---------------------- Forwarded by Sanjeev Khanna/NA/Enron on 02/06/2001 
03:58 PM ---------------------------


Brian Otis
02/06/2001 02:40 PM
To: Sanjeev Khanna/NA/Enron@Enron
cc:  

Subject: CIBC Swap Volumes

Sanjeev;

Currently KCS Energy has a five year swap with CIBC that is currently 
out-of-the-money by approximately $25.0MM.  What we are considering is to 
require KCS to use part of the proceeds that we advance through a VPP to pay 
off this position.   However, based on the assumption of a declining price 
market, we would like to give them the ability to recoup a portion of the 
$25.0MM paid to CIBC through either Put Swaptions or Puts that are $0.30 to 
$0.60 out-of-the-money.

Attached is a spread sheet that has the volumes that KCS currently has swaps 
on with CIBC.  Could you please provide pricing for the following scenarios:


1) Put Swaptions:   at-the-money; $0.30 out-of-the-money; and $0.60 
out-of-the-money for the following terms begining in July 1, 2001.


a) 9/2001 through 8/2001
b) 9/2002 through 8/2002
c) 9/2003 through 8/2003
d) 9/2004 through 8/2004
e) 9/2005 through 8/2005


2) Puts; at-the-money; $0.30 out-of-the-money; and $0.60 out-of-the-money for 
the following terms beginning April 1, 2001

a) 4/2001 through 8/2005



If you have any questions, give a call.  Thanks.

Brian Otis
x39082