Citizens Deal

Kim:

Following our discussion of last Thur., we need to prepare the term sheet for
Citizens. I want to focus on the TW deal first. There are a number of things
that I hope you can get from the desk by early afternoon my time, so we have
time to do the term sheet.

I want to show them a structure that would give them right to call on gas
each day. What there be a demand charge? What would be the Gas Daily
adder? High end of the range? Mid point? What would the demand charge be
for mid-point of the range? We would also compensate the desk to receive a
demand charge equal to the full monthly cost of the lateral. The desk should
love that much of the structure. Try to get some numbers from Janie.

I have had numerous conversations with Citizens and TW. TW will do the deal
but want their liability limited to $140,000 year. Citizens wants this
liability increased to $1,000,000. We could do this by buying insurance. We
might subcontract with TW to do this so the services deals is between ENA and
Citizens. We would need to increase the demand charge to pay for this
increase in laibility.

Once we know all our costs, we would bundle this together and then increase
the demand charge for orig.

Call me first thing on Monday

C