---------------------- Forwarded by George Weissman/HOU/ECT on 01/25/2001 
10:05 AM ---------------------------


Linda Roberts@ENRON
01/19/2001 05:28 PM
To: George Weissman/HOU/ECT@ECT, Jill T Zivley/HOU/ECT@ECT, Gary 
Bryant/ENRON@enronxgate, Melissa Graves/HOU/ECT@ECT, John 
Grass/Corp/Enron@ENRON
cc:  
Subject: KCS VPP


---------------------- Forwarded by Linda Roberts/NA/Enron on 01/19/2001 
05:21 PM ---------------------------
From: Joan Quick@ECT on 01/19/2001 04:45 PM
To: Brian Otis/NA/Enron@Enron, Larry Lewis/HOU/ECT@ECT, Phillip 
Ballard/NA/Enron@Enron, Ryan Synnott/HOU/ECT@ECT, Avinash 
Jain/NA/Enron@Enron, Teresa G Bushman/HOU/ECT@ECT, Scott 
Josey/Corp/Enron@ENRON, Bob Devine/NA/Enron@Enron, C John 
Thompson/Corp/Enron@ENRON, Arvel Martin/HOU/ECT@ECT, Merrill W 
Haas/HOU/ECT@ECT, Bradford Larson/HOU/ECT@ECT, Tricia Spence/HOU/ECT@ECT, 
Marshall Eubank/HOU/ECT@ECT, Don Schroeder/HOU/ECT@ECT, Linda 
Roberts/NA/Enron@Enron, Gary Bryan/HOU/ECT@ECT
cc:  

Subject: KCS VPP


Per Schroeder, a good number to use for crude basis is the $3.00.  H is 
meeting with Tom [mid con properties] on Tues, and Sam [GC properties] on Wed.

Regarding BTU factors on the gas spreadsheet for the midcon area, these 
factors are all wellhead.  Randy will be providing the tailgate factors to me.

Regarding missing marketing info: MELP has been deleted from the deal and 
South Drew is a PUD, not yet drilled.


---------------------- Forwarded by Joan Quick/HOU/ECT on 01/19/2001 04:38 PM 
---------------------------
From: Joan Quick on 01/19/2001 03:27 AM
To: Brian Otis/NA/Enron@Enron, Larry Lewis/HOU/ECT@ECT, Phillip 
Ballard/NA/Enron@Enron, Ryan Synnott/HOU/ECT@ECT, Avinash 
Jain/NA/Enron@Enron, Teresa G Bushman/HOU/ECT@ECT, Scott 
Josey/Corp/Enron@ENRON, Bob Devine/NA/Enron@Enron, C John 
Thompson/Corp/Enron@ENRON, Arvel Martin/HOU/ECT@ECT, Merrill W 
Haas/HOU/ECT@ECT, Bradford Larson/HOU/ECT@ECT, Tricia Spence/HOU/ECT@ECT, 
Marshall Eubank/HOU/ECT@ECT, Don Schroeder/HOU/ECT@ECT
cc:  
Subject: KCS VPP


GAS
The below spreadsheet has all my info re the gas marketing [still not 
"pretty"] for all the fields except MEPLP & South Drew.  I have an email to 
Harry to find out whom I am to talk to about these 2 fields.  

So far, there are 39 delivery points in the mid continent/Michigan area, 25 
delivery points in the gulf coast area [including the 7 VPP points], approx 
20 points go thru plants, 24 go thru gathering lines.  There is a lot going 
on here.  I know we have not discussed what we might want to take physically 
[and I have not discussed this with anyone on the trading or wellhead desks], 
but my gut feel and recommendation is to take all the crude physically, and 
re gas, take the bigger receipt points that flow directly to a mainline 
connection, and the VPP vols.  

I have updated the basis numbers, updated all the gathering fees, fuel ... 
and using vols that I have been given by KCS, the weighted average basis 
number is around $0.25 [$0.2443, go figure].  I still need MI basis numbers, 
but these s/b positive to NYMEX, which should bring the wtd average down.  I 
think everyone knows this, but keep in mind, I have not read any of the 
contracts, all information is hearsay, all numbers are assuming that the 
current prices and fees are to remain constant for the next 5 yrs, but for 
now, this the best we have, especially since I was given this information 
less than 48 hrs ago - the information received originally from the Houston 
office was incorrect.

In my email yesterday, I wrote that there are several delivery points where 
the pricing is POP.  My initial thinking and concern with this, was that if 
KCS had, let's say, an 80/80 deal, and the marketer sold the gas and the 
NGL's for whatever price(s), then, KCS would get 80% of that amount.  which 
makes it impossible to do a clean hedge.  However, the deals KCS has, is that 
they receive [in this instance, in general] 80% of the residue gas, at a set 
IFGMR price.  Thus, we can decide on a volume, we know the pricing, and we 
can hedge.  No issue.

I did receive a binder today with all the gulf coast gas marketing contracts 
[and briefs].  I have not looked at any of this so I am not sure what all is 
in there, but I do not think gathering, processing... contracts are 
included.  Merrill - by chance, have you reviewed any of these?

I s/b receiving the mid con contracts/briefs on Friday.




OIL

Getting the crude info has been harder than the gas.  There are about 14 
fields in the gulf coast area - totaling a little under 500 BOPD.  There are 
about 16 fields in the mid con/Michigan area - totaling a little over 2,300 
BOPD, of which, 1,440 b/d is sour, and 530 is in Michigan.  For the fields 
Mills Ranch, Oak Hill and Pittsburg, the operator markets the crude under 
their JOA.  Thus, I have no information re these fields.  All the crude is 
termed up for the next month or so, so it will soon be available for you to 
take in kind.  There is no crude under the Hall Houston VPP.

Don - I have highlighted in bold the field where Randy [KCS Tulsa] said the 
oil is, for sure, obviously, sour. At first he was telling me that what 
deemed 40' means is that the crude is sour, but he's really getting a sweet 
price.   Needless to say, he is checking with their crude oil marketing 
person - Tom Kivisto, whom I know you know, to find out what field(s) really 
are sour.  On your chair are the two spreadsheets for each region.  The mid 
con spreadsheet is also below, the gulf coast spreadsheet is only a hard 
copy.  Give me a call and let's discuss.  We are currently using a basis of 
$3.00, and any notional basis number would greatly be appreciated.




Larry - call me and let's talk about what you need.