Re: Draft of response after May 22

CONFIDENTIAL AND PRIVILEGED ATTORNEY/CLIENT COMMUNICATION & ATTORNEY'S WORK
PRODUCT

I will close the loop with Bob Baird and Rex Rogers on whether any other
steps would need to be taken. My only comment on your points below would be
on the "magnitude" issue. We told the analysts this morning that we did not
believe that any adjustment would have a material impact on our overall
financial position. If we have essentially the same fourth quarter "number"
next week, and we receive a follow- up call from one of the same analysts,
wouldn't we want to be able to reiterate our statement? To do otherwise
might suggest a change in our position/perception. SWD

Scott Vonderheide@ENRON
05/16/2000 01:46 PM

To: Lori Maddox/Houston/Eott@Eott, Steve Duffy/Houston/Eott@Eott, Kathryn
Corbally/Corp/Enron@ENRON, Stanley Horton/Corp/Enron@Enron
cc: Paula Rieker/Corp/Enron@ENRON, Mark Koenig/Corp/Enron@ENRON
Subject: Draft of response after May 22

Below is a first pass at suggested responses assuming we do not file the 10-Q
on or before May 22. Kathryn Corbally will coordinate comments from the IR
side. Lori is coordinating comments with AA. Steve - could you coordinate
with Bob Baird/Rex Rogers.

If you need to reach Kathryn, her direct line is (713) 853-4785.

Thanks -
Scott

Suggested comment if EOTT has not filed the 10-Q on May 22, 2000 (we will
only provide response if asked):

? We are continuing our review of the implementation of our new marketing and
accounting systems.
? We expect to have our analysis complete and the Form 10-Q finalized by June
15.

If specifically asked about the issues under investigation:

? We implemented a new marketing and accounting system in November of 1999.
As we stated in our first quarter earnings release, we are specifically
reviewing integration issues related to the to this implementation.

If asked about the magnitude of possible adjustments:

? We need to complete our investigation before we can answer specific
questions on what adjustments, if any, would be appropriate. The required
review is labor intensive. We are working very diligently and will provide
the information as soon as possible.