Message-ID: <26556925.1075842633055.JavaMail.evans@thyme>
Date: Wed, 13 Dec 2000 00:41:00 -0800 (PST)
From: mark.whitt@enron.com
To: amcmullen@canscot.com
Subject: Powder River Gas Purchases
Cc: paul.lucci@enron.com, gerald.nemec@enron.com
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Dear Art,

As we discussed, Enron North America (ENA) is very interested in purchasing 
your Powder River gas supplies at Glenrock.  The market at Glenrock is 
forecasted to be very constrained over the next 12 months until the loop of 
the WIC Medicine Bow Lateral is completed.  Therefore, we are not able to 
offer a firm price or firm takes during this period.  However, ENA is the top 
natural gas marketer in North America, and we hold firm transportation on WIC 
and CIG which is complimented by our firm markets on KMI.  These skills and 
assets enable us to offer you competitive pricing and takes during this 
difficult period.  Aligning yourself with ENA will prove to be valuable as 
you try to bring to market your estensive Powder River production.

We will work with you to develop a portfolio of daily and monthly pricing 
which will mirror you production requirements.  And as you get a better feel 
for when your production will ready to flow we will be able to provide you 
the market price at that time.  For consideration, we are buying other gas 
under similiar monthly arrangements and are offering the following terms for 
the month of January.

 Price:  80% of forecasted daily volume  at Inside FERC CIG North System 
first of the month Index minus $.12
               20% of forcecated daily volume at Gas Daily CIG North System 
Mid Point Index minus $.15

Generally if gas is expected to begin flowing during the month we will price 
it at 100% Gas Daily minus the current market discount until a stable 
production level is established.

As you get a better idea of when your gas will flow, let's discuss the 
pricing at that particular point in time.  It would be helpful if you could 
provide us with a forecast of your production for the next year in order for 
us to build your volumes into our planning forecast.

You should have received a draft contract from our attorney, Gerald Nemec.  
Please review it and discuss any questions you may have with Gerald.

We look forward to doing business with you and your company in the future.

Sincerely 

Mark Whitt