We have received a letter dated 2/6/01from Chamberlain, Hrdlicka, counsel to 
Fletcher Challenge, with respect to the acquisition of Fletcher Challenge by 
Shell Overseas Holdings Limited, and Shell's proposed subsequent assignment 
of the Fletcher Challenge Canadian nat gas trades to Apache Corporation.  I 
am sending copies of this letter to Russell Diamond, Mary Cook, Greg Johnston 
& Joe Hunter.

 Russell, I need to know if we would agree to the assignment of the trades to 
Apache. 

Russell, Mary:   With respect to such assignment, we have an old ERMS ISDA 
Local Currency Master Agreement in place.  Do we want to continue to transact 
w/Apache under this master, or use this as leverage to get a revised ISDA 
master in place?  Among the issues I quickly spotted in the Apache master 
were:

1.  It's a Local Currency Form, so we cannot transact cross border/cross 
currency products under it
2.  We have a 3rd Party Cross Default to Enron Corp. of $25,000,000
3.  We've got market quotation instead of loss for terminations
4.  No arbitration language
5.  Hard to believe, but we've made no choice of law election (maybe I'm 
blind)
6.  Don't have trade option rep (which probably doesn't matter anymore)
7.  ISDA Defintions refer to 1987 Interest Rate & Currency Exchange 
Agreement-time to update
8.  Setoff language old and doesn't have affiliate language in it
9.  Market Disruption Events not standard
10.  Old "ERMS" Collateral Annex
11.  $10,000,000 Exposure Threshold-is this sufficient all this business?
12.  Credit Event Upon Merger triggers -0- threshold
13.  LC Only Annex - really old LC language/forms everywhere

Joe Hunter, I am going to send you down the letter which has what they 
believe to be all the Fletcher Challenge trades listed.  Do we agree?

As usual, they would appreciate a prompt response so they can get this 
assignment completed.  Thanks you all for your help!