Re: Coastal Deal-With Exxon Participation under the Project

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---------------------- Forwarded by Daren J Farmer/HOU/ECT on 04/11/2000
11:54 AM ---------------------------

Enron North America Corp.

From: Brenda F Herod 04/10/2000 05:24 PM

To: Steve Van Hooser/HOU/ECT@ECT
cc: Michael C Bilberry/HOU/ECT@ECT, Brian M Riley/HOU/ECT@ECT, Daren J
Farmer/HOU/ECT@ECT, Pat Clynes/Corp/Enron@ENRON, Gregory L Sharp/HOU/ECT@ECT,
Edward D Gottlob/HOU/ECT@ECT
Subject: Re: Coastal Deal-With Exxon Participation under the Project
Agreement

Thanks for the info!

As Greg mentioned in the staff meeting today, the intent is that this
restructured deal is papered effective 4/1/00. The impact is potentially
that the gas is not pathed properly by counterparty or on the appropriate
transport/gathering agreements, etc. If any rates are changing, then those
need to be changed in our systems also. There may be other areas of changes
also - I'm not attempting to list them all. Rather I just want to make
people aware that retroactive deals can have impacts on the daily operations.

Thanks for the information.

Pat/Daren: Can you get with Mike and/or Brian to determine the potential
impact, if any? Thanks.

From: Steve Van Hooser 04/10/2000 03:06 PM

To: Brenda F Herod/HOU/ECT@ECT
cc: Michael C Bilberry/HOU/ECT@ECT, Brian M Riley/HOU/ECT@ECT
Subject: Coastal Deal-With Exxon Participation under the Project Agreement

Brenda,

Per your request, attached are the Draft documents which will be used to
finalize the new Gathering Arrangment between HPL and Coastal, the revenue
sharing arrangement between Exxon and HPL (Transaction Agreement) and the
Residue Gas Purchase Agreement between Coastal, as Seller and HPL as Buyer
(Amendment to Wellhead purchase agreeement).

I do not have a copy of the Processing Agreement between Exxon and Coastal,
as such agreement does not involve us (and I believe it is far from
finalized. The only other document that I plan to prepare is a termination
agreement relative to the current Liquifiables Purchase Agreement between
Exxon as purchaser and HPL as seller--this termination will be affective as
of 4/1/2000.

If I can be of any further assistance, please let me know.

Steve