Tri-Union

Brent -

Per our conversation earlier, attached are the documents forwarded by
Jeffries & Co. for the Tri-Union bond offering. To recap:

1. Tri-Union is a small independent E&P that is currently in bankruptcy.
The company is being run by the courts at the present.

2. Tri-Union has hired Jeffries & Co. as investment bankers to help float a
$160 MM high-yield bond offering. The offering, if successful, would bring
Tri-Union out of bankruptcy, with about $30 MM in additional cash to use for
capital expenditures and working capital.

3. As part of the high-yield bond offering, Tri-Union needs to execute a
two-year swap agreement to hedge production, and that is where Enron comes
into the picture.

Tri-Union is (obviously) a horrible credit, and so we would need to take a
security interest in their reserves/producing properties in order to execute
the hedge. They have proposed the execution of a document that would make us
the most senior creditors in the event of default. I have attached the
current form of this document, as I received it from Jeffries & Co. this
afternoon (IMPORTANT NOTE: Brent, the attached document is a new version
that I received after our meeting this afternoon, and I assume that it
differs from the hard copy that I brought to you earlier today).

Can you please take a look at this and advise me on how we can proceed with
this? As I understand from our conversation, this issue will probably
require the assistance of outside counsel, with the pursuant expense. The
originator on this deal is Fred Lagrasta, so please contact him (ext. 36529)
to discuss how this expense will be handled.

Thanks for your help; please contact me if you have any questions.

Jay