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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: kodiak_bull who wrote (5235)	11/27/2001 4:35:09 PM
From: excardog	Respond to of 206350

DJ Enron Fights To Find Near-Term Sellers,But Still Trading By Mark Golden Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Enron Corp. (ENE) continued to struggle Tuesday to find willing sellers of near-term gas and power in North America, but the one-time market maker was still able to trade on a limited basis, according to market sources. "It's not getting any better," said one major energy broker. Many energy trading companies aren't selling to Enron and are only buying from it near-term. These include Aquila Inc. (ILA), Mirant (MIR), Royal Dutch/Shell Group (RD) subsidiary Coral Energy, Sempra Energy (SRE), and Morgan Stanley Dean Witter's energy trading subsidiary, said the broker. The broker estimated Enron's over-the-counter trading volume to be about 25% of what it was a month ago. Companies are willing to buy from Enron in the spot gas and power markets, because taking delivery on commodity and paying for it a month later poses no credit risk for the buyer. Some other companies, like Dynegy Inc. (DYN), Duke Energy Corp. (DUK) and BP PLC. (BP), continue to trade with Enron fairly freely, the broker said. Dynegy has reached an agreement to acquire Enron, though the terms of that deal are being renegotiated. The trading subsidiaries of troubled California utility-holding companies PG&E Corp. (PCG) and Edison International (EIX) also are trading with Enron. The third and largest group of companies are trading with Enron on a very limited basis to reduce exposure by taking off-setting trades against deals done long ago. These include El Paso Corp. (EPG), Reliant Resources (RRI), Tractebel SA's (B.TRB) U.S. trading unit and regulated utilities, the broker said. Several energy traders said that both power and gas were being sold at prices lower than Enron was offering. "They've been cut off from so many people," said one electricity trader. Enron Says Just Slight Reduction In Transactions An Enron spokesman said he has seen a slight reduction in transactions but not to 25% of the one-month-ago level. The notional value of Enron's 30-day rolling average of transactions is $2.8 billion, said Enron spokesman Eric Thode. Thode declined to give volume data for Tuesday or Monday, although the company was giving daily information two weeks ago. "We're not doing daily information. We're only speaking in terms of 30-day rolling averages. ... It's not fair to speak in terms of daily because of daily volatility," Thode said. Traders and brokers said they hope Dynegy will offer some kind of guarantee to Enron's trading to restore confidence. But, after Enron's ability to transact took a severe turn for the worse Nov. 20, Dynegy said that the companies must continue to operate independently until their merger is approved and completed. Energy companies began shying away from Enron over the past month, as concerns about its finances precipitated a 75% drop in its stock price and left its bonds trading at levels typically associated with junk-rated debt. But Enron saw its ability to trade seriously damaged last week following the late release of its quarterly financial report with the U.S. Securities Exchange Commission. For the first time since Enron's troubles began a month ago, energy companies stopped selling to Enron in the spot markets for fear that Enron might not be able to pay its bills as soon as next month based on the quarterly filing. Moody's Investors Service and Standard & Poor's all rate Enron one notch above speculative grade. Moody's has Enron's ratings on review for a downgrade, and S&P has Enron on negative credit watch. Fitch calls Enron's credit rating "evolving." Enron's ability to do business in the energy markets depends on its maintaining investment-grade ratings. -By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com (John Edmiston in Houston and Jon Kamp in Chicago also contributed to this article.) (END) Dow Jones Newswires 27-11-01