Thanks.  You got the message correct.  We will not accept a firesale price but if the price is fair we are sellers.  It is a tough message to deliver but people need to hear the truth.   I appreciate your efforts in arranging the floor meeting.  Any news on Eco?

 -----Original Message-----
From: 	Mahan, Mariella  
Sent:	Thursday, November 15, 2001 4:53 PM
To:	Horton, Stanley
Subject:	RE: Confidential - Decision tree on projects

Hi Stan,

I am sorry this took so long to reply to but I was out of the office yesterday with my little one on a field trip.  

Here is the feedback (combined with my own appreciation of how people feel) and some very humble suggestions that I hope will help.

During the EGAS session, people felt very good about being able to air out their concerns and about getting "official information" as to the proposed merger and implications on the company.  Some times, even if no new information is provided, people simply feel better because an effort is made to communicate with them.  People appreciated your open-ness and the frank-ness with which you addressed some of the tougher questions regarding long term employment viability or security.  On the other hand, people read a message into the statements regarding the fact that retention packages will be developed for key individuals.  They read that if they didn't get a retention package they should be looking for a job because they are not key.  Perhaps, bluntly, that is exactly what the message is but now you have many people spending their time trying to figure out the "definition of key individual."  People like to feel important (non-core is, for them, non-important) and absent that they worry about every little thing - many of these no one can help or mitigate.  Finally, people took comfort in the comment regarding how long it might take for all to be sold (i.e,. approx. 3 years) and understood and felt better that no fire sale will take place.    

My biggest recommendations are:
-	We need to keep up our communication efforts; people feel important and feel better if folks make an effort to communicate;  Pete and I (and others) need to work on 	communicating further with each of our teams and on motivating them to support the company during these tough times but both you and Jim should continue to 	update people as often as possible.
-	We need to move quickly to identify our key people so that we can be effective about retention efforts;  my own view is that you start with the field; those are your 	most critical individuals because they are running the asset.  
-	We need to continue to deliver the message that the merger is a good thing and that it is not simply another "life" bought out by Enron (i.e., many people felt and still 	feel that there is still a chance Enron might make on its own and would pay the breakage fee to get out of the Dynegy deal - this may be more hope than belief but 	that is the case).

A key distinction that I noted in the meeting today was that it sounds as though we will move forward very aggressively to sell all of the EGAS assets.  There is no longer the attitude or position that: if the asset has good earnings and good cashflow, then what's the hurry.  The message today (and forgive me if I mis-read it) was: we will put together a corp. development group that will be focused on selling EGAS assets even if they are performing assets - cash is still king and will continue to be until the merger.

Hope this helps and THANK YOU very much for taking the time to talk to us.

Mariella 
 -----Original Message-----
From: 	Horton, Stanley  
Sent:	Wednesday, November 14, 2001 7:47 AM
To:	Mahan, Mariella
Subject:	RE: Confidential - Decision tree on projects

We will discuss at the next Staff meeting.  Thanks for bringing it up.  Any feedback from the floor meeting yesterday would be appreciated.

 -----Original Message-----
From: 	Mahan, Mariella  
Sent:	Tuesday, November 13, 2001 2:54 PM
To:	Horton, Stanley; Hughes, James A.; Hayslett, Rod; Sommers, Jeffrey E.
Subject:	Confidential - Decision tree on projects

Something for us to talk about during our next staff meeting.

There are three projects which have significant cash flow problems and thus difficulties in meeting debt obligations: these are: SECLP, Panama and Gaza.  In the past, as I suppose we have done in Dabhol, we have taken the position that we would not inject cash into these companies and would be prepared to face a default and possible acceleration of the loans.  SECLP has been the biggest issue/problem.  Panama is much less (a few million of floating of our receivables from the company) would be sufficient to meet the cash crunch in April of this year.  Note that, in Panama, the debt is fully guaranteed by the government and is non-recoursed to the operating company, BLM.  In the past, we have discussed letting the debt default, which would cause the bank to potentially seek complete payment and acceleration from the GoPanama.  The reason: the vast majority of BLM's problems stem from actions taken by the regulator that have effectively amended our PPA's with private parties; those actions resulted in significant loss of revenues, which although today have stopped or have been limited, have left a "mark" on the company's liquidity position.  

Now the question is: come April of 2002, should any of our actions in Panama or decisions related thereto (which we would have otherwise taken or made) be affected in any way by either the proposed merger or an effort by Enron to preserve efforts to re-establish investor/creditor confidence?  The same could go for SECLP and Gaza.

This is simply an overall "guidance" question.  Let's take it up during our staff meeting next week, if that's ok with you.

Many thanks, Mariella