---------------------- Forwarded by Kay Mann/Corp/Enron on 06/20/2000 01:17 
PM ---------------------------


Kay Mann
09/02/1999 08:34 AM
To: Robert E MacMillan/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: David Barru/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, John 
Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Eddie 
Clay/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jerry D 
Martin/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bill 
Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Erik 
Kingshill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Keith 
Marlow/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Ed 
Giblin/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert E 
MacMillan/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Dick 
Westfahl/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jamie 
Dunlap/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Larry L 
Izzo/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Mary E 
Garza/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 

Subject: Re: EPC 43/50 (Demar)  

Bob (and others),

The line  of credit on EPC 4 is expired, and I believe tapped out, if you add 
in the fee to Enron ($5mm?) which remains unpaid.   Another option would be 
to try to get a security interest in the revenues on 4 for the new project.  
I have been looking in to this option since you, Erik and I discussed this 
possibility.  Input from Mexican counsel will be required and has been 
sought.  

Dick has scheduled a meeting for later today when we can brainstorm on these 
options.  I'm confident that there will be a way to skin this cat, it just 
may take a few days to sort through.

Kay 



Robert E MacMillan
09/02/99 07:44 AM
Sent by: Robert E MacMillan
To: David Barru/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: John Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Kay 
Mann/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Eddie 
Clay/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jerry D 
Martin/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bill 
Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Erik 
Kingshill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Keith 
Marlow/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Ed 
Giblin/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Robert E 
MacMillan/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Dick 
Westfahl/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jamie 
Dunlap/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Larry L 
Izzo/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Mary E 
Garza/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 

Subject: Re: EPC 43/50 (Demar)  

David,

To mitigate the risk of funding Demar before an assignment of contract 
revenue for the EPC-43/50 offshore work is in place we could seek written 
confirmation from Demar that the present assignment of contract revenues can 
be utilized to cover early advances for this new work.  It is my 
understanding that there is in excess of $60MM to collect and the present 
$20MM line of credit is funded to $16MM+.

The collateral in place is a barge worth approximately $12MM, property in Cd. 
del Carmen worth approximately $3.2MM and a house in Mexico City worth 
approximately $500,000.  Obviously the source of repayment is the revenue 
from the Pemex contract EPC-4 which we receive in a bank account controlled 
by Enron.

Practically, the Pemex contract will likely take 30 days to execute and an 
assignment of contract revenues which can only be requested after the 
contract execution, will take approximately 1 week to have in hand.  Due to 
urgent nature of the work, that is, it will start immediately upon advice of 
award from Pemex, Demar can not wait some 40 days for funding.  

Our experience with Demar has been good, so good as a matter of fact that we 
have decided not to provide the administrative support in Cd. del Carmen and 
Mexico City to which we are  obligated in our agreement with Demar.

I ask all members of the team to consider the possibility of funding 
initially under the EPC-4 agreements, which need to be extended in any event 
and to add language to cover this issue would be fairly straight forward.

Bob MacMillan