PHYSICAL NATURAL GAS PRICES ??
Gulf/Eastern Region
| Agua Dulce | 2.06 |
| ANR SE | 2.15 |
| Carthage TG | 2.13 |
| Chicago Citygate | 2.20 |
| Columbia Gulf Onshore | 2.17 |
| Dominion South Point | 2.37 |
| Henry Hub | 2.19 |
| Houston Ship Channel | 2.18 |
| Katy Hub | 2.13 |
| NGPL LA Pool | 2.14 |
| NGPL - Midcontinent | 2.07 |
| NGPL STX | 2.10 |
| NGPL TX/OK | 2.12 |
| NNG Demarc. | 2.16 |
| Niagara | 2.36 |
| Sonat Tier 1 | 2.16 |
| TCO IPP Pool | 2.27 |
| Tetco ELa | 2.16 |
| Tetco M-3 | 2.48 |
| Tetco STX | 2.08 |
| TGP Zone 0 | 2.11 |
| TGP Zone 1 (500 Leg) | 2.15 |
| TGT Zone SL | 2.17 |
| New York Citygate | 2.56 |
| Transco Station 65 | 2.22 |
| Transco Zone 6 (NY) | 2.56 |
| Trunk ELa | 2.15 |
| Western Region
| California Border | 2.17 |
| El Paso Keystone | 2.05 |
| El Paso San Juan-Blanco | 2.05 |
| Waha Hub | 2.10 |
| Canadian/Rockies Region
| Nova/Aeco (C$/gig) | 2.99 |
| Dawn Hub/Union | 2.30 |
| Northwest Stanfield | 2.04 |
| Wyoming Pool | 1.91 |
| Opal | 1.91 |
| PGT-Malin | 2.10 |
| Sumas | 2.00 |
Flow Dates 02/2-4
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NATURAL GAS FUTURES
Henry Hub
12 Month Strip ?2.5156 -0.0023 ? ? ?
18 Month Strip ?2.6121 -0.0052? ?
| Month | High | Low | Close | Change |
| MAR | 2.175 | 2.100 | 2.138 | +0.000 |
| APR | 2.220 | 2.160 | 2.198 | +0.008 |
| MAY | 2.280 | 2.240 | 2.266 | +0.008 |
| JUN | 2.350 | 2.310 | 2.331 | +0.005 |
| JUL | 2.410 | 2.385 | 2.391 | +0.000 |
| AUG | 2.465 | 2.425 | 2.446 | -0.002 |
| SEP | 2.470 | 2.430 | 2.446 | -0.002 |
| OCT | 2.480 | 2.440 | 2.470 | -0.002 |
| NOV | 2.710 | 2.650 | 2.695 | -0.004 |
| DEC | 2.920 | 2.880 | 2.894 | -0.010 |
| JAN | 3.020 | 2.480 | 2.981 | -0.013 |
| FEB | 2.960 | 2.480 | 2.931 | -0.016 |
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Natural gas futures for March delivery on the NYMEX ended another boring session flat for the day last Friday at $2.138 per MMBtu. The April contract gained $0.008 to $2.198 per MMBtu. The market opened lower, but was soon boosted by short-term cold and short-covering from speculators and locals pushing as high as $2.165 per MMBtu. Buy-stops were believed to be above $2.17 per MMBtu, and will still likely be there today. Estimated volume Friday was only about 50,400 contracts, with 19,600 of those spreads. There just was not enough volume to hit the buy-stops as the market hovered mostly between $2.14 $2.15. With the market unable to breach $2.17, speculators were forced to back-off late. If $2.17 can be breached today, the market could rise to the next resistance level at $2.22, and then possibly as high as $2.48 before reality once again sinks in. However, if the cash market opens lower this morning, the market may not get a chance to test the resistance. With still !
more than 1 Tcf in excess storage over last year and a relatively mild winter so far, the markets short to medium term bias is still down. Natural gas for weekend delivery across the US and Canada was generally flat to $0.10 higher Friday. Natural gas for weekend delivery at the Henry hub gained $0.05 to $2.19 per MMBu.
Enrons 4th quarter power trading volumes were about 26% lower than the previous quarter, which is surprising since it was bankrupt for a third of the quarter and in deep trouble for over half of the period. Enron Power Marketing sold almost 221 million MW from October through December, down from about 300 million MW sold during the 3rd quarter. Last week, the FERC began investigating allegations that Enron unfairly raised wholesale power prices during California's power crisis last year. After Enron took a $1.2 billion write-down in shareholder equity related to its off-balance-sheet transactions, other energy firms limited their trading with Enron out of concern credit obligations. In the first 3 quarters of 2001, Enron had about 15% of the nations wholesale power market and AEP was next in line with about an 8% share. The table below shows Enron's biggest customers, the total MW sold and the highest price paid by each for the 4th quarter.
ENRONS TOP 10 CUSTOMERS - 4th-QUARTER 2001
In an attempt to allay the fears of investors, Mirant plans to sell assets and reduce expenditures to lower its debt. Shares of Mirant have fallen by 50% in the last 2 months, following the downfall of Enron and the downgrade of about $4.9 billion of its debt to junk status by Moodys. Last week, Mirant said that 4th quarter earnings had dropped by 55%, due to lower energy prices and a charge of $66 million from exposure to Enron. It also cut its capital budget by 50% and lowered its earnings forecast in 2002 to $1.60 to $1.70 per share, from its December estimate of $1.90 to $2.00, because of lower profit margins. Mirant expects 1st quarter profits of $0.30 per share, lower than last years $0.52 per share. Profit for the 4th quarter dipped to $30 million, or $0.09 per share, from $67 million, or $0.20 per share a year ago. Revenue was off 9%, to $7.24 billion from $7.96 billion. Mirant was spun off from Southern Company in September 2000 and the deal was completed last !
April, when Southern distributed 272 million shares, or 80% of Mirant for $9.44 billion. In efforts to distance itself from Enron, Mirant points out that assets, such as power plants, contributed 90% to its profitability, unlike Enron, whose trading unit was responsible for 90% of its 2000 revenue. Mirant has delayed plans to spend $3 billion on tripling its 15,000 MW of power this year. Instead it will limit capital spending to the completion of power plants that will produce 5,700 MW. Mirant will also cut about 65% of job at its German unit, Bewag, which it wants to sell.
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The number of rigs searching for oil and natural gas in the US fell by 6 to 853 last week, according to Baker Hughes. The total was down from 1,138 a year ago. The number searching in Canada was down 7 to 452, compared to 579 a ago. The number of rigs in the Gulf of Mexico was down 3 to 114, compared to 159 a year ago. In the US, the number searching on land was 714, and the number offshore was 121. Eighteen were operating in inland waters. The total North American rig count fell by 13 to 1,305, down from 1,717 a year ago.
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The Midwest Independent Transmission System Operator has implemented its tariff and will now provide regional transmission service for bulk power in the Midwest ISO footprint. Transmission customers are now able to request transmission service from Midwest ISO without going to individual transmission owners. The Midwest ISO, which serves 21 transmission owners in 15 states, is responsible for evaluating and coordinating requests for access to the regional power grid on a non-discriminatory basis. The Midwest ISO says that transmission customers in the Midwest will now benefit from standardized rates, terms and conditions for service over its 86,000 miles of transmission lines. Transmission customers are now able to request transmission service from the MISO's OASIS website, giving them the ability to view transmission availability data at the same time and request transmission service in the same manner. It also provides for streamlined electronic scheduling which allows!
customers to easily schedule approved transactions for service across multiple control areas in the MISO footprint. In addition, customers will now have access to an independent, regional analysis of bulk power flows utilizing a standard methodology. The MISO will provide a single bill to customers for all transmission service provided.
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Wisconsin Energy plans to build $3 billion in new electricity generators over the next nine years to meet growing energy demands. Forecasts indicate Wisconsin will need more than the 2,800 MW the new units will generate by 2011. The projects include 2 natural gas fired generators and 3 coal burning units at existing power plants. Other power producers including Calpine and Mirant have delayed new construction in the state because of lower electricity demand and prices. The first natural gas fired should be under construction by early next year to be in service before the summer of 2005. Wisconsin Energy has created a subsidiary that would build and own the generators and lease them back to the utility for up to 25 years. Calpine, Enron and PG&E had opposed the proposal, saying it would delay deregulation in the state by more than a decade.
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