RISK ASSESSMENT AND CONTROL ENRON NORTH AMERICA PORTFOLIO WATCH LIST UPDATE AS OF 6/16t2000 a II~ U Distribution: Boweti, Ray (via cc:Mail) Buy, Rick Delainey. Dave Frevert, Mark flacdacke, Mark (via cc:Mail) Lydecker, Richard (via cc: Mail) Skilling, Jeff Sutton, Joe (via cc:Mail) PLEASE NOTIFY RICK CARSON AT X3-3905 WITH QUESTIONS OR COMMENTS CONFIDENTIAL U ii Cost & Carry Values as of5-31-2000. Market Values ftom Merchant Portfolio Report Dated 6-12-2000. IEXHI9rTZ3O(o(&21 I~CaI~~I II~~oii ECTeO35498542 EXHO43-00020 I GOVERNMENT EXHIBIT 24589 Crim No H 04-0025 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 6116/2000 VALUES INDICATED ARE FOR ENRON NORTH AMERICA TABLE OF CONTENTS WATCH ASSETS.................................................................3-5 Bonne Terre Lewis Energy Group Sacramento Basin (NEW) City Forest (NEW) Under Energy LLC WB Oil Company DPR Holding LSI Specialty Carp Ecogas Corp. Mariner Energy Heartland Steel (NEW) Oconto Fails Juniper Exploration TROUBLED ASSETS...............................................................6-9 Beau Canada (NEW) Gasco Distrilmilon Kafus lndustnes/ Canfibre Brigham Exploration Hughes Rawls Queen Sand Resources C-Gas Ice Drilling Sierra Well Service Crown Energy Industrial Holdings Transcoastal Marine EnSerCo Offshore Inland Resources Eugene Offshore Holdings LLC LOSS ASSETS.....................................................................9 Belco Oil & Gas Nakomthai Strip Mill Lyco Energy RESTRUCTURED ASSET ACTIVITY In Progress I Partially Completed' Restnzcturingu Completed Brigham Exploration Carrizo Oil & Gas C-Gas Costilla Energy Crown Energy Eugene Offshore Holdings. LLC Enscrco Offshore Forecncrgy Gasco Distribution Ice Drilling Hogan Exploration Inland Resources Hughes Rawls LI.C Repap Resources Industrial Holdings Transcoastal Marine Katijs Industries I Canfibre Tripoint, Inc. L co Ener * Quatitech Steel Nakornthai Stri Mlll~ Queen Sand Resources * CONFIDENTiAL EXHO43-00021 2 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 6/16/2000 VALUES INDICATED ARE FOR ENRON NORTH AMERICA Sierra Well Service CONFIDENTIAL 3 FC.ThO?~4~R544 EXHO43-00022 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 611 6/2000 VALUES INDICATED ARE FOR ENRON NORTH AMERICA WATCH Assets displaying early warning signs of potential weakness that deserve close attention. Boone Terre Exoloration (Limited Liability Company) JEDI II & Balance Sheet * A probable dissolution of the LLC is now thought likely, with potential financial liabilities remaining of$l .2MM to $3.9 MM, including $1.5 MM in delay rental payments. No wells have been drilled or additional monies spent since the last report. Two wells at Saturday Island have came back on line adding monthly net cash flow of approximately S300K to the LLC. The LLC Agreement contains a conversion option that can be cxeivised in Jan-2001, which allows any member to divest itself from thc LLC. Bonno Tcrrv has gathczvd intcrcst from two major crcdit-worthy playcrs rcgarding the potential for drilling certain of the LLC inventory. Cost: S2LStiO MM Market Value: S17.054 MM Carry Value: S17.054 MM City Forest Cornoratiom (Senior I Sob Loans, with IPC's) Balance Sheet and ENA CLO Trust #1 * MOVED FROM 'PERJORMIr4G" Members of RAC and the ENA Commercial Team recently made a site visit to the Company to examine operational issues associated with a new tissue machine. The machine is currently producing at approximately 60% of capacity and efficiency. The OEM is providing consulting services as pail of their original turnkey contract, but the progress to date on correcting the technical difficulties has not been satisfactory. City Forest can claim CoiiipelIintOry damages, as a result of the failure of two performance tests, but their ability to do so will still not make them 100% whole on a cash flow basis for the revenue that is being lost. Less than expected cash flow from the technical difficulty is anticipated through the end of Q-3-2000. The asset will be left on "Watch" until the technical difficulties are resolved and cash flow is normalized. Cost: 50.00 Market Value: S3.496 MM Carry Value: S 3.477 MM (Transfer to ENA CLO #1) S29.000 MM Cvoress Exuloration (Working Interest) Balance Sheet Final documents are being negotiated to set-up the Newco. The major players are Allen & Co., the New York based 1-bank firm that will provide the investors, Resource Acquisition Corp. a limited partner and Bill Rogers, the new managing member in charge of daily operations. While a new structure is being defined, certain fixed costs will continue to require payment, such as delay rentals on. the leases. Estimates are that delay rental expenses will be in the S2-S3 MM range for year 2000. Cost: 557.249 MM Market Value: SSS.531 MM Carry Value: S57687 MM DPR Holding Comnany. LLC (Senior Debt & Private Equity) JEDI II & Balance Sheet * An Enron RAC member recently conducted a financial control review of the Company at their Beckley, West Virginia office. No material findings were made, however in certain instances the payincnt of intcr-Company accounts continucs to lag thc agrecd upon 15 day scttlcmcnt aftcr monthly close. Improvement is noted, but certain outstanding instances were found an excess of 90 days. There axe no current material litigation items. Shaft construction is underway and Cline continues to project that the slope work at the Eagle Seam in the Panther mine will be completed by early July. DPR has strong economic incentives to complete this work as soon as possible, due to a significant amount of distributable cash flow at the Holding Company (which Cline is due 81%) being required for principal and interest debt service at the Panther mine. Coat: S23.087 MM Market Value: S24.567 MM Carry Value: 527.398 MM (Transfer to ENA CLO #1) 523.504 MM CONFIDENTIAL ECTh035498545 EXHO43-00023 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 6/1 6/2000 VALUES INDICATED ARE FOR ENRON NORTH AMERICA WATCH - (Continued) Econs Corooratisa (Private Equity & Revolving Debt) Balance Sheet * Three of the five banks thai were sent information memorandums on the 560 MM long-terni financing facility have expressed interest and one has signed a tern sheet. The two remaining banks are expected to submit term sheets shortly. A term sheet has also been signed with AEB Financial Ser~viccs on thc $8.8 MM Nelson Covel proicet in San Antonio, with closing expected by the cnd of June. Discussions continue with two potential EPC contractors, NEPCO (an Earoit Subsidialy) and The Shaw Group, on the Fresh Kills (Staten Island), New York project Ecogas will close shortly l4ith Fidelity Investments on a $5 Mlvi Section 29 tax credit monetization on the McComxnas Bluff facility in Dallas. Tern sheets have been exchanged mid signing is anticipated shortly on the S400K (approximate) in penalties owed to Frito Lay for gas that was net delivered (Penalty was the difibrenee between what Frito Lay paid for gas and S2. 15). Cost: S39.610 MM Marke.t Value: S47.616 MM Carry Value: 349.706 MM Heartlaud Steel (Senior Debt, Coimnon Stock & Warrants) Balance Sheet * MOVED FROM "PERFORMING" Recent ENA prqjections of actual vs. budgeted results indicate a YTD EBITDA shortfall of $9 MM. The margins between hot band and galvanized have been squeezed by competitive pressures, making it unprofitable to produce commodity grades of galvanized steeL May shipments of 8,000 tons fell well short of the 23,000 tons forecasteL Problems have also been encountered with the integration of production and management reporting Systems and an outsidc consultant has bccn retained to address the issues A more dctailcd analysis is underway, ~th a RAC and ENA site visit planned to Heartland the week of Jitne l9~". Cost. 313.183 MM Market Value: 539.603 MM Carry Value: 339.603 MM (Transfer to Condor) S 14.754 MM Juniner EmIgration (Limited Partnership) JEDI II & Balance Sheet * Jumper has brought a prospect at Eugene Island ("El.") # 80 forward and Enron will likely participate at the 50% level. Enron is also reviewing a prospect at El. #60 for technical ment. The ENA Commercial group invited Houston based Allbrecht & Associates in recently to examine the possibility of monetizing part or all of our interest in Juniper. Based on those discussions and the general M&A climate for Gulf Coast shelf projects in general, it is unlikely that any inunediate divestiture is likely. Drilling success for the Partnership remains a concern with IS wells having been drilled to date and only 6 currently having prodaction. Cost: 317.357 MM Market Value: 319.226 MM Carry Value: 319.474 MM Lewis Ener~v Groan ("LEG~ (Limited Partnership & Term Loans) iF])! I (Gross #'s) * A 5500K non-refundable deposit has been received from LEG regarding the $15.5 MM buyout for JEDI l's 35% interest in the Limited Partnership. The deposit will be applied towards the S 15.5 MM purchase price. LEG will also pay a non-refundable fee o($ lOOK that will not be part of the purchase pree, to extend the closing until July 30~ The total buyout amount from LEG will then be $15.6 Cost: S14.945 MM Market Value: 313.306 MM Carry Value'~ 313.845 MM (Transfer to ENA CLO UI) S 2.392 MM Limier £nerav LLC: (66.7% Membership Interest) JEDI II & Balance Sheet * ENA believes the possible buy-out of our membership interest by Linder has been put on hold for now No recent response has been noted from Roger Linder, the principal of Linder Energy, CONFIDENTL4L r*r4W%.nnr Annr Afl EXHO43-00024 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 6/1 6/2000 VALUES INDICATED ARE FOR ENRON NORTH AMERICA regarding this possibility. Distributions received from the LLC have improved over the past couple of months (driven by strong commodity prices), with S902K received for February and $1.34 MM received in Maivh. Cost~ 514.622 MM Market Vaiue: 515.332 MM Carry Value: 514.957 MM WATCH - (Continued) LSI Electric Sneemaltv Con) (Sr. Term Loan. Preferred Stock and Warrants) lED! II & Balance Sheet ENA recently closed on a $500 K working capital loan with LSI to provide Short4eriu working capital. The Note was priced at Prime +2% with a 5% linancing fee charged. Proceeds were used to inCrease inVentOiy levels. [SI had recently been losing business on short lead-rime, over the counter orders for lack of supporting inventory stock. LSi has gained "preferred provider" status with Enron Engineering & Construction Company and with Enron ~j~s~ja13~ NEPCO which should positively impact year 2000 EBIThk 11~ Enron alliances should also strengthen the Company's "E" mtin& thereby facilitating the re-financing o(the ENA CLO Tnist #1 term loan that matures in April, 2001. The LSI year end 1999 financial slateinenis need to be (inalried shortly and may contain a qualified audit opinion front Deloitte & Tauche as a result of debt covenant violations, should a decision be made internally to not grant waivers Cost: S3.375 MM Market Value: 53.320 MM Carry Value: 53.292 MM (Transfer to ENA CLO Trust #1) 55.450 MM Manner Encz~ (Private Equity & Debt) JEDI I & Balance Sheet (Gross #'s) Reported Q-l-2000 EBI'TDA of $15.2 MM vs. $5.1 MM in Q-1-99 and 57.2MM in Q-4-99 Increase in EBITDA was driven by higher nverage realized commodity prices and a 51% increase in production, partly offsetbv higher lease operating and G&A expenses. Hedging reduced revenues by S4.6 MM in Q-l.2000 vs. no efibet in Q-l-99. EBITDA coverage of interest was 3.53x in Q-1-2000 vs. l.4x in Q-1-99 and 1.69x in Q-4-99. At May-16-2000, the balance (net of a short4erm cash investment of $3.6 MM) was $26.4 MM on the recently increased $70 Mlvi B of A led revolving credit facility. Mariner's S-I has been updated should the IPO markets become more receptive. Mariners $100 MM 10 '/2% senior sub-notes of 2006 were recently quoted by Bank One Capital Markets at $90.75 bid, +605 bps. to Treasuries, with a YTW of 12 690/.. Cost: 5235207 MM Market Valise: 5386.322 MM Carry Value: S 379207 MM (Transfer to Iguana) S 71208 MM Oconto Falls (Sub-Debt/Equity & IPC's) Balance Sheet * Start-up of the second tissue machine remains on schedule for June 4L1, with full production expected in Scpt-2000. A CFO was schodulod to ho hired no later than Junc 1~. The Company has agrecd to notiI~ Enron of any potential changes in capital structure and will only use new equity to finance operations and to buy-back Enron's 15% equity and 15% IPC. Enron may prefurto retain an equity interest via our IPC investmexg in Oconto Falls and then shift our debt exposure to the Re-Box facility which will manufacture higher margin, same day engineered corrugated containers and laminated packaging. Cost: S 5.000 MM Market Value: 510.721 MM Carry Value: S 10.721 MM (Transfer to ENA CLO Trust #1) S 5.000MM Sacramento Basin Exoloratie. Venture (50% WI. and a 40% NM) JEDI II & Balaiice Sheet * MOVED FROM "PERFORMING" This deal was formerly know as the Amerada Hess Exploration Venture. The current IV partner, Calpine has evaluated the project and has determined that in their opinion the properties will not perform according to expectations. Based on a desire to take advantage of the remaining comrnitmcnj of S3.0 MM (which expiu~ Dec-31-2000), Calpine has proposed to substitute venture properties with replacement properties. Negotiations on this proposal CONFIDENTh~.L 6 EXHO43-00025 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 6/16/2000 VALUES INDICATED ARE FOR ENRON NORTH AMERICA are continuing. Tbree wells have currently been drilled to date, with only One currently producing. The current cost basis in the asset, 31.318 MM (net of $1.86 MM in contributions and 3548K in distributions) compares to a carry value at Mar-31-2000 of S72K. Maximum commitment for JEDI II I ENA is 35MM. Cost: S .650 MM Mailcet Vaiue.~ 50.012 MM Carry Value: S 0.000 MM WATCH -(Continued) WB Oil Company (Private Equity) Balance Sheet No updates since our laat report Cost: 52.509 MM Market Value: S1.3~0 MM Carry Value: 51.360 MM TROUBLED - Assets for which the returns are considerably less than originally projected. ~ (Common Stock & Warrants) lED! & JEDI II (Gross #'s) * MOVED FROM "WATCH" Axuiounced on May 11"' the hiring of two outside directors to assist with the potential sale I merger of the Company. Beau also sold its Bantiy Oil Properties for approximately US$10 MM, with pn:iceeds allocated towards reduction of their working capital deficit. Enron Canada Corp ('ECC") has agrccd to an cxtcnsion of tim Bcau tcnn oquity notc (schcdulcd to mature on Jun-I I"') for a six-month period. The note was re-priced at BA +4% for the first three months, increasing to BA 46% for the next three months. Beau has also rescinded their right to pay off the note by issuing shares of common stock. The 7.9 MM warrants that were issued with the term ot~uity iiOtC expired worthless (strike price of C$2.S0, current stock price of CSI .70). In the original deal approval sheet the warrants represented approximately 400/. of the expected all-in return of 15.74%. ECC economic analysis suggests that on an NAV basis approximately 3060 MM of residual valuation would exist gii~n a total liquidation of the Company. The exit Strategy remains to be clearly defined, bui the likely take-out is an Enron (ENA CLO Trust #1) or other third-party re- finance. Cost: S 8.475 MM Market Value: 31363 MM Carry Value: S 8.531 MM (Transfer to ENA CLO UI) S26.685 MM Brinbain Exploration Co. (Sub-dcbt, Common Stock & Warrants) JEDI II & Balancc Shcct * Reported Q-l-2000 EPS I CFPS o((SO.1O)I $0.05 vs. ($0.20) I ($0.06) from the comparable Q-l-99 period. First Call estimates s~ue for CFPS of $0.04. Production for the quarter was 16.9 MMCFE / day, in line with Company projections. (ins realizations were $1.93 for the quarter, down due to hedging. BEXP plans to spud 11 wells in the next sixty days. Current production is 19 MMCFE I day and the exit rate for second-quarter production is anticipated at 23-26 MMCFE I day. The Company is lacentivized to bring wells on as quickly as possible due to having 15 MMCFI day hedged at S2.20 NYMEX through Apr-2001. For the remainder of the year, the hedged amount equals 70% of estimated gas production or 57% of estimated total production. CIBC, who has been retained by Brigham to design a re-capitalization plan, has approached ENE regarding reducing a portion of our sub-debt to common equity. No commitments have been made. Cost: 536.518 MM Market Value: 526.973 MM Carry Value: S21L353 MM CONFIDENTIAL 7 FC~T0fl~AAQR~.A$~ EXHO43-00026 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 6/16/2000 VALUES INDICATED ARE FOR ENRON NORTH AMERICA C-Gas (Private Equity) JEDI I (Gross #'s) C-Gas is moving ahead with their year 2000 business plait and there is no intention at the moment to sell all or a part of the Company. The expressions of interest that ENA had received were largely believed to be less tItan tithe value. The Company is operating under a 31 well (21 - Rosenin and 10- Clinton) drilling budget for year 2000. Cost: 532.770 MId Market Value: 528.020 MM Carry Value: 529.107 MM TROUBLED - continued ~lML~MlZX (Private Equity) Balance Sheet liclcamd financial & opcrational results for Q-1-2000 on May 15th Prior ycar pcriod comparisons were un~vorablc with total revenue decreasing from $4819 MM for the period ended Mar-31-99, to 51.316 MM for the period ended Mar-31-2000, a decrease of 72.6%. The Company has postponed its 2000 Annual Meeting of Shareholders (originally scheduled for Jun-21) until a future date to be determined. Crown is evaluating its options and strategic alternatives and believes postponing its Ainmal Meeting will enable it to further explore and evaluate such matters. Crown common stock closed Jun-9th at 50.255. The shares are down 37.23% YTD. Cost: 55.468 MM Market Value: 53.020 MM Carry Value: S3020 MM EnSerCo OWahore (formerly NorAm) (Senior Term Loan) EnSerCo ENA and SCF Partners have retained ABS to assess the cost of upgrades that would be necessazy to make the rig saleable. Estimates are that 52 -54 MM of upgrades would be required. The shidy will also make recommendations as to what the best marketing approach would be -jack-up rig~ powcr barge~ bear bones charter. etc. Logal pursuit against the guarantors continues following unsuccessful mediation. Cost: 55.458 MM Market Value: S5.877 MM Carry Value: SS.458 MM Eneene Offshore lioldiu~s. LLC (Sr. & Subordinate Revolvers) JEDI I (Gross #s) RESTRUCTURING COMPLETED - FINAl REPORT - JEDI and ENA consented to the proposed merger of Magellan Exploration LLC with 3TEC Energy Corp (NASDAQ: "TrEN"), with JEDI receiving 130,000 warrants from 3TEC that feature a four-year term and a $30.00 strike price (current 3TEC price: $8.00), JEDI will also have net exercise rights and piggyback registration tights. lED! entered Into and closed on a formal purchase and sale agreement with 3TEC for $2.7 MM on the Breton Sound 34 properties. Enron retains an exploration option on Eugene Island 34 (this property has no current book value). Cost: 543.00 MM Maziset Value 30.00 MM Carry Value 50.00 MM Gasco INstilbutlon (form Loan with Warrants) lED! I (Gross #'s) Approval from tho vartous staic regulators (Gasco scivos parts of fivc states) was grantcd and the pa~ffoftbe loan was received on May-2Y". Gasco agreed to a $1.6 MM payoff on the term loan and will also fully pay their trade credit.. amortizing the 5600K over a five-year period. Cost: 32.322 MM Market Value: 51.232 MM Carry Value: 51.789 MM Hunhes RawIs LLC (LLC Membership and Senior Loan) JEDI [& Balance Sheet (Gross #'s) Almost all of the LLC employees were terminated on May 30~k~~ Dudley Hughes, the remaining principal of the LLC, is actively marketing the properties and has received 3 offers thai are under review. JEDI and ENA have contracted with Hughes to provide administrative and accounting functions. An APE has been approved that will allow production to be restored to the Y-29 well. Dry hole costs of $37,000 were incurred for an onshore prospect. CONFIDENTIAL 8 EXHO43-00027 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 6/1 6/2000 VALUES UIDICATED ARE FOR ENRON NORTH AMERICA Cost: S 20.623 MM Market Value: S7.587 MM Carry Value: 38.111 MM Ice DrllIla~ (Term Loan with Warrants) EnSeiCo RES7RUCTUR1NO COMPLETED - No major updates since our last report A reconcihalion of the amounts owed indicates C$1,0S7,836 (US$719,616) outstanding on the original US$10 MM (gross) loan afler the sale of assets placed in receivership. A negotiated settlement on the deficiency with the guarantors was unsuceessfixl and legal action is now unden~'ay. Cost: S.. MarketValue: 3- CarryValue: 3- TROUBLED - continued Induitnal Roldiun "IHIP' (Terra Loan) EnSerCo A term sheet has been sent to tHu to restructure the existing note. The proposed term sheet would increase the face amount of the note to $16 MM gross, mth a 15% interest rate due and payable monthly and a maturity date of Feb-28-2001. The interest would be payable in cash or the fully registered shares of THu common stock. Warrants to receive 2.2 MM shares of common stock have also been priced into the term sheet, with a strike price of $0.01 per share and an expiration date of Feb-28-2004. A conversion option, triggered by non-payment of the debt at maturity date, has been incorporated allowing for conversion of the debt into fully registered shares of 11111 common given an event of default Cost: 57.5 MM Market Value: S7.122 MM Carry Value: S7.122 MM kiani,iii~j (Cumulative Convertible Preferred) .IEDI LI RESTRUCTURLVG COMPLETED. Privatcly owned, Salt Lake City, Utah based Flying S (who twice before has attempted a merger with Inland) is putting together a Letter of Intent on a possibte merger. The discussions appear to have the support of both parties pnmaxy lenders - Chase for Flying J and TCW for Inland. Chase is proposing a $150 MM borrowing base facility, hosed on Flying J contributing their Salt Lake City refinery (which would be upgraded), Utah E&P properties and nine gas stations. Flying I refines and markets approximately 15% of the diesel fuel sold in the United States. Monthly cap-ex for Inland is currently exceeding monthly cash flow with the Company drilling around one welt per week, at a cost of 5300K. Monthly cash flow is estimated at 5900K. Enron holds approximately 12.6% of the outstanding common stock of Inland (2,920,975 shares) and also holds preferred shares with a face value of $10 MM. Inland common stock closed on May-26th at $4.00. Cost: 56.920 MM Market Value: 35.614 MM Carry Value: 55.413 MM Kafus Industries. Ltd.. Canlibre of Riverside. Inc.. (Debt & IPC's) Balance Sheet * Randy Maffett. Commercial VP of ENA has been appointed to the Board of Directors of Kafus and Kcnncth Swaisland, foundcrofthc Company and its largcst ~tockholdcr has resigned. Kafus officers, Mike McCabe, COO and Tony Valentine, CPO (ex-Enron), were in Houston recently to talk with ENA Commercial and RAC Underwriting regarding future strategic direction and leadership issues within the Company. Emma RAC personnel are performing site audits this week and the ENA Commercial Group is performing a mm-of-the-pans valuation on the Kafus / CanFibre entities to assist in the determination and timing of an exit strategy. Kafus common stock continues under pressure, closing as low as $3.00 I share on May 30a, before rebounding to its current 53 7/8 level. The shares are clown 58.04% Yin. Cost: $ 9.06MM Market Value: S 3.111 MM Cany Value: S 2111 MM (Riverside) Cost: S66.742 MM Market Value: $77.546 MM Carry Value: 3116.463 MM (Other Kalus) (Transfer to ENA CIA) Tnast #1) 5 60000 MM Queen Sand Resources. Inc. (Equity.- Preferred & Common) JEDI (Cross #s) CONFIDENTIAL ~ EXHO43-00028 RISK ASSESSMENT & CONTROL PORTFOLIO WATCJI LIST-UPDATE AS OF 6116/2000 VALUES INDICATED ARE FOR ENRON NORTH AMERICA RESTRUCTURING PARTIALLY COMPLETED Recently reported Q-3-2000 (fiscaA year end of 6/30/99) EBITDA of $5.2 MM vs. $49 MM in Q-3-99 and $5.7 MM in Q-2-2000. EBITDA coverage of interest was Ilix in Q-3-2000 vs. 1. 16x in Q-3-99 and l.35x in Q-2-2000. Queen Sand continues in discussions with different 1-Banks regarding a re-capitalization of the Company. Prelisninaiy drafis indicate the JEDI ownership position in the Company being diluted from approximately 22% currently to around 17%, based on a reverse split that would reduce shares outstanding to around 2 'A Mlvi. QSRI's $125 MM, 12 'A% senior noteholders (3 institutional 144A holders) would convert S75 MM at approximately $0.60 cents on the dollar and would take equity for their remaining S50 MM. Cost: S12.057 MM Market Value: $1399 MM Carry Value: S5.0l6 MM TROUBLED - continued Sierra Well Service (Senior Secured Notes with Warrants and Prefen~d Stock) lED! II SierrafiledanS-tAtheweekofMay22~,withplanstooffer3.7MJv¶sharesatapricebetween $14.00 - $16.00 a share. The Company has been conducting a "road show" the first few i~eks of June to niarket die offering and to answnr investor questions. Sierra has advised that their asset-based lender has approved a loan lesel that is $8 MM less than anticipated. As a result. Sierra as proposing that ENE (ENA CU) Trust #1) retain $8 MM of debt along with the $5 MM of Preferred Stock that has previously been committed to (this assumes an 11'O of less than $55 MM). Cost: 52.732 MM Market Value: 54.191 MM Carry Value: S 4i91 MM (Transfer to ENA CLO Trust #1) SSL 735 MM Transcoasta! Mazime Services ("TCMS") (Subordinated Dcbt with Warrants) JEDI II * RESIRUCJURLVG COMPLKI7~D. ENA has been advised that TCMS will file Chapter It bankruptc on Jun.l9d~, requesting debtor in possession status from the Court. TCMS is in default on its senior and subordinated debt obligations and the Company's senior lender, Bank One, has "blocked" ENA CLO Trust I from receiving the Q-l-2000 interest payment. TCMS's wholly owned subsidiary, Dickson GMJ International previously filed a voluntary petition for Chapter 11 Reorganization. This action was triggered by claims niade by Chevron Global Technology Services Company in the amount of approximately $28 MM against Dickson for fabrication of platforms and weliheads totaling $86 MM that were installed offshore Veneeuala. indications are that Chevron has agreed to settle this suit for $2.5 MM. Cost: 541.001 MM Market Vaiee: 5004 MAW Carry Value: S .061 MM (Trraiisfer to ENA CLO Trust #1) S 20.00 MM LOSS 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) * ~ realized unless another transaction is consummated with Belco that would involve re-pricing the warrants, which stcke at S27.50. The warrants expire Nov-25-2000. Cost: $7525 MM Carry Value: S 0.005 Lvco Enemy (Private-Convertible Preferred & Common) lED! land Balance Sheet (Gross #'s) RESThUCTURNO PARTIALLY COMPLETED. Arrangements for the pay-off our preferred and common stock invcsuncat for $2.5 MM (approximately $0.50 ccnts on thc dollar) on Jun~30th remain on tradc. CONFIDENTIAL 10 ECI~O$5498551 EXHG43-00029 RISK ASSESSMENT & CONTROL PORTFOLIO WATCH LIST-UPDATE AS OF 6/16/2000 VALUES INDICATED ARE FOR ENRON NORTH AMERICA Cost: S5.O MM Carry Vahie: S -0- Nakoruthal Strip Mill (NSM) -Thailand (Subordinated Notes w/Warrants) Balance Sheet_ RESTRUCTURING PARTIAlLY COMPLETED. The Banknzptcy Council of Thailand has agreed to a re-Capitalization of the Company that may allow for the recovery of nunor (less than 5500K) residual value for the Enron ~'C' notes. The value would not come as distribuuon from the banknzptcy, but r.ulas as a sale to a third party, such as Qakiree Capital, the purchaser of the Enron "B" notes. The ENA commen~iaI group and internal counsel also continue to work towards obtaining releases (two remain - Farallon Capital Mgmt & Lcgg Mason) on the lawsuits that v.tre filed against the original underwriting group that included ECT Securities. Cost: 531.308 MM Carry Valu,e S -0- CONFIDENTIAL Ii FCTAA~4QR552 ____ ~XHO43-OOO3O