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I would like to add electronic index descriptions to the database. Please refernece Gas Daily publication, page three for the location of these indices. We can simply insert the location of the electronic index where we currenly have the gas daily index survey language in the gd swaps in the database. I would like to have electronic gd swaps for the following points. El Paso Permian, El Paso , non-bondad, Kern River/Opal Plant, Socal Gas, large packages. We will need to add electronic to the product title to differentiate between the two gd swaps. Thanks,
Electronic index descriptions
Anne, We would like to know the P&L for trading California gas this year for physical only. Please run a report summarizing the P&L at Socal Topock, PG&E Topock, Socal Ehrenberg, Ca Production, PG&E Topock, Malin, etc. We will then need to notify John Lavorado of the results. Thanks,
CA Report
Good morning. With the energy crisis in California at this time, we will need to be extra careful with nominations at Socal and throughout the west to ensure that we continue to provide the excellent nomination service that we have been providing to our customers. You guys are doing an excellent job and we understand that you are under quite a bit of pressure with limited staff. Our contracts state that we must notify every customer of pipeline allocations 12 hours in advance. We all know that this can be almost impossible on EPNG, but because of the current price levels at Socal and the basins, Enron needs to call each customer and notify them of their cuts with an explanation of the pipeline cuts each day to avoid any potential penalties. We also need to document when the call was made. In regards to the ATM nominations on Socal (ones that we can't monitor), Enron will be requesting full pipeline summaries of the nominations from our counterparties. Please try to think of any nomination gaming that may take place at these historical levels. We need to remember that our counterparties may not act as they have in the past due to the market price implications on their P&L. We should not rely on prior business conduct in regards to "standard epng allocations" when dealing with our customers. I would expect that the market is going to overreact to any cuts that may be above the "pipeline average". Let's discuss how we are going to monitor the flows of nominations out of our control. How do we prevent collusion with respect to the socal nominations that we can't see? Are there package numbers on each baseload contract to ensure that they don't simply reshuffle gas according to price? Let me know which companies are not providing Enron with timely allocation reports at Socal and I will call their senior trader to discuss getting this operational information sooner. Sincerely,
Socal ATM nominations
It looks like Anne accidentally include two Sumas trades in the Rockies data priced at 13.90 and 14.00. She will send out a revised spreadsheet on Thursday. The Rockies Opal wacog will then be $5.913. Sorry for the error. Sincerely,
Enron bidweek prices
Okay, I think the tds tab in newcurrentday was wrong. It is showing a jan pos of 269.55 lots, but TDS is showing 539.1. False alarm. We will fix newcurrentday. Mike
PG&E Citygate Basis position for January
The PG&E basis position in TDS does not match the FEB/MAR position. The Baja spread was executed as a NOV-MAR position months ago. The only real changes were to Socal basis over time. There is no telling when this might have changed in error. Will you please research the position to see when this position was reduced. I am guessing that a park and loan was executed by Frank Ermis at some point and the basis risk was allocated to GD New by mistake. Thanks,
PG&E Citygate Basis position for January
Are we confident that the gda priced positions are not being represented in my newcurrentday position sheet? I know that Phillips triggered their volumes back to GDA equivalent and that Matt Lenhart bought some GDA malin gas. How do we keep these from showing up in the physical risk? Mike
physical gda volumes
The position sheet from yesterday afternoon, close of business, is quite different than the position posted in newcuurentday for 11/29. What do you think the difference is? The SJ, Perm, and Socal don't match. Are we booking them correctly. Let me know. Ask Anne to reconcile each day with comments on the prompt tab. Thanks,
newcurrentday
We will need to discuss how to adjust physical risk to match the flow constraints on EPNG. The currrent capacity cuts in the SJ and Socal topock delivery points are 50%. I would like my P&L to show this risk. Please find a way to adjust the positions according to a daily flow curve that can be set in newcurrentday by either myself or Monique. Also, We will need to set up a new physical curve for Mojave Topock. Our transport is currently being reallocated by EPNG for deliveries to Mojave instead of Socal topock. I would like to show the transport on EPNG value as SJ plus cost to Mojave and have the value roll out each month, if any. The risk is showing the value of SJ to Socal topock (currently wide spreads for 2001) on the transport when it actually has less value delivering to Mojave topock. Sincerely,
IM WEST Book
Please create the following monthly for daily swap. IF GD/D CIG (N SYS). The GD index is listed under CIG (N. Sys) on page two. The monthly index is listed as CIG Rocky Mountain. Thank you,
CIG
Hey guys. Let's try this. Take the data from 2000 and change the following. Take Keystone West volumes to 850,000/d rateably, then add the new gen numbers posted below. You will need to add this demand to the EOC S ML demand numbers (Is Salmayuca included in this number?). We should use the 2000 waha west volumes for now. You should end up with reduced ehrenberg volumes for the reduction in Keystone west volumes and the addition of New Gen demand. Run the storage balance at 2000 Socal in this scenario. We will then plug forward with waha west volumes to balance Socal in 2001. Also, add columns to adjust (90%, 60%, 50%, etc) the burns for new gen in SW. We should then look to adjusting socal demand down for the high hydro/increased NW imports to CA scenario that could happen. Use the SP-15 2000 gen numbers and then back out the avg of 1999 and 2000 power imports. I would like to avoid averaging 1999 and 2000 socal gas demand. Use a 10,000 heat rate to reduce gas demand. Have Jay adjust EOC demand for normal weather. We may have to refer to the load sensitivity data from west power to reduce the SW electric loads and then back out of gen numbers using a 10,000 heat rate. We will then be exposed to EPNG and the OPS increasing Keystone west volumes between now and next summer - run the 2001 with this possibility as well. Take Key West to 1.1 bcf. Let me know where my errors in approach may be. This should give us a picture of the Socal deliverability for 2001. Thanks,
APR-OCT Analysis
This is the data that we will use to build our Socal growth estimates. Take a look at the file and then we can discuss how to combine this with current pipeline capacity and future expansions. Mike
New Generation as of Oct 24th
Ina, I can't seem to find the expense deposit for the SW Bell charges in my account. Will you please contact them again and ask them for a copy of the check? Thank you so much. Mike
SW Bell expense
After continuing to play musical chairs with the west eol products, I think we have decided on a plan. Keith and Frank will handle the prompt and term basis. This includes the monthly basis, daily basis, and gd index for SJ, ROX, Scal, CG, and Malin. They will make certain that the gd index products are out there for all terms. Cary Metz is managing the Perm products. I will handle the prompt month physical fixed price and index for all of the index points. The term physical index will be coming soon. The rest of the group will continue to manage their cash index points for the next day trading, while adding the BOM physical with a basis link to Monique's GD BOM products. I would like to get the cash products out on eol by 7:15 each morning. The early info will come in handy as we approach winter. Let me know what you think. Steve and Matt have started a pilot program in the NW for rolling out their next day cash products after 11:00 am each day. We will look into rolling out the SW in the future. We are in the process of sending out the "odd lot" notice to our customers regarding all products on eol. We will change our product minimum to one mmbtu in the next week. You may want to discuss this with your direct customers before the mailout. With the addition of Olivia Newton-John to my Scour selection, it is no secret that we have a new commitment to physical in the west. If you review your customer contact sheet and discover an old customer that we haven't contacted in some time, then call them and visit. We will be using EOL and the brokers for physical volumes, but nothing beats the direct phone call for the baseload phys. Thanks,
EOL Products
Anne, After NX1 going forward, I would like to load my final positions in the LIQBasis tab in NCD. The positions will include basis, physindex and gd index positions. We can then run settlement index scenarios to see what my risk will be to index postings. This will be a huge benefit. Gracias, Mike
LIQBAsis tab
Please read the following email from EOL. I have asked them to assist the West desk in mailing out an ad to all of our customers (utilities, producers, industrials, and some IPPs) notifying them of our plan to reduce the minimum volume accepted on all of our EOL products. Start thinking of which customers should be on the list and try to think of a creative way to present this to our customers. EOL has asked us to provide them with the text of our message. Also, let's go ahead and reduce the min volume on our products (primarily all phys and gas dailies) this week. We are attempting to capture all of the odd lot flow in the market. I would see this service as a clear advantage over the other web platforms. Let's get together on Friday afternoon at Ninfa's to discuss our ideas. Thanks,
customer mailout
Please add PG&E citygate GD/D - HHub GD (basis) to the database. Also, I would like to check on the status of the Baja spread product. Please sweep the new products in FIN basis, Fin swaps, and non-tx physical <or= to 1 month. Thanks,
new products
Please order two new monitors for me. I will be adding the two to the left of the four screens I currenly have. please request the arms as well. thanks
new monitors
We need to run regression on this load profile for Palo Alto. We should back out the industrial class and run their residential load. Can you find reliable weather for Palo Alto? Kim Ward is signing a full requirements deal with Palo on PG&E. Thanks,
Palo Alto load information
Mo, Are your reports still available for EOL that you created months ago? I would like to turn them over to the fundies group ( Matt Smith) tomorrow. Mike
EOL reports
Dear Tom, Enron would be interested in getting together with other trading partners to discuss listing other index points at the Socal border. I think the market requires other postings to reflect the fundamental changes in the market with respect to transportation constraints. The market has clearly seen a divergence in the summer spreads between PG&E and Socal interconnects. The marginal generation load in SP-15 and Southern California this summer has proven that Socal Gas is short delivered gas and is incapable of meeting daily demand with flowing supplies, and will be incapable of injecting gas during these months. Because of this, supply being transported from the Southwest supply basins can only find a home going into PG&E. This places downward pressure on PG&E Topock gas and upward pressure on Socal Topock gas. Remember, Socal is an island, not because of the delivered capacity to the border via EPNG and TW, but because of the limited capacity of Socal's interconnects. Demand exceeds the supply interconnect capacity. There is also a divergence between Ehrenberg and Topock because of liquidity. Topock is a more liquid market because of the upstream transport contracts on EPNG and downstream buying patterns of certain Socal markets. The market is more diversified at Topock than Ehrenberg. The overwhelming demand pressure on Socal gets exposed at Topock. Although Ehrenberg is the marginal point for gas into Socal, there is more of an imbalance in upstream capacity (EPNG and TW) to downstream capacity (Socal Topock 545,000/d) at Socal Topock than at Ehrenberg. The Socal Ehrenberg interconnect has 1.1 bcf of capacity and is primarily sourced by one market transporter. Ehrenberg simply gets placed at "market prices" because of varying objectives. One transporter may place gas to larger buyers to ensure flows, while smaller buyers on Socal may not approach this transporter for supplies. This illiquidity has led to a spread existing between Topock and Ehrenberg. Picture the market, San Juan gas is trading well below the Permian and Waha basins, which happen to be the marginal supply points for the west. Because of the of the limited capacity going into Socal Topock, every transporter on EPNG and TW wants to fill their contracts with San Juan gas first. These molecules compete for Buyers at a limited delivery interconnect. Likewise, all Buyers reach out for supply coming through a limited delivery interconnect (Topock). The San Juan then trys to find an outlet going east on the SJ east leg of EPNG. This transport leg simply displaces Permian gas going into Plains North and allows Permian gas to head west to Ehrenberg on the EPNG south mainline. While the Socal market peaks in the summer, so does the EOC demand. Permian west (Keystone West meter) cannot satisfy both the EOC demand and the Socal demand. So for the first time ever, we saw EPNG Waha West at maximum capacity to source transport contracts on the EPNG south mainline. This tells the entire story. When demand exceeds all available historical supply points, and begins to reach to Waha to meet Ehrenberg demand, you have a paradigm shift. This eliminates any correlation that may have existed between the supply basins and the market area. When Keystone West reaches maximum capacity, the rule of market spreads not exceeding the max rate transport rate then dies a fast death. There is simply no available capacity at the Keystone West meter to allow a shipper to buy max rate transport on EPNG and ship it to Socal. If you asked the market what the maximum interconnect capacity at Keystone West is, 9 out of 10 would not know. This leads to blaming market participants for wide spreads that are above historical levels. It is like Al Gore blaming "big oil companies" for the high prices of gas, when all refineries are at maximum capacity. There simply isn't the capacity to meet demand. The supply exists, but there isn't enough refining capacity available to meet demand. Fundamentals rule the market in all cases. I would like to propose the following index points for the Southern California border. The market would be better served with supply being included in these index points. One, Socal CA production/Socal storage/EPNG Ehrenberg, Two, Topock TW and EPNG, Three, KRS/Wheeler Ridge. The market will be experiencing more changes with respect to the Socal restructuring in the future. We will then address the different interconnects and propose an index for the Socal citygate as well. Call me on Monday to discuss the Enron Online download. Sincerely,
SOCAL
Ina, I need to add my son, Clark Watson, to my beneficiary list for medical, etc. Please let me know what I need to do to complete this task. Thank you,
Medical Insurance
Tom, See the email below for the ID and password. Call me on Monday to discuss the download process, if you should have any questions. You will log into www.enrononline.com and I think you will need to download shockwave media (the site should walk you through this process). Once you have typed in the ID and password, you will then have the option of setting up a personalized quote page. Also, call me about where to see our posted daily indices each day on the website. Enron releases the weighted average of all gas traded at each physical point every day. Thanks,
Gas Daily Request
The guest view only password is in the process of being approved. I apologize for the delay. I will send you the information as soon as I get it. Sincerely,
EOL password
Anne, I would like to check the index positions in the physindex tab in NCD. Please have all of the positions in the BasisTransport tab, section transport model, added to the phys index position totals. Please look at the PG&E CG positions for May-Oct, I added the transport positions already. I would like to add a KRS row in the physindex summary to account for the 20000/d transport that we have. Also, please have the new transport index positions at Socal that we are booking tomorrow included in the new KRS column in the physindex tab. We can review in the afternoon. You are doing a great job. I am sorry that I have not had a chance to thank you recently. The market is distracting me. Sincerely,
Physical Index positions in NCD
Steve, Start buying N-M citygate index this week. Pay as much as necessary to get resonable size. I am thinking 100,000/d for the winter. Grigsby
PG&E citygate index N-M
Let's continue to buy Socal for the rest of the month. I would like to sell Rockies, and remian neutral on Permian and San Juan, unless it looks like the maint on washington ranch will have a bullish effecst on the basins. I will leave it up to you to determine. I will call later. Mike
GD products
Can we create a San Juan phys for Oct bidweek? What did we decide with this product - swing only? If we do, I would like to link it to the basis plus nymex, or to the fixed price gas daily (fixed price gas daily will be rolled out during bidweek this month because of our risk in gd basis going forward). I want to roll the Inside Ferc phys points out during bidweek 7-4, as defined by Inside Ferc, last trade is mid. The NGI index points will be out 7 to 4 during bidweek, as defined by NGI. We will plan on sending the data to both index publications. Time open to market, time of actual trade, counterparty, price, etc. This will be considered their last opportunity to be accurate or we will decline to participate until their numbers are audited. Thanks,
EP San Juan phys
Please contact Keith Holst if you should have any questions regarding the new spread products. Please let him know when they are completed. I will be out of the office until Wednesday. Thank you very much. Mike Grigsby
Baja and redwood spreads
I am sure that you are aware of the move to daily basis from monthly. The west desk will be trying to phase out monthly for daily in the next month. We have created term gd basis vs. the HHub gd through apr-oct 01 for all index points. Grigsby
GD Basis products
I created the term gd basis products for waha, perm, sj, opal, and malin this weekend. Call Dale or Melba to activate. Keith and I briefly discussed how we would handle the new responsibility. I am fine with managing the prompt month gd basis, while you guys manage the term. I will be back in the office this week and we can talk about the products. Would we handle the monthly the same way? When do we plan to phase the monthly out? Have Phillip manage the perm and waha basis until I return. Dale is also working on the Baja and Redwood on/off system spreads. We can roll these out for all terms as well. See you this week. Grigsby
GD Basis products
Greg, I wanted to forward this letter to you that I received from a good friend of mine who is interested in discussing global steel trading oppotunities with Enron. If you don't mind, I would like to have Chase Belew call you to possibly set up a meeting. I work on the west gas trading desk. You can reach me at x37031. Thank you for your assistance. Sincerely,
Meeting with Enron Networks
Bruce, I work with Phillip Allen in West Gas Trading and he talked to Greg Piper about the letter attached below, and Greg told us to forward it to you. Mr. Chase Belew and Mr. Carleson, with E*Steel, would like to meet with you to discuss market opportunities in the global steel market. I would like to have Mr. Belew call you to set up a time to meet with you. Would this be a problem? Please call me to discuss. Sincerely,
Meeting with Enron Networks
Dale, Will you please create the following products for me when you get the chance? I would like to have GD/D HHUB vs EP San Juan, GD/D HHUB vs. EP Permian, GD/D HHUB vs. Malin, and GD/D HHUB vs. Kern/Opal. These will look like the GD/D HHUB vs. SCal that we currently have in EOL. Also, Can I please create three Gas Daily basis products. GD/D BAJA spread - This spread will simply be the GD/D SCAL vs. PG&E Citygate. The GD/D Redwood off-system spread - GD/D Malin vs. SCal. The GD/D Redwood on-system spread - GD/D Malin vs. PG&E Citygate. Call me to discuss. Thank you. Mike Grigsby x37031
New Products
I would like to see if the following applications are installed in the Trading Cluster. TDS position manager, CQG, Dow Jones telerate, IP TV Viewer, Microsoft Internet Explorer. Thank you.
Terminal server - Trading Cluster
Please have the technician bring another network cord for the laptop. I would like to connect it to the nortel hub as well. My laptop is here at work, so if they need it to install the VPN, etc., please let me know. Thanks,
Nortel box
Jay and Matt, We should get together and build a gas consumption model for the new generation in the west. We should identify the delivery point and then continue to monitor their status. This will provide us with more information behind our Socal/Rockies spread. Thanks,
new build
Jeff, Thank you for the resume. I am interested in talking to you about Jennifer Bagwell, as well as discussing the possibility of moving Susan Scott back to my book. I will talk to you tomorrow. Sincerely,
GD NEW
I received a notice to provide feedback on Jose Marquez. My review is brief, but very favorable. The west desk is very pleased with Jose's contribution. He has gone out of his way to assist each of us. Jose communicates the weather and its impact very clearly. Let me know if you need additional information. Sincerely,
Performance
Craig, Did you ever follow up with Kim Ward and the desk on the contract language for the deal or deals you did with CA endusers? We need to make certian that the customers are signed to the correct contract for balancing, etc. Please get with me to discuss. Mike Grigsby
CA endusers
Anne, can we add the new pg&e topock curve to the basis transport tab? Also, the LT transport section is showing the transport positions through 2002, which is incorrect. Please review the transport deals in the model and delete the positions. Thanks,
NCD
We need to talk about the contract language for Holly Sugar. Please see Kim Ward about some of the language we have used for full-req customers on PG&E. Thanks,
Holly Sugar?
Anne, Can we add PG&E Topock and Mojave Topock index points to the NCD locations? I think we discussed that they can't be added because of their association with Socal curves. Let me know. Also, can we add the new rockies index locations to the NCD sheet? It would be nice to see these locations broken out in detail. Mike
NCD sheet
We need to make certain that the transport for Pasdena is booked properly in sitara. I am taking a flash to actual hit on P&L because of our inability to book this deal properly. I need the transport booked in sitara at index to index, and then book the fixed cost payed to Pasadena in an index minus sale to them at the border. Please run a minibook of the transaction thru the remaining term and let me review it. Please let me know when this has been fixed. Kim, what is the cost of the transport for the month of May? Did we roll the cost from April? Also, did we change the index in the San Juan to Inside Ferc? Thanks,
Pasadena
Jay, what are we doing with questar positions? Are you managing this index point? I have an April position and Mark Whitt is working on a term deal. Thanks,
Questar positions
Please write up a ticket transferring my CIG and WIC April physical positions to IM denver. I will be selling CIG index to Jay at CIG index flat and buying the 2000/d at CIG index minus .03. Also, run a report of all my term index positions at CIG and WIC for the summer, so that we can transfer these to Jay as well. Thanks,
CIG and WIC
Anne, We will need to add a message to the email that we send out to the publications this bidweek. Let's get together to discuss the text. We have added new products that will need to be matched with their respective Index postings. Thanks,
West Index spreadsheet for bidweek
Ken called yesterday and we bought 5000/d april from him at 4.87. He said it could be either Milagro or El Paso SJ. Please call him and confirm the receipt point. Thanks,
Philips SJ
Please review the transport positions in sitara for next month. We should have the Baja transport included. 100,000 short for PG&E topock, 80,000 long Citygate, and 20,000 long KRS. The sj to socal transport should be broken out to like 24,000 topock, 14,000 mojave, and the balance to pg&e topock. Also, please check on the kingsgate to malin and stanfield to malin for next month. What about sj to waha? Patti, please run a report showing all of the sitara transport deals. Thank you! Mike
Transport for April
Phillip, Courtney needs me to watch the boys on Thursday in order to get organized before we leave for Italy. I can be reached on my cell phone 713-408-6256. Please have Anne update the newcurrentday sheet in order to manage my position. Please call me with any pertinent market information. I will see you Friday. Thanks for the help. Thanks,
Out of office on Thursday
Melba, Will you please take a look at the term non-texas index products greater than one year and activate them? The section is numbered (1126) in product manager. Thanks,
Activate draft products
Steve, Let's discuss all of your new rox products for EOL. I would like to know which products to roll out on EOL for April bidweek. I would also like to discuss creating a south of Muddy Creek product for Kern gas. I would assume that it would fall under the IF Kern index. Thanks,
Rockies products
We have created the new southern border index products for Socal and PG&E topock. Please create your new basis and gas daily products for these indices as soon as possible. Mattt will need to create the gd index products as well. Let the brokers know about the new indices I have the back office setting up new curves to book these deals. You will have two curves for Socal now. The curves will show your risk on the old index, as well as the new index. The new Socal index is the same as the old except that excludes KRS. I will be taking these phys products out on EOL as soon as possible. Thanks,
New Socal and PG&E products
Frank, The new procedures for trading basis are working well. We still need to get the desk comfortable with submitting orders to you guys, but overall I am pleased with the new procedure. I need to work on staying out of the basis market entirely going forward. Can you also try to work all basis at Socal through Keith. Let Keith and Mo see all of your Socal/Malin spreads in the future. I think I gave you an order to work Apr-Oct 02 socal/malin at the same time Keith was trying to sell a-o 02 socal basis. I will let him know in the future so that we do not cross him in the market. Thanks,
Basis trading
The index products look great. Can you have the same constraint language included on the PG&E Topock location for creating the phys forward (fixed price) product? Let me know when that is done. Thank you.
PG&E Tpock phys forward description
Please check the gd swap cheyenne positions for March. I am confident that I have cheyenne short positions on this month, but they are not showing up in the intraday tab. Please check to see if they are booked as kern/opal by mistake. Thank you.
Cheyenne hub positions
Dear John, I had a meeting with Phillip after our morning discussion about P&L and it seems that there may be some issues regarding how I run my book. It was my mistake about whether or not the put options for April Socal were booked properly. The options were booked properly by Larry May and my Book runners and the profit was realized for 03/08. My apologies for declaring that the options were not in my position. Also, the tolls curves are not treated as schedule C. I will adjust the tolls curves to account for basis curveshift as needed. My P&L did not match the Socal position because of physical index curveshift and an adjustment to transport. The discussion and feedback from Phillip regarding your conversation with him concerns me. I am confident that I run the most accurate physical and financial trading book within Enron. I will stand on the fact that no one within the market has a better understanding of his/her position better than I. The physical/financial risk in my book is managed to a standard not seen at Enron since I have been here. Few people realize the great lengths I go to to manage the risk in the IM West trading book. I am transitioning from my role as a trader on the west desk to one that it is responsible for communicating with you directly. Let's get together and discuss exactly what my responsibilities to you will be going forward. It may be that I relied to heavily on my subordination to Phillip Allen up until this point. This may have contributed to my miscommunication with you. I will see that this will not happen in the future. Thank you for all of my added responsibilities. Sincerely,
Curveshift 03/08/01
Let's have Matt start on the following: Database for hourly storage activity on Socal. Begin forecasting hourly and daily activity by backing out receipts, using ISO load actuals and backing out real time imports to get in state gen numbers for gas consumption, and then using temps to estimate core gas load. Back testing once he gets database created should help him forecast core demand. Update Socal and PG&E forecast sheets. Also, break out new gen by EPNG and TW pipelines. Mike
matt Smith
Our associates on the desk have asked why they have been included in the associate evaluation. Are they in the corporate associate pool or are they simply designated associates on the trading floor? No big deal - just forwarding their comments. Mike
Associate/ Mid-Rotation Evaluation
Please let me know when our new socal and pg&e index descriptions are available. Also, please activate the phys index producst in draft - one year terms 02-04. Thanks,
NEW indices in database and products in draft
Will you please set up the 100% flow SJ product? I would like the title to be just like the current EP product - no mention of 100% flow on the title. I would like to avoid making this a separate index posting. Let's make this available to the entire market. Thanks,
100% flow SJ
Let's start thinking about transitioning SJ to 100% flow. I would like to discuss all of the issues and costs of presenting such a product to the market. Think about what we might need in the form of Northwest transport, storage, operations personnel, etc. I realize that this will be risky and that I may experience some financial downside with this endeavor, but I think we should press forward. Will we need intra-day traders to place the gas? Do we need to establish intra-day relationships with SJ producers, utilities, etc? Will the allocation on EL Paso in April alleviate some of the cuts? Let's discuss in detail. Mike
100% SJ
I will submit the move request for the west desk on Monday. We should have Anne fill this spot. I would like her to keep track of New Current day and all new deals that flow through the desk. She can coordinate tickets to your group and make sure that they get booked throughout the day. She can also put physical deals in Sitara. Let me know what the desktop PC will need to be loaded with. Start thinking of other tasks that she might be able to accomplish so that your group may get home at an earlier time each day. You can keep this desk for your own use and rotate people through as needed. Thanks,
runner on the desk
We should change all settlements at Socal to NGI Southern Border, Socal from Southern California Border average. This new index excludes KRS fixed priced trades. Please let the brokers know about the changes to Socal basis going forward. Please change basis and gd swing swaps (fp and index) in EOL. Also, Frank and Matt should set up basis and a gd swap (fp and index) for southern border, PG&E. This will be the index for PG&E Topock. This index will be effective for April 2001. I will have the physical product out there as soon as possible. Let me know when they have been changed. Mike
Changes to Financial settlements for CA
It is my understanding that Susan will be starting her new job on the west desk Monday morning. We are couting on having her full time beginning the same day. Let me know if I am incorrect. Sincerely,
Susan Scott
Ina, Please have the IT group delete all copies of ICE and Altrade from the west desk. I think Randy is the only one. Thanks,
Get rid of all ecommerce software on west desk
Dear Jeff, I am interested in summarizing all of our contracts in the western region and identifying any problems (i.e. penalty language, notification deadlines for OFOs, etc.) that may need to be addressed. We have experienced a few problems with SW Gas Corp. recently. They have been penalizing Enron for cuts on EPNG, but when we pursued penalties with them on a baseload one month deal last month, they claimed that all one month deals have been booked on an interruptible contract and cannot be penalized. This was news to me. Can you help me identify what types of contracts we are using to transact business with our customers in the west? I can honestly say that these contracts have not been reviewed by the west desk for some time. Phillip Allen transferred the desk to me in August of 2000 and I have not spent the time to review all of contracts. Let's get together and discuss exactly what I may need. Sincerely,
Western Region Contract issues
How do I get the software to operate Socal Gasselect and Passport? I would like to have them installed on my desktop and laptop. Thanks,
Passport and Gasselect
Take a look at my review and let me know if we should any more of your 2000 accomplishments. I need to get this in your file for HR. Mike
2000 review
To: Energy Law Professionals On December 6-7, the Rocky Mountain Mineral Law Foundation is sponsoring a Special Institute on Natural Gas Transportation and Marketing. The brochure may be downloaded from our website at www.rmmlf.org. If you have any questions, please feel free to contact us. If you have trouble opening or printing the PDF file from the website, please E-Mail us with your fax number. We hope to see you at this cutting-edge program in Houston.
RMMLF Natural Gas Institute
Attached, please find the final Robin Potts opinion. All changes appear to have been made that were submitted last night. Please note that when you click on the attachment, you will only be able to see the fax cover sheet, but when you print it, all pages are there. I propose to post this opinion and the attached Memorandum to Members on our website as soon as possible today. Accordingly, please let me know within the next hour if you have any questions. Kimberly Summe <<310a389R-Andrew Woolmer-M10D18-ERSKINE CHAMBERS-.tif>> <<Convertible Bonds.doc>>
Final Potts Opinion
I have a concern about Enron's forward-looking exposure associated with legacy deals (deals that existed during the June 2000 through the May 2001 price shock). If Edison gets its way, all customers will pay for Edison's under-recovery from June 2000 through January 2001 plus CDWR spot market purchases during 2001. This would take the form of a surcharge on future bills. My concern is that Enron will be on the hook for these future charges associated with past under-collections -- even beyond the term of our legacy deals. For example, if a deal ends in March 2002 we could be on the hook for surcharges that a legacy customer would receive on its bill after that date, provided the surcharge pertained to costs incurred by the utility during the time that the legacy customer was ours.
Another Version of Negative CTC Risk?
I think that the BOE should be admitted to membership. Also, Bob, about the Hong Kong Monetary Authority (HKMA), following the recent seminar we did for them in HK, I think that we are likely to hear more from them about membership. Frankly, it is easy for me to raise the issue with David Carse/Simon Topping, which might well precipitate a formal application, but obviously I would rather not do so without hearing further from the Board about the potential success of such an application. It is probably best if I write separately about the HKMA and its functions including why membership for them might make sense. At that point, further discussion would be useful. Regards
Memo: Re: Bank of England Application
Mark -- If possible, I'd like to schedule some time with you (10 min) to discuss approval of a certificates transaction that involves ECE and Elektro. Orlando has scheduled some time w/ Lavorato at 1:00 Houston time, so sometime before then would be best if you are available. A memo has been prepared by Vicky Martinez that should have been forwarded to you by now, but I'll confirm that. Please let me know what works for you.
Risk memo for ECE-Elektro Certicates deal
Please see attached. Thank you. Donna M. Cagle Executive Administrator to President & CEO Mariner Energy, Inc. 580 WestLake Park Blvd., Suite 1300 Houston, TX 77079 281/584-5511 (phone) 281/584-5515 (fax) dcagle@mariner-energy.com <<Special BOD Mtg. Notice - 10-17-01.doc>>
Notice of Rescheduled Special Telephonic Meeting of the BOD
FYI, still under discussions between Enron and Light. This deal is similar to the Duke Call Options we closed last month. I'd rather do it under a Master Agreement and will check with the business guys if we can do so. Rgds, Sami
Light Call Option of 50MW
Attached are drafts of two memos I would like to circulate regarding EBS matters. One relates to Legal Risk Memos and one relates to legal review of contracts. I am also preparing one for contract retention. Would you please let me know if you have any comments? With respect to risk memos, I understand you announced on Thursday that there are 4 buckets you wanted referenced. Unfortunately, as you know, I missed Thursday's presentations. Thanks. Lance.
Memos
Following the recent administration of Railtrack and the draft Memorandum to Members of 11 October circulated by ISDA (copy attached for info), a number of you have expressed a wish to formally respond to ISDA on the issues raised. I've attached the draft we propose to send to ISDA. If you could let me have any thoughts/comments on the draft as soon as possible. I'll leave the decision as to when/if to submit the letter to Bryan. Thanks and regards,
Draft letter to ISDA re. "Not Contingent" and convertible bonds
Shortly before the teleconference Board meeting two weeks ago we received an application from the Bank of England for subscriber membership. When we have considered central banks or government agencies for membership in the past, consideration has focused on the nature of the applicant's derivatives activities, its regulatory role and the type of information they are likely to obtain from ISDA. Because of their derivatives activities, we have generally admitted these applicants (e.g., the Kingdoms of Belgium, Denmark and Sweden, the Reserve Banks of South Africa and New Zealand). We have even admitted the Bank for International Settlements as a member. In general, we let them know that they may not be able to receive the full range of ISDA materials (e.g., draft comment letters or position papers) and that there may be a need to exclude them from certain committees or discussions. In previous Board discussions, a higher degree of concern has been expressed if, theoretically, the Federal Reserve, the Bank of Japan, the Bank of England or similarly influential central banks were to apply for membership. These central banks typically have a greater degree of involvement in the regulatory debates (particularly on capital) and are better positioned to influence the process. Since some of those previous debates, the regulatory role of the Bank of England has diminished and the role of the Financial Services Authority has correspondingly increased. The Bank of England still plays the traditional central bank roles of controller of the money supply, dealing in the market and lender of last resort, but the supervisory role has shifted to the FSA. In light of these developments, but recognizing the concerns previously expressed on central bank membership, I would appreciate your views on the application of the Bank of England. We have also had overtures from the Hong Kong Monetary Authority regarding membership although we have not received an application. Please share your views with the other members of the Board. Bob
Bank of England Application
Please let me know if you have any comments or if I can provide additional info. re the attached. The DASH will circulate this afternoon or Monday. Esmeralda -- Please printo out and fax to my attention at the Woodlands the attachment.
Legal Risk Memo re Siemens Repair and Parts Agreements
Hello Everyone, Just a friendly reminder that our next Board Meeting is scheduled for next Tuesday, October 16th at 8:00 a.m. in the Glass Room. Please let me know if you will be attending. You may call me at 713-940-8037 or email me at Bennettlb@aol.com. You should be receiving your Board Meeting packet in the mail. Please remember to bring your packet with you on Tuesday. I will have a few extra packets made up in case someone should forget theirs. I look forward to meeting everyone on Tuesday. Lori Bennett
Board Meeting
We are nearing the "final" form of the document for further use. I have asked Bradford to speak with you regarding use of it for major trading counterparties that may not be investment grade, but with whom Credit sees the ability to greatly enhance our liquidity via netting of margin requirements (not the small accounts). Two issues. 1. Do you think we should write a risk memo concerning the issues surrounding the ultimate effectiveness under the Code and "square setoff" rights? Basically, the intent would be to clarify that if a court did not enforce the close-out netting, and then did not enforce the square setoff, our collateral position on a trading master by trading master basis could be underwater because we would have netted the positions under the master netting agreement for margining purposes. Further to this, the bankruptcy reform aspects of this issue are not moving as previously hoped due to consumer issues and current events. 2. FYI: It has come to my attention this week that Global Finance has consummated a receivable financing, and desires to consummate additional such financings which conflict with master netting agreements in place (as well as setoff language in trading contracts) and with the general concept of master netting for the future. We are meeting tomorrow with Bradford and Global Finance representatives to gather facts, sort through the issues, and try to resolve what appear to be different objectives concerning trading receivables. From a cash perspective, I would think Enron as whole would get more benefit from master netting (dollar for dollar benefit) than loan security (which would never be a dollar for dollar benefit)--do you think this is a correct analysis?
Master Netting Agreement: Update, Issues, Questions
Good morning. Per Michael Tribolet's request, I am forwarding you graphs that display the high level detail of bankruptcy exposure by 1) Business Unit and 2) Enron Corp consolidated. Regarding the Portland General graph, please note that we currently have knowledge of only one counterparty exposure - PG&E. Please call me if you have any questions or comments. Thank you and have a great day. Regards,
Bankruptcy Exposure Graphs
Mark Just a quick question while I remember, as you know I am giving an overview of the DASH process and the Legal Risk Memo that must accompany any DASH. My understanding is that the Legal Risk Memo must be attached to the DASH when the DASH is circulated and that on the face of the DASH form prepared by RAC, we should not be and there should not appear any Legal Risk assessment, which must only be contained in the Legal Risk Memo. The DASH should simply refer to "See attached Legal Risk Memo". I am hoping that this is also how you like to see the process work in practice. In addition I am going to say that if possible you need to be briefed and receive a draft of the Legal Risk Memo before it is circulated with the DASH. See you shortly. Marcus
Legal Risk Memo
The resume for Jeff Huff was inadvertently dropped from the message we sent yesterday evening. The resume is attached below for your convenience. Below are a few points for your review: Resume: Currently the second most productive Partner at Diamond-Cluster, a technology consulting firm. He has been a consultant dedicated to Enron for the last 2+ years, first for Tom Gros in EBS and Net Works and then for Dan Reck in Freight, developing trading systems. The Job: We are looking to bring Jeff in as VP, Commercial Support. The demands of growing the group require a consistent focus on technology, expenses, front and back office productivity, as well as constant re-analysis of growth strategies. Justification: Jeff's capabilities in these areas make him extremely qualified. We rely on him heavily already, but at consulting rates he costs us more than $1.3mm per year and his focus is limited to technology. Most importantly, the lead commercial folks in the group are overburdened with administrative issues and spending too little time bringing in earnings. Thank you.
Jeff Huff Resume
As I mentioned to you last week, there are currently about 50 EBS employees who are exempt from the Enron e-mail retention policy. These individuals were exempted from the e-mail retention policy in order to preserve documents related to the Blockbuster litigation. Now that the Blockbuster litigation is over, there is no reason for these individuals to continue to be exempt from the e-mail retention policy. I propose sending the following e-mail to the currently exempt EBS employees:
E-mail retention
Mark: Attached is a sample term sheet for a common stock acquisition that could be helpful as a starting point for the Mariner transaction. If the Mariner transaction will be structured as a stock exchange, I am not sure how helpful this will be. I have not located any term sheets for a stock exchange, but I will be glad to begin drafting one at your request. Also attached is a running list of issues and a listing of the portfolio assets Scott had indicated may move into Mariner and the current ownership of those assets. Please let me know if there is anything further I can do. Teresa
Mariner Term Sheet and Issues
I have not been able to locate any other term sheets that are tailor-made to purchases of oil and gas properties (most of the documents we have are related to financing someone else's acquisition of properties). However, Nancy Corbet has a template for an oil and gas property purchase and sale agreement that we could review and use to "beef up" our standard LOI and term sheet if you wanted to go that route. Let either of us know if you want to see that document, or if we can help out on the project.
Oil & gas transaction Term Sheet
Attached is a draft press for Coburg Power regarding our decision not to renew our exclusivity agreement. Any thoughts? They do not have a planned release date yet, but we expect it to be sometime this week or next once they have received approval from us. Eric
DRAFT PRESS RELEASE: Coburg Power
Mark nothing has changed since our meeting last week, but here's a quick summary for your convenience: 1. Deliberation 15: COMAE (board for ASMAE, which acts as the clearinghouse for the MAE) issued Deliberation 15 directing ASMAE to do its accounting without applying Annex V by Oct. 31, 2001. The generators object because without Annex V, they are 20% short instead 5% short. Elektro and the LDCs object because failure to apply Annex V ignores the contract which is registered with the MAE, and a 20% long position will never be upheld. Deliberation 15 further directs ASMAE to gather and supply to the generators and LDCs the information for application of Annex V, seven days prior to Oct 31. This is good because it gives Elektro the information it needs to calculate the set off against the generators for its 5% long position. Thus, it is unnecessary for Elektro to seek an injunction against ASMAE compelling the information. 2. Letter to COMAE/ASMAE: To preserve its position, Elektro sent a letter objecting to the COMAE's failure to direct ASMAE to apply Annex V. The letter confirms a list of information LDCs require for the calculation. If the information is not provided or is delayed, Elektro will go to court to compel the information. Once it gets the information, Elektro can go to court to force ASMAE to apply Annex V. Prior to taking the set off, Elektro will seek an injunction to protect its assets from seizure by the generators under Annex VI. Subsequently, Elektro will file a suit against the generators to enforce the contractual application of Annex V. 3. Two suits are being filed immediately to compel ANEEL to permit Elektro to recover or pass through various costs increases pursuant to its concession agreement. Regards,
Annex V
Mark, Please review the attached listing and advise if you agree to the projects and amounts listed as billings that Enron North America will receive in 2002 for support of these efforts. I'm at x30352 if you have any questions. Thanks!
2002 IT Systems Development Allocations
This follows up on my voice-mail to you of just a few minutes ago. I reviewed a voice-mail from Theresa Bushman this morning about the timing on the new Mariner matter that Mariner for which Mariner would like to retain F&J. She has spoken with Scott Josie, apparently one of our business people, and has been advised that the December 27 closing is critical, due to market conditions. Theresa also believes that the December 27 date will be aggressive even for F&J, given the late date. Theresa, please let me know if I have mischaracterized what you said. I see two options: 1. If you agree with me that we can't sign the letter as is: I do my best to get an acceptable letter negotiated with Uriel Dutton today. If I can't, Mariner retains someone else today. Frankly, I am not optimistic about getting an acceptable letter from F&J, based on where F&J started. 2. If you believe that we need to go ahead and get the best deal we can from F&J under the circumstances: I will do my best to get that done by noon or so, and if F&J doesn't budge, we may have to sign the letter as is. Caveat: I don't know if Dutton is in the office this week, so he and I may not be able to communicate quickly. Also, if we redraft a letter, we will probably not have time to get comments back from all the other interested Enron attorneys. I would also suggest telling Kelly Zelacovitz, Mariner's GC, this morning what our game plan is, and if it is option one, have her go ahead and contact her back-up choices of law firms, start running conflicts checks, etc., and have them be ready to hit the ground running. If there is anyone else I need to send this e-mail to, please let me know. I am in all day today; please let me know what you want me to do. Britt
In re F&J Representation
We are close to making a decision on whether to use F&J or some other firm for a new Mariner matter. I anticipate that if we retain some other firm besides F&J, F&J may want to give us our files back, per the original Gus Blackshear letter to Jim. Of course, F&J will insist in giving back one of Mark's files under any circumstance. Put aside for a moment the problematic ethical issue that I believe that raises for F&J and whether we would pursue F&J for taking such an action. If F&J sends our files back, can we live with that in the cases/matters you are handling? For Mark, Jordan and Theresa, I of course already have Theresa's voice-mail regarding the new Mariner matter, and have (along with Jim) spoken with Scott Josie. I also have an urgent call in for Kelly Zelacovitz. If there is anyone else you think I should include in this e-mail, please let me know. Please reply ASAP. Britt
In re F&J Representation/Urgent
Mark, Thanks for your voice mails yesterday regarding the cash needs of ou= r two organizations, EGEP and EOGIL. Based on your messages I am a little = confused and if I need to talk with someone else to actually move cash to E= GEP and or EOGIL in the near-term I need to know the process to follow and = whom to talk with. Here is a synopsis of our situation. The cash generating company that EGEP manages is EOGIL (our Indian E&P sub)= . EOGIL generates about $5 to 6 Million dollars of before tax free cash fl= ow each month (depending on oil prices and variable operating expenses) tha= t is deposited into a New York EOGIL account and immediately swept to an En= ron Corp. account (currently EDF). Therefore, this sub is self sufficient = and should be able to handle all planned 2002 extra-ordinary capital or ope= rating expenses. The only near-term issue is our estimated tax payment tha= t is due 12-15-01 of 6.4 MM$ for the 4th quarter of 2001. Since all of ou= r money is immediately swept to EDF, we do not have these funds on hand and= we will not receive enough cash prior to the 15th to make this payment. T= herefore, if we want to be self sufficient, a) we need to retain any new fu= nds in our EOGIL account and, b) any deficit can be borrowed from EGEP (ass= uming it is funded as described below) and repaid to EGEP from 2002 cashflo= ws. EGEP is the Houston based technical arm and management for EOGIL. We have = 40 people that work directly on the EOGIL assets (we had over 100 people la= st year and have cut staff to current levels as we sold assets) and these p= eople are currently pledged to British Gas for a 60 day transition period i= f and when we close the sale of EOGIL to BG. All of these people will be s= evered after the transition period and they all know this is their fate (th= ey have known this since October 2000). The reason they are still here is = for two reasons; 1) Divestiture agreements and 2) Severance payments. If w= e can not guarantee pay-roll, severance and divestiture we will lose people= immediately. Most of the staff can walk to EOGR at any time and without s= ome comfort regarding severance and divestiture, I know they will leave whi= ch puts us in jeopardy for a) maintaining our operations and operatorship, = b) being able to fulfill our contractual commitment to BG, or c) losing the= talent necessary to re-market if we can't close the BG deal. =20 Operatorship is a very valuable commodity and retaining it for re-sale is w= orth $50-75 million even if we elect to sell to an Indian company. In orde= r to retain operatorship it is vital that we retain the current staff. I realize this may seem trivial in the larger scope of things, but in light= of the reasons we are looking into this matter of keeping our cash generat= ing subs operational, having money for these items will be essential. EGEP= 's monthly G&A is approximately 1.8 MM$ per month. Enron's obligations to = the employees in the form of severance and divestiture is approximately $10= million. Therefore, I would recommend that we deposit $15mm into the EGEP= account to cover known commitments and we will bill future months of EGEP = G&A either to EOGIL or BG, whichever is appropriate. Furthermore, EOGIL ca= n use the $15 million to draw against if we need any near-term funding befo= re we build any cash reserves. I hope this helps clarify our situation. I am available to discuss this is= sue at your convenience and can be reached at 3-5934 or my cell 713-569-471= 3. Let me know if I need to talk to others in the organization. Thanks
EGEP & EOGIL Cash Needs
Hi Mark. I know that you are busy with critical Enron business matters now. I don't want to intrude on your time at this critical juncture. I do want to wish you much luck and success in getting things worked out. When things settle down, I would enjoy having an opportunity to continue our discussion. I appreciated your willingness to speak with me earlier this fall. Thanks for your consideration. And if I may ever be of help to you, please don't hesitate to contact me. Best regards,
Hello from MSU
larry further to our discussion this morning attached the powers of attorney that I discussed we would like to get them executed so that we would in a position to sign the sale sale agreement today. I am currently working on the resolutions. David Minns
Powers of attorney for sale of Australian companies
Mark, Long time no see - I hope you're doing well despite the difficult times we're in. Enron Europe Limited entered into administration earlier today, but nobody seems to have much idea or can render any information about the faith of the captioned company and its Nordic power trading business. We are thus pretty much in the dark over here and I wonder if you can you advise us or direct us to somebody that can. Thanks. Martin
Enron Capital & Trade Resources International Corp.
Thank you to those who attended the Documentation Committee meeting in New York on November 29. We look forward to meeting our European members at the meeting on December 13 in London. Earlier this week, we distributed the first draft of the 2002 ISDA Master Agreement with accompanying documents to the Committee. We strongly encourage you to participate in the development of the 2002 ISDA Master Agreement. To that end, please send in your comments on the first draft of the Master Agreement by Monday, January 7. Comments should be addressed to Kimberly Summe (ksumme@isda.org) and Katherine Darras (kdarras@isda.org).
Documentation Committee
All: I understand that Mirant, the buyer in our EcoElectrica deal, may have some outstanding trading exposure with Enron and/or its affiliates. The issue has been raised of whether Mirant may attempt to offset amounts to which Mirant believes it is entitled against the $266 million purchase price that Mirant is obligated to pay an Enron affiliate in the EcoElectrica deal. I understand that Enron has netting agreements in place with certain counterparties which may permit such offsets. Which lawyer in the Enron trading world can help me determine what, if any, contractual arrangements are in place with Mirant that bear on this important issue? Pls let me know. Bill Krenz X67749
EcoElecrica / Possible Mirant Offset
Mark - I'm going ahead and faxing the documents that I have already got signed to Brian Korn at Weil Gotschal FAX: 713 224-9511. I'll tell him that Lavorato's signature will be faxed to him by your office when you've been able to get it. Please let me have the originals so that I can get them to Brian. The docs. to be faxed are: Written Consent of Directors of PBOG Corp. re approval of Agreement and Plan of Merger between PBOG and Hartsook (you already signed this one), and Certificate of Merger. Sorry it's such a problem getting J's signature. I tried my best! Kate
Documents awaiting John Lavorato's signature