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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: June 5, 1997
Commission File Number 1-3423
ENRON CORP.
(Exact name of registrant as specified in its charter)
Delaware 47-0255140
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
Enron Building
1400 Smith Street
Houston, Texas 77002
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(Address of principal executive (Zip Code)
Offices)
(713) 853-6161
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
On June 2, 1997, Enron Corp. ("Enron") announced the settlement of all
contractual issues involving the J-Block contract in the U.K. North Sea with the
J-Block producers, Phillips Petroleum Company United Kingdom Limited, BG
Exploration & Production Limited and Agip (U.K.) Limited. As previously
reported, the J-Block contracts are long-term gas contracts that an Enron
subsidiary entered into in March 1993 with the J-Block producers. As a
consideration for the settlement, Enron made a cash payment of $440 million to
the producers. Enron will record a second quarter non-recurring charge to income
of $450 million after tax ($675 million pretax), or approximately $1.80 per
common share, primarily reflecting the full accounting for the effects of the
amended contract under current market conditions.
Under the terms of the settlement agreement, the former take-or-pay
depletion contract was amended to become a firm long-term supply contract, and
the fixed contract price for J-Block gas has been reduced to reflect current
market conditions for long-term gas sales contracts in the U.K. gas market. The
settlement concludes all J-Block litigation between Enron and the J-Block
producers.
In a separate matter, on June 3, 1997, Enron announced that the London
Commercial Court had ruled in favor of the "CATS" parties in their dispute over
the availability of the CATS (Central Area Transmission System) transportation
facilities. As previously reported, the CATS parties sued Teesside Gas
Transportation Limited (TGTL), an Enron subsidiary, and Enron (on the basis of
its guaranty of TGTL's obligations under the transportation agreement between
TGTL and the CATS parties) for allegedly failing to make quarterly "send-or-pay"
payments under the transportation agreement. TGTL had refused to make these
payments based upon its position that the transportation facilities were not
available as required by the contract. The effect of the Court's decision is
that TGTL is required to release withheld send-or-pay payments to the CATS
parties in the amount of approximately 81 million Pounds Sterling, plus
interest and costs. This judgment has no effect on the above referenced J-Block
gas sales agreements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENRON CORP.
Date: June 5, 1997 By: /s/ Edmund P. Segner, III
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Edmund P. Segner, III
Executive Vice President and Chief
of Staff
