Press Release

ENRON CORP. REPORTS INCREASED EARNINGS RESULTS FOR THE FIRST QUARTER OF 1999

HOUSTON - Enron Corp. announced today that 1999 first quarter net income increased 18 percent to $253 million compared to $214 million in the first quarter of 1998. Enron also reported earnings per diluted share of $0.68 for the most recent quarter compared to $0.65 a year ago. These results exclude the cumulative effect of accounting changes recorded during the first quarter of 1999.

“Our first quarter results reflect the continued strength of our worldwide energy businesses. Each region of our wholesale business continued to grow during the quarter in terms of both volumes of energy delivered and profitability. Also, during the quarter, Enron Energy Services added $1.7 billion of retail contracts, including several large, multi-location energy outsourcing agreements,” said Kenneth L. Lay, Enron chairman and chief executive officer. “We expect 1999 to be another excellent year at Enron for both earnings growth and return to our shareholders.”

Enron’s energy businesses include Wholesale Energy Operations and Services, Transportation and Distribution, Exploration and Production and Retail Energy Services.

Wholesale Energy Operations and Services: Enron’s wholesale group includes two primary activities: Commodity Sales and Services (the marketing of energy commodities and services and the management of the related contract portfolios) and Energy Assets and Investing (the development, construction and operation of energy assets and Enron’s finance and investing activities).

Income before interest, minority interests and taxes (IBIT) in the wholesale business increased 29 percent in the first quarter of 1999 to $320 million compared to $249 million in the first quarter of 1998.

Earnings in the Commodity Sales and Services business increased 74 percent to $224 million in the first quarter of 1999 from $129 million in the first quarter of 1998, as Enron continued to increase profitability and volumes from its natural gas and power marketing businesses in North America and Europe. In the first quarter of 1999, physical deliveries of energy commodities increased over 30 percent to 29.3 trillion British thermal units per day compared to the same period last year. These volumes included a 31 percent increase in natural gas deliveries and a 16 percent increase in electricity marketed. During the quarter, Enron’s new wholesale businesses which offer innovative coal, emission, weather and paper-related services also contributed to earnings. Additionally, Enron’s large commodity portfolio allowed the wholesale business to benefit from favorable changes in energy and credit markets worldwide.

Enron’s Energy Assets and Investments business generated $136 million of IBIT during the first quarter of 1999. The earnings are primarily attributable to strong results from the international wholesale business, including earnings from a growing operating asset base, project development and construction activities and, to a lesser extent, merchant asset sales.

Transportation and Distribution: This group, which includes both the Gas Pipeline Group and Portland General Electric, generated $218 million of IBIT in the first quarter of 1999 compared to $205 million in last year’s first quarter. In the Gas Pipeline Group, total throughput increased due largely to the high utilization of the 700 million cubic feet per day (MMcf/d) expansion of Northern Border Pipeline Company placed into service in late 1998. The quarterly earnings for Portland General reflect strong operating results related to continued growth in its retail customer base, reduced operating expenses and favorable hydroelectric conditions.

Exploration and Production: Exploration and Production includes the operations of Enron Oil & Gas Company (EOG) and Enron’s hedging of its exposure to commodity prices related to its majority ownership of EOG. In the first quarter of 1999, Exploration and Production generated $12 million of IBIT compared with $43 million in the first quarter of 1998. These results reflect strong operating results, including an 11% increase in total production. During the quarter, Enron’s commodity price hedges contributed $23 million to IBIT.

Retail Energy Services: Enron’s retail business, Enron Energy Services, provides energy outsource products to commercial and industrial end-use customers throughout the U.S. Since inception, this new business has experienced substantial contracting success, has developed nationwide service capabilities and is uniquely positioned to capitalize on the large market for energy management and outsourcing.

In the first quarter of 1999, Enron Energy Services continued to contract with customers to provide natural gas, electricity and energy management and outsource services, and added $1.7 billion of customers’ future energy expenditures to its contract portfolio.

Enron Energy Services reported a loss before interest and taxes of $31 million in the first quarter of 1999 compared to a loss of $27 million in the first quarter of 1998, or an after-tax loss of $(0.06) per diluted share in each quarter. These losses primarily reflect costs associated with building this new business.

As previously discussed in its financial reports, Enron adopted new required accounting standards in the first quarter of 1999 which primarily require that costs for start-up activities, including certain project development costs, be expensed as incurred and not capitalized. The adoption resulted in a $131 million after-tax charge, or $0.35 per diluted share.

This press release includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although Enron believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those in the forward looking statements herein include political developments in foreign countries, the ability to penetrate new retail natural gas and electricity markets in the United States and Europe, the timing and extent of changes in commodity prices for crude oil, natural gas, electricity and interest rates, the extent of EOG's success in acquiring oil and gas properties and in discovering, developing, producing and marketing reserves, the timing and success of Enron's efforts to develop international power, pipeline and other infrastructure projects and conditions of the capital markets and equity markets during the periods covered by the forward looking statements.

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Please see attached tables for additional financial information.

For additional information please contact:

Mark A. Palmer

(713) 853-4738