Re: Excess Credit Exposure

Bill, can you set up a meeting to discuss credit issues. just you and I is
fine.

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 05/17/2000
08:35 PM ---------------------------
From: William S Bradford on 05/02/2000 04:04 PM
To: David W Delainey/HOU/ECT@ECT
cc: Rick Buy/HOU/ECT@ECT
Subject: Re: Excess Credit Exposure

Dave,

a) I do not believe Skilling is aware of the latest updates on our efforts
to syndicate some of the Canadian exposures. To my knowledge, the last time
it was brought to his attention was March 1999 (Blue Range default). We do
report our top exposures to him and the Board which includes CNR,
Petro-Canada, and Talisman on a quarterly basis. Rob and team are actively
working with my team to mitigate exposures through other measures.
b) I will be happy to provide insight as needed. The riskiest commercial
objections are from Lagrasta's group.
c) We have received margin from Sempra and Duke. We have a valuation dispute
with Statoil and are actively working through the details.

Let me know if you need further information.
Bill

David W Delainey
05/01/2000 07:04 PM
To: Rick Buy/HOU/ECT@ECT, William S Bradford/HOU/ECT@ECT, Rob
Milnthorp/CAL/ECT@ECT, Edward Ondarza/HOU/ECT@ECT, Jeffrey A
Shankman/HOU/ECT@ECT, Raymond Bowen/HOU/ECT@ECT
cc: John J Lavorato/Corp/Enron@Enron
Subject: Excess Credit Exposure

Guys, I went throught the Credit Margin Exception Report for 4/24/00. This
shows our excess credit exposure at approximately $ 391M (after guarantees).
I have a couple of questions:

a) Canada (<$200M) - Rick/Bill/Rob - Is the board and Skilling aware of the
credit positions and OK? I know Rob has been working on mitigation plans;
b) Commercial Objections: (<$67M)
- Paper - Edward ($27M) - The report shows a number of commerical
objections to calling for collateral ie) Repap, Times Mirror and Waste
Mgt. Can you give me a call to discuss - we may need documentation to support;
- Gas/Mid-Mkt - Jeff ($29M)- Do you own Cross Timbers Oil Co, Torch Energy,
Aurora Natural Gas, Seneca Resource Corp and Cody Energy? We have in these
cases additional commercial objections to calling for collateral - lets
discuss;
- Mariner ($9M)- Ray we are showing a collateral need of approx. $9.0M -
given our equity position this may be moot;however, lets discuss.
c) Margin Call (<$51M) - Rick/Bill - have we been successful in getting the
margin posted by Sempra, Statoil and Duke?

Canada is a tricky issue; however, we should be able to work down the
commercial objections and collect on the margin calls to get the number down.

Regards
Delainey