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Enron Mail |
I spoke with Gary Chapman regarding the fee. He references Section 6.5 of =
the Agreement which says "ECS will pay Dow a brining fee of twenty cents ($= 0.20) per ton (2,000 pounds) of salt removed from the ESC well ...... We need to come up with the legal arguement linking it to bbls of capacity = created, as the language of the agreement bases the fee on the amount of sa= lt removed. He said the $167,000 estimate came from using the Sonar measurement to dete= rmine the amount of salt removed. Lets talk Monday. Brian -----Original Message----- From: =09Zisman, Stuart =20 Sent:=09Friday, January 11, 2002 1:10 PM To:=09Nemec, Gerald; McMichael Jr., Ed; Parks, Joe Cc:=09Redmond, Brian; Hodge, Jeffrey T. Subject:=09RE: Bridgeline Meeting and the Second of my 10 daily emails Please see the attached for various suggestions - action items (in red) -----Original Message----- From: =09Nemec, Gerald =20 Sent:=09Friday, January 11, 2002 12:18 PM To:=09Zisman, Stuart; McMichael Jr., Ed Cc:=09Redmond, Brian; Parks, Joe; Hodge, Jeffrey T. Subject:=09RE: Bridgeline Meeting and the First of my 10 daily emails I visited with John Higgins, Bridgeline's attorney and discussed the wareho= useman's lien. I pointed out the Section 542 of the bankruptcy code requir= es them to turn over property of the estate and our position is they don't = have a valid lien. I also indicated they were opening themselves up to dam= ages for violation of the bankrupcty stay. John indicated that since this = issue (whether Article 7 of the UCC applies to natural gas storage) would = be a case of first impression they would be willing to litigate considering= the amounts involved. Summary - They are not willing to release the gas. = They are willing to release gas in excess of the amounts we owe to them, b= ut only if stipulated that they are not waving their rights to assert the w= arehouseman's lien . At this point it is probably better to get some gas a= nd then decide whether to litigate the remainder. Thoughts? [Zisman, Stua= rt] This sounds like the right way to go. Joe Parks should visit with the= appropriate person at Bridgeline to figure out how much gas they are willi= ng to release and try to get it sold. Stuart, the answers to your questio= ns are inserted below. -----Original Message----- From: =09Zisman, Stuart =20 Sent:=09Friday, January 11, 2002 11:02 AM To:=09Nemec, Gerald Cc:=09Redmond, Brian; Parks, Joe Subject:=09Bridgeline Meeting and the First of my 10 daily emails I think we need to crystallize, in very short order, what the approval proc= ess [Zisman, Stuart] Gerald when you are able to figure out what must be = done please advise. will be for the sale of the Pad Gas in Storage Caverns = #13/#14 to Bridgeline. I will send you via fax the proposed deal sheet. Several interesting points from the meeting: 1) Bridgeline is of the view that 3/12/2002 (we thought it was 4/402) is t= he last day on which they are obligated to reimburse Enron for the Dow Leas= e - Any thoughts? Who is right?; The contract states that they are obligat= ed to reimburse through the earlier of July 1, 2002 or 114 days following t= he 4 BCF Date. The 4 BCF date is defined at the day of the last Enron Pad = Gas Payment. The last Pad Gas Payment (for the month of November) was due = on 12/10/01. Thus, the 114 days should run from 12/10/01, which puts right= around 4/4/02. [Zisman, Stuart] The Bridgeline folks said something abo= ut an August date and then adding 110 days to that and then adding 114 days= to that. Does that make any sense to you?=20 2) Their plan (assuming our deal goes through) is to amend and assume the = existing lease - and get Dow to expressly release LRCI from any and all cla= ims/liabilities/etc. following Bridgeline's assumption of the amended lease= ; This approach sounds reasonable.=20 3) Bridgeline indicated that Dow is of the opinion that approximately $167= k is owed by Enron for dewatering brine removal fees ($0.20 per ton of salt= removed) - I need your help to determine whether this is accurate; I don't= see any basis for this in the agreement. The $0.20 per ton of salt remove= d fee, refers to barrels of capacity being created in the Cavern #1. This = is related to the leaching operation. If the fee is related to the leachin= g operation, then they might be correct. (Accounting would need to verify t= heir numbers though). If they are seeking a fee for brine removal during d= egassing, I don't think they have a basis for this fee. We need to underst= and their basis for the claim. [Zisman, Stuart] Brian would you please c= all Gary to find out what this is all about?=20 4) Bridgeline is desirous of having Cavern #1 (along with the various righ= ts-of-way) conveyed sooner rather than later (and wondered whether we could= expedite the approval process on this part of the deal). I don't know wha= t the advantages/disadvantages there are to this but would love your input = along with your thoughts on whether this is feasible or not; We have until = July 1, 2002 to convey the Cavern #1. To the extent we wanted to wait to w= rap up all our issues and convey at that time, we are not harmed under the = Partnership agreement. Obviously we retain any risks associated with owner= ship of the cavern. [Zisman, Stuart] Is there any downside to doing it = early? Might we lose negotiating leverage? If not, we should consider try= ing to do this as a good faith gesture.=20 5) We indicated that we thought the approval process would take approximat= ely 30 days from the day that we reached what we believed were mutually agr= eeable terms with Bridgeline (does this sound right?) - The goal is to be d= one no later than March 1, 2002; and I think this sounds reasonable.=20 6) Eric Booth is going to call Robert Morgan to get the support for the $5= 50k of expenses relating to the dewatering line and the flowline. Stuart
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