1373835--4/2/2007--Spectra_Energy

related topics

{gas, price, oil}

{capital, credit, financial}

{investment, property, distribution}

{financial, litigation, operation}

{stock, price, share}

{operation, natural, condition}

{cost, regulation, environmental}

{cost, contract, operation}

{provision, law, control}

{operation, international, foreign}

{product, liability, claim}

{cost, operation, labor}

{loss, insurance, financial}

Reductions in demand for natural gas, or low levels in the market prices of commodities affects Spectra Energy s operations and cash flows. The lack of availability of natural gas resources may cause customers to contract with alternative suppliers, which could materially adversely affect Spectra Energy s sales, earnings, and cash flows. Investments and projects located in Canada expose Spectra Energy to fluctuations in currency rates that may adversely affect cash flows and results of operations. Natural gas gathering and processing operations are subject to commodity price risk which could result in economic losses in earnings and cash flows. Spectra Energy s business is subject to extensive regulation that affects operations and costs. Transmission and storage, distribution, and gathering and processing activities involve numerous risks that may result in accidents or otherwise affect operations. Spectra Energy is subject to numerous environmental laws and regulations, compliance with which requires significant capital expenditures, can increase cost of operations, and may affect or limit business plans, or expose Spectra Energy to environmental liabilities. Spectra Energy is involved in numerous legal proceedings, the outcome of which are uncertain, and resolution adverse to Spectra Energy could negatively affect cash flows, financial condition or results of operations. Spectra Energy relies on access to short-term money markets and longer-term capital markets to finance capital requirements and support liquidity needs, and access to those markets can be adversely affected, which could adversely affect cash flows or restrict businesses. Spectra Energy may be unable to secure long-term transportation agreements, which could expose transportation volumes and revenues to increased volatility. Native land claims have been asserted in British Columbia and Alberta which could affect future access to public lands, the success of which claims could have a significant adverse affect on Spectra Energy s natural gas production and processing. If Spectra Energy or its rated subsidiaries are unable to maintain an investment grade credit rating, liquidity may be adversely affected and the cost of borrowing may increase. Spectra Energy cannot be sure that Spectra Energy or its rated subsidiaries will obtain or maintain investment grade credit ratings. Protecting against potential terrorist activities requires significant capital expenditures and a successful terrorist attack could adversely affect Spectra Energy s business. Due to proposed or potential changes in Canadian tax laws, Spectra Energy may not be able to fully realize its goal of utilizing tax-efficient structures to improve its cost of capital, optimize returns on assets, and finance portfolio growth. Risks Relating to the Separation of Spectra Energy from Duke Energy Spectra Energy may be unable to achieve some or all of the benefits that it expects to achieve from the separation from Duke Energy. Spectra Energy may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as a separate, publicly-traded company, and Spectra Energy may experience increased costs as a result of the separation. Spectra Energy s agreements with Duke Energy may not reflect terms that would have resulted from arm s-length negotiations among unaffiliated third parties. Spectra Energy will be responsible for certain contingent and other corporate liabilities related to the natural gas transmission and storage, distribution, and gathering and processing businesses of Duke Energy. Spectra Energy s executive officers and some of its directors may have or may hold Duke Energy equity awards which may create, or may create the appearance of, conflicts of interest. Spectra Energy might not be able to engage in desirable strategic transactions and equity issuances following the distribution. Risks Relating to Spectra Energy s Common Stock Substantial sales of Spectra Energy s common stock may occur in connection with its spin-off from Duke Energy, which could cause its stock price to decline. Provisions in Spectra Energy s certificate of incorporation, by-laws and of Delaware law may prevent or delay an acquisition of the company, which could decrease the trading price of Spectra Energy common stock. Although Spectra Energy currently anticipates paying dividends, there cannot be any assurance that dividends will be paid in the future.

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1373835--4/2/2007--Spectra_Energy_Corp.