ENA BA&R is currently in the process of preparing the 12/31/99 financial 
statements to be filed with the NYMEX by July 21st in order to keep our 
trading seat.  These financial statements reflect all of the North America 
trading operations.  ECTEG1 is ENA's legal rollup within Hyperion and should 
reflect all of the North American trading (i.e., price risk management) 
activity.  Therefore, Consolidated Reporting, with the assistance of Trading 
Accounting and Tax, prepared the financial statements with ECTEG1 activity.  
These financial statements are complete and ready for BA&R management review 
and reflect $722MM in earnings.

However, as of 6/29, we were notified by the Tax department that three 
companies were included in ECTEG1 as of 12/31/99 that were no longer legal 
owned by ENA.  In addition, there was one company that became ENA owned 
during 1999.  The companies are as follows:

Improperly Included:
ECM Treasury Consolidated  (Company 969)
ECT Retail Services    (Company 1Q6)
ECT Power Marketing, Inc. - Retail  (Company 890)

Improperly Excluded:
Enron Gas Liquids, Inc.    (Company 104)

I have corresponded with Tana Jones from the Legal department, Johnson Leo in 
Corporate Reporting, and Julie Gartner from the Tax department to determine if
the financial statements that we prepared reflected accurate and complete 
North America trading activity.  These discussions confirmed that the 
Hyperion legal 
structure was not accurately reflecting ENA's actual legal ownership.  In 
addition, the three companies have $192MM in trading activity income that 
would be
removed from the bottom line.  This activity should probably be reported to 
the NYMEX (regardless of legal structure) as it represents price risk 
management
activity.

The primary issue is accuracy of the financial statements.  We are prepared 
to have to restate the compiled financials as soon as we are notified where
we can retrieve accurate ledger information.  The other main issue is 
timing.  We need to file these financial statements no later than July 21st.  
Before that can
happen they need to be reviewed by several levels of management in several 
departments.

The Legal department is currently reviewing the NYMEX requirements in order 
to determine the proper activity to report.  As soon as that is determined, 
we can
proceed with data retrieval.

Please contact me if have any questions, concerns or comments.

DT