Subject: Project Timber
From: [email-masked]
To: [email-masked], [email-masked]
Cc: [email-masked]
Date: Fri, 1 Jun 2001 01:10:00 -0700 (PDT)

A quick heads-up.  Our initial VAR calculations from Bjorn suggest a current 
increase in John's VAR from $8.3MM to $11.5MM in total.  Bjorn is still 
working with Scott Earnest in regard to position limits.  

A few other facts from Rick Causey's meeting yesterday with Mike Patrick and 
Rodney Faldyn.  Rick asked questions regarding (1) how EGM would manage these 
positions, (2) how we would manage the securities law issue of short-swing 
profits (Section 16 in the SEC 1934 Act) regarding the FAS 140 and the 
restructure of the subordinated units in 3Q on which corporate development is 
working, (3) disclosure of the transaction and sensitivities due to the 
affiliated parties and (4) whether or not the FAS 125/140 structure makes the 
most sense versus other EWS earnings.  I may need to ask you guys to call 
Rick on #4 to let him know how important this is for EGM and that Stan and 
Rod are comfortable with the FAS 125/140 deal.  John and I will follow-up 
with Rick on #1.  We are working on structuring around issue #2 and we will 
be working with Koenig's group next week regarding issue #3.  We are 
currently in discussions with AA regarding their recommendation concerning 
disclosure which will be the input for which Rex Rogers and Mark Koenig will 
be looking.  Thanks.  

-Larry-

Larry Lawyer
Enron Global Markets
Finance & Structuring
Work# 713-853-5513
Cell#   281-541-4296
Fax#   713-646-3203
Assistant: Kristy Armstrong 713-853-9937