Problem: BODY: Below are my responses to your email: 1. Masters that limit weather trading or contain another trading limitation in the master only: per our conversation. 2. CMS Marketing Services & Trading: Trading is limited to fixed price swaps, basis swaps, swing swaps and options. This limitation is contained in the Company's Trading Policy, which they have provided to us. We cannot trade anything except the types of products listed in the trading policy. 3. Venezuela: per Mark's conv. w/Dave Forster, we do not want to pursue the due diligence on this country at this time. 4. Phibro, Inc.: see note #1 5. Swiss Re: See my note 11 below. 6. Tokyo Mitsubishi: We are preparing amendments that would be added to to the Online and regular confirmations when they go out to deal with the lack of legal terms in the master to do anything but interest rate and currency transactions. This should solve our problem so we should be able to open them for trading any commodity. 7. Trinidad & Tobago: same comment as #3 above. 8. UBS AG. They recently sold their book and got out of the energy commodity business so we should not be doing anything but FX and interest rate transactions with them. Their master is also trading limited, and we could not trade energy commodities with them without amending it or doing a fix similar to Tokyo Mitsubishi. 9. Aspect Resources. I discussed this one with Mark and Bill, and we have agreed to open up Aspect for all trading under the Master. 10. Brant-Allen: Their Board of Directors limited the trading we did with them to only the one trade we did under the master. We cannot do any other trading with them without specific pre-approval via a new resolution from their Board of Directors. So they are still "no" for online derivatives trading. 11. Insurance Companies: With respect to trading with insurance/reinsurance companies without a master in place, these types of counterparties have special authority/legal issues that the online trading process does not address. When we do trades with this type of counterparty without a master in place we get legal opinions, guarantees, articles of incorporation & bylaws and other kinds of statutory documentation to evidence the approval for this type of counterparties doing these types of transactions. All kinds of special representations are also added to the contract based on the type of counterparty. We therefore have to continue to say "no" to online trading based on these special handling procedures. 12. Cox and Perkins: We could say "yes" to online derivatives trading, however, would have to treat them like any other counterparty we did not have a master in place with. 13. Kinetic Resources. Ditto comment 12 above. 14. Midland Cogeneration. Still under review as to regulated utility status. 15. Praixair: see comment #1 above. 16. Tembec. The bylaws of this corporation require that all contracts for this counterparty must be executed by two officers from a list they provided to us . I spoke to Mark about this and they could not trade online unless their Password Application was signed by two of the officers as directed above. Another way to solve this would be to get a special resolution from Tembec's board of directors allowing only one individual to sign the Password Application. Either way, you cannot trade online without meeting these special signatory requirements. 17. EW Scripps. Same comment as #1 above. 18. Maritime Electric. Is a Canadian utility. No Trading. Critical Changes to my list: 1. Mexico: Per our conversation, we are contacting outside counsel to request legal advice as to whether online transactions are enforceable in Mexico. However, we can still not do financial trading without having a master in place. 2. Public Service Company of Colorado: the person that signed the master appears not to have the authority to sign the master, so until we get this resolved, we are switching them to a "no". Per my meeting today with Credit: I've got 38 we disagree on, either as to whether they're a regulated utility or an eligible swap participant. I'll be working on those tomorrow and will get back to you. My Review of Your List: List #1 1. BP Exploration & Oil Inc.: Originated from London Credit, missing from your list. This is a counterparty that both Houston & London trade with. ECT has a master in place with them. Trades would roll under the ECT Master. The master is the old ECT Form of master that limits the trading to energy price swaps and options. No weather. Case of Credit override.5 2. Elf Trading: Both ECT and ECT International have masters in place and trade with this counterparty. Mark was going to talk to Louise about what to do with these situations when we have more than one master in place. 3. Morgan Guaranty Trust Company of New York: We've got several overlapping issues I am going to have to talk to London about. First, here in the U.S. Morgan got out of the energy commodity business. We, in fact, "bought their book". We actually couldn't "buy their book" because of our low credit rating relative to Morgan, so all their trades remain in place, 'tho all payments go in and out through us and we act as servicer for their commodity business. Their master with ECT is bad, it only covers energy price swap (not options!) and does not have the trade option rep which means if we were to do an option transaction with them we would have to do a fix similar to the Tokyo Mitsubishi fix. Saying all that, I don't know what, if any, trading Morgan continues to do outside the U.S. I need to talk to London and find out. So Morgan right now is a big open issue. 4. Vitol S.A.: Both Houston and London trade with this counterparty. Houston has a master with this counterparty. Trades should be done under the master. The master does not cover weather, so this would be another case of the Credit override. 5. Missing counterparties from 1st list: (1) Wisconsin Electric Power Company, no master in place, not approved for trading, it is a utility, (2) Wisconsin Gas Company, no master in place, not approved for trading, it is a utility, (3) Wisconsin Power and Light Company, we do have a master in place, approved for all trading, except weather, which is not covered in the master, would have to be a Credit override, (4) Xeron, Inc., no master in place, approved for all trading. List #2 1. Cabot Oil & Gas: Missed "X" on final set of weather 2. Callon Petroleum: Missed "X" on final set of weather 3. EIL Petroleum: Missed "X" on final set of weather 4. Fortune Energy: Missed "X" on final set of weather 5. Plains Resources: Missed "X" on all weather 6. PXRE Corp: deleted final set of weather, good for weather deals only 7. St. Mary Land & Exploration: Missed "X" on final set of weather 8. Stratum Group: Missed "X" on final set of weather 9. Tempest Reinsurance: deleted final set of weather, good for weather deals only 10. Twister Gas: Missed "X" on final set of weather 11. United Salt: Missed "X" on final set of weather 12. West Texas Gas: Missed "X" on final set of weather List #3 1. Bargo Energy: Missed "X" on final set of weather 2. Belco Oil & Gas: Missed "X" on final set of weather 3. Cross Timbers: Missed "X" on all weather 4. Encore Acquisition: Missed "X" on final set of weather 5. Norfolk Southern: You've got them restricted for everything, I've got them as "OK" for everything 6. RMS Monte Christo: Missed "X" on final set of weather 7. Sapient Energy: Missed "X" on final set of weather
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A: SUBJECT: Response to your email

Problem: BODY: Good to see you guys on saturday morning. forgot to hit you up for money. those in attendance tomorrow night, please bring your 150 check. Pig, thanks for the scotch and lures. have a good week in dallas. e.
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A:
SUBJECT: KC $