Enron Mail

Subject:YPO IOS Request
Date:Wed, 29 Nov 2000 06:32:00 -0800 (PST)


I am a YPOer in the Rebel Chapter who was given your name from an IOS source
as someone who could potentially help in this situation. As background, I
sent this IOS request out last week:

Description of Situation
My highway construction company has been negatively impacted by price
volatility in energy prices (fuel, natural gas, and asphalt cement). We
offer long term, fixed price contracts to our clients yet must purchase our
petroleum and energy-related products at spot market prices. Thus we are
exposed to significant price adjustment risks.

Type of Feedback Requested:
Does anyone have experience using commodity contracts as an arbitrage
strategy to offset the risks of potential price volatility in the energy
sector? If so, do you have specific recommendations for how we should

Thank you for any information you can offer.

As I have investigated this further, I find no one in this industry (highway
construction) who is purchasing futures to mitigate their energy cost
exposure. I have spoken with folks who are doing this in the building supply
sector with lumber futures.

Do you have any thoughts or suggestions in this matter? Any input would be
greatly appreciated.

Many thanks,

Michael Mangum
Rebel Chapter

The Mangum Group, Inc.
PO Box 31768
Raleigh, NC 27622-1768

919.571.7605 Phone
919.510.6740 Fax
919.868.8179 Mobile
919.845.3497 Home