Re: Heartland Invoice for March

F Y I
----- Forwarded by Dan J Hyvl/HOU/ECT on 02/21/2001 01:21 PM -----

John Enerson
02/21/2001 01:19 PM

To: Dan J Hyvl/HOU/ECT@ECT
cc: Charles Jacobs/NA/Enron@ENRON, Patrice L Mims/HOU/ECT@ECT
Subject: Re: Heartland Invoice for March

Never wire these people any money. Only give them credit for a future bill
or prepayment.

Dan J Hyvl
02/21/2001 01:12 PM
To: Charles Jacobs/NA/Enron@ENRON
cc: John Enerson/HOU/ECT@ECT, Patrice L Mims/HOU/ECT@ECT
Subject: Re: Heartland Invoice for March

I would recommend that once the trueup information is available and verified,
a credit statement be prepared and forwarded to Heartland, such statement to
provide that the credit statement is to be used in determining the next
month's (April) prepayment. I would not wire them the true-up amount so long
as we have any reason to believe that they will continue to be in some level
of operation requiring some level of gas purchases. John, any comments.

Charles Jacobs@ENRON
02/21/2001 01:03 PM

To: Dan J Hyvl/HOU/ECT@ECT, John Enerson/HOU/ECT@ECT, Patrice L
Mims/HOU/ECT@ECT
cc:
Subject: Re: Heartland Invoice for March

So what should the invoice look like for the March prepayment? Should I just
bill them the 1,500/day at the NX3+.34 next Monday; let them pre-pay that and
then wire them whatever money is owed back to them after the trueup (probably
sometime mid-April after the pipeline statements have been received and the
volumes have been acutalized)? Or does somebody want to estimate what the
buyback volume and price would be so I can deduct that up front?
---------------------- Forwarded by Charles Jacobs/NA/Enron on 02/21/2001
12:38 PM ---------------------------

Dan J Hyvl@ECT
02/21/2001 12:00 PM
To: John Enerson/HOU/ECT@ECT
cc: Charles Jacobs/NA/Enron@ENRON, Patrice L Mims/HOU/ECT@ECT

Subject: Re: Heartland Invoice for March

Chuck, The price obtained as the average of the closing price for the last
three trading days for the month plus $0.34 is to be the price for the next
month. We need to give them a credit for the volumes that we purchase back
due to their volume defaults in the month. Our buyback price is to be Gas
Daily midpoint less $0.15 for the shortfall in volumes. The $0.15 is the
penalty for the default and the Gas Daily Midpoint price is what we purchase
the shortfall back for; but remember if the Gas Daily Midpoint is higher that
the Nx3, we use the Nx3 as the buyback price for the shortfall. I know that
you will not have all of the information at the time you send them the
invoice for the next month's prepayment, so you need to keep a schedule and
trueup each month for the prior months activity.

John and Patrice, Do you agree with the foregoing?

John Enerson
02/21/2001 11:33 AM

To: Charles Jacobs/NA/Enron@ENRON
cc: Dan J Hyvl/HOU/ECT@ECT, Patrice L Mims/HOU/ECT@ECT
Subject: Re: Heartland Invoice for March

Dan - please confirm for Dan that the pricing will be different after the
last three trading days of the month for the NYMEX contract. Dan - can you
make sure you check with Patrice for this exact number so Chuck can send the
invoice. Thanks.

From: Charles Jacobs @ ENRON 02/21/2001 10:59 AM

To: John Enerson/HOU/ECT@ECT
cc:
Subject: Heartland Invoice for March

John,

When do you want me to send an invoice to Heartland so they can pre-pay for
March gas? I can bill the 1,500/day but I'll need the pricing. Are we still
going to use the NX3+.34 for March or do you want to use something else? The
NX3 will not be available for March until Monday so that would be the
earliest I could send it using that price.

Let me know...
Chuck