Project Triple Lutz

We have now been informed by the accounting gurus that we can go ahead and
transfer the Entex contract to the purchaser of HPL and not have to undo the
marked to market position. As a result, we will transfer the Entex contract
as well as the other contracts which cannot be in HPL to a new Enron and sell
the stock in the new sub along with the HPL stock. There will be no need
for a back to back contract. However, we will need to unwind the cash
monetization transactions involving the Entex contract, as well as the one
involving the Union Carbide contract. (there may be others and we are
checking on them now.)

Anne C. Koehler
Sr. Counsel, ENA
EB 3832
713-853-3448