel the customer choice option as of that date. Without the change in dates, consumers who continued to take power from their local utility will be responsible for $1.98 billion. That is because from July 1st to September 20th last year, about 11% of the total electric service of the state's investor-owned utilities shifted from bundled service from the utilities to direct access service from other companies. About 10,000 businesses signed the new power deals last summer when wholesale electricity priced dropped, a move severely criticized by state consumer groups. However, the PUC reserved the option to shift the cutoff date back to July 1st if the Sept 20th date hurt customers who stayed with their utility. ------------------------------------------------------------ Ziff Energy Group presents Gas Storage 2002 Redefining the Fundamentals: Is Gas Still in the Storage Game? Power Drives Storage Will the recession affect plant and storage development? Will record high volumes in storage further depress gas prices? Is it possible to mitigate storage risk while dealing with year-round price volatility? Plus Two Important Workshops Calpine Corporation Hear what the Power Generator wants from the storage industry Bruce Bernard Learn from the expert how to mitigate storage price risk in the 2002 gas marketplace February 6 & 7 Houston Four Season Hotel 1300 Lamar Street Register Today for this Important Conference Call 1-800-853-6252 Email: gasconference@ziffenergy.com Visit: http://www.ziffenergyconferences.com ------------------------------------------------------------- California PUC Urged to Shift Power Choice Date An administrative law judge to the California PUC has urged the regulators to amend a ruling that jettisoned the right of customers to choose their electricity provider. The ALJ says the ruling needed to be changed because it unfairly shifted almost $2 billion of costs to utility customers. To avoid penalizing the customers, the ALJ recommends that the PUC set July 1st as the cutoff date for energy users to sign new direct access contracts to buy electricity from independent companies. The CPUC voted last September to cancel the customer choice option as of that date. Without the change in dates, consumers who continued to take power from their local utility will be responsible for $1.98 billion. That is because from July 1st to September 20th last year, about 11% of the total electric service of the state's investor-owned utilities shifted from bundled service from the utilities to direct access service from other companies. About 10,000 businesses signed the new power deals last summer when wholesale electricity priced dropped, a move severely criticized by state consumer groups. However, the PUC reserved the option to shift the cutoff date back to July 1st if the Sept 20th date hurt customers who stayed with their utility. ------------------------------------------------------------- R. W. Beck is an engineering and management consulting firm serving utilities, developers, financiers and governments worldwide. Founded in 1942, we help our clients face energy market challenges by providing: Portfolio Analysis to improve diversification and risk-adjusted performance of energy assets. Risk Control to help reduce the probability of losses. Asset Valuation to understand the market value and risk characteristics of physical and financial energy assets. Training to improve your ability to identify and manage tactical and strategic risks. Please visit our web site at http://www.rwbeck.com ------------------------------------------------------------- POWER FUTURES | Month | COB | Change | PV | Change | | FEB | 21.25 | +0.00 | 21.25 | -0.85 | | MAR | 18.50 | +0.00 | 21.00 | -0.75 | | APR | 20.00 | +0.00 | 22.25 | -1.00 | | MAY | 18.25 | +0.00 | 23.25 | -0.75 | | JUN | 20.00 | +0.00 | 27.75 | -0.75 | | JUL | 29.50 | +0.00 | 37.75 | +0.00 | | AUG | 40.00 | +0.00 | 42.50 | -0.75 | | SEP | 34.00 | +0.00 | 32.25 | -0.50 | | OCT | 28.00 | +0.00 | 27.75 | +0.00 | | NOV | 27.50 | +0.00 | 26.25 | -0.50 | | DEC | 28.50 | +0.00 | 26.75 | -0.50 | | JAN | 28.50 | +0.00 | 28.25 | +0.00 | | Month | Entergy | Change | Cinergy | Change | | FEB | 18.25 | -0.05 | 19.70 | +0.00 | | MAR | 19.25 | -0.15 | 20.85 | +0.05 | | APR | 19.25 | -0.15 | 20.85 | +0.05 | | MAY | 22.60 | +0.10 | 24.25 | +0.25 | | JUN | 26.75 | +0.35 | 29.00 | +0.30 | | JUL | 33.50 | +0.25 | 37.25 | +0.00 | | AUG | 33.50 | +0.25 | 37.25 | +0.00 | | SEP | 26.00 | +0.00 | 22.30 | +0.05 | | OCT | 21.35 | +0.00 | 21.85 | -0.05 | | NOV | 21.35 | +0.00 | 21.85 | -0.25 | | DEC | 21.35 | +0.00 | 21.85 | -0.25 | | JAN | 24.25 | +0.25 | 25.25 | +0.25 | ------------------------------------------------------------- Power Futures | Month | PJM | Change | | FEB | 23.50 | -0.25 | | MAR | 24.05 | +0.00 | | APR | 24.05 | +0.00 | | MAY | 27.25 | +0.50 | | JUN | 33.25 | +0.25 | | JUL | 44.50 | +0.10 | | AUG | 44.50 | +0.10 | | SEP | 25.50 | +0.20 | | OCT | 25.00 | +0.05 | | NOV | 25.00 | +0.05 | | DEC | 25.00 | +0.05 | | JAN | 29.00 | +0.50 | ------------------------------------------------------------- MARKET OUTLOOK Hold on to the short position in the March natural gas futures. The GasTrader model is still in a bearish mode and continues to stay short, although no new trades are recommended. Prices continue in a pervasive downtrend, yet stop loss provisions are in place to guard against any unexpected price rallies. The massive short interest held by non commercial accounts is of concern, but the stop loss provisions of the model are designed to cope with what economists call "exogenous variables". Weather, storage, and the economy are all negative, and combined with the unfavorable technical environment suggest that prices could work still lower. GasTrader Consultant is a natural gas futures trading program designed to minimize the opportunity costs (losses) that often result under the best intentioned but often misguided hedging programs. Specific trading parameters are in place daily and trades are executed on the close or at predetermined trading points. Results assume positions are maintained in the spot (most liquid) futures contract and are rolled over on the 16th of the month prior to contract expiration. If the program is in a long mode producers and physical market longs would lift all hedges. Conversely if the program is in a short mode end users would lift their hedges. If the model is flat or neutral, a conservative strategy requires hedging by both long and short market participants. It is believed that by combining natural gas price trends with hedging requirements opportunity costs can be minimized and greater participation in market moves can be realized. Hedging costs are synchronized with the market. Check out the FREE TRIAL subscription. Go to: SubscribetoGasTrader.net ------------------------------------------------------------- Energy Seminars, Inc. Announces Key Seminar Offerings for January: Energy Seminars will be going to Florida and Calgary in 2002! Click to http://www.energyseminars.com to see our 2002 schedule. Register on-line at http://www.energyseminars.com or call Registrar Gina Patrick Phone: 281-362-7979 FAX: 281-296-9922 -------------------------------------------------------------------------------------------------------------------------- Progas Storage and Services, Inc. Progas can custom build gas storage in the Upper Midwest. ? Design to your specifications ? Close to your markets ? Unregulated storage ? Lower transportation fees ? Lower storage rates Progas is now accepting proposals and orders for years 2002-2007 for approxamately 5 bcf of storage on Midwestern system serving Indiana, Illinois, and 3 bcf on Texas Gas Transmission system serving Tennessee, northern Kentucky, Indiana, and Ohio. Additional potential storage filds beding acquired at this time on Midwestern, anhandle Eastern and A & R (Coastal) systems serving the Upper Midwest. Inquiries from potential partners, investment bankers, and brokers welcome. Progas Storage and Services, Inc. 8610 South Highway 277 Abilene, TX 79606 Phone: 915-698-3699 Fax: 915-698-2859 Email: gastorage@aol.com ------------------------------------------------------------- FINANCIAL SUMMARY The TSE 300 lost 15.56 points to 7643.73 The CRB Index fell 1.98 points to 187.87 The US Dollar increased 0.02 points to 119.87 The Dow advanced 25.67 points to 9865.75 The S&P 500 dipped 0.22 points to 1133.06 The Nasdaq was up 6.21 points to 1943.91 March NYMEX Crude Oil climbed 0.06 to 20.05 Canadian-US Exchange rose 0.0046 to 1.6125 ------------------------------------------------------------- ENERGY MANAGEMENT INSTITUTE Higher Education for refined product professionals NOW ENROLLING RISK MANAGEMENT COURSES: PROFESSIONAL GASOLINE AND DISTILLATE MANAGEMENT, PETROLEUM MARKETER, and ADVANCED GASOLINE AND DISTILLATE MASTER LEVEL. REGISTER NOW, CLASS SIZES ARE LIMITED. SEE COMPLETE DETAILS CLICK HERE :http://www.energyinstitution.org ------------------------------------------------------------- Pure Text, Lotus, AOL, Yahoo, Excite, Readers-subscribe by writing to: enerfax-subscribe@egroups.com Outlook Email Readers-subscribe to webmail by writing to: mailto:join-EnerfaxDaily@relay.netatlantic.com ------------------------------------------------------------- To view past issues of Enerfax Daily -Sign up for free at Divine's Sagewave at http://www.sagewave.com/D2/autolog/common/log.asp?KEY=enerfax ------------------------------------------------------------- Please welcome our advertisers by visiting these websites. http://www.e-acumen.com http://www.kwi.com/ http://www.fea.com/ http://www.caminus.com/ http://www.progas.net/wip http://www.ziffenergyconferences.com/ http://www.energyseminars.com http://www.desert-crossing.com http://www.epis.com http://www.rwbeck.com http://www.NewEnergyAssoc.com enerfaxtext, forward to delete@enerfax.com to unsubscribe.
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