Investors

Prefacing an hour-long discussion with investors on Friday,Enron Corp. COO Jeffrey Skilling said the rumors about theHouston-based energy giant, which have sent the company’s stockspiraling to a 52-week low, are mostly “noise,” with no basis infact. Skilling, who said his comments would be “short and sweet,”reiterated more than once that business from all four sectors is in”great shape.”

Prefacing an hour-long discussion with investors on Friday, Enron Corp. COO Jeffrey Skilling said the rumors about the Houston-based energy giant, which have sent the company’s stock spiraling to a 52-week low, are mostly “noise,” with no basis in fact. Skilling, who said his comments would be “short and sweet,” reiterated more than once that business from all four sectors is in “great shape.”

The future is bright for investors in the power market, butrather dim for the nation’s power users, Salomon Smith Barney (SSB)warned in a new report titled “The U.S. Electric Shock.”

Westcoast Energy CEO Michael Phelps told Reuters news serviceafter a New York investors conference yesterday that he expectsMaritimes & Northeast gas volumes to triple in five years tomore than 1.6 Bcf/d.

Moody’s Investors Service assigned a Baa2 issuer rating toPG&E National Energy Group Inc. (NEG) and confirmed the ratingsof subsidiaries, PG&E Gas Transmission-Northwest (GTN: seniorunsecured debt at Baa1) and PG&E Generating Co. LLC (PG&EGen: bank loan rating of Baa2). PG&E Gen’s rating is removedfrom review for possible downgrade where it was placed on Jan. 29,2001. The ratings of PG&E Gen’s subsidiaries are alsoconfirmed. The rating outlook for NEG and all rated subsidiaries isstable. The Baa2 issuer rating reflects the consolidated strengthof NEG’s business units, including the cash flows and operatingincome from GTN, PG&E Gen, USGenNE, and PG&E EnergyTrading, Moody’s said. Of particular note is the amount of cashflows provided by highly predictable sources, including theregulated cash flows coming from GTN, the dividends sourced by thecontracted portfolio of PG&E Gen and the cash flows expectedfrom the standard offer tariff customers of USGenNE. NEG’s Baa2issuer rating incorporates the legal ring-fencing structureimplemented by PG&E Corp. on Jan. 12 to insulate the creditquality of NEG and its subsidiaries from the effects of any creditdeterioration at PG&E Corp. Specifically, PG&E Corp.established PG&E National Energy Group LLC (NEG LLC) as abankruptcy-remote entity and the direct parent of NEG. PG&ECorporation contributed 100% of the issued and outstanding sharesof NEG to NEG LLC. Specific provisions were established which helpto insulate NEG from the financial condition and the creditors ofits parent company.

Northern Border Partners L.P. (NBP) entered an agreement topurchase Bear Paw Energy, LLC from a consortium of investors for$370 million in cash and stock. Bear Paw Energy has gathering andprocessing operations in the Powder River Basin (PRB) in Wyomingand the Williston Basin in Montana, North Dakota and Saskatchewan.The company has about 226,000 acres under dedication and 600 milesof gathering pipelines in the PRB. Bear Paw holds over 2,800 milesof gathering pipoelines and four processing plants with a capacityof 90 MMcf/d in the Williston Basin. “Once completed, we will haveadded over $625 million in non-regulated assets to the partnershipwith our third major acquisition in a little over one year. Ourtotal mix of non-regulated businesses will be slightly over 25%,”said Bill Cordes, CEO of NBP. “These strategically located assetswill fit, both commercially and operationally, with Crestone EnergyVentures and Northern Border Pipeline.” NBP said $185 million willbe paid in its own common stock, with the remainder paid in cashand assumption of liabilities. Pending shareholder and regulatoryapprovals, the acquisition is targeted for completion by the end ofthe first quarter.

Moody’s Investors Service warned yesterday that some municipalelectric utilities face a dangerous possibility of having to buymore power than expected on the spot market because of very lowhydroelectric supplies.

High power costs in the Pacific Northwest prompted Moody’sInvestors Service yesterday to change its outlook on securitiesissued by PacifiCorp (senior secured debt at A2) to negative fromstable.

Burlington Resources Inc.’s management team took heat frominvestors and some analysts last week, after it reported onThursday that its natural gas production for the second quarter ofthe year rose slightly compared with 1999, but still fell 7% fromthe first quarter of 2000. Burlington reported that its natural gasproduction for the entire year will be flat compared with lastyear, and said that its oil production probably will be 10% lowerfrom a year ago.