Subject: "Letters of Credit; Preference; Swap Transactions".

Body: Julia sent me a copy of your memo following up on one of the questions asked at the session earlier this week. I would like to ask a follow-up question: Do we lose the benefit of the special treatment under the bankruptcy code when we enter into cross-product (i.e. physical and financial products) netting and joint credit support arrangements. If we agree with a counterparty to net all of our trading exposures under multiple agreements (swap agreements and gas, power, steel, coal, etc. trading agreements) to determine how much credit support should be posted and then only ask for a single LC that supports the whole shebang, do we lose this protection since arguably we are no longer just "under a swap agreement?"

Subject: "Pompano".

Body: In light of Kay's comments of last evening and our conference call of this afternoon, a revised version of the response to DEP's notice of change is enclosed. Please let me have your comments ASAP, as it is important that we file this response today if at all possible. Thanks!

Subject: "Site Lease and PSA form".

Body: Terry, Attached is a PSA form we have used before with the perspective of Enron as buyer. Probably a little more detailed than we need for this one since the facilities are only estimated at $200,000. Kennedy Oil is Seller and Enron Midstream Services, L.L.C. is Buyer. Some further detail on the site lease agreement: CounterParty is Black Hills Trucking, Inc Initial 1 year term, then month to month up to 2 years total Fee $800/month Black Hill will provide phone and electricity service hookup and Enron to reimburse Enron will directly pay phone and electricity bills Area is approximately 250 ft. X 400 ft. and is fenced off separately Include is existing 40 ft. X 40 ft. building on site. Enron reserve right to install any other building reasonably necessary for site to function as an equipment laydown yard Enron reserve right to install septic system for bathroom in buildings used by Enron Enron needs access at all times through Black Hills front gate to get to site. Enron will remove all equipment and buildings (except existing) upon termination.

Subject: "Services agreement".

Body:
Heather, This is a rough cut of a services agreement. Since the loan agreement, services agreement and LLC agreement are all pieces of the same puzzle, I thought I would send it your way. Kay