FYI

-----Original Message-----
From: Saunders, James 
Sent: Wednesday, October 31, 2001 3:28 PM
To: Walden, Clint; Causey, Richard; Hayslett, Rod
Cc: 'roger.d.willard@us.andersen.com';
'heather.l.mueck@us.andersen.com'; Allen, Joe; Dimacali, Aurora
Subject: RE: FW: Third Quarter Review of Northern and Transwestern




-----Original Message-----
From: roger.d.willard@us.andersen.com
[mailto:roger.d.willard@us.andersen.com]
Sent: Wednesday, October 31, 2001 1:25 PM
To: Saunders, James
Cc: ;
christopher.j.herbold@us.andersen.com; gerrard.r.heep@us.andersen.com;
david.b.duncan@us.andersen.com; michael.c.odom@us.andersen.com;
michael.m.lowther@us.andersen.com
Subject: Re: FW: Third Quarter Review of Northern and Transwestern



Jim, thanks for the note.  Please forward this on to Clint Walden, Rick Causey and Rod Hayslett (and anyone else you think needs this information)

I have a couple of comments on the conditions below that were discussed on the phone but were not included in the list below.  We would expect a
representation from the Board as well as outside legal counsel on point #4 below.  Also, I assume this review is a condition precedent in the debt
documents.  Enron should be aware that there may be issues that arise that do not allow us to complete our work in the timetable necessary and should
consider whether wording the loan documents relating to this cp should be modified to describe the review as something that is a condition precendent
"if it is professionally able to be completed."   Also, all of these conditions assume there are no financial obligations from the entities in
the reviews from or to Enron corp.  If so, those contractual relationships will need to be evaluted to determine if "overhang" issues combined with
the financial obligations might preclude us from completing our review.   This is a high priority item.  I would ask that the company assist us in
immediately identifying and evaluating those financial obligations, if any,  to determine if significant issues exist.  We can get started now on that.
Please call Heather Mueck and Chris Herbold.  I would like to get that identification work completed by end of business tomorrow.  Heather and
Gerrad will be leading the review work and Chris will be assisting also.

Overall debt questions.  We need to understand terms, conditions and debt documents.  Who has these? We are ready to start reviewing today.

Financial statements and review work. What periods are going to be included in the documents? The comment below says quarterly.  Which quarters?
Year-to-date? Comparison to prior years? We would expect a full set of financial statements with footnotes for all periods presented (balance
sheets, income statements and cash flows?   Who is drafting the footnote that describes the overhang issues? This is a high priority item that will
get much review and scrutiny. l would like to get the Company's signed off footnote disclosure on the "overhang" issues tomorrow.  Also, we will need
immediate access to the financials and your people to answer questions. When can we get the financials that will be included in the deal.  I assume
Enron personnel will be available to answer questions 24/7 beginning today to complete this work in the necessary timeframe?

I know these are many questions.  More to come I am sure.  But I also want to get started and focused on time consuming issues.  We will be
determining our expanded scope procedures that are referred to below. 

To:   Roger D. Willard@ANDERSEN WO
cc:   Heather L. Mueck@ANDERSEN WO
Date: 10/31/2001 10:47 AM
From: James.Saunders@enron.com
Subject:  FW: Third Quarter Review of Northern and Transwestern


fyi

we have provided draft third quarter nng and tw financials to gary peng
and clint walden at ene


>  -----Original Message-----
> From:   Hayslett, Rod
> Sent:   Wednesday, October 31, 2001 10:35 AM
> To:     Saunders, James
> Cc:     Walden, Clint
> Subject:     FW: Third Quarter Review of Northern and Transwestern
>
>     Can you please get with Roger and make sure we understand what
> needs to be done?
>
>  -----Original Message-----
> From:   Causey, Richard
> Sent:   Wednesday, October 31, 2001 8:45 AM
> To:     Hayslett, Rod
> Subject:     FW: Third Quarter Review of Northern and Transwestern
>
> Just in case you have not seen this.  Thanks for your help and let me
> know of any issues.  Thanks again
>
>  -----Original Message-----
> From:   Walden, Clint
> Sent:   Wednesday, October 31, 2001 3:56 AM
> To:     Butts, Bob; Peng, Gary
> Cc:     Causey, Richard
> Subject:     Third Quarter Review of Northern and Transwestern
>
>
> FYI,
>
> Andersen has agreed that they will be able to issue review reports on
> the pipelines based on the following terms:
>
> 1.  The review opinions must be restricted to the lenders only.
> 2.  There must be a substantial footnote on the "overhang" issues
> (i.e., SEC investigation, potential bankruptcy, asset carryvalues in
> certain situations, etc.)
> 3.  The review opinion will contain an emphasis of matter paragraph
> related to the above footnote.
> 4.  ENE management rep and O/S legal must rep that nothing they are
> working on (related to investigation) affects the pipelines or its
> management.
> 5.  Pipelines must represent that it is not involved in any of the
> matters under investigation.
>
> In addition to the above, AA  believes that they must expand their
> review work in order to satisfy themselves related to the issues and
> reps required above.
>
> In connection with all of this, the banks need these reviews completed
> by the closing date which is currently expected to be November 9.
>
>
>
> I believe that the following are our immediate to do's in order to get
> Andersen started:
>
> 1.  Ene to provide full quarterly statements of Northern and
> Transwestern to Andersen ASAP.
> 2.  Discuss w/ Willard/Duncan the level of detail/analysis that they
> will need to perform review.
> 3.  Provide necessary PBC schedules, etc.
> 4.  Draft the footnote discussed in 2. above and get approved by Rick
> and Legal
> 5.  Get Andersen to draft the language they would like to see in rep
> letters.  Get approved by Rick/ Legal.
>
>
>
> As to each of the above to do's,
>
> Gary  - can you contact the pipeline group as soon as you get in this
> morning and see if the financial statements for the 3Q have already
> been put together.  If they have not, we need to get them produced
> ASAP.  They have already been put on notice that these statements will
> be a priority.  Also, lets see what type of support they typically
> provide to AA for their quarterly financial reveiws.   I assume the
> scopes will now be much lower since the reviews are on stand alone
> pipes instead of ENE Consol.
>
> Bob - can you call Saunders and fill him in?  Once I get in I want to
> talk to Duncan and Willard about #2, #4 and #5 above. You are welcome
> to be a part of those discussions.  Also we should discuss what we
> believe the appropriate scopes to be.
>
> Rick - Any thoughts on the above Andersen requirements?  Other
> thoughts?
>
> If I have missed any critical steps that you can think of, please let
> me know.
>
> It is now 4:00 a.m.  I plan to be in by around 10:00 a.m.  If you need
> me for any reason call me at home (832-593-8065).  Thanks.
>
>


**********************************************************************
This e-mail is the property of Enron Corp. and/or its relevant affiliate
and may contain confidential and privileged material for the sole use of
the intended recipient (s). Any review, use, distribution or disclosure by
others is strictly prohibited. If you are not the intended recipient (or
authorized to receive for the recipient), please contact the sender or
reply to Enron Corp. at enron.messaging.administration@enron.com and delete
all copies of the message. This e-mail (and any attachments hereto) are not
intended to be an offer (or an acceptance) and do not create or evidence a
binding and enforceable contract between Enron Corp. (or any of its
affiliates) and the intended recipient or any other party, and may not be
relied on by anyone as the basis of a contract by estoppel or otherwise.
Thank you.
**********************************************************************







*******************Internet Email Confidentiality Footer*******************


Privileged/Confidential Information may be contained in this message.  If
you are not the addressee indicated in this message (or responsible for
delivery of the message to such person), you may not copy or deliver this
message to anyone. In such case, you should destroy this message and kindly
notify the sender by reply email. Please advise immediately if you or your
employer do not consent to Internet email for messages of this kind.
Opinions, conclusions and other information in this message that do not
relate to the official business of my firm shall be understood as neither
given nor endorsed by it.