Brent -

Per our conversation earlier, attached are the documents forwarded by 
Jeffries & Co. for the Tri-Union bond offering.  To recap:

1.  Tri-Union is a small independent E&P that is currently in bankruptcy.  
The company is being run by the courts at the present.

2.  Tri-Union has hired Jeffries & Co. as investment bankers to help float a 
$160 MM high-yield bond offering.  The offering, if successful, would bring 
Tri-Union out of bankruptcy, with about $30 MM in additional cash to use for 
capital expenditures and working capital.

3.  As part of the high-yield bond offering, Tri-Union needs to execute a 
two-year swap agreement to hedge production, and that is where Enron comes 
into the picture.


Tri-Union is (obviously) a horrible credit, and so we would need to take a 
security interest in their reserves/producing properties in order to execute 
the hedge.  They have proposed the execution of a document that would make us 
the most senior creditors in the event of default.  I have attached the 
current form of this document, as I received it from Jeffries & Co. this 
afternoon (IMPORTANT NOTE:  Brent, the attached document is a new version 
that I received after our meeting this afternoon, and I assume that it 
differs from the hard copy that I brought to you earlier today).  

Can you please take a look at this and advise me on how we can proceed with 
this?  As I understand from our conversation, this issue will probably 
require the assistance of outside counsel, with the pursuant expense.  The 
originator on this deal is Fred Lagrasta, so please contact him (ext. 36529) 
to discuss how this expense will be handled.

Thanks for your help; please contact me if you have any questions.



Jay