Message-ID: <10851553.1075840216173.JavaMail.evans@thyme> Date: Fri, 13 Oct 2000 09:22:00 -0700 (PDT) From: joseph.sutton@enron.com To: jeffrey.sherrick@enron.com Subject: Re: EGEP Sale Announcement Cc: pam.benson@enron.com, kenneth.lay@enron.com, jeff.skilling@enron.com, cliff.baxter@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: pam.benson@enron.com, kenneth.lay@enron.com, jeff.skilling@enron.com, cliff.baxter@enron.com X-From: Joseph W Sutton X-To: Jeffrey Sherrick X-cc: Pam Benson, Kenneth Lay, Jeff Skilling, Cliff Baxter X-bcc: X-Folder: \Kenneth_Lay_Dec2000\Notes Folders\All documents X-Origin: LAY-K X-FileName: klay.nsf Jeff, I wish you would have cleared this through me first due to the implications in India. Keep me in the loop on all further announcements. JOe Jeffrey Sherrick@ENRON 10/13/2000 03:26 PM To: Kenneth Lay/Corp/Enron@ENRON, Jeff Skilling/Corp/Enron@ENRON, Joseph W Sutton/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Cliff Baxter/HOU/ECT@ECT cc: Subject: EGEP Sale Announcement Ken, Jeff , Joe & Cliff, This is a copy a note I sent to PR(Steve Kean & John Ambler), IR(Mark Koenig) and Enron India(Sanjay Bhatnagar & Jimmy Mogal) regarding our internal announcement to EGEP/EOGIL employees in Houston and India on October 13, 2000. On Friday (last night Houston time) we announced to employees Enron's decision to sell Enron Oil & Gas India Ltd. (EOGIL), our subsidiary that owns a 30% interest in the Panna, Mukta and Tapti concession areas. We now have bankers involved and a data room is being prepared in Houston which made it extremely difficult to keep the deal quiet any longer. There were numerous rumors circulating through the office, but the reality of the announcement was still a shock to most of the employees in India and Houston. Basically we said the following: 1) Selling assets or companies is a routine part of Enron's strategy to redeploy capital in the higher return opportunities. The company has exposure to a number of tremendous opportunities today that were not envisioned even twelve months ago. In line with this strategy, we are placing EOGIL in the market. 2) Depending on the success of finding an acceptable buyer for EOGIL, we will be reviewing the balance of our portfolio for transfer to other Enron entities or for sale as separate packages. We anticipate closing the EOGIL transaction and rationalizing the remaining portfolio by March 31, 2001. 3) Pending the success outlined in item #2, we will eliminate Enron Global E&P as an Enron business unit on March 31, 2001. 4) We announced some interim staff changes to facilitate the process. a) Jeff Sherrick would re-focus his time largely on the sale process b) Mike Stewart will be responsible for all India activity except the sale process c) Steve Harper will be responsible for EGEP's sale activity and coordination with our bankers and Corporate Development 5) Commented on the potential impact to employees in general terms. We told them it was pre-mature to outline all of the possibilities until we signed a PSA with a buyer. However, in general, there is a good likelihood that many people will either have opportunities for future employment with the buyers or through redeployment within Enron. Those people that do not remain with the assets or are not redeployed in Enron will be involuntarily terminated March 31, 2001 unless they are needed to close a transaction or to provide transition services to a buyer. I would like to keep this as low-keyed as possible. Last year when we were for sale there were not a lot of comments, but you never know. If anyone in the media picks up on this I would expect it to happen early next week. Mike Stewart is currently in India in the Mumbai office (01191228395841) and can be reached at the Mariott after-hours(01191228577878). He is fully briefed on our position regarding the activities within EGEP and EOGIL. Mike will be traveling offshore and to Baroda over the weekend and on Monday. I will be available all weekend and next week at the following numbers; (work) 713-853-5934, (home) 281-320-2198, (cell) 713-569-4713. I would suggest talking with Mike or I before making any comments to the media if possible. This afternoon I notified our partners and the Gov't of India of our intention to market our assets. I will be making a trip to India soon to visit with the appropriate people in these organizations within the next two weeks. While I wouldn't expect this to happen, please refer any inquiries from our partners (ONGC and Reliance) or the GOI to Mike or me. As you might expect, we want to be careful and consistent in our message to these groups. I will keep you informed regarding any changes to the above. If you have any questions, contact me at the above numbers. jeff