Message-ID: <2288971.1075840226228.JavaMail.evans@thyme>
Date: Tue, 28 Nov 2000 12:34:00 -0800 (PST)
From: david.delainey@enron.com
To: kenneth.lay@enron.com
Subject: Mariner
Cc: jeff.donahue@enron.com, raymond.bowen@enron.com
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Ken, in response to your note, I am not aware of any official dialogue with 
Mr. Kase Lawal about a potential sale of Mariner or with the economics of the 
aborted IPO.  His $250 M valuation may have been appropriate 12 to 18 months 
ago.  However, Mariner has enjoyed a series of successful wells that are 
expected to be booked in reserve reports next March not to mention 
significant increases in gas and oil prices.  Our current valuations, in the 
$600M range is a stretch target but not incredibly out of line given reserve 
growth and current energy prices.  Our current goal, is to be able to 
demonstrate three to four quarters of increasing operating cashflow and 
reserves growth before attempting a private sale mid next year to a 
significant E&P concern that desires an offshore division.  The 
concentration, operating and exploration risk implicit in Mariner make it a 
very poor IPO candidate ((ie) I'm not sure that an IPO was ever a viable 
strategy to maximize the exit value).

I would recommend that we not meet to make the following points:
 a) Mariner is not on the market at this point in time and
 b)  his un-solicited offer does not warrant serious attention.

Otherwise, we would be glad to speak to him in the future if we decide to 
sell tha asset.

I hope this meets with your approval.

Regards
Delainey