Exhibit 10.2

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is entered into
effective as of July 16, 2003 (“Effective Date”) by and between Reef Global
Energy I, L.P., a Nevada limited partnership (“Transferor”), and Reef Global
Energy II, L.P., a Nevada limited partnership (“Transferee”).

 

Preliminary Statements

 

A.                                   On January 14, 2003, Transferor entered
into an agreement with Cheniere Energy, Inc. and Tri-C Resources, Inc. (the
“Exploration Companies”) to participate in the drilling of an oil and gas well
known as the “Dolphin Prospect” (the “Dolphin Participation Agreement”), a copy
of which is set forth on Exhibit 1;

 

B.                                     Following its execution of the Dolphin
Participation Agreement, Transferor determined that the terms of its partnership
agreement would likely prohibit its participation in the Dolphin Prospect due to
delays in the commencement of drilling activities;

 

C.                                     Transferor has determined it to be in its
best interest to transfer all of its right, title and interest to the Dolphin
Prospect to Transferee in exchange for the Prospect Fee (defined below)
Transferor paid to participate in the Dolphin Prospect.

 

D.                                    In consideration of Transferor’s
assignment and transfer of the Dolphin Participation Agreement, Transferee has
agreed to assume certain liabilities and obligations of Transferor arising under
the Dolphin Participation Agreement.

 

Agreement

 

The parties to this Agreement, intending to be legally bound, agree as follows:

 

1.                                      Assignment.  In exchange for the sum of
$33,270 (the “Prospect Fee”), the receipt and sufficiency of which is hereby
acknowledged, Transferor hereby conveys, transfers and assigns to, and
contributes to the capital of, Transferee, its successor and assigns, forever,
all of Transferor’s rights, title, privileges and interest in and to the Dolphin
Prospect arising under the Dolphin Participation Agreement.  Transferor hereby
represents and warrants that the Prospect Fee is the amount originally paid by
Transferor to the Exploration Companies under the Dolphin Participation
Agreement.

 

2.                                      Assumption of Obligations and
Liabilities by Transferee.  In connection with the transfer to Transferee of the
Dolphin Participation Agreement, Transferor hereby assigns to Transferee and
Transferee hereby assumes all of Transferor’s obligations and liabilities
arising under Dolphin Participation Agreement (collectively, the “Assumed
Obligations”).

 

3.                                      Further Assurances.  Transferor and
Transferee, for themselves and their respective successors and assigns, covenant
and agree that they will execute and deliver such additional agreements,
instruments or documents such as deeds, bills of sale, assignments, UCC
financing

 

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statements, transfers and conveyances, powers of attorney, assurances, consents
or assumptions, and will take such further actions, as are necessary to transfer
and assign more fully the Dolphin Participation Agreement and to assume more
fully the Assumed Obligations.

 

4.                                      Governing Law. This Agreement shall be
construed in accordance with and all disputes hereunder shall be governed by the
laws of the State of Nevada, excluding its conflict of law rules.

 

5.                                      Counterparts.  This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
for all purposes and all of which together shall constitute one and the same
instrument.

 

* * * * *

 

The parties to this Agreement have executed and delivered this Agreement as of
the Effective Date.

 

TRANSFEROR:

TRANSFEREE:

 

 

REEF GLOBAL ENERGY I, L.P.

REEF GLOBAL ENERGY II, L.P.

 

 

 

 

 

By:  Reef Partners, LLC

 

By:  Reef Partners, LLC

 

 

 

 

 

 

 

By:

/s/ MICHAEL J. MAUCELI

 

 

By:

/s/ MICHAEL J. MAUCELI

 

 

Name:

Michael J. Mauceli

 

Name:

Michael J. Mauceli

 

Title:

Manager

 

Title:

Manager

 

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EXHIBIT 1

 

Dolphin Participation Agreement

 

(See Attached)

 

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PARTICIPATION AGREEMENT

AREA OF MUTUAL INTEREST

 

THIS AGREEMENT, dated effective January 14, 2003, is made and entered into by
and between Cheniere Energy, Inc. (“Cheniere”) and Tri-C Resources, Inc.
(“Tri-C”) and Reef Global Energy I, L.P. (“Reef”). Cheniere, Tri-C, and Reef
shall sometimes be collectively referred to as “Participants” and sometimes
individually as “Participant”.

 

WHEREAS, Cheniere has identified a certain oil and/or gas prospect identified
herein as the Dolphin Prospect underlying the State of Texas offshore tracts
listed on the attached Exhibit “A”, that being the Area of Mutual Interest
(“AMI”);

 

WHEREAS, these tracts are currently unleased, and the State of Texas General
Land Office (“GLO”) is offering the tracts listed on the attached Exhibit “B”
for lease at the upcoming State of Texas Lease Sale to be held on January 15,
2003 (“January Lease Sale”);

 

WHEREAS, Cheniere is soliciting participation by one or more industry partner(s)
in the Dolphin Prospect; and

 

WHEREAS, the Participants have evaluated the Dolphin Prospect so identified by
Cheniere within the AMI and have decided to participate with Cheniere under the
terms and conditions stated below.

 

NOW THEREFORE, for and in consideration of the mutual covenants and promises
herein stated, the Participants agree as follows:

 

1)                                      Commitment to Bid a Mutually Agreeable
Bid Amount – Each Participant agrees that its undivided interest in the prospect
shall be the following:

 

Tri-C

 

70.00

%

 

 

 

 

Cheniere

 

25.00

%

 

 

 

 

Reef

 

5.00

%

 

 

 

 

 

 

100.00

%

 

The amount of the bid on each tract shall be the amount shown beside each tract
listed on Exhibit “B”. Cheniere shall prepare and submit legal bids at the
January Lease Sale on each of the tracts listed on Exhibit “B”. If after
publication of bidding results of the January Lease Sale by the State of Texas
General Land Office Cheniere is the apparent high bidder on any tract shown on
Exhibit “B”, each Participant agrees to immediately initiate and deliver by wire
transfer to Cheniere its proportional share of the successful bid amount.  If
publication of the bidding results is delayed beyond 12:00 PM January 15, 2003,
by the General Land Office or if the high bid submitted by another company has
not as yet been accepted, then each Participant agrees to fund by wire transfer
no later than 12:00 PM January 15, 2003.

 

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2)                                      Prospect Fee – In the event Cheniere is
awarded the Dolphin “A” lease as described on Exhibit “B” as a result of the
January Lease Sale, each Participant shall within five (5) days of such award
remit to Cheniere their proportional share of a one-time prospect fee of
$200,000. In the event Cheniere is awarded the Dolphin “B” lease as described on
Exhibit “B” as a result of the January Lease Sale, each Participant shall within
five (5) days of such award remit to Cheniere their proportional share of a
onetime prospect fee of $100,000. Upon payment by Participants, Cheniere shall
promptly execute and deliver to each Participant an assignment conveying their
proportional share of 100% of 8/8ths record title interest in the acquired
leases. A form of the assignment is attached hereto as Exhibit “C”.

 

3)                                      Designated Operator/Joint Operating
Agreement – Tri-C shall be the designated Operator on all tracts owned by the
Participants within the AMI. Furthermore, within five (5) days of issuance of
the lease(s), the Participants agree to execute a Joint Operating Agreement
(“JOA”) in a form acceptable to Tri-C.

 

4)                                      Cheniere’s Reserved Interest – Before
Payout, as hereinafter defined, Cheniere shall be entitled to receive a 5% of
8/8ths overriding royalty interest (“ORRI”) from each Participant proportionally
reduced to each Participant’s working interest in all production attributable to
the lease(s). At Payout of the costs described below, Cheniere shall be entitled
to receive an additional 2% of 8/8ths overriding royalty interest (“ORRI”) from
each Participant proportionally reduced to each Participant’s working interest
in all production attributable to the lease(s). After Payout, Cheniere will own
a total of 7% of 8/8ths overriding royalty interest.

 

5)                                      Before Payout Costs – The Participants
shall proportionally bear 100% of the costs to acquire, maintain, drill,
evaluate, develop and produce the leases within the Dolphin Prospect, subject to
Cheniere’s reservation of the ORRI’s referenced above.

 

6)                                      Payout Definition – At such time as the
value of 100% of the gross income received by the Participants from the sale of
production from the Dolphin Prospect (less existing burdens, including the ORRI
described in Paragraph 4 above, and production and severance taxes allocable
thereto) equals 100% of (i) all lease acquisition, lease maintenance costs, and
the Prospect Fee described in Paragraph 2 above. (ii) all costs incurred to
drill the test well and any additional wells, including substitute wells, plus
the costs to design, fabricate and install facilities, and (iii) the costs to
develop, produce, operate and maintain the Dolphin Prospect, up to and until
such time, then Payout shall be deemed to have occurred.

 

7)                                      AMI Obligation – Should any Participant
acquire an interest in lease located within the Dolphin Prospect AMI through
means other than a successful bid at the January Lease Sale, in addition to the
Prospect Fee set forth in Paragraph 2 above, Cheniere shall be entitled to the
reserved interest set forth in Paragraph 4 above, proportionately reduced to
Participant’s working interest.

 

8)                                      Termination Date – In the event that any
portion of the Participants’ bid(s) at the January Lease Sale is not successful,
each Participant’s share of such bid shall be returned within two (2) days. In
the event of an unsuccessful bid as described above, this Agreement shall
terminate on January 31, 2005.

 

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9)                                      Right To Submit Bids At the
January Lease Sale – Nothing contained herein shall limit a Participant’s right
to submit a bid at the January Lease Sale. Specifically, the other Participants
shall have the option, within thirty (30) days following the Sale, to acquire
their proportional share of all such interest acquired by the bidding
Participant by reimbursing the bidding Participant their proportional share of
the costs paid by the bidding Participant to acquire such interest. In the event
a Participant exercises such option, the terms and conditions of this Agreement
shall apply.

 

10)                                Miscellaneous - This Agreement shall be
construed by and interpreted under the laws of the State of Texas.

 

11)                                This Agreement shall be binding on the
Parties’ heirs, successors and assigns.

 

12)                                In the event of a conflict between the terms
of this Agreement and any other agreement between the Participants, written or
oral, this Agreement shall supercede and replace any such agreement or
understanding.

 

THIS AGREEMENT is executed effective as of the 14th day of January, 2003.

 

 

CHENIERE ENERGY, INC.

TRI-C RESOURCES, INC.

 

 

 

 

By:

 /s/ J.S. Gross

 

By:

 /s/ Robert T. Herrin

 

 

 

Name: J. S. Gross

Name: Robert T. Herrin III

 

 

Title:

  Vice President - Exploration

Title:

  Vice President

 

 

 

 

REEF GLOBAL ENERGY I, L.P.

 

 

 

 

 

By:

 /s/ Michael J. Mauceli

 

 

 

 

Name: Michael J. Mauceli

 

 

 

Title:

  Managing General Partner

 

 

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EXHIBIT “A”

 

Attached to that certain Participation Agreement dated January 14, 2003, by and
between Cheniere Energy, Inc. and Tri-C Resources, Inc. and Reef Global Energy
I, L.P.

 

Prospect

 

Tracts

 

 

 

Dolphin Prospect

 

GA 2781 S2 SE4

 

 

 

 

 

GA 3061 N2 NE4

 

 

 

 

 

GA 3061 S2 NE4

 

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EXHIBIT “B”

 

Attached to that certain Participation Agreement dated January 14, 2003, by and
between Cheniere Energy, Inc. and Tri-C Resources, Inc. and Reef Global Energy
I, L.P.

 

Dolphin “A” Prospect

 

GA 306L S2 NE4

 

MGL No. 378

 

$216,000 Bid ¸ 1.5% GLO sales fee

 

Dolphin “B” Prospect

 

GA 278L S2 SE4

 

MGL No. 373

 

$144,000 Bid ÷ 1.5% GLO sales fee

 

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EXHIBIT “C”

 

Attached to that certain Participation Agreement dated January 14, 2003, by and
between Cheniere Energy, Inc. and Tri-C Resources, Inc. and Reef Global Energy
I, L.P.

 

ASSIGNMENT OF RECORD TITLE

 

STATE OF TEXAS

{

 

OFFSHORE TEXAS

{

KNOW ALL MEN BY THESE PRESENTS:

                       AREA

{

 

 

This Assignment of Record Title to Oil and Gas Lease of Submerged Lands
(“Assignment”) is made by CHENIERE ENERGY, INC., whose address is 3400 Three
Allen Center, 333 Clay Street, Houston, Texas 77002 (hereinafter referred to as
“Assignor”) in favor of                                           , whose
address is                               , (hereinafter referred to as
“Assignee”).

 

WITNESSETH

 

In consideration of One Hundred Dollars ($100.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Assignor by these presents does hereby CONVEY, TRANSFER and ASSIGN to Assignee,
subject to the further provisions hereof, a            % of 8/8ths working
interest in the following described oil and gas lease(s) (the “Lease”):

 

1)                                                                                     
Oil and Gas Lease No. M-                       by The State of Texas, as Lessor,
to Cheniere Energy, Inc., as Lessee, dated effective as of
                             , 2003, covering the                  of Tract
            ,                Area, Offshore                     County, Texas,
and containing              acres.

 

2)                                                                                     
Oil and Gas Lease No. M-                        by The State of Texas, as
Lessor, to Cheniere Energy, Inc., as Lessee, dated effective as of
                              2003, covering the                  of Tract
              ,               Area, Offshore               County, Texas, and
containing               acres.

 

By acceptance of this Assignment, Assignee acknowledges the existence of, and
This Assignment is made without warranty of title express, implied or statutory;
provided only that Assignor warrants that it has not heretofore granted or
conveyed to any other party any interest in

 

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or lien or encumbrance on the interest of assignor in the Lease except as
described herein.

 

This Assignment may be executed in any number of counterparts, each of which
shall be valid and binding with respect to the signatories thereto and the
interest in the property conveyed hereby, but only upon execution by all
signatories of the Assignment or a counterpart hereof.

 

This Assignment shall inure to the benefit of and be binding upon the
successors, representatives and assigns of the parties hereto.

 

This Assignment shall be effective
                                                  , 2003.

 

 

WITNESSES:

ASSIGNOR:

 

 

 

CHENIERE ENERGY, INC.

 

 

 

 

 

 

 

 

 

 

By:

J.S. Gross

 

Title:

Vice President – Exploration

 

 

 

 

WITNESSES:

ASSIGNEE:

 

 

 

 

 

 

 

 

By:

 

 

 

Title:

 

 

 

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STATE OF TEXAS

§

 

§

COUNTY OF HARRIS

§

 

On this        th day of               , 2003, before me appeared J.S. Gross, to
me personally known, who being by me duly sworn, did say that he is the Vice
President – Exploration of Cheniere Energy, Inc., a Delaware Corporation, and
that said instrument was signed in behalf of said corporation by authority of
its Board of Directors, and said Appearer acknowledged that he executed the same
as the free act and deed of said corporation.

 

IN WITNESS WHEREOF, I have hereunto set my official hand and seal on the date
hereinabove written.

 

 

 

 

 

 

Notary Public in and for

 

The State of Texas

 

 

 

STATE OF TEXAS

§

 

 

§

 

COUNTY OF HARRIS

§

 

On this         th day of                    , 2003, before me appeared
                                  , to me personally known, who being by me duly
sworn, did say that he is the                    of
                                          ,
a                                          Corporation, and that said instrument
was signed in behalf of said corporation by authority of its Board of Directors,
and said Appearer acknowledged that he executed the same as the free act and
deed of said corporation.

 

IN WITNESS WHEREOF, I have hereunto set my official hand and seal on the date
hereinabove written.

 

 

 

 

 

 

Notary Public in and for

 

The State of Texas

 

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