Subject: Cash Flow
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Date: Tue, 13 Mar 2001 02:26:00 -0800 (PST)

Phil,

Yesterday we had our call to nominate the April LNG ship delivery.

We decided to nominate our five day window between April 4 thru 8.  PREPA is 
forecasting a 75% dispatch thru that period.  If the dispatch is 75%, we 
forecast that we would be running out of LNG about on the 8th.  Typically, we 
nominate with a few days cushion against the late delivery date.  We decided 
not to have a few days cushion for  the following reasons:

1. We avoid a cash flow shortfall of between $1-5 million (depending on the 
ship size) prior to April 16, 2001.

2. Inventory projections are based on 100% power plant availability.

3. Based on lastest loading schedules, Cabot is expected to respond with 
April4-6 delivery window.

4. There is sufficient LPG available to cover several days of LPG operation.

5. In the event that PREPA dispatches higher than 76% (and exposes themselves 
to SFP), volumes that we have made available to PREPA are priced at 
$6.75/mmBtu, which should cover our LPG costs.  Additionally, the volumes 
made available would only allow dispatch at about 87%.  We are prepared, if 
necessary, to significantly increase the price of any additional volumes made 
available to discourage dispatch above 87%.

Although our nomination should take care of a cash flow shortfall in April, 
we will have a problem in May (prior to May 17, 2001) unless we receive 
insurance money.  If we have a problem in May, it is not clear to me that we 
will be able to draw on the DSR as debt service payments are due only in 
March, June, September, and December.

Our insurance strategy must now include getting at least a partial payment in 
April.  Jaime please undate the cash flow (we will need this to address the 
Lenders recent request for an update) and advise us of our options assuming 
we will have a cash flow shortfall in May.

Rick