Stacy:
I spoke with John about this.  I think in the Master Physical language we 
need to do 2 things to the existing language:

1. Clarify that the exposure that is being subtracted from $50M is ENA's 
Exposure.  The defined term in the ISDA is "Exposure".

2. Clarify that Counterparty's threshold is zero if as a result of 
subtracting ENA's Exposure from $50M you get a negative number.

We will go ahead and draft the multi-product guaranty and copy you on the 
draft that we send out.

Carol


----- Forwarded by Carol St Clair/HOU/ECT on 06/19/2000 09:21 AM -----

	John Suttle
	06/19/2000 08:29 AM
		
		 To: Carol St Clair/HOU/ECT@ECT
		 cc: 
		 Subject: Re: Energen

Carol,  

Sorry for the confusion.

1) Yes - the guaranty should cover both contracts - $75MM to cover the 
aggregate $50MM threshold.
2)  I spoke with Jeff Hodge on whether or not this would work prior to 
sending worksheets to you guys.  The idea is that there is a $50MM aggregate 
threshold for the counterparty.  The ISDA will be a normal ISDA - with a 
$50MM threshold.  The Master Physical will be the document that needs to be 
customized to the new concept.  The Master Physical threshold language is to 
simply read that there is a $50MM threshold less any exposure under the ISDA 
collateral threshold.  I understood that Stacy or Jeff would adapt the Master 
Physical to address any legal language differences in the contracts  - i.e. 
"Exposure", "Termination Amounts" etc.   Your team needs only to provide the 
ISDA to Stacy Dickson's group, and I believe they will draft the Master 
Physical to their comfort level.  

Please call me to confirm whether or not you need anything else on this  - 
and whether or not you think it can go out today.  

Thanks,

John


   Carol St Clair                06/16/2000 05:13 PM

To: Brad Schneider/Corp/Enron@Enron, John Suttle/HOU/ECT@ECT
cc: Susan Bailey/HOU/ECT@ECT 
Subject: Energen

Brad and John:
We have not sent out the ISDA draft on energen because I need calrification 
on the following points:

1. Is the $75MM Guaranty cap meant to cover both physical and financial 
combined or are we doing separate Guarantys each with a $75MM cap amount?

2. How does the $50MM collateral threshold work?  I noticed in the physical 
master that it appears as if we subtract from the $50MM threshold our 
exposure under the ISDA to arrive at the Counterparty's threshold, although 
the language in the physical says "the exposure" and it is not clear whose 
exposure they are talking about.  Is that how it is suppposed to work?

Carol