RE: Balance Sheet Review

Louise,

A detailed discussion of all of the assets currently under management by EC=
R is being prepared by Jesus Melendrez and is near completion. I am meeting=
with Pam Becton in the morning to review the various off balance sheet veh=
icles. The assets that are in active divestiture process are CGAS and Juni=
per. An agent has been engaged for the Juniper assets. We are in discussi=
on with a group on CGAS. We expect both of these transactions to close by =
year end but hopefully in the 3rd quarter. The Preston I & II VPPs were sy=
ndicated into Brazos in December '00 and January '01, respectively. The Cr=
escendo ($7.5 MM) VPP was syndicated into Brazos in December '00. The rema=
inder of the Crescendo VPPs should be moved into Brazos by year end or 1Q'0=
2 once a second VPP transaction occurs. The KCS VPP ($159 MM) is set to cl=
ose and fund no later than 6/27 according to Tim Proffitt. Hanson is an acc=
rual and may be sold by year end if no other drilling occurs. Ameritex, Cyp=
ress, Sam Gary/Bonne Terre, Vastar, Texland are assets that are still in de=
velopment. Crescendo, Westwin, Nutech and Preston Equity are recent transac=
tions (< 1yr old). Several options are being reviewed on Mariner - (i) sal=
e or merger with another company, (ii) IPO, provided Enron gets its debt re=
paid and 75% of its equity sold at an enterprise valuation of $500 MM or gr=
eater (the MEGS pipeline asset would be included in this option), or (iii) =
continue to develop the asset. We will make our recommendation on Mariner =
once Allan Keel completes his analysis.

I recognize that this explanation is brief. Let me know if you need additi=
onal information or would like to meet to discuss further. =20

Scott =20
-----Original Message-----
From: =09Kitchen, Louise =20
Sent:=09Thursday, June 21, 2001 9:08 AM
To:=09Josey, Scott
Subject:=09Balance Sheet Review

I am trying to get a grip on the projected balance sheet (including any off=
balance sheet items JEDI, Trutta, Condor, Hawaii) for end of year.

You have the following on the balance sheet - which ones are you working on=
removing?

Those I am looking at are:-

=09 Ameritex =09=09$4.4
=09Crescendo=09 =09 3.2
=09Crescendo=09 =09450,00 =20
Crescendo=09 =096.0
=09Crescendo VVP =09200,000
=09Crescendo VVP =09 500,000
=09Cypress=09 =0921.7
=09Cypress=09 =09 4.8
=09Hanson=09=09 =09 1.7
=09Hanson=09=09 =09400,000
=09Juniper=09=09 =098.6
=09Juniper=09=09 =0912.9
=09KCS VPP=09 =09159.0
=09Mariner=09=09 =09130.0
=09Mariner=09Common=09363.0
=09Mariner Warrants=0924.5
=09McGarett K/CGAS=0930.0
=09Nutech Energy=09=094.2
=09Preston I Equity=09=09569,000
=09Preston II Equity=09=09350,000
=09Sam Gary/Bonne Terre=097.2
=09Sam Gary/Bonne Terre=094.7
=09Sam Gary/Bonne Terre=09209,000
=09Texland(R)=09=095.7
=09Texland(R)=09=093.8
=09Vastar(R)=09=09980,000
=09Westwin Energy=095.0
=09Westwin Energy=092.5
=09Crescendo VPP=097.5
=09Preston I VPP=09=0936.7
=09Preston II VPP=09=0922.8
=09Crescendo VPP=09500,000