Given the experience we had pulling back our West Gate sales this past weekend and the ongoing opportunity for pull back this summer, we should reaquaint ourselves with Enron Canada's Malin deals and shrinkage obligations with the Cochrane extraction plant now owned by Williams.

ECC has longterm Kingsgate sales to ENA of 87,500 mmbtu plus fuel.
Supply is from a producer pool at NIT of 67,500 mmbtu plus fuel  and at ABC of 20,000 mmbtu plus fuel (from Talisman for 10,000 mmbtu plus fuel and from Chevron for 10,000 mmbtu plus fuel on a NIT for ABC buy/sell).
ECC has a firm longterm commitment to supply the Cochrane plant with 59,000 mcf each day subject to exceptions for force majeure and allowable "Supplier Deficiency Default" days.  ECC is paid $0.005/mcf.  Any shrinkage above this level is interruptible.
In any rolling one-year period ECC is allowed 80 SDD days but has to pay a penalty for deficient volumes.  Penalty scale is as follows:
Days	Deficiency Penalty
0-30	$.0075/mcf
31-40	$.01/mcf
41-50	$.015/mcf
51-60	$.028/mcf
61-70	$.033/mcf
71-80	$.037/mcf
>80	Triggering Event (i.e. allows the contract to be terminated or renegotiated)

As of June1, 2001 there were zero SDD days used up.
Talisman and Chevron have shrinkage arrangement that have to be respected.  Their volumes are ranked first through the ABC meter ahead of ECC's.
 A Force Majeure event with proper notification does not constitute a SDD day.

Implications for Trading

Approximately 9,000 mmbtu can be safely pulled back from Kingsgate without incurring a SDD day.
Approximately 69,000 mmbtu can be pulled back from Kingsgate without pulling back Chevron/Talisman from ABC.
Pulling back Chevron and/or Talisman requires their prior consent and Eric Ledain must first be consulted.
Triggering Event absolutely must not be incurred unless specifically directed by Eric or above.

Stacey/Andrea: It is extremely important that and accurate and up to date SDD count is maintained in our ANG point balance and verified against the monthly statement from the plant that Accounting receives.  Myself, Peggy and Trading should be regularly made aware of what the count is especially at the begining of each month and when we approach a new penalty tier.

Any questions or clarifiacations let me know.

Kevin