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Enron Mail |
Wes, please have the detailed HPL numbers available to discuss on Monday.
Regards Delainey ---------------------- Forwarded by David W Delainey/HOU/ECT on 07/19/2000 09:34 PM --------------------------- Brian Redmond 07/19/2000 03:02 PM To: David W Delainey/HOU/ECT@ECT cc: Jean Mrha/NA/Enron@Enron, Julie A Gomez/HOU/ECT@ECT, Wes Colwell/HOU/ECT@ECT, Patrick Wade/HOU/ECT@ECT, Timothy J Detmering/HOU/ECT@ECT, Jeff Donahue/HOU/ECT@ECT, John J Lavorato/Corp/Enron@Enron, Michael C Bilberry/HOU/ECT@ECT, Jim Coffey/HOU/ECT@ECT, Mark Frevert/NA/Enron@Enron, Todd Busby/NA/Enron@Enron Subject: Re: Project Triple Lutz/Tarantula Team: I have scheduled a meeting for 2 August to review our Triple Lutz and Tarantula deliverables. A preliminary summary of our current status is as follows: 1. Entex Contract - (John L.) - T. Martin cost to unwind Texas desk P/L (incl. Entex) = $134.881MM - J. Schwieger cost to unwind storage book = $28MM 2. Storage Value Algorithm - (Jean M., John L., Jim S.) - J. Mrha discussions with J. Schwieger and J. Lavo continuing - Working on reconciling EOY balancing and modeling physical storage constraints 3. Storage Acquisition Targets - (Jean M., Julie G.) - Target list prepared, preparing facility costs analysis. 4. Bammel Header - (Jean M.) - Analyzing Northern Texas and Beaumont Markets 5. Project Torque: (Wes C., J. Coffey) - P/L established based on physical gas flow from POPS system and $ flows from general ledger. No direct tie to UNIFY settlements information but now numbers are reconcilable - 1999 Margin Summary Gross Margin = $111MM (not including financial trading), Net Margin = $101MM EBITDA (HPL standalone before G&A) = $48MM EBITDA (HPL standalone) = $35MM - Book Value Summary Non-Houston BV of $398MM (incl. $129MM monetizations) Houston BV (incl. FV) = $2.3 bn + Texas & Storage P/L unwind of $163MM requires a lease payment for Houston assets of $19MM over 30 yrs Pad gas BV = $153MM (on basis of $2.34/mmBtu) not included in above Working gas BV = $116MM (on basis of $2.34/mmBtu) not included in above 6. HPL Acquisition (T. Detmerming): - Base Case Structure: sale of non-Fair Value assets, 30 yr. lease of FV assets Both bidders want ENA to provide/contribute trading and business operations services. - Duke Field Services: interested in base case structure, wants ENA to provide trading services on a contract basis under a JV arrangement (Bridgeline) - AEP: interested in base case structure, wants ENA to sell trading desk (and potentially provide business operation services under a service arrangement) - Info memo being prepared to be delivered in August, data room being formed. David W Delainey 07/05/2000 12:33 PM To: Jean Mrha/NA/Enron@Enron, Julie A Gomez/HOU/ECT@ECT, Brian Redmond/HOU/ECT@ECT, Wes Colwell/HOU/ECT@ECT, Wes Colwell/HOU/ECT@ECT, Patrick Wade/HOU/ECT@ECT, Timothy J Detmering/HOU/ECT@ECT, Jeff Donahue/HOU/ECT@ECT, John J Lavorato/Corp/Enron@Enron cc: Mark Frevert/NA/Enron@Enron Subject: Project Triple Lutz/Tarantula Guys, as a follow up to our meeting today, I thought I would put together a list of deliverables agreed to in the meeting. The goal would be to have a definitive strategy for HPL and storage assets by the end of July that could be acted upon. a) Elimination of the Entex contract - current value - John L.; b) Storage value algorithm incorporating spread values, increasing intra-day and monthly volatility and blowdown values - Jean M, John L, Jim S.; c) Storage acquisition targets and issues surrounding value/execution - top 5 to 10 for blowdown and tarantula strategy - Jean M, Julie G.; d) Structure, value, cost and issues surrounding Bammel "header" - Jean M.; e) Project Torque - definitive balance sheet, income statement and contribution margin statement for HPL - Wes C.; f) Establish viability of selling HPL assets - small private placement - working with Lehman to finalize value, exection risk, timing, structure et al - Patrick W. I would like this group to get back together in the fourth week of July to determine a final action plan. Regards Delainey
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