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Gold/Mining/Energy : Canadian REITS, Trusts & Dividend Stocks -- Ignore unavailable to you. Want to Upgrade?

To: trustmanic who wrote (2129)	12/1/2001 1:05:04 AM
From: Cogito Ergo Sum	Read Replies (2) \| Respond to of 11633

HI George, Don't quote me on this but I would guess that the production where they can cancel the contracts and get new ones (the physical) are most likely as you say a bit of welfare reduction. I mean gas is not widgets, they don't back up with a trailer, deliver the entire load, and then send a bill. So I'm guessing the loss on these will mainly stem from poorer contracts going forward. as I mentioned to sportsman The remaining 2.0 Bcf contract is a financial hedge with Enron Canada Corp. is what concerns me because of the legal action statement I assume this is toast, but frankly I haven't the foggiest idea how it works. They really didn't give us anything to go on with this one either, a bad sign, but on the bright side this puts the % much closer to what IR originally told us. I nothing else I'll learn more about hedging as they are obviously not all created equal. regards Kastel a cute and cuddly Canadian Remember guys I'm just learning here so if anyone's got a better handle on this I've got thick skin.

To: trustmanic who wrote (2129)	12/1/2001 4:53:02 PM
From: grayhairs	Read Replies (1) \| Respond to of 11633

Hi George. PWI's exposure to Enron for "potential" non-payment on November physical product deliveries is slightly less than $900,000 (30 days of gas sales @ 7,500 GJ/d @ $3.97/GJ). That is, of course, not a very nice hit to perhaps take but still, relative to total November sales revenues, it certainly is not catastrophic. Regarding the 8.8 BCF of hedges\fixed sales that PWI had\has with Enron, it looks like PWI simply drops from 58% hedged on its 2002 gas volumes to about 50% hedged. At Friday's natural gas and futures prices, this loss of hedge is expected to reduce gas revenues by a total of only $3.9MM. That averages just $156,000 per month throughout the 25 month term. Again, certainly not too nice but also not catastrophic. Bottom line, what's the magnitude of a PWI unitholder's exposure to Enron ?? I estimate 0 to 1 cent per unit in 2001, 2 to 3 cents per unit in 2002, and 1 cent per unit in 2003 (Eg. If the ANNUAL distributions would otherwise be say $2.38, $1.60 and $1.60 for 2001, 2002 and 2003 respectively, then ANNUAL distributions risk dropping to $2.37, $1.57, and $1.59 respectively without the hedges\fixed price contracts). JMHO but Enron's pending Chapter 11/7 doesn't really appear to be the biggest concern PWI unitholders will have over the next 12 months. Have a great day. Later, grayhairs