Levels

None of Williams’ three main subsidiaries matched 1997 earningslevels, the company said Thursday, as it announced a total 1998 netincome of $140.7 million, or $0.31 per diluted share, down from$368.3 million, or $0.85 per diluted share in 1997. For the fourthquarter, Williams posted a net loss of $20.2 million or $0.05 perdiluted share versus a net income of $57.5 million or $0.13 perdiluted share in 1997. Company officials blamed poor marketconditions, large accrual and impairment amounts, and disappointingresults in the communications business as reasons for the poorperformance.

Sumas prices were subsiding Monday from their sky-high levelsgoing into the weekend, but the same severe cold front that hadgoosed Sumas as high as $25 Friday caused a moderate supply crisisin Northern California that pushed PG&E citygates up to $10 andMalin to $5. Most points in the overall market rose between anickel and 50 cents as an Arctic cold front was expected to leaveFlorida as about the only warm area left in the U.S. and Canada bytonight.

Natural gas is second only to the newly established electricitymarket in terms of volatility, and Tuesday it did little to dispelthat notion as the market dipped momentarily, only to spikedramatically higher in the last 90 minutes of trading, leaving eventhe most weathered of bulls surprised by the advance. Octobersettled at $2.132, a 17.8-cent gain for the day and nearly ahalf-dollar above the $1.63 low established less than two weeksago. Estimated volume confirmed the active trading with over120,000 contracts changing hands.

Given mild weather, bearish storage levels and the normal slumpin weekend demand, many traders were surprised Friday to see nearlyall Eastern points stay flat or go up as much as 3-4 cents. ThoughGulf Coast numbers were “falling hard” near deadline after startingseveral cents higher, a producer surmised they were being held upat first by “hurricane hype.” Other sources also mentioned that asthe reason for the relative Eastern strength, saying they couldthink of no other explanation.

Bulk power transactions in 1997 increased significantly over1996 levels, pointing to the continued emergence of a competitivewholesale power market, according to Metzler Services’ 1997operating data and statistics for the electric utility industry.

Due to excess supply levels threatening system integrity and aconstraint on storage injections, Sonat implemented an OperationalFlow Order Type 6 effective Saturday. The OFO carries tieredpenalties ranging up to $15/dth for shippers with positive dailyimbalances exceeding allocated volumes by 3% or 200 dekatherms. Forthe same reasons as above, Sonat began a production areapoint-specific OFO Type 5 for nine points on its 26-inch Main PassArea Line. A penalty of $15/dth is involved for affected shippersor poolers exceeding scheduled quantities by 4%. Finally, an OFOType 1 (force majeure notice) began Saturday in connection withSonat’s retirement of facilities at the Main Pass 127 platform,which involved shutting in the Main Pass 129 and Main Pass 129Redelivery points. The work, which originally had been scheduled tostart on Friday, was expected to last 24-48 hours.

Trading at the New York Mercantile Exchange returned to “morenormal” levels Monday following last weeks GasMart/Power tradeshow, a phenomenon one broker said was reflected in the 4.8 centgain (to $2.215) the June contract posted yesterday. “Cash marketprices were up a dime or so on the weather, and futures traderstook notice,” he said. However, he noted the strength was notenough to forge a settle above major resistance at $2.26, which ledhim to believe “the technical trading range remains.”

Following a tough first quarter in which earnings fell short of1Q97 levels by about $32 million, Sonat Inc. announced plans for amassive restructuring of its E&P properties, including the saleof 19% of its gas reserves, or 487 Bcf, and 24% of its production,or 200 MMcf/d.

Cash markets settled down for the weekend Friday with flat toslightly softer prices prevailing. Most of the declines of 2-4cents were concentrated in the Gulf Coast and Appalachia/Northeast.