Enron Mail |
Dave/John:
Attached is a recommended strategy for addressing the Cushion Gas issue with AEP. Bottom line is: 1. Hedge our obligation now - understand that John has already done this. 2. Begin working with AEP to get their bid on purchasing the Cushion Gas from us (at a premium that will cover the cost of the additional 5.5 bcf) 3. Begin working with the banks regarding the cost/potential for Enron to re-monetize the Cushion Gas at a higher basis (again to cover the cost of the additional 5.5 bcf). At a minimum, this gives us additional negotiating leverage with AEP. 4. Re-classify the 5.5 bcf from PP&E to a long term asset to delay recognition of the higher cost. 5. Once we get AEP's bid on purchasing the pad gas - introduce the fact that we mistakenly omitted from the balance sheet a 2007 liability to re-inject the 5.5 bcf of pad gas. Offer for Enron to assume this 2007 liability. 6. If necessary we can also look at a higher threshold for the A/S line liability, as I think that the risk that additional repairs will be required is low. Any comments/direction is appreciated, Brian
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