Summary
ONEOK Inc. (OKE) filed an 8-K on December 3, 2001, addressing its exposure to Enron. The company announced that its net exposure to Enron, calculated using NYMEX futures prices as of November 29, 2001, is less than $40 million pre-tax. This figure primarily relates to financial exposure from storage management and natural gas production, estimated at approximately $36 million, with direct physical commodity exposure being significantly lower, less than $4 million, should Enron fail to meet its obligations. The company is actively seeking to mitigate this exposure. Importantly, ONEOK reported that there are no amounts currently past due from Enron. The total exposure is expected to decrease substantially to less than $2 million pre-tax after January 4, 2002, assuming Enron fulfills its current obligations. Investors should note that while the exposure is being managed, the situation warrants continued monitoring given Enron's ongoing financial difficulties.
Key Highlights
- 1ONEOK's net exposure to Enron is less than $40 million pre-tax based on November 29, 2001, NYMEX futures prices.
- 2The majority of the exposure, approximately $36 million, is financial exposure related to storage management and natural gas production.
- 3Net delivered physical commodity exposure is estimated to be less than $4 million if Enron fails to perform its obligations.
- 4ONEOK is actively pursuing strategies to mitigate its exposure to Enron.
- 5No amounts are currently past due from Enron as of the filing date.
- 6Total exposure is projected to drop to less than $2 million pre-tax after January 4, 2002, assuming Enron's performance.
- 7This filing was made in response to potential concerns stemming from Enron's financial situation.