HESCO Collateral requirements

Kim -

Here are the credit requirements for additional HESCO deals, per your earlier call:

1. 300/day @ SOCAL border
Price: $3.35
Dec '01 - May '02
Collateral Requirement: $100,000

2. 1900/day @ SOCAL border
Price: $3.32
Oct '01 - Sept '02
Collateral Requirement: $900,000

3. 500/day @ SOCAL border
Price: $3.24
Oct '01 - Mar '02
Collateral Requirement: $165,000

4. 750/day @ PG&E Citygate
Price: $3.78
Aug '02 - Jul '03
Collateral Requirement: $375,000

5. 1000/day @ PG&E Citygate
Price: $3.68
Jan '02 - Dec '02
Collateral Requirement: $500,000

Just FYI, I priced these collateral amounts to include the receivable exposure that we would wear as well as potential MTM exposure, priced at $0.75/MMBtu. Please give me a call with any questions.

Thanks,

JRW