Exhibit 10.1

 

 

[CMI LOGO]

 

CHALLENGER MINERALS INC.

A GlobalSantaFe Company

 

15375 Memorial Drive

 

Langlands House

Suite G200

 

Huntly Street

Houston, Texas  77079

 

Aberdeen AB10 1SH

USA

 

Scotland

Tel (281) 925 7200

 

Tel +44 (0) 1224 654400

Fax (281) 925 7280

 

Fax +44 (0) 1224 654478

 

December 4, 2003

 

By mail and fax to (972) 994-0369

 

Reef Partners LLC

1901 N. Central Expressway, Suite 300

Richardson, TX  75080

 

Attn:                    Mr. H. Walt Dunagin

Vice President - Land

 

Re:                               Reef/CMI North Sea Joint Venture Agreement -
New

Reef /CMI Gulf of Mexico Joint Venture Agreement - Amended

 

Dear Walt,

 

Pursuant to our recent discussions with Reef Partners LLC (“Reef”), Challenger
Minerals Inc. (“CMI”) is requesting your timely approval of the following
proposal to amend the current Reef/CMI Gulf of Mexico Joint Venture Agreement
and to provide for Reef entering the CMI North Sea Joint Venture under a new and
separate agreement:

 

1.                                       Upon Reef’s approval and execution of
the attached Joint Venture Agreement for the CMI North Sea JV program, Reef will
enter the CMI North Sea JV program for 5% participation interest, effective
December 1, 2003 for a three-year term, conditioned upon your approval of this
proposal that shall amend Reef’s current CMI Gulf of Mexico JV Agreement, which
became effective January 31, 2002, by reducing Reef’s participation interest in
the CMI Gulf of Mexico (“GOM”) Exploration JV program to 7.5% and by continuing
Reef’s 12.5% participation interest in the CMI GOM Field Development JV program.

 

2.                                       To accomplish the above, Reef hereby
relinquishes to CMI a 5% participation interest carved out of Reef’s 12.5%
participation interest in the CMI GOM Exploration JV program (under the current
GOM JV Agreement effective January 30, 2002 referenced above) in exchange for
Reef’s new 5% participation interest in the CMI North Sea JV, with no increase
in the U.S. $375,000.00 annual funding level currently being paid to CMI by Reef
as its Participation Fee under its GOM JV Agreement, as follows.  Reef shall pay
an annual Participation Fee in the amount of U.S. $75,000.00 for 5%
participation interest under Paragraph 3 of the attached new North Sea JV
Agreement.  Reef’s annual Participation Fee under Paragraph 3 of the current GOM
JV Agreement shall be reduced by such U.S. $75,000.00 to the

 

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Reef Partners LLC

December 4, 2003

 

amount of U.S. $300,000.00, effective with the Participation Fee payment due on
January 30, 2004 for the third Participation Year.  For your convenience, CMI
will continue to invoice Reef for each such fee payment.

 

3.                                       Reef shall have the option, but not the
obligation, to add one additional year to the term of its current GOM JV
Agreement as amended herein.  Unless Reef provides CMI written notice on or
before May 31, 2004, that it elects to exercise such option, Reef shall be
deemed not to have exercised such option; provided, that in no event shall Reef
have fewer than ten days after receipt of written notice from CMI during May
2004 requesting Reef’s election, to consider whether to exercise such option. 
Reef’s exercise of such option shall extend such agreement’s term to a new
Termination Date of January 30, 2006, and require Reef to pay an additional
annual Participation Fee in the amount of U.S. $300,000.00 on or before
January 30, 2005, for a fourth Participation Year commencing January 31, 2005
and ending January 30, 2006.

 

4.                                       Reef’s current GOM JV Agreement
effective January 32, 2002, shall remain in full force and effect except as
expressly amended by this agreement.

 

If this proposal is acceptable to Reef, please have your authorized
representative execute as provided below and fax back an executed copy hereof,
and of the attached North Sea JV agreement, to the undersigned at (281) 925-7216
by Friday, December 12, 2003, then mail back both executed agreements at your
convenience.  CMI appreciates your confidence in us by expanding your
participation in the CMI Joint Venture programs.  We look forward to bringing
you up to date as to pending North Sea prospect opportunities at your earliest
convenience.

 

Sincerely,

Challenger Minerals Inc.

 

 

/s/ Paul F. Nielsen

 

Paul F. Nielsen

Land Manager

 

Enclosure

 

AGREED TO AND ACCEPTED this 11 day of December, 2003:

 

Reef Partners LLC

 

By:

/s/ Michael J. Mauceli

 

Its:

President

 

 

 

 

Xc:

Mr. Tom Morrow

Mr. Chuck Hauf

 

Mr. Jack Downing

Mr. Ron Symecko

 

Mr. Jon Goodale

Mr. Al Schneider

 

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