Susan: please update the Master Demand Log with the information below.  Let's make sure we DO NOT send a termination letter on Friday.  We need to attempt to resolve this payment question first.

Sara: we'll discuss this in the morning.

Thanks

Talked to Bill O'Brien today.  He contends that Select made required payments, with the exception of some holdbacks which were clearly documented and provided to Enron.  Select wants to perform under the contract until that time we can mutually negotiate an early termination.  He is faxing 26 pages of information which supports Select's previous payments.

Bill requests that Enron:
q	Provide current written payment instructions
q	If we cannot resolve the payment dispute tomorrow (demand letter deadline), rescind the demand letter w/ rights to reopen after analysis is complete
q	Have Enron's attorney contact Select's attorney (see fax cover sheet for contact information)

Bill expressed concern that Enron would send a termination notice tomorrow (3/8/02) prior to resolution of the payment dispute.  I assured him that our intention was to resolve the payment issue if possible, reserving that we might agree to differ if resolution isn't possible.

 -----Original Message-----
From: 	Shackleton, Sara  
Sent:	Wednesday, March 06, 2002 5:31 PM
To:	Dicarlo, Louis; Bailey, Susan
Cc:	Bridges, Michael; McMichael Jr., Ed; Miroballi, Angelo
Subject:	Select Energy and Stone Energy Corporation

(1)  Received a voice mail from Bill O'Brien (credit manager) of Select Energy at 860-665-2376.

He says that payments were previously made on the referenced invoices and he is pulling the data together.  He wants to talk on Thursday.  Louis, can you call him please?

(2)  Received a demand letter from Stone Energy Corporation which cites ENA's (i) failure to pay Stone $46,564 under the swap EV3943.1 which will be a default in 2 business days, and (ii) bankruptcy.  Stone may later designate an Early Termination Date.

Stone will also offset amounts owed by ENA Upstream Company to Stone.

Louis:  we need to verify the swap payment issue and I'll have a copy of the letter sent to you.

Sara Shackleton
Enron Wholesale Services
1400 Smith Street, EB3801a
Houston, TX  77002
Ph:  (713) 853-5620
Fax: (713) 646-3490