Subject: Canadian Memo
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked]
Date: Tue, 9 Nov 1999 00:59:00 -0800 (PST)

Peter:
Are you handlig these matters or should we be involved?  Please call me or 
Sara when convenient.  Thanks.
Carol
---------------------- Forwarded by Carol St Clair/HOU/ECT on 11/09/99 08:58 
AM ---------------------------
   
	Enron North America Corp.
	
	From:  John Suttle                           11/08/99 04:54 PM

To: Sara Shackleton/HOU/ECT@ECT, Carol St Clair/HOU/ECT@ECT
cc:  
Subject: Canadian Memo

Rob,

The following is an update on the ongoing situations with some of the 
Canadian counterparties that have recently changed their corporate 
structures.  Clearly there are some issues that should be discussed regarding 
the approach Enron should take moving forward.  On some issues, we are at a 
point that decisions need to be made on whether or not to begin exercising 
our contractual rights.  Other issues remain to be resolved within Credit, 
and I expect these to be resolved within the next week.

Please call me to discuss any questions you might have with the following. 

1) Dominion Energy Inc. acquired Remington Energy Ltd. in April 1999.  
Remington operates as a wholly owned subsidiary under Dominion Energy Inc. 
and has a Master Physical under which its deals have been confirmed.  It has 
failed on each of the financial MAC covenants in the contract.  Repeated 
efforts have been made to obtain a parent guaranty from Dominion including 
conversations that have taken place with both commercial and credit 
contacts.  Nonetheless, the counterparty to date has been unresponsive to 
guaranty inquiries.  In the past few weeks, repeated phone calls to our 
Dominion contacts have not been returned.  Current mark-to-market exposure 
for Remington is approximately $9MM USD.  

2) Marathon Canada Ltd., a wholly owned sub of Marathon Oil Company (BBB-), 
acquired Tarragon  Oil and Gas Ltd. in August 1998.  Marathon Canada Ltd. is 
a private company and requested a confidentiality agreement prior to its 
providing financial statements.  Enron delivered the CA in July 1999 and 
Marathon provided unaudited financials November 4.  Tarragon has a Master 
Physical in place and has MACd on its covenants as a result of not providing 
financial statements.  The financial statements provided need to be discussed 
in further detail with the counterparty.  A request for parent guaranty from 
Marathon Oil Company may be the final option prior to calling for 
collateral.  Total exposure to the combined entity is $13.5MM USD.  

3) Talisman Energy Inc. acquired both Rigel Oil and Gas Ltd. and Highridge 
Exploration Ltd.  We have transactions confirmed under a Master Swap and a 
Master Physical with Highridge,  a Master Physical and a Master Swap with 
Talisman, and a Master Physical with Rigel.  Talisman has agreed to assign 
all outstanding deals to the existing master contracts we have in place with 
Talisman Energy Inc.  As soon as possible, we need legal to draft paper to 
Talisman moving the outstanding deals under the Rigel and Highridge contracts 
to the Talisman contracts.  In the same letter, Talisman has agreed to 
terminate the Rigel and Highridge contracts.  In return, credit has agreed to 
review the collateral thresholds and credit terms in the existing Talisman 
contracts.  Talisman has its third quarter financials available this Friday.  
By the end of next week we should be able to send the letter to Talisman with 
amendments, transaction transfers, and Rigel/Highridge contract 
terminations.  Combined exposure for the entities is approximately $30MM USD.

4) Renaissance Energy Ltd. amalgamated Pinnacle Resources Ltd.  We have one 
deal on the books, but no contracts with Renaissance. We have a long term 
deal confirmed under a Master Swap and a long term deal confirmed under a 
Master Physical with Pinnacle.  Pinnacle does not want to move the existing 
Renaissance deal under the Pinnacle master agreement.  It appears as though 
Renaissance is finalizing a sale of assets that will include some Pinnacle 
properties.  If they sell the Pinnacle properties underlying our deals, they 
said they would probably assign the outstanding deals and contracts to the 
purchaser (presumably after obtaining Enron approval for such).  
Renaissance's current corporate structure automatically obligates Renaissance 
to the obligations of Pinnacle and the resulting exposure under the two 
contracts.   Combined exposure for these entities is $13MM USD.  A credit 
review on Renaissance will be conducted within the next week.

5)  Devon Energy Corporation acquired Northstar Energy Corporation in 
December 1998.  Northstar continues to operate as a wholly owned subsidiary, 
has an executed Master Physical, and it has MACd on each of its covenants.  
There is approximately $9.3MM USD mark to market exposure with Northstar.  
Northstar has had several counterparties request a parent guaranty, but has 
not offered any to date.  Devon offers limited financial information on its 
Canadian operations in its 10-K, but exclusive Northstar data is not 
provided.  We have sent Northstar our preferred form of guaranty, and they 
have been unresponsive to subsequent phone calls.