Project Pacific

Team
Over lunch I received a voice mail from Salamon Smith Barney concerning
EOTT's bid on the this package. The silence since Monday spoke volumes and
he confirmed that. Jonathon Barrett stated that companies that were asked in
were a "number of multiples higher than us" and he was NOT referring to
EBITDA multiples BUT multiples of our overall value. He indicated
willingness to provide more color and how this played out and my return phone
call found out he was travelling so I'll keep you posted on what I learn.
In an attempt to justify a price twice our offer, I had to 1) reduce DCF
rate to 10%, 2) assume no taxes ongoing, 3) increase the staff reduction to
75%, 4) add the volume gain at Texas City and 4) increase volumes to 250
MBPD. We were willing to explore 2 and 3 and even pay some for volumes over
204 but I think our stretch number would be 200 or less.
Anyway a good shot at a good package of assets that came up way short. Once
again, I appreciate your assistance on this project and look forward to
working with you again.
dwight