Gerald/Chip,

Could you tell me how to proceed on this deal.  This differs a bit from the deal that was originally discussed but seems to make sense.  Please disregard the second attachment at it relates to a modification of the Storage Agreement that has not been discussed (and one that we are not willing to make).  Also, the letter as drafted does not contemplate (but we will insist on) placement of the proceeds from the sale of gas associated with pre-petition amounts into escrow with some third party until some resolution is reached on those amounts.

By way of example, if Centana is owed $100k pre-petition, $150k post-petition and has $1,000,000 worth of gas in the ground, Centana would remit (i) $100k to an escrow agent for subsequent resolution and disposition and (ii) $750k to ENA ($900k offset by the $150k for post petition obligations).

The key issue is what level of approval is needed to do this.  A strong case could be made for Cash Committee only because no pre-petition amounts are being paid (and no resolution of those amounts is being reached).  Rather, we are just converting the commodity to cash when the market is higher than it has been over the past several weeks.

Another good reason for doing this is that after the cavern is empty, we can argue that we are not using it and therefore no more post-petition obligations continue to accrue following the consummation of the deal (while we decide to accept or reject).

Please advise at your earliest possible convenience.

Thanks

Stuart


-----Original Message-----
From: Parks, Joe 
Sent: Thursday, February 14, 2002 11:31 AM
To: Zisman, Stuart
Subject: FW: cipco storage obligations draft letter proposal


give them a once over

-----Original Message-----
From: Greg A. Swidensky [mailto:gaswidensky@duke-energy.com]
Sent: Thursday, February 14, 2002 11:15 AM
To: Parks, Joe
Subject: cipco storage obligations draft letter proposal


here you joe...let me know what your  comments are

(See attached file: StorageLeaseLettterAgree2-14-02.doc)


(See attached file: StorageLeaseRevisions-2.doc)