The New York office has been speaking to Credit Suisse First Boston for 
roughly 6 months about a producer hedging deal that is part of a strucutured 
deal they're putting together. It now looks as if it will get done in the 
next 3 weeks-1 month so we want to get all the necessary credit issues taken 
care of. 

In brief, the deal is a fixed price one, basis TCO (67% of the volumes) and 
CNG (33%) with a fixed price Nymex component as well. It will settle against 
the Inside FERC indices for both locations. The term of the deal is from 
December, 2000 to December 2012. The volumes decline throughout the term from 
roughly 22,000 mmBtu/d to 13,000 mmBtu/d. The average daily nominal volume is 
17,000 mmBtu/d. As I understand it, these volumes are about 65% of the 
producers' total volumes. I've attached a spreadsheet to this message with 
more details. 

There are a couple of contractual and credit issues that CSFB wants to 
clarify. 

First, there is a question of the monthly cash settlement. CSFB would like 
payment to take place on the fifteenth of the month following the date both 
the floating and fixed prices are known. As I understand it,  for the 
December settlement, which would be known in early December, cash payment 
would take place on February 15, 2000. 

Second, there is a question of a parent guarantee from Enron Corp. 
Apparently, there is an existing credit arrangement in place between ENA and 
Credit Suisse First Boston International - the same counterparty that we 
would be dealing with here - that has a $15 million guarantee from Enron 
Corp. CSFB would like to increase this guarantee to at least $100 million. 
(CSFB already has an unlimited guarantee from Enron Corp. for a deal they've 
done with us in Europe so in their opinion it should not be an issue). 

 There is another minor issue involving centralizing credit discussions with 
the aim of securing a similar credit arrangement for CSFB's dealings with 
EnronCredit.com - which may be an issue for London rather than Houston. 
However, CSFB agreed that this was a secondary issue in relation to this 
transaction.

CSFB would like to do the entire deal through us, rather than having to split 
it among one or more counterparties. Per, Caroline Abramo, and I are meeting 
with Paul tomorrow to discuss various credit issues, including this one. 
Ideally, CSFB would like to have a good idea of where they stand by the end 
of this week. 

Please let me know if you have any questions or suggestions.

Regards,
Russ