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Proposed Sale of Enron North America’s/People’s Energy Joint Venture

Proposed Sale of Enron North America’s/People’s Energy Joint Venture. Presentation to __________ February ___, 2002. Agenda. Executive Summary People’s Energy Summary Oxy Summary Dominion Summary Valuation Comparison Timing Constraints Deal Risks. Executive Summary.

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Proposed Sale of Enron North America’s/People’s Energy Joint Venture

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  1. Proposed Sale of Enron North America’s/People’s Energy Joint Venture Presentation to __________ February ___, 2002

  2. Agenda • Executive Summary • People’s Energy Summary • Oxy Summary • Dominion Summary • Valuation Comparison • Timing Constraints • Deal Risks

  3. Executive Summary • Proposing a sale of Enron North America’s gas supply contract partnership with People’s Energy to either Dominion Energy Clearinghouse or Occidental Energy Marketing, Inc. • Sale estimated to yield $38-12 MM, contingent upon the closing date and market conditions • Estimated closing date of March 25th • Sale considered superior to other options due to the business characteristics of the bidders (ie. credit ratings, balance sheet mix, etc.) • Auction process yielded eight bids, the field was narrowed to three based on price, finally two due to contractual units

  4. Peoples Energy Summary • People’s Energy Corporation (“PGL”) is the parent of two natural gas utilities, Peoples Gas, Light and Coke (“PGL&C”) and North Shore Gas (“NSG”). • PGL&C operates a natural gas distribution system in the Chicago area and NSG provides natural gas services to several of Chicago’s northern suburbs. • Combined, PGL serves approximately 1 million customers. • PGL’s gas system connects to four interstate pipelines, allowing the company negotiating leverage in obtaining required gas supply. • PGL operates a large gas storage field near its distribution system, enabling the company to purchase gas for winter use during the summer • PGL has established a supportive regulatory environment

  5. Dominion Bid Proposal • Purchase Price: • For a April start date, the purchase price for Enron’s/Peoples gas supply contracts is approximately $____ million. • The purchase price will be change over time with the change in the price of the Nymex gas strip price, with the estimated change to be around $350,000/day.

  6. Oxy Bid Proposal • Purchase Price: • For a April start date, the purchase price for Enron’s/Peoples gas supply contracts is approximately $____ million, which excludes the $4.0 million for the price of the Enovate transaction. • The purchase price will be change over time with the change in the price of the Nymex gas strip price, with the estimated change to be around $350,000/day

  7. Bid Comparison

  8. Deal Risks • Deal Not Done: • PGL transaction is to be terminated with Enron North America • ISDA agreements with PGL are to de put in line with creditors

  9. Time Frame • Timeframe: • Feb. 20th: • Feb. 21st: Internal Approval • Feb 22nd: Bankruptcy Committee

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