Rod:

As we discussed here are the bulletts that summarize what we heard from our
consultants.

Overall demand picture

Believe it will be 2006 before the California market will get back to
2000/2001 demand levels

          2002           demand down approximately 900 mmcf/d
          2003      demand will be flat
          2004      growth in demand will begin
          2005-2006 return to 2001 demand levels

Reasoning:

   2001 was a dry year - the lack of hydro generation created an additional
   600 mmcf/d demand for gas in California
   Anticipated generation capacity overbuild in California - new more
   efficient power plants with better heat rates will displace older gas
   fired generation, reducing the amount of gas required to generate a MW
   of electricity on the margin
   California electricity rate increases have curtailed demand for power
   and subsequently, gas

Gas transmission capacity into the state

Over the next two to three years there will be an additional 2.0 Bcf/d of
transmission capacity into California

   800 mmcf/d in 2002
   900 mmcf/d in 2003 (Kern River expansion)
   300 mmcf/d                 (El Paso conversion of All American oil line
   and power up)

San Juan basin gas

San Juan basin production is declining

   first half of 2001 vs. first half of 2000 production off by
   approximately 200 mmcf/d
   Rockies gas will not replace declining production in the San Juan
   San Juan gas will move closer to Permian pricing



The consultants believe that the combination of these factors will put
decontracting pressure on existing transmission into the state of
California, and especially the El Paso and Transwestern lines.

However, the "wild card" in their view is unforeseen California power
demand growth.

As we discussed, JPMorgan would like to hear your views on the above
issues.

Please give me a call when you have had sufficient time to digest and we
can set up a conference call to make the most efficient use of your time.

Thanks Rod

Brent

Also, when you have had a chance to look at sales gas volume growth please
e-mail the volume numbers to me...thanks