Lost Creek

Shonnie/Gerald,

We are still pursuing the opportunity with Kinder Morgan to move gas from
Glenrock to Lost Creek. Our current deal looks like this....

Currently, KMI takes approx 25,000 MMCFD from the tailgate of the Beaver
Creek Plant into their interstate pipeline on behalf of their shippers for
long haul service to the midcontinent. KMI can easily displace this gas with
the Glenrock interconnect. KMI is offering to give us a transportation
service with the physical points listed as Glenrock for receipt and Beaver
Creek Plant for delivery (which is really only a receipt pt.) . (The
interstate transportation agreement would not have Lost Creek as the delivery
point.) When we nominate on the agreement, KMI would physically direct their
Beaver Creek tailgate volumes directly into Lost Creek in exchange for the
Glenrock volume. The gas volumes that Lost Creek takes would never touch KMI
interstate facility. This arrangement would be extremely valuable over the
next 15 months due to our capacity constraints on Medicine Bow.

How much regulatory jeapordy does this present to Lost Creek's
nonjurisdictional status? If there is any, couldn't ENA do this anyway in a
post 20/20 environment?

KMI is aware of our sensitivity to this issue and their regulatory folks have
told us there should not be a problem with this type of an arrangement. I
told them that didn't give me a lot of comfort.