Confidential Work Material - Attorney Client Privilege Attached for review is a draft of the letter to be sent to Wildhorse concerning the Gathering Agreement under which the Entrada and Dakota production is committed. Please review and provide comments. To summarize activities to date concerning this Gathering Agreement: 1. Conducted a conference call with Brett Frie on Wednesday. Brett also forwarded some correspondence between Enogex and Wildhorse. The correspondence contained a summary of meeting minutes for two meetings conducted between Enogex and Wildhorse. No demands were made by Enogex and no claims of unprofitability were made by Wildhorse. Brett stated that the Entrada and to some extent the Dakota gas were shut in or curtailed because the downstream carriers starting enforcing their tighter gas specifications. Enogex took Wildhorse's word for that and never checked with Northwest or Questar. I asked Brett why he thought Wildhorse would straight away release the gas. He responded that he thought they would do so only if Crescendo negotiated an alternative arrangement with Wildhorse. 2. I received more correspondence on Friday from Ken Krisa. Nothing really useful. There was a letter from Wildhorse to another producer in the area called Lone Mountain Production Company which stated that Wildhorse thought these assets were in a state of economic viability decline. Unfortunately this letter was not directed to Enogex. However, the draft letter takes that position with Wildhorse. 3. I am securing local consul out of Denver. I want someone intimately familiar with Utah and Colorado law from a litigation and timing perspective to be involved. We may need to seek a declaratory order. We have run into to conflicts with law firm that have represented either KN or Tom Brown. Should have this resolved on Monday. 4. Agreed to language on Friday with Ken Krisa and Jim Osborne and the declaration by Crescendo giving power to ENA to negotiate with Wildhorse. This draft does state our desire to pursue a release of the gas. However, to reiterate, based on the current facts we do not have a black and white right to deem this gas as released under the Gathering Agreement. The fact that the Entrada Gas is not in spec. with the downstream pipelines for inerts, allows Wildhorse to suspend their receipt of this gas without being in default.
Answer: Wildhorse Letter
The technical difficulties with the SAP Security email box have been resolved. You may once again follow the normal submission process as noted in the instructions for the SAP Security Request Form and the IBuyit eProcurement Request Form. If you submitted a request for security during the week of July 16-20 and have NOT received a notification of it's receipt, please resubmit the form. We can not be certain that all mail directed to the box during this period was actually received. We apologize for any inconvenience that this may have caused you.
Answer: SAP Security Mailbox functional again
We have received a notice dated 7/10/00 from Merrill Lynch International Bank that it intends to transfer their FX business to Merrill Lynch International Bank Ltd., a United Kingdom incorporated bank regulated by the SFA, effective as of the fourth quarter of 2000. We do have an ISDA Master Agreement in place with Merrill Lynch International Bank. I am sending a copy of the notice to Gary Hickerson & Tanya Rohauer (I am also sending Tanya the financials of the new entity). We will await Credit's instructions as to how they would like to proceed after reviewing the documentation.
Answer: Transfer of Merrill Lynch International Bank FX Business
With respect to future Enron guarantees, there are at least three issues to be addressed in addition to the pervasive objective of transitioning out of the parent guarantee: 1. Excluding the value of major equipment from the guarantee. I believe this is already being done for new bids. 2. Carving out at least part of the guarantee as within Enron's/Nepco's discretion to establish performance or other bonding instruments. 3. Negotiating transferability of the guarantee, i.e. the guarantee can be assumed by another credit-worthy entity with at least investment grade or, if necessary, at least a rating equal to Enron's at the time of assumption. Since the substantive financial protection afforded by an Enron parent guarantee to the contract value would not be compromised if these are implemented, Enron's corporate position is very likely to push very hard on these points. Logically, owners and project lenders should be willing to accept these structures--even though there undoubtedly would be strong initial pushback. On the other hand, there may be a real question whether to accept contracts that do not provide for these relatively small steps away from the traditional hell or high water parent guarantee that Enron has approved in the past. Discussion of these issues should be included in the DASH. In any event, each new contract requiring an Enron guarantee will have to be approved by Rick Buy personally.
Answer:
Enron parent guarantees