ENRON NORTH AMERICA ENRON GLOBAL MARKETS ENRON INDUSTRIAL MARKETS PORTFOLIO WATCH LIST UPDATE AS OF 10/31/2000 Distribution: Baiter, Cliff Buy, Rick Delainey, Dave Donahue, Jeff Frevert, Mark Haedicke, Mud (via ccMaII) Lydedwr, Richard (yb cc:Mail) McConneil, Mlk* MeMahon, Jeff Skilling, Jeff ECTeO1231O798 EXHO43-00043 I GOVERNMENT EXHIBIT 24593 Cnni No II 04-0025 I RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 1913112000 VALUES ARE GROSS / NET TO ENRON AS INDICATED PLEASE NOTIFY RICK CARSON AT X3-3 905 WITH QUESTIONS OR COMMENTS CONFIDENTIAL Cost & Carry Values as of 9-30.2000. Market Values from Merchant Portfolio Report Dated 10-31-2000 TABLE OF CONTENTS WATCH ASSETS...................................................................3-6 Banns Terre Exploration Linder Energy LLC Sacramento Basin Exploration City Forest Corporation Mariner Energy Vaioco, Inc. Cypress Exploration Ma.iada (From Performing) WB Oil Company DPR Holding Company (EGM) Oconto Fails (ElM) Jioupsi- Exploration TROUBLED ASSTIS.................................................................6- 10 Beau Canada Brigham Exploration Co C-Gas Ecogas EnSeiCo Offshore Heartland Steel Hughes Rawls LLC Ice Drilling Industrial Holdings "IHif" Iniand Resources Kafus Industries I Canfibre LSI Electric (From Watch) Queen Sand Resources, Inc. Basic Energy (Sierra Well Service) Transcoastal Marine Services LOSS ASSETS.......................................................... Belco Oil & Gas Nakornthaj Strip Mill Crown Energy RESTRUCTURED ASSET ACTIVITY In Progress I Partially Completed * Restnictw1n~s Completed Bri~Jiam Exploration Camzo Oil & Gas Costilla Energy Eugene Offshore Holdings, LLC Forcenergy' Ice DrilL Hogan Exploration Inland Resources Lyon Energy Industrial Holdings Repap Resources Kafus Industries / Canfibre TnPoint, Inc. NSM - Thailand Qualitech Steel CONFIDENTIAL 2 ECTeOI 2310799 EXHO43-00044 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 10/3 ltZOOO VALUES ARE GROSS / NET TO ENRON AS INDICATED ccii Sand Resources * Basic Ener~, (Sierra Well Service) Transcoasal Mm-inc' WATCH Assets displaying early warning signs of potential weakness that deserve close attention. Bonne Terre Exoforation (Linuzcd Liability Company) JEDI II & Balance Sheet (Net N's) Two exploration agreements are being finalized to promote in Manti Resources aid Tn-C Resources to develop the Catieron Padsh pn$eot area on what EVA views as favorable tennis. In addition, EVA wE close on a sale of the Black Bayou Dome Field with RIMCO in late October. A sw-time transferable seismic license to the Black Bayou 3D survey has also recently been aoqtirod. DIssolution of the LW oaiAinues to progress and ElKs outside cowisel has prepared aid distributed the first draft of the Windup Agreement The insurance company has denied 85750K oil spill claim related to an incident that occurred in March at the Black Bayou field in Louisiana. Further pursuit and discussion of the claim involving the insurance broker and the underwriters, with an outcome unlikely for at least 2 months. EVA, on behalf of Bomie Terre Exploration Company & Nexus, has negotiated an Extension Agreement (the properties are located on a wiltiffe refuge aid activity is restricted during the Oct-I4ar.peeiod) withTexaoo and issued a $LZ5MM Irrevocable Standby Letter of Credit. This enables EVA and its partners to defer the obligatory operation for the year 2000 witH 2001. Absent this extension. EVA would Itely have lost its rights to develop the diverse set of prospects identified in theTexaco acreage block. EllA has engaged Resource Solutions, a Geological 1 Geophysical shop in Denver. to preyade teobmacal assistance inprospeot generation aid manketm9 mthe rO$tZt area. - City Forest Cornoratlon (Senior I Sub Loans, with IP's) Balance Sheet & ENA CLO Trust #1 (Net #'s) * The Company recently presented its year 2001 Plan to the ENA Restructuring Group. Full yew 2001 EBITDA is forecasted at $10 MM, with cash flow after debt service projected in the $2 MM range. Margins are tight however, and running a 5% downside adjustment to commodity prices results in year 2001 EBrrDA of zero. The commodity portion cannot be practically hedged due to the hig$-end, value added color tssue that is produced as well as the specificity of customer requests. Similarly, a production level thatwourldomne iriat6tonsfdaylessthanplan(with I42tons/dayexpected),would result in year 2001 EBITDA being reduced to zero. Operational / commissioning issues at the plant have been mostly resolved and problems are now confined to the routine variety. Milestones to track production and efficiency gains were included as of the ear 2001 Plait (Transfer to ENA CLX) #1) S29.610 MM 51663 MM of Carry Value is hedged through i&aptor" Cvnress ExDlmtion (Working Interest) Balance Sheet (Net U's) * Dnlling activity at the Bernard No. I well is continuing with $13 MM spent to date and an AFE request of an additional S250K being circulated this wet The Thomwell property is in the process of being sold for $28 MM (all cash) to publicly traded Denbury Resources. The sale is expected to be completed by Nov-30-2000, subject to normal closing conditions. Denbury will use its existing credit facility to Rind the purchase. An exploration agreement is also being worked on with Rozel Onshore Exploration, which will assist with prospect generation. The exit strategy, post the Thoinwell CONFIDENTIAL FCTeOI 23108W EXHO43-00045 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 10/3112000 VALUES ARE GROSS / NET TO ENRON AS INDICATED disposition is to identify prospects under lease and then spend minimal exploration dollars that will create value, define potential and maximize sale proceeds WATCH - (Continued) DPR Holdinf Common,. LLC (Senior Debt & r~va±e Equity) JEJJI II & Balance Sheet (Net a's) Discussions continue on the sale of the Panther mine to Cline. Under the transaction, EGM would retain the rights to market the Panther cool and Cline wnuld pay $29 MM for the EGM / JEDI H Panther IPC's and the EGM / JEDI U interest in DPR's Membership Units of Panther. Curie would also pay down the outstanding debt balance of $19.3 MM to $10 MM at closing. Panther would then execute a demand note for $10 MM payable the earlier of the closing date of the Jupiter-Eagle joint venture or the one-year anniversary of the Panther closing. EGMIJEDI II have received equity distributions of S 3.3 MM YTh. Total equity distributions for the year are expected to be $6.5 MM compared to $ 8.2MM of budgeted distnbutjoss. Marketing Fees received YTD total $ 807 K As of Aug-2000,YTD, DPR TIC reported tonnage of 2.6 MM, EBITDA of $10.3 MM and net income before taxes of $1.6 IviM These results are less than originally budgeted primarily due to problems experienced at the DaJcota mine with roof control problems and the development of a longwall at Panther. The Remington mine continues to perform well. Actual pToduction exceeded budget in September by 16/e and on a YTD basis by 19.8%. The equity value of DPR has been written down by $ 9.0 MM primarily due to a reduction in the calculation of the projected put value in the valuation model and revised production and cost estimates for the Dakota Mine. The contractual put value is now limited to the PV of future cash flows reduced by a liquidity discount. The revised projections reduced yearly production by 180K tons in 2000 and roughly 244K tons from 2001 to 2008. After adjustments for the hed~e and cash received, the DPR equity at approximately $26 MM (Tramafer to ENA CLO #1) 323.054 MM Junlger ExploratIon (Limited Partnership) 151)111 & Balance Sheet (Net #'s) * The Eugene Islauid 57 project is now produohig along with Eugene Island 28 aid the Bay Marchand Wells. The I acity issues that had prevented m.akimwn production at Eugene Island 57 have been resolved with the operator (Energy Development Cospi and flow rates have miproved. The 1st of approved prospect AFE's for undrWed wells includes West Cameron 310. Vermilion 67. Eugene Island 148. Eugene Island 163. Eugene Island £0 and Eugene Island 80. Approval was also granted for the acquisition of High Island Block 72 at the August Minerals Management Servicelease sale and Juniper made the high bid. A prospect swap agreement has been entered into with Saniedan, which entitles Juniper to review and partic~pate in a well ~ High Island Block 72 aid obtain a I armout option on 16 "held by production' blocks. Currently. there is ongoing drilling activity at the Carp. Diem prospect well hi the Bay Marchand project area, with Juiwper having an i8~ working interest. The Eugene Island 60 prospect will spud this month. Cash flow from the Bay Marchand Eugene Island 28 aid Eugene Island 57 properties are currently covering general aid a'kniruistatr.,e costs. Drilling results for the partnership remain disappointing. with a total of 15 wells drilled to date with 7 cim-aitly producing. Gross contributions to date total $28.74 MM with distributions of 3123 K CONFIDENTIAL ECTeOI 2310801 EXHO43-00046 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 10/31/2000 VALUES ARE GROSS I NET TO ENRON AS INDICATED CaiTy Value has been hedged through "Raptor". WATCH - (Continued) Linder Enemy LLC: (66.7'h Membership Tnterest) JEDIJI & Balance Sheet (Net #'s) ENA Engineering has finaljzed the Oct-la pertoership distijbution interest re-detemiination and distributions will continue running 99% to JEDI Ill ENA A PV12 value of S38 MM was assigned to the LLC based on the October l~ natural gas strip. The ENA Restructuring Group continues to examine methods to exit the investment Linder is attempting to line up capital through reserve-based lenders who typically will loan between 50% - 60% of the PV8 value. Luider has made one offer to ENA to take us out at cost - that offer was refused. A negotiated seuleman between NPV 0% and NPV 12% (the return on the on~inal deal was capped at 12% is the like exit ¼ Mariner Enemy (Private Equity & Debt) JEDI I & Balance Sheet (Gross U's) * Mariner Management believes that recent increases in commodity pricing has created a window of opportunity for projects that can be placed on stream quickly. The Company has identified three short cycle projects that cmi be initiated before year-end and which, if successfuL would be forecasted to generate EBITDA in year 2001 of roughly $22 MM (using pnce decks of $24.00 for crude and $3.75 for gas). Year 2000 cap-ex would increase $12.] MM as a result of these projects. Mariner Management believes there is adequate debt capacity to fund the cap-ex activity and to provide for future opportunities such as the Eastern (3ulf of Mexico lease sale. The Company will also be receiving cash from the sale of its remaining 20% working interest in the Devils Tower field. Management is taking the approach that all projects must avoid the need for additional Enron funding through early 2003 and maintain year 2002 forecasted pwduction at a level (8.5 MMBOE or greater) to retain the at attractive ricing. ~, Masada (Private Equity - Membership Interests) Balance Sheet (Net U's) * MOVED FROM" PERFORMING" The commercial viability of Masada's main strategic focus, a manufacturing process converting garbage-to-ethanol, remains in serious question. Masada's proposed Middletown, New Jersey plant, which utilizes this type of technology, would be the first of its kind in the world. An EPC contractor has not been signed and Merrill Lynch has been unsuccessful to date in raising private equity that would help built the plant The bond underwriting effort remains on hold as well Oiiginal base case modeling projected EBIIDA of $7.6 MM in year 2000 and $21061 MM in year 2001. The ENA investment was to be repaid through sepai~te transactions with U.S. Filter Operating Services, contingent upon closing of the New Jersey project and two additional projects. The upside to the transaction was to be the retained membership interests in Masada OxyNol. LLC (parent) CONFIDENTIAL EC12012310802 EXH043-00047 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 10/31(2000 VALUES ARE GROSS I NET TO ENRON AS INDICATED and Pencor-Masada OsyNol LLC. ENA was also to act as Global Energy Manager for the parent Conipan~~ Oconto Falls (Sub-Debt I Equity & IPC's) Balance Sheet (Net #'s) * A conceptual Agreement has been reached on a "buy-beck" of the ]PC's associated with Oconto Falls however, the details and tuning of that anulgement rnnam to be worked out. The uutial payment is currently expected to be received prior to November 30th. The ENA Commercial Group believes that once the first payment is made the future payments will come in on schedule. The 35 MM of debt at the CLO / Merlin level will remain as the Company is precluded from paying that ofl~ prior to repayment of their senior debt. ENA is not participating in the financing of the Re-Box Paper facility (a greenfield linerboard project), but will retain warrants to purchase 250 shares of Re-Box common ~ (Transfer to ENA CLO Trust #1) S 5.000MM *Carry Value is hedged through "Raptor." WATCH - (Continued) Sacramento BasIn Exnloratlou Venture (50% W.L & a 40% N.RL) JEDI II & Balance Sheet (Net #'s) * (Formerly known as the Ameada Hess Exploration Venture) On July-28'. a new agreement was reached between Calpine and ENA / JEDI l1~ wherein the onginal Prospect Wells were to be replaced with new wells to be proposed by Calpine. The maximum commitment was reduced from 55 MM to $4 MM (with the imdesstaiding that ENA has already funded $1879 MM), and the commitment period was extended to Dec-31-2001. Calpine has since submitted 4 wells, 3 m California and I in south Louisiana. ENA Engineering has reviewed the wells and has made recommendation for 2 of them. No llshavebenmadeandarein¶hk~lywi~j2oo1, basedontheprospectareabeinglocatedinawet delta re~on that is ant dnll accessible during4he April - Octoberyeriod. S ___ * Asset values are hedged through "Raptor." Venoco Inc. (Private Equity - Cumulative Convertible Prefer. Stock) JEDI II & Balance Sheet (Net l$'s) * Company representatives were m Houston last week to meet with The Bank of Montreal and Toronto Dominion regarding the securing of a 3100MM borrowing base facility. Both banks are prepared to underwrite the $100 MM facility and take the existing bank group out at par. Venoco plans to use the new credit facility and the increase in borrowing ba.ie to fund activity at its offshore south Ellwood, California location. Permitting applications at that site have been filed, but are unlikely to be approved before early nexi year. Venoco has been recently fair-valued up in excess of $36 MM during August and if the financing issues described above are favorably resolved. the asset will move back to the * Asset values are hedged through 'Rnptor." TRoLJBL~ - Assets for which the returns are considerably less than originally projected. Beau Canada (Common Stock & Warrants) JEDI & JEDI II (Gross ~*'s) CONFIDENTIAL 6 ECTeOI 2~1 08A3 EXHO43-00048 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 10/31/2000 VALUES ARE GROSS I NET TO ENRON AS INDICATED Murphy Oil Corp. (NYSE - "MUR") and Beau announced on Oct-4~, that they have entered into an agreement tinder which Murphy will make an offer of C52. 15/ share in cash for all of the issued and outstanding common shares of Beau. The total value of the offer is approximately CS381 MM, including the assumed indebtedness of Beau of approximately C$I 83 MM at Sept-30-2000. The Offer represented a 27% premium over Beau's closing price of CSI.69 on the Toronto Stock Exchange on Oct-4-2000. The Offer has the unanimous support of Beau's Board of Directors and they have advised that they will tender their Common Shares to the Murphy Offer The agreement provides that Beau Canada will pay Murphy a termination fee of CS1O MM in certain circumstances. In addition, Beau Canada has agreed to close its data room and not solicit further offers. The credit quality of the ENA CLO Trust ff1 term equity note is aiJ~anced as Murphy is rated "A-" by S&P. The term equity note will ywdl be paid off at par at that time, includi accrued interest (rransfer to ENA CLO #1) 312.241 MM TROUBLED - continued Bultha, ExMoraUon Co. (Sub-debt, Common Stock & Warrants) JEI)I 11 & Balance Sheet (Net tPs) * FINAL REPORT Brigham has agreed to the total "buy-out" number that was proposed by the ENA Restructuring Group for the repurehase of our sub-debt, common stock and warrants. Closing of the transaction occurred on October 3l~, and funding was received November 2~, in the amount of $20 MM(~oss) dEC World Markets advised En durin~ the transaction process. - ) .. Y-,3~ami,.. - C-Gas (Private Equity) JEDI I (Gross #'s) * Year 2000 operational results for the Company have been good Through the first rune months of the year, C-Gas recorded actual EBITDA of 36.945 MM, vs. plan of 35.001 MMI Actual cash flow of $5513 MM for the same nine-month period compares to projected cash flaw of 33.553 MM, a 55% Improvement Production nianbers have been slightly below forecast far the year. but EBITDA and cash flow have increased as a result of the strong commodity environment Dnlling results through the first nine months indicate 24 wells drilled, with a 71% success rate. The Company has recently been notified by Bank One that its new borrowing base, effective Nov-I' would be $25 MM (current outstanding of roughly $17.5 MM). C-Gas also received a favorable 50 basis point reduction in Its borrowing coats, to Libor + 175, v, the previous Libor + 225. Given the reasonably strong operational results YTD. no immediate sale of the Company is planned Ecoana Coruoratlon (Private Equity & Revolving Debt) Balance Sheet (Net#'s) * ENA will be providing no further capital to the Company. The piece meal liquidation of Ecog~s is currently widaway with the Austin and Bridgeton (St Louis) facilities having been sold and liquidation of the remaining assets ongoing. The two sales made to date are estimated to have provided adequate cash to allow operations to continue through the end of October. If a couple of other sales materialize pnor to the end of Oct., there should be suflicient cash to last until the end of November. Unsecured creditors are forecasted to caine out at around $0.75 cents on the dollar, based on the belief CONFIDENTIAL ECTeO1231O8O4 EXHO43-00049 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 10/31/2000 VALUES ARE GROSS! NET TO EN RON AS INDICATED that asset sales will generatc approximately $4 Mlvi2 vs. the $4.8 MM that is owed (some funds will be retained by ENA for liquidation purposes). The proposed settlement is viewed as having a good chance of appeasing the creditor group (some payables are over 2 + years, ~th most creditors currently assuming no recovery) and should mitigate previously implied litigation threats. The NY Ecogas entitaesareSPV remoc-andwrflbenotbceffectedbyanyofthesaleprocesses 'Carry value is totally represented by the debt portion of the asset and itis hedged through "Raptor - EnSerCo Offshore (formerly NorAm) (Senior Term Loan) EnSerCo (Net #'s) The purchase and sale agreement entered into with Kingdom Eneru did not close. The Company was not able to provide 510MM in cash at scheduled closing. The ENA Restructuring Group contifl~ in discussions with Kingdom, but has advised the Company that any subsequent purchase and sale contract would need to incorporate an escrow of cash feature prior to closing. ENA is also attempting to identify a buyer by working with Bassoe Offshore, a selling agent for about 8(7/. of the rige cinrently on the market A deficiency judgment rendered in Galveston County against the fourier -. elicontinueto bej~zsu4 TROUBLED - continued Heartland Steel (Senior Debt, Common Stock & Warrants) Balance Sheet (Net U's) * ENA is reducing involvement with the Company including resigning its Board of Directors seat The ENA Restructuring Groups' analysis indicates that the equity in the Company is worth zero. Current project needs to complete ramp-up at the Terre Haute plant are estimated at $25 MM The Heartland bank group (headed by PNC Deutsche Bank). has granted an extension of a previously signed forbearance agreement to Dec-15', in return for a 5% non-cash fee. There are two principal payments due to the Senior Bank Group on or about Jan-1-2001, for $5 MM and $6.6 MM respectively. Absent a significant third party cash infusion, it is unlikely those payments will be made. EBITDA for year 2000, originally forecasted at positive $15 MM, will likely caine in at a negative $35 Mlvi EB1TDA for year 2001 is now projected to be in a range between SI 5MM - $25 MM, vs. a previously estimated $85 MMI The Co~ yhashiredRothschildsas a Advisor. Restructwin~ (Transfer to Condor) (Transfer to ENA CLO #1) S 15.000MM 'Carry value has been hedged through "Raptor." Huzhes RawIs LLC (LLC Membership) JEDI I & Balance Sheet (Gross U's) EPL has made an offer of $1.5 MM for the Hughes Rawls properties. This was on the high end of a previously expected range that used Jun-2000 pricing Discussion continues internally on whether the offer reflects fair value, given the current commodity environment. Values are higher than the $1.5 MM offered, using fiat SEC PYIO September pricing and it is also higher using current ENA price curves. However, both of those cases do not "risk" the behind pipe reserves. The ENA Restructuring Group also plans to negotiate the split on the proceeds if a sale is made, with the previous verbal agreement calling for a 50-50 division of the proceeds. ENA believes that the 50-50 split has been compromised CONFII)ENTIAL ECTeOI 2310805 EXHO43-00050 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 10/31/2000 VALUES ARE GROSS / NET TO ENRON AS INDICATED by Huajis Rawis unilaterally perticipating in three wclls, that subsequently cxperienced steeper than expected decim the value of the LLC. ~ Cany value has been hedged through "Raptor" kii»=riliiu. (Term Loan with Warrants) EnSerCo RESTRUCTURING COMPLETED - No major updates since our last report. A reconciliation of the amounts owed indicates C$l,05 7,836 (US$719,616) outstanding on the onginal US$11 MM (gross) loon after the sale of assets placed in receivership. A negotiated settlement on the deficiency with the guazuntors Was unsuccessful and legal action Is now underway. Liishi~biaLilgidjngi "Hill" (Term Loan) EnSerCo (Net U's) Indications are that Company is doing better under their new management. Positive earnings were recorded for Q-2-2000 and guidance is that Q-3.2000 results will continue that trend. The senior debt of the Company matures at the end ofJan-2001 (bank group currently headed by Comerica and Heller) and that refinancing will involve a pay-down for the ENA debt position. Interest on the note continues to accrue at the 18% default rate. Recourse against Industrial Holdings has been limited based on the unsecured status of the ENA note *~4~ *Cany value has been hedged throuaJi "Raptor.' TRO~~~~LTh - contInued Inland Resources (Cumulative Convertible Preferred & Conmion Stock) IEDI U (Net #'s) RESTRUCTURING COMPLETED. Inland announced on Oct-10' that asset purchase negotiations with privately held Flying J Inc. (Salt Lake City, UT) have been discontinued. Inland was unable to resolve certain issues related to the purchase of such assets. Inland had signed a letter of intent in May to purchase Flying l's North Salt La4c City refinery, nine gasoline stations and its IJintab Basin oil and gas assets for $50 MM, the assumption of S5.8 MM of debt and the issuaiice of about 7.8MM common shares. The sale and merger had previously been expected to close during October. A processing agreement between the parties will survive the breakdown of the ncgotiations. The exit strategy for the asset is to sell the convertible preferred note to an institutional buyer and monetizt the common shares throuh retail channels r. ~ ICafus Industries. Ltd.. Canlibre of RiversIde. Inc.. (Debt & IPC's) Balance Sheet (Net U's) On Oct-24', CanFibre~s Group Ltd2s wood recycling plant near Riverside filed for Chapter II bankruptcy protection m Delaware. lining debts of more than SIOO MM. The mill has averaged only about 55% of its production capacity since it opened. The plant will maintain a four-day a week Operating schedule. Trading on CanFilre's stock in Canada was halted Tuesday, and the 86% of its stock that Kafus owned was assi to ECT Merchant Inves (Riverside) (rransfer to ENA CLO Trust 1) $ 60.000MM CONFIDENTIAL ECTeOI 2310806 EXHO43-0005 1 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF lO/31t2000 VALUES ARE GROSS / NET TO ENRON AS INDICATED LSI Eiectr* Soecialtv Cow (Sr. Tcnn Loan, Preferred Stk~ & Warants) JEDI U & Bal. Sheet (Net #'s) MOVEJ) FROM "WATCH" The Company made their Sept-30' interest payment, but remain in default on the principle portion. LSI has had liquidity issues brought about by ramping ap inventory (currently estimated in the $4.6 MM range) in anticipation of sales that have not fully lnaleIialiZC(L As a result of the default, a demand and acceleration notice was sent and LSI responded with a request for a standstill agreement. A standstill agreement was punted by ENA concerning the event of default. however, the acceleration feature continues to apply. The Company is currently in refinancing discussions with a number of banks, including Frost, Sterling and Bank United IINA mandated that the Standstill Agreement, provides for secuntization of principal and interest payments to the ENA CLO Trust through year-cod This would likely be accomplished through a factoring arrangement that would allow monetization of receivables. Milestones were incorporated in the standstill agreement and be stnctJ~ enforced Interest payments are also now required weekly rather than m Ill I. Ii (Fransfer to ENA CLO Trust #1) 55.200 MM 'Carry value has been hedged through "R.aptor." Oucen Sand Resources. Inc. (Equity - Preferred & Common) JEDI (Gross Wa) * RESTRUCTURING PARTIALLY COMPLETED. The Company filed a prospectus under its new name, DEVX Energy, on Oct-27', offering 10 MM shares of its conmion stock at $7.00 I share. The recent re-capitalization, also included paying off $75 MM of senior high yield notes for $52.5 MM, resulting in a decrease in annual interest expense by roughly $10.8 MM. Upon completion of the offering, the indenture governing the currently outstanding 12 1/2% senior notes will be amended to allow ar increase in the level of permitted borrowings wider an existing credit facility to approximately $49 MM. Following the re-capitalization, JEI)I will own approximately 229,391 shares of common OSRI position in ~ * ~Cany value has been hedged through 'Rmptor." TRO~LED - continued Basic Enerajy (Sierra Well Servicel (Senior Sec Notes w' Warrants & Preferred Stock) JEDI II (net Wa) Jefferies continues to broker the private equity re-financing, First Reserve declined participation following their due diligence, however DLJ has stepped in on essentially the same terms. A deal approval sheet has been circulated internally providing for an offer of $35 MM in cash and a $5 MM cash flow participation certificate. The 535 MM offer would take out the ENA CLO senior secured credit facility (approximately $24.41 MM outstanding), at par. The ENA CLO senior subordinated credit facility (approximately $28.1 MM outstanding), would be retired at around $0.38 cents on the dollar. The cash flow participation certificate is for a five-year term and is capped at $1 MM per year and $5 MM in total Closing is by mid-November (Transfer to ENA CLO Trust #1) S 53.611 MM Transcoastal Mann. Services ("TCM,S") (Subordinated Debt with Warrants) JEDI II RESTRUCTURING PARTIALLY COMPLETED. The judge assigned to the TCMS bankruptcy ~e has entered an order approving the borrowing of funds from Morian Investments, Inc. in the aznountof$2MMforafour~monthpenod. Thefuwillbeusedtopaytheexpensesofthe bankruptcy estate such as insurance, security, labor and other items used to maintain the collateral. The ENA Commercial poup has been advised by outside legal counsel that "some" value for ENA and the CLO Trust should flow from the bankruptcy liquidation. CONFIDENTIAL 10 ECTeOI 2310807 EXHO43-00052 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 10131/2000 VALUES ARE GROSS I NET TO ENRON AS INDICATED ~ _ (rruasfer to ENA CLO Trust #1) S 20.00MM 3QilA~unmnr (Private Equity) Balance Sheet (Net #'s) No major updates since our last repoit. A recent well drilled by Coastal at High Island Block 85 was unsuccessful. Coastal had signed a participation agreement with WB, whereby they paid 3700K for a 77.5% working interest at High Island Block 85 Coastal was to pay an additional $300K~ when driLhna~carimenced on the initial test well The ENA exit strategy is sale of the interest 71 "1 * Asset values are hedgad through "Raptct." L No future cash flows projected and FMV of the asset has been written off. Residual recovery possible. Delco Oil & Gas (Warrants) JEDI I (Gross #s) TheBelcowurrantsareoutofthemoneytotheextentthatitisnotlikelythatanyvaluewillberealized unless Mother transaction as consummated with Belco that would involve re-pricing the warrants. - 27.50 (Oct-31 ~cosing1~ 59 1/4). The warrants expire Nov-25-2000. - continued Crown Enerrr (Private Eqwty) Balance Sheet * The Company has recently experienced management turnover, with their COQ'CFO resigning and their VP of Finance leaving Litigation issues continue with MCN Energy (owiently in the process of meeging with the parent Company of Detroit Edison - DTE Enea~y), filing a court action requesting a stay on all previously filed lawsuits between Crown Energy and MCN. MCN cites language in the Operating Agreements that mandate arbitration prior to the initiation of legal proceedinga. Crown is not in favor of arbitration and believes that the issues in question and the magnitude of their importance merit court consideration. The pilot program at Asphalt Ridge is complete and the process of separating oil from sand has proven effective. The economics of the project continue to be examined - current pricing for asphalt in the Salt Lake City area (3175 I ton) would suggest moving ahead (bose case pncing was 375 / ton). but the capital coi~iints of the Company will likely dictate otheiwise. Given the many issues suzrowidmg Crown's ability to continue as a going concern, ENA Senior Management recently made the decision to murk the cany value of the asset to zero. CONFIDENTIAL 11 ECTeO1231O8O8 EXH043-00053 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 10131f2000 VALUES ARE GROSS I NET TO ENRON AS INDICATED Nukonithal Shin Mill fNSM) -Thailand (Subordinated Notes wiWarrents) Balance Sheet_ RESTRUCTURING PARTIALLY cOMPLETED. The Company has delayed submission of a reorganization plan on its $32.5 billion baht ($768 MM) defaulted debt, citing it needs mare time to design a workout arrangement. The Thai Bankn~ptcy Court approved an extension until Nov-6'. Negotiatiown continue to obtain releases from the lawsuits that were filed against the original underwri ~oup that included ECT Securities CONFIDENTIAL 12 ECTeOI 2310809 EXH043-00054