Message-ID: <16786801.1075842254570.JavaMail.evans@thyme>
Date: Thu, 10 Feb 2000 05:34:00 -0800 (PST)
From: dan.bump@enron.com
To: dan.hyvl@enron.com
Subject: FW: Mortgage Agreement
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FYI
---------------------- Forwarded by Dan J Bump/DEN/ECT on 02/10/2000 02:33 PM 
---------------------------
   
	Enron Capital & Trade Resources Corp.
	
	From:  Doug Garrett <dkg@enernetok.com>                           02/10/2000 
12:13 PM
	

To: "'qeoh@aol.com'" <qeoh@aol.com>, "'qecinc@aol.com'" <qecinc@aol.com>
cc: "'roobannon@phillipsmcfall.com'" <roobannon@phillipsmcfall.com>, Dan J 
Bump/DEN/ECT@Enron 
Subject: FW: Mortgage Agreement



FYI,
The following was conveyed to Dan Bump via a telephone conversation:

 In order to operate in the states of WY and MT, Enernet of Wyoming,
LLC (EOW)
 executed 3 operating bonds (1) $10,000 bond to WY State Office of
Lands and Investments
 (2) $25,000 statewide operating bond in favor of the MT BLM and (3)
a $50,000 statewide  operating bond in favor of the MT Board of Oil and
Gas Conservation.

 BancFirst guaranteed the $25,000 MT BLM bond, $25,000 of the $50,000
MT State bond and
 the $10,000 WY State Lands bond.  BancFirst required EOW to execute
two $25,000 promissory
 notes to secure the banks guarantees.  Enernet, Inc., (50%
owner/member of EOW)and its owners  guaranteed the promissory notes for
the bank.

 EOW can immediately move to have one if not both of these promissory
notes cancelled in order
 not to impede the mortgage transaction with Enron.  Alternatively,
in the very near future,
 EOW will transfer all of its operated properties in MT to the new
operating entity currently  being formed by Quantum and US Energy.  When
the new operating entity is in place, EOW will
 immediatedly transfer operations on all existing properties to the
new entity.  Once  operations are transfered EOW will request
cancellation of all MT bonding, which, will be
 appproved by the BLM and the MT State Board of Oil and Gas upon the
successful transfer of
 operations from EOW to the new entity.  With the MT bonds cancelled,
BancFirst will release
 the mortgage in question.

 EOW owns 2.5% of the Bonepile lease.

This should not be an obstacle in this transaction.  If Enron makes it one,
it can be taken out of
the equation.

The Enron record check in progress should reveal that 97.5% of the Bonepile
lease should be free
and clear of liens and encumbrances but for the JOA recording supplements
filed routinely by EOW and
other operators.

I will await the next communication from Dan Bump or Dan Hyvl.

-----Original Message-----
From: dbump@ect.enron.com [mailto:dbump@ect.enron.com]
Sent: Wednesday, February 09, 2000 4:07 PM
To: dkg@enernetok.com; Roobannon@phillipsmcfall.com
Subject: Mortgage Agreement


Gentlemen:

Latest version of subject document attached for your review.

I've been told to advise you that Enron would like to do further due
diligence (e.g. credit analysis, etc.) to get comfortable with Enernet's
existing mortgage(s) to have a good understanding of the situation.  Same
me need to be done for Quantum.  In other words, the agreement below could
be amended based on further analysis.

I'll let you know if anything materializes other than a phone call from
Enron credit to Enernet for information.

Dan

(See attached file: Quantum Mortgage Agreement redline 02-09-2000.doc)


 - Quantum Mortgage Agreement redline 02-09-2000.doc