Message-ID: <27117689.1075842602495.JavaMail.evans@thyme>
Date: Sun, 23 Jul 2000 10:12:00 -0700 (PDT)
From: gerald.nemec@enron.com
To: dan.bump@enron.com, joan.quick@enron.com
Subject: Wildhorse Letter
Cc: scott.josey@enron.com, barbara.gray@enron.com, brian.redmond@enron.com, 
	teresa.bushman@enron.com
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Confidential Work Material - Attorney Client Privilege


Attached for review is a draft of the letter to be sent to Wildhorse 
concerning the Gathering Agreement under which the Entrada and Dakota 
production is committed.  Please review and provide comments.

To summarize activities to date concerning this Gathering Agreement:

1.  Conducted a conference call with Brett Frie on Wednesday.  Brett also 
forwarded some correspondence between Enogex and Wildhorse.  The 
correspondence contained a summary of meeting minutes for two meetings 
conducted between Enogex and Wildhorse.  No demands were made by Enogex and 
no claims of unprofitability were made by Wildhorse.  Brett stated that the 
Entrada and to some extent the Dakota gas were shut in or curtailed because 
the downstream carriers starting enforcing their tighter gas specifications.  
Enogex took Wildhorse's word for that and never checked with Northwest or 
Questar.  I asked Brett why he thought Wildhorse would straight away release 
the gas.  He responded that he thought they would do so only if Crescendo 
negotiated an alternative arrangement with Wildhorse.  

2.  I received more correspondence on Friday from Ken Krisa.  Nothing really 
useful.  There was a letter from Wildhorse to another producer in the area 
called Lone Mountain Production Company which stated that Wildhorse thought 
these assets were in a state of economic viability decline.  Unfortunately 
this letter was not directed to Enogex.  However, the draft letter takes that 
position with Wildhorse.

3.  I am securing local consul out of Denver.  I want someone intimately 
familiar with Utah and Colorado law from a litigation and timing perspective 
to be involved.  We may need to seek a declaratory order.   We have run into 
to conflicts with law firm that have represented either KN or Tom Brown.  
Should have this resolved on Monday.

4.  Agreed to language on Friday with Ken Krisa and Jim Osborne and the 
declaration by Crescendo giving power to ENA to negotiate with Wildhorse.  

This draft does state our desire to pursue a release of the gas.  However, to 
reiterate, based on the current facts we do not have a black and white right 
to deem this gas as released under the Gathering Agreement.  The fact that 
the Entrada Gas is not in spec. with the downstream pipelines for inerts, 
allows Wildhorse to suspend their receipt of this gas without being in 
default.