This is the content of an email: Rick 1 Limits. Here's how I interpreted the BOD approvals: The BOD approved an aggregate of $150MM, with $50MM of discretionary VaR, plus the new policy which doesn't recognise the concept of discretionary VaR. So here's what I did: Effectively I allocated all the $50MM of discretionary such that Pug's "Big Buckets" are now as follows: US Gas $100MM US Elec $100MM Europe Gas & Elec $35MM Global Products $20MM Financials $15MM Emerging Businesses $20MM If you have a calculator handy you'll see that this aggregates to $149.164MM (assuming zero correlation). At Business Unit level the individual commodity limits are unchanged, and I have put limits over the Business Units themselves as follows: Enron Americas $82MM EWS OOC (aka George Martingale) $3MM EEL $34MM EGM $23MM EIM $8MM EBS $4MM PGE $4MM ETS $1MM Again I used root-sum-of-squares, and remember the original commodity limits (by VaR, net open and mat gap) are still in place (e.g. gas = $61MM as before). So that keeps it screwed down pretty tight and preserves the discretion between the "Big Buckets" and the Business Units. I spoke to Rebecca C who could only remember the decision outlined above, but offered to call Pug and let him know. I said I would come back on that. I think we should do that ourselves, possibly with Lay in the loop (?). Cleared it with Whalley today (he laughed), mentioned the dwindling membership of the Risk Management Committee and said "In my current role I think I should be asking for limits, not approving them" ...and then... 2 The gas desk lost $98MM yesterday A combination of a very bullish AGA number (3 Bcf injection - not a typo - three Bcf !) plus some hurricane activity in the gulf sent prices up by between 25 and 30c all across the strip. The long and the short of it was we are long Nov - Jan but short (big-time) out beyond that - the rest is arithmetic. So we have two flavors of P&L notification, one at the business unit level (Americas) $89MM loss against VaR limit of $82MM; the other as a commodity, losing $126MM (the desk aren't the only ones with a gas position, as usual) against the Big Bucket number of $100MM. Total trading was a loss of $106MM against a VaR limit of $150MM so no calls to Pug required (thank goodness). That's it for now, hope you're having fun and remember: pan-fry the big ones and throw back the little ones. DP

Subject: Policy and other items

This is the content of an email: Moses, Jesus and an old man are golfing. Moses steps up to the tee and hits the ball. It goes sailing over the fairway and lands in a water trap. Moses walks down, parts the water and chips the ball onto the green. Jesus steps up to the tee and hits the ball. It goes sailing over the fairway and lands in the water trap. Jesus just walks on the water and chips the ball onto the green. The old man steps up to the tee and hits the ball. It goes sailing over the fairway and heads for the water trap. But just before it falls into the water, a fish jumps up and grabs the ball in its mouth. As the fish is falling back down into the water, an eagle swoops down and grabs the fish in its claws. The eagle flies over the green, where a lightning bolt shoots from the sky and barely misses it. Startled, the eagle drops the fish. When the fish hits the ground, the ball pops out of its mouth and rolls into the hole for a hole-in-one. Jesus turns to the old man and says, "Dad, if you don't stop fooling around, we won't bring you next time."

Subject: Golfing with Jesus

This is the content of an email: We sold the National Fuel back to the Canadian desk for June at NX1 + $.235. The volume is 9189 per day, deal ticket 782980. Kimat, please forward to the Canadian Book Admin.

Subject: National Fuel for June

This is the content of an email: Attached for review is a redline of the latest revisions to Schedules to the Purchase and Sale Agreement. Also attached are various supplements to the schedules. The only items not included are the Capital Account Balances - Schedule 3.1(g) and the Financial Statements - Schedule 3.1(i). Karry Kendall will be forwarding those shortly this evening. Also attached is Exhibit A-2. This is an item description of the equipment included in the EMS gathering systems. I also forwarded Exhibit D - Specified Geographical Area and Exhibit A-1 - Map of the EMS Gathering System earlier today via FEDEX. You should have those tomorrow morning.
Subject: 20/20 Schedules