Remarkable

Enron Corp.’s $25 million settlement of a lawsuit filed against one-time rival and 15-minute merger partner Dynegy Inc. was approved in New York City late Thursday by the bankruptcy court overseeing Enron’s massive case. The resolution will free up more than $62 million for Enron, which had been held in escrow since late last year.

Although many might want Enron Corp.’s once remarkable trading platform to resume as soon as possible, several factors may delay a quick start-up of the proposed UBS AG-Enron wholesale trading arm. The two companies may have come to terms in a 10-year deal, but the transaction faces the scrutiny and ultimate decision of the bankruptcy court handling Enron’s case and several federal authorities. It also faces the blessing of creditors, who would have 10 days following a court’s decision to appeal.

Although many might want Enron Corp.’s once remarkable trading platform to resume as soon as possible, several factors may delay a quick start-up of the proposed UBS AG-Enron wholesale trading arm. The two companies may have come to terms in a 10-year deal, but the transaction faces the scrutiny and ultimate approval of the bankruptcy court handling Enron’s case and several federal authorities. It also faces the blessing of creditors, who could appeal any decision, and because of the legalities involved and the witch hunt going on in Washington, many analysts remain tight-lipped about the deal.

Nearly all of the U.S. independents posted remarkable earnings in second quarter earnings announcements last week, boosted by high commodity prices and increased production — especially in the natural gas sector. Anadarko Petroleum Corp. and Apache Corp., both headquartered in Houston, got a boost in production and earnings from strategic acquisitions, while Barrett Resources Corp., XTO Corp. and Mitchell Energy & Development Corp. relied on their own U.S.-based production reserves.

The early May aftermarket is shaping up as typical of itspredecessors in the new millennium: showing remarkable strengthdespite a general lack of fundamental support. Only in the West,where a combination of hot weather and nuclear outages sent powerprices spiking, did sources see anything besides a sharp rise onthe futures screen to account for Monday’s cash upticks.

Following Thursday’s remarkable 27-cent spike, natural gasprices eased Friday at the New York Mercantile Exchange as tradersrolled out of near-month October contracts in favor of wintermonths. While the October contract finished down 6.7 cents, theloss was much less severe for November, which closed down 1.5cents. December and January 2000 contracts resisted the downturnaltogether, notching gains of 4 cents and 2.2 cents respectively.

Except for some western upticks, the cash market bore remarkableresemblance to a pancake Wednesday. Flatness remained the order ofthe day at nearly every trading point. And much as on Tuesday, thelittle bit of price movement that did occur in the East wasgenerally a little lower.

Fueled by what one veteran trader called one of the mostdramatic price moves in the history of the natural gas market,futures prices rallied Monday as the prompt January contractsettled up 12.3 cents to $2.101. But that daily change paled incomparison to the enormous advances seen in the cash market wheredaily gains registered more than a half-dollar for many pipes.Forecasts calling for cooler temperatures for most of the countryand undervalued cash prices were reasons for the market strength,sources agreed.

Basis relationships have tightened by a remarkable degree inMarch, and Thursday’s continuing price strength in the West coupledwith drops of a nickel or so at points in the Gulf Coast,Midcontinent and Appalachia/Northeast brought the regions evencloser.