Subject: Re: Upstream Energy Services Co, L.L.C.
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Date: Thu, 17 May 2001 06:26:00 -0700 (PDT)

I agree with the corrected amount.  Thank you for bringing that to my 
attention. Spell check doesn't work on numbers or capitals.  

	Megan Parker@ENRON
	05/17/2001 01:10 PM
		
		 To: Janie Aguayo/HOU/ECT@ECT
		 cc: Melissa Graves/ENRON@enronXgate, Bryce Baxter/HOU/ECT@ECT, Dan J 
Hyvl/HOU/ECT@ECT, Andrew Edison/NA/Enron@Enron, Brian M Riley/HOU/ECT@ECT
		 Subject: Re: Upstream Energy Services Co, L.L.C.

There appears to be a typo in the amount due HPL from Upstream.  It should be 
$238,508.61.  I will withhold this amount on the 25th.

Megan Parker
713-571-3261

Janie Aguayo@ECT
05/17/2001 12:56 PM
To: Megan Parker/Corp/Enron@ENRON, Melissa Graves/HOU/ECT
cc:  

Subject: Re: Upstream Energy Services Cio, L.L.C.

FYI...
---------------------- Forwarded by Janie Aguayo/HOU/ECT on 05/17/2001 12:53 
PM ---------------------------

Dan J Hyvl
05/16/2001 05:12 PM
To: Janie Aguayo/HOU/ECT@ECT, Bryce Baxter/HOU/ECT@ECT
cc: Andrew Edison/NA/Enron@Enron 
Subject: Re: Upstream Energy Services Cio, L.L.C.  

Brian Riley contacted me regarding the subject company and the fact that HPL 
had overpaid them to the tune of $328,508.61(should be $238,508.61) and would 
it be appropriate for HPL to withhold that amount from the next payment being 
sent to Upstream.  The documentation that has been provided to me shows that 
this amount relates to overpayments made in 1997 and early 1998.  The 1997 
payments were made pursuant to a spot contract and that they had confirmed a 
nomination of 500 a day however, Killam Oil Company, the operator of the 
wells, has made a reallocation of volumes from these wells from the parties 
that Upstream represents to Enron Oil and Gas Company.  The information 
provided does not indicate when Killam made the reallocation.  Based on the 
reallocation, HPL or its predecessor has paid Upstream for 97,384 MMBtu that 
has now been allocated to EOG.  I am told that Upstream has not denied its 
responsibility for repaying the money, only that it needed time to collect 
the money from the parties that it represents.  Upstream's attorney, Ty Kelly 
written correspondence indicates that the Spot contract was not complete 
because it did not provide a document evidencing the delivery point and 
volumes.  That contract provides that the remittance advice serves as the 
confirmation evidencing the transaction.  He also stated that the volumes 
should have been sold to HPL under the Big Cowboy agreement which they did 
not have a copy of.  Brian Riley has indicated that the purchase price was 
the same under the Big Cowboy and the Spot contract.  Kelly also indicated 
that since HPL's agreements routinely provide for arbitration, the issue 
should be resolved through arbitration.

Based on my review of the information available, HPL should withhold the sum 
of $328,508.61(should be $238,508.61) from the next payment to be made to 
Upstream and hold such sum in suspense until the issue is resolved.  HPL 
needs to be aware that in the event it is not able to prevail on its claim 
for such sum, it will need to remit such amount together with interest to 
Upstream.