Violation Memos Distribution

Jeff,

Per your request from our meeting last week, the following is a summary of
the required distribution of violation memos per the Risk Management Policy
for NA Natural Gas:

Plus: Plus:
Ted Murphy Jeff Skilling Ken Lay
John Lavorato Rick Buy

Position 300 - 315 Bcf 315 - 330 Bcf < 330 Bcf

12 Month Rolling Position 350 - 367.5 367.5 - 385 < 385

Value at Risk $40 - 42 MM $42 - 44 MM < $44 MM

In addition to the above policy requirements, Mark Frevert and Joe Sutton
have asked to be copied on all violation memos and loss notification memos.

Loss notification memos are also required as follows:
Plus:
Skilling Lay
Buy
Murphy
Lavorato

Daily Loss 50% - 75% of VAR Limit < 75% of VAR Limit (VAR Limit = $40 MM)

5-Day Cumulative Loss 75% - 100% of VAR Limit < VAR Limit

Please call me if you have any questions.

Mike
x-35242