<PAGE>   1
                                                                   EXHIBIT 10.3
===============================================================================



                              REDEMPTION AGREEMENT

                                 by and between

                             TATHAM OFFSHORE, INC.,

                                      And

                     FLEXTREND DEVELOPMENT COMPANY, L.L.C.








                               FEBRUARY 27, 1998
===============================================================================


<PAGE>   2


                               TABLE OF CONTENTS

<TABLE>

<S>                                                                 <C>
1. Transfer of the Properties........................................1

2. Delivery of Senior Preferred Stock................................1

3. Representations and Warranties of the Company.....................1
       3.1. Organization.............................................1
       3.2. Authority and Conflicts..................................1
       3.3. Authorization............................................2
       3.4. Enforceability...........................................2
       3.5. Title....................................................2
       3.6. Contracts................................................2
       3.7. Litigation and Claims....................................2
       3.8. Approvals and Preferential Rights........................3
       3.9. Compliance with Law and Permits..........................3
       3.10. Status of Contracts.....................................3
       3.11. Production Burdens, Taxes, Expenses and Revenues........3
       3.12. Production Balances.....................................3
       3.13. Expenditure Commitments.................................3
       3.14. Payout Balances.........................................4
       3.15. Qualification...........................................4
       3.16. Absence of Certain Changes..............................4
       3.17. Disclaimer..............................................4

4. Representations and Warranties of Flextrend.......................4
       4.1. Organization.............................................4
       4.2. Authority and Conflicts..................................4
       4.3. Authorization............................................5
       4.4. Enforceability...........................................5
       4.5. Qualification............................................5
       4.6. Senior Preferred Stock...................................5

5. Closing...........................................................5
       5.1. The Closing..............................................5
       5.2. Deliveries by Company at Closing.........................6
       5.3. Possession...............................................7
       5.4. Deliveries by Flextrend At Closing.......................7

6. Assumption by Flextrend...........................................7

7. Production, Proceeds, Expenses and Taxes..........................7
       7.1. Division of Substances...................................7
       7.2. Division of Expenses.....................................7
       7.3. Division of Proceeds.....................................8
</TABLE>

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<PAGE>   3

<TABLE>

<S>                                                                 <C>
       7.4. Property Tax Prorations..................................8
       7.5. Adjustments..............................................8

8. Negative Covenants................................................8

9. Survival and Indemnification......................................9
       9.1. Survival and Notice......................................9
       9.2. The Company's Indemnification............................9
       9.3. Flextrend's Indemnification.............................10

10. Further Assurances..............................................10

11. Notice..........................................................10

12. Assignment......................................................11

13. Governing Law...................................................11

14. Expenses and Fees...............................................12

15. Integration.....................................................12

16. Waiver or Modification..........................................12

17. Headings........................................................12

18. Invalid Provisions..............................................12

19. Multiple Counterparts...........................................13

20. Termination.....................................................13

21. Guarantee.......................................................13

22. Certain Definitions.............................................13
</TABLE>


                                     -ii-

<PAGE>   4




EXHIBITS

Exhibit 1           -          Oil and Gas Properties
Exhibit 3.6         -          Contracts
Exhibit 3.7         -          Litigation and Claims
Exhibit 3.8         -          Approvals and Preferential Rights
Exhibit 3.13        -          Commitments
Exhibit 3.14        -          Payout Balances
Exhibit 21          -          Form of Guarantee


ANNEXES

Annex IA            -          Assignment of Leases and Bill of Sale [State 
                               Filing Form]
Annex IB            -          Assignment of Leases and Bill of Sale [MMS Filing
                               Form]



                                      -iii-

<PAGE>   5

                              REDEMPTION AGREEMENT



         This Redemption Agreement is made and entered into on this the 27th
day of February, 1998, by and between Tatham Offshore, Inc., a Delaware
corporation (the "Company"), and Flextrend Development Company, L.L.C., a
Delaware limited liability company ("Flextrend").

1. TRANSFER OF THE PROPERTIES . Subject to the terms and conditions herein set
forth, in consideration of (i) redemption of the 7,500 shares of 9% Senior
Convertible Preferred Stock, par value $0.01 per share, of the Company (the
"Senior Preferred Stock"), owned or beneficially owned by the Partnership and
(ii) all accrued and unpaid dividends on the shares of Senior Preferred Stock
due to the Partnership, the Company agrees to sell, assign, convey and deliver
to Flextrend, and Flextrend agrees to acquire from the Company, effective as of
7:00 a.m. at the location of each of the Oil and Gas Properties on the date of
Closing (as defined in Section 5.1(a)) all of the interest of the Company in
and to the Properties as they exist on such date as such Properties are more
specifically described on Exhibit 1.

2. DELIVERY OF SENIOR PREFERRED STOCK . In consideration for the transfer of
the Properties to Flextrend, Flextrend shall cause the Partnership to agree
that all accrued and unpaid dividends on the shares of Senior Preferred Stock
shall conclusively be deemed to have been satisfied and paid in full, and the
shares of Senior Preferred Stock owned or beneficially owned by the Partnership
shall be redeemed, and Flextrend shall cause the Partnership to deliver to the
Company the shares of Senior Preferred Stock, free and clear of all
Encumbrances.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . The Company represents and
warrants to Flextrend as follows:

   3.1. ORGANIZATION . The Company is a corporation validly existing and in
good standing under the laws of the State of Delaware and is qualified to do
business in and is in good standing under the laws of Texas, Louisiana and
Alabama.

   3.2. AUTHORITY AND CONFLICTS . The Company has full corporate power and
authority to carry on its business as presently conducted, to enter into this
Agreement and any agreements contemplated hereby to which it is a party and to
perform its obligations hereunder and thereunder. The execution and delivery of
this Agreement by the Company and any agreement contemplated hereby does not,
and the consummation of the transactions contemplated hereunder and thereunder
shall not, (a) violate or be in conflict with, or require the consent of any
person or entity under, any provision of the Company's governing documents, (b)
conflict with, result in a breach of, constitute a default (or an



<PAGE>   6

event that with the lapse of time or notice, or both would constitute a
default) under, or require any consent, authorization or approval under any
agreement or instrument to which the Company is a party or to which any of the
Properties or the Company is bound, except as disclosed in Exhibit 3.8, (c)
violate any provision of or require any consent, authorization or approval
under any judgment, decree, judicial or administrative order, award, writ,
injunction, statute, rule or regulation applicable to the Company, or (d)
result in the creation of any Encumbrance on any of the Properties other than
those contemplated by either this Agreement or any related agreements and
documents.

   3.3. AUTHORIZATION . The execution and delivery of this Agreement and the
agreements contemplated hereby have been, and the performance of this Agreement
and the agreements contemplated hereby and the transactions contemplated hereby
and thereby shall be at the time required to be performed hereunder, duly and
validly authorized by all requisite corporate action on the part of the
Company.

   3.4. ENFORCEABILITY . This Agreement has been duly executed and delivered on
behalf of the Company and constitutes the legal, valid and binding obligation
of the Company enforceable in accordance with its terms, except as
enforceability may be limited by Equitable Limitations. All documents and
instruments required hereunder to be executed and delivered by the Company
shall be duly executed and delivered and shall constitute legal, valid and
binding obligations of the Company enforceable in accordance with their terms,
except as enforceability may be limited by Equitable Limitations.

   3.5. TITLE . The Company has (i) Marketable Title to the Oil and Gas
Properties and (ii) defensible title to all of the Properties other than the
Oil and Gas Properties.

   3.6. CONTRACTS . Exhibit 3.6 contains a complete list of all contracts that
constitute a part of the Properties or by which the Properties are bound or
subject (collectively, the "Contracts").

   3.7. LITIGATION AND CLAIMS . Except as set forth on Exhibit 3.7, no claim,
demand, filing, cause of action, administrative proceeding, lawsuit or other
litigation is pending or, to the best knowledge of the Company, threatened that
could now or hereafter adversely affect the ownership, development or operation
of any of the Properties, other than proceedings relating to the industry
generally and as to which the Company is not a named party. No written or oral
notice from any governmental body or any other person has been received by the
Company (i) claiming any violation or repudiation of the Oil and Gas Properties
or any violation of any law, ordinance, code, rule or regulation with respect
to the Oil and Gas Properties or (ii) requiring, or calling attention to, the
need for any work, repairs, construction, alterations or installations on or in
connection with the Properties with which the Company has not complied.


                                      -2-

<PAGE>   7

   3.8. APPROVALS AND PREFERENTIAL RIGHTS . Exhibit 3.8 contains a complete and
accurate list of all approvals required to be obtained by the Company for the
assignment of the Properties to Flextrend and all preferential purchase rights
that affect the Properties.

   3.9. COMPLIANCE WITH LAW AND PERMITS . The Properties have been operated in
compliance with the provisions and requirements of all laws, orders,
regulations, rules and ordinances issued or promulgated by all governmental
authorities having jurisdiction with respect to the Properties, noncompliance
with which reasonably may be expected to have a material adverse effect on the
Properties. All necessary governmental authorizations with regard to the
ownership, development or operation of the Properties have been obtained where
the failure to obtain such authorizations reasonably may be expected to have a
material adverse effect on the Properties, and no material violations exist in
respect of such licenses, permits or authorizations.

   3.10. STATUS OF CONTRACTS . (i) To the Company's knowledge, all of the
Contracts and the rights and obligations of the Company thereunder are in full
force and effect, and (ii) the Company is not in breach of or default, or with
the lapse of time or the giving of notice, or both, would be in breach or
default, with respect to any of its obligations thereunder to the extent that
such breaches or defaults reasonably may be expected to have a material adverse
effect on the Properties.

   3.11. PRODUCTION BURDENS, TAXES, EXPENSES AND REVENUES . All rents,
royalties, excess royalty, overriding royalty interests and other payments due
under or with respect to the Oil and Gas Properties have been properly and
timely paid; and all ad valorem, property, production, severance and other
taxes based on or measured by the ownership of the Properties or the production
of Substances therefrom, have been properly and timely paid. All expenses due
and payable as of the date hereof under the terms of the Contracts have been
properly and timely paid. All of the proceeds from the sale of Substances have
been properly and timely paid to the Company by the purchasers of production
without suspense or indemnity other than standard division order indemnities.

   3.12. PRODUCTION BALANCES . None of the purchasers under any production
sales contracts are entitled to "make-up" or otherwise receive deliveries of
Substances at any time on or after January 1, 1998, without paying at such time
the full contract price therefor. No person is entitled to receive any portion
of the interest of the Company in any Substances or to receive cash or other
payments to "balance" any disproportionate allocation of Substances under any
operating agreement, gas balancing and storage agreement, gas processing or
dehydration agreement, or other similar agreements.

   3.13. EXPENDITURE COMMITMENTS . Exhibit 3.13 contains a complete and
accurate list of (i) all authorities for expenditures ("AFE") to drill, rework
or plug and 


                                      -3-


<PAGE>   8


abandon Wells or for other capital expenditures pursuant to any of the
Contracts that have been proposed by any person on or after January 1, 1998,
whether or not accepted by the Company or any other person, and (ii) all AFE
and oral or written commitments to drill, rework or plug and abandon Wells or
for other capital expenditures pursuant to any of the Contracts for which all
of the activities anticipated in such AFE or commitments have not been
completed by the date of this Agreement.

   3.14. PAYOUT BALANCES . Exhibit 3.14 contains a complete and accurate list
of the status of cost recovery or other "payout" balance, as of the dates shown
in Exhibit 3.14, for each Well that is subject to a reversion or other
adjustment at some level of cost recovery or payout.

   3.15. QUALIFICATION . To the extent required with respect to the ownership,
development and operation of the Properties, the Company is properly qualified
by the MMS to own and operate the Properties.

   3.16. ABSENCE OF CERTAIN CHANGES . Since January 1, 1998, the Properties
have not suffered any material destruction, damage or loss; provided that no
representation or warranty is made in this Section 3.16 relating to Viosca
Knoll Block 817.

   3.17. DISCLAIMER . Except as set forth herein, the Properties are being
transferred to Flextrend hereunder "as is", "where is" and "with all faults"
without any representations or warranties of any kind, including, without
limitation, those relating to merchantability, fitness for purpose, quality,
condition, value or otherwise.

4. REPRESENTATIONS AND WARRANTIES OF FLEXTREND . Flextrend represents and
warrants to the Company that:

   4.1. ORGANIZATION . Flextrend is a limited liability company validly
existing and in good standing under the laws of the State of Delaware and is
qualified to do business in and is in good standing under the laws of Texas,
Louisiana, and Alabama.

   4.2. AUTHORITY AND CONFLICTS . Flextrend has full limited liability company
power and authority to carry on its business as presently conducted, to enter
into this Agreement and any agreements contemplated hereby to which it is a
party, and to perform its obligations hereunder and thereunder. Flextrend has
full corporate or similar power and authority to purchase the Properties on the
terms described in this Agreement. The execution and delivery of this Agreement
by the Company and any agreement contemplated hereby does not, and the
consummation of the transactions contemplated hereunder and thereunder shall
not, (a) violate or be in conflict with, or require the consent of any person
or entity under, any provision of Flextrend's governing documents, (b) conflict
with, result in a breach of, constitute a default (or an event that with the
lapse of time or notice, or both, would constitute a default) under, or require
any consent, 


                                      -4-


<PAGE>   9


authorization or approval under any agreement or instrument to which Flextrend
is a party or is bound, (c) violate any provision of or require any consent
(except for qualifying with and filing the appropriate bonds and transfer
documents with the MMS), authorization or approval under any judgment, decree,
judicial or administrative order, award, writ, injunction, statute, rule or
regulation applicable to Flextrend, or (d) result in the creation of any
Encumbrance on the Senior Preferred Stock.

   4.3. AUTHORIZATION . The execution and delivery of this Agreement and the
agreements contemplated hereby have been and the performance of this Agreement
and the transactions contemplated thereby shall be at the time required to be
performed hereunder, duly and validly authorized by all requisite partnership
action on the part of Flextrend.

   4.4. ENFORCEABILITY . This Agreement has been duly executed and delivered on
behalf of Flextrend and constitutes a legal, valid and binding obligation of
Flextrend enforceable in accordance with its terms, except as enforceability
may be limited by Equitable Limitations. All documents and instruments required
hereunder to be executed and delivered by Flextrend shall be duly executed and
delivered and shall constitute legal, valid and binding obligations of
Flextrend enforceable in accordance with their terms, except as enforceability
may be limited by Equitable Limitations.

   4.5. QUALIFICATION . To the extent required with respect to the ownership,
development and operation of the Properties, Flextrend is properly qualified by
the MMS to own and, upon the MMS' acceptance of the required bond from
Flextrend, operate the Properties.

   4.6. SENIOR PREFERRED STOCK . The shares of Senior Preferred Stock are owned
by the Partnership free and clear of all Encumbrances.

5. CLOSING.

   5.1. THE CLOSING . (a) The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Akin, Gump,
Strauss, Hauer & Feld, L.L.P., 1900 Pennzoil Place, South Tower, 711 Louisiana
Street, Suite 1900, Houston, Texas 77002 on the later of (i) July 1, 1998 or
(ii) such later date which shall be one business day following the Completion
Date (as defined in the Contribution Agreement); provided that, should the
Completion Date fall on or after October 1, 1998, the Company may, at its
option, elect to close the transactions contemplated by this Agreement on any
date on or after October 1, 1998, with ten (10) days' prior notice to
Flextrend, in which case, the Closing shall be deemed to occur on a date
specified by the Company. Time shall be of the essence in this Agreement.



                                      -5-

<PAGE>   10

          (b) The obligation of each of the parties hereto to effect the 
transactions contemplated hereby is subject to the satisfaction or waiver of
the following conditions: (i) the representations and warranties made by the
other party in this Agreement shall be true and correct on and as of the date
hereof (unless stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date), but only if the failure to be true would,
after giving effect to any indemnification rights, have a material adverse
effect on the value or operation of the Properties and the other party shall
have performed its covenants and agreements herein to be performed prior to the
Closing, except where the failure to perform such covenants and agreements
would not, individually or in the aggregate, have a material adverse effect on
the value or operation of any of the Properties or the ability of such other
party to consummate the transactions contemplated hereby, and an executive
officer of the other party shall have provided a certificate to such effect,
dated the date hereof; (ii) all material consents and filings required in
connection with the transactions contemplated hereby shall have been obtained
or made; and (iii) the other party shall have made the deliveries required to
be made by it pursuant to this Section 5.

   5.2. DELIVERIES BY COMPANY AT CLOSING . The Company shall have delivered to
Flextrend the following instruments, properly executed and acknowledged:

        5.2.1. Counterparts of the following: (i) State Assignment; and (ii)
MMS Assignment.

        5.2.2. Such other instruments as are necessary to effectuate the
conveyance of the Properties to Flextrend.

        5.2.3. With respect to any leases in which the Company owns less than
all of the operating rights or leasehold interests and is designated as the
operator under the applicable operating or other similar agreement, (i) letters
to all working interest owners in which the Company resigns as the operator and
recommends Flextrend or an affiliate of Flextrend as the successor operator and
(ii) any forms promulgated by the appropriate governmental authority and
necessary for the resignation by the Company as operator, which forms shall be
completed and executed by the Company and shall designate Flextrend or an
affiliate of Flextrend as the operator under the applicable operating or other
similar agreement. With respect to any leases in which the Company owns all of
the leasehold interests or operating rights and is designated as the operator,
any forms promulgated by the appropriate governmental authority and necessary
for the resignation by the Company as operator, which forms shall be completed
and executed by the Company and shall designate Flextrend or an affiliate of
Flextrend as the operator under the applicable operating or other similar
agreement.




                                      -6-
<PAGE>   11

   5.3. POSSESSION . At the Closing, the Company shall deliver to Flextrend at
Flextrend's offices all of the Data and shall deliver to Flextrend possession
of the other Properties.

   5.4. DELIVERIES BY FLEXTREND AT CLOSING. Against delivery of the documents
and materials described in Section 5.2, Flextrend shall cause the Partnership
to deliver to the Company, free and clear of all Encumbrances, a duly executed
certificate or certificates representing the 7,500 shares of Senior Preferred
Stock owned or beneficially owned by the Partnership, together with transfer
powers endorsed in blank relating to such certificates.

6. ASSUMPTION BY FLEXTREND . At Closing, Flextrend shall assume all of the
costs, obligations and liabilities of the Company relating to the Properties
that arise from or relate to (i) the period beginning on January 1, 1998, (ii)
plugging, abandonment or similar restoration operations relating to any Wells,
platforms or other facilities on or related to the Properties necessary or
appropriate to comply with all contracts, and any rules, laws, regulations or
orders of any governmental authority relating to such plugging, abandonment and
similar restoration operations and (iii) that certain (a) Production Payment
Agreement dated September 19, 1995 between the Company and J. Ray McDermott
Properties, Inc. and (b) Production Payment Agreement dated September 19, 1995
between the Company and F-W Oil Interests, Inc. Except to the extent provided
in clause (ii) and (iii) of the immediately preceding sentence, Flextrend shall
not assume any costs, obligations or liabilities (including negligence and
strict liability) that relate to the Properties and arise from or relate to the
period ending prior to January 1, 1998; or any obligation of the Company or any
other person to pay and discharge any refunds, including interest and
penalties, if any, that may be imposed by any governmental agency arising from
the sale of the Substances prior to January 1, 1998. Notwithstanding anything
to the contrary herein, the Company expressly reserves and retains any and all
of its rights and interests in and to that certain (a) Exchange Agreement dated
September 19, 1995 between the Company and J. Ray McDermott Properties, Inc.
and (b) Exchange Agreement dated September 19, 1995 between the Company and F-W
Oil Interests, Inc.

7. PRODUCTION, PROCEEDS, EXPENSES AND TAXES.

   7.1. DIVISION OF SUBSTANCES . After the Closing, all Substances produced
from the Oil and Gas Properties on or after January 1, 1998 shall be owned by
Flextrend. All Substances produced and sold from the Oil and Gas Properties
prior to January 1, 1998 shall be owned by the Company.

   7.2. DIVISION OF EXPENSES . Subject to Section 9 hereof, all costs, expenses
incurred and other expenditures incurred in connection with the Properties and
attributable to the period ending prior to January 1, 1998 shall be borne by
the Company.



                                      -7-
<PAGE>   12

Subject to Section 9 hereof, all costs, expenses and other expenditures
incurred in connection with the Properties and attributable to the period
beginning on January 1, 1998 other than costs and expenses not assumed by
Flextrend under Section 6 shall be borne by Flextrend.

   7.3. DIVISION OF PROCEEDS . All net proceeds earned in connection with the
Properties attributable to the period ending prior to January 1, 1998 shall be
deemed to be owned by the Company. All proceeds earned in connection with the
Properties attributable to the period beginning on January 1, 1998 shall be
deemed to be owned by Flextrend.

   7.4. PROPERTY TAX PRORATIONS . Real and personal property taxes for the
Properties for the year in which Closing occurs shall be prorated between
Flextrend and the Company as of January 1, 1998. If the actual taxes are not
known as of the Closing Date, the Company's share of such taxes shall be
determined by using (i) the rates and mileages for the year prior to the year
in which the Closing occurs, with appropriate adjustments for any known and
verifiable changes thereto, and (ii) the assessed values for the year in which
Closing occurs.

   7.5. ADJUSTMENTS . At the Closing, the Company or Flextrend, as appropriate,
shall make a cash payment to the other to give effect to the provisions of
Section 7 to the extent then determinable and promptly after such amount is
finally determinable, the Company or Flextrend shall make such payments as may
be necessary to make final settlement. If, after the Closing, the Company
receives any proceeds that pursuant to this Section 7 belong to Flextrend, then
the Company shall deliver such proceeds to Flextrend within five Business Days
after receipt of such proceeds. If, after the Closing, Flextrend receives any
proceeds that pursuant to this Section 7 belong to the Company, then such
proceeds shall be returned to the Company within five Business Days after
receipt of such proceeds. If after Closing either party hereto receives
invoices for costs or expenses that pursuant to the terms of this Section 7 are
the responsibility of the other party, the party receiving such invoices shall
immediately deliver them to the other party.

8. NEGATIVE COVENANTS.

      Except as Flextrend may otherwise consent in writing, between the date of
this Agreement and the date of Closing and except as contemplated by this
Agreement, the Company shall not:

      (a) sell, transfer, assign, convey or otherwise dispose of any Properties
other than (i) oil, gas and other hydrocarbons produced, saved and sold in
the ordinary course of business, and (ii) personal property and equipment
which is replaced with 




                                      -8-
<PAGE>   13

property and equipment of comparable or better value and utility in the
ordinary and routine maintenance and operation of the Properties;

      (b) create or permit the creation of any Encumbrance on the Properties,
other than Permitted Encumbrances;

      (c) grant any preferential right to purchase or similar right or agree to
require the consent of any party to the transfer and assignment of the
Properties to Flextrend;

      (d) designate any Person, other than Flextrend, as an operator of the
Properties;

      (e) incur or agree to incur any contractual obligation or liability,
whether absolute, contingent, matured or unmatured, which would constitute
an assumed liability by Flextrend as provided in Section 6 above; provided
that, the Company may incur such obligations or liabilities in the ordinary
course of business or in the ordinary and routine maintenance and operation
of the Properties with the consent of Flextrend which consent shall not be
unreasonably withheld or delayed; provided that any such obligation or
liability would not, either individually or in the aggregate, have a
material adverse effect on any of the Properties;

      (f) enter into any transaction the effect of which, considered as a
whole, would be to cause the Company's ownership interest in any of the
Working Interests to be altered from its ownership interest as of the date
hereof; or

      (g) agree or commit to do any of the foregoing.

9. SURVIVAL AND INDEMNIFICATION.

   9.1. SURVIVAL AND NOTICE . The liability of Flextrend and the Company under
each of their respective representations, warranties and covenants contained in
this Agreement shall survive the Closing and execution and delivery of the
assignments contemplated hereby. Any assertion by any party to this Agreement
that any party is liable for the inaccuracy of any representation or warranty
or the breach of any covenant (except in Section 7.5, which shall survive until
the closing of the applicable statute of limitations) must be made in writing
and must be given to the other party not later than the first Business Day
occurring eighteen months after the date of Closing. The notice shall state the
facts known to the person providing such notice that give rise to such notice
in sufficient detail to allow the receiving person to evaluate the claim.

   9.2. THE COMPANY'S INDEMNIFICATION . To the extent permitted by law, the
Company, from and after Closing, shall defend, indemnify and hold Flextrend
harmless 



                                      -9-
<PAGE>   14

from and against any and all damage, loss, cost, expense, obligation, claim or
liability, including reasonable counsel fees and reasonable expenses of
investigating, defending arid prosecuting litigation (collectively, the
"Liability"), suffered by Flextrend as a result of (i) any cost, liability or
obligation that was not assumed by Flextrend pursuant to Section 6 (other than
Liability resulting from the inaccuracy of any representation or warranty or
the breach of a covenant by Flextrend contained in this Agreement); (ii) the
failure of the Company to comply with the bulk sales laws of Texas or any other
jurisdiction in connection with the transactions provided for in this
Agreement; (iii) any brokers' or finders' fees or commissions arising with
respect to brokers or finders retained or engaged by the Company and resulting
from or relating to the transactions contemplated in this Agreement; (iv) the
inaccuracy of any representation or warranty of the Company set forth in this
Agreement; and (v) the breach of, or failure to perform or satisfy, any of the
covenants of the Company set forth in this Agreement.

   9.3. FLEXTREND'S INDEMNIFICATION . To the extent permitted by law,
Flextrend, from and after Closing, shall defend, indemnify and hold the Company
harmless from and against any and all Liability suffered by the Company as a
result of (i) any cost, liability or obligation that was assumed by Flextrend
pursuant to Section 6 (other than Liability resulting from the inaccuracy of
any representation or warranty or the breach of a covenant of the Company
contained in this Agreement); (ii) the failure of Flextrend to comply with the
bulk sales laws of Texas or any other jurisdiction in connection with the
transactions provided for in this Agreement; (iii) any brokers or finders' fees
or commissions arising with respect to brokers or finders retained or engaged
by Flextrend and resulting from or relating to the transactions contemplated in
this Agreement; (iv) the inaccuracy of any representation or warranty of
Flextrend set forth in this Agreement; and (v) the breach of, or failure to
perform or satisfy any of the covenants of Flextrend set forth in this
Agreement.

10. FURTHER ASSURANCES . After the Closing, the Company and Flextrend shall
execute, acknowledge and deliver or cause to be executed, acknowledged and
delivered such instruments and take such other action as may be necessary or
advisable to carry out their obligations under this Agreement and under any
exhibit, document, certificate or other instrument delivered pursuant hereto.
The Company and Flextrend, as applicable, shall cooperate and use their best
efforts to obtain all approvals and consents required by or necessary for the
transactions contemplated by this Agreement that are customarily obtained after
Closing.

11. NOTICE . All notices required or permitted under this Agreement shall be in
writing and, (a) if by air courier, shall be deemed to have been given one
Business Day after the date deposited with a recognized carrier of overnight
mail, with all freight or other charges prepaid, (b) if by telegram, shall be
deemed to have been given one Business Day after delivered to the wire service,
(c) if by telex, provided a confirmation is received and 




                                     -10-
<PAGE>   15

such notice is also sent by U.S. mail, shall be deemed to have been given when
such telex is sent, (d) if mailed, shall be deemed to have been given three
Business Days after the date when sent by registered or certified mail, postage
prepaid, and (e) if sent by telecopier, provided a confirmation is received and
such notice is also sent by U.S. mail, shall be deemed to have been given when
such telecopy is sent, addressed as follows:

                     The Company:      Tatham Offshore, Inc.
                                       7400 Texas Commerce Tower
                                       600 Travis
                                       Houston, Texas 77002
                                       Attention:  Chief Executive Officer
                                       Telecopier:  (713) 224-7574

                     with a copy to:   Rick L. Burdick
                                       Akin, Gump, Strauss, Hauer & Feld, L.L.P.
                                       711 Louisiana Street, Suite 1900
                                       Houston, Texas  77002

                     Flextrend:        Flextrend Development Company, L.L.C.
                                       7200 Texas Commerce Tower
                                       600 Travis Street
                                       Houston, Texas  77002
                                       Attention:  President
                                       Telecopier:  (713) 547-5151

or to such other address as either party hereto may from time to time designate
by notice in writing to the other.

12. ASSIGNMENT . This Agreement and any of the rights, interests or obligations
hereunder may be assigned by any of the parties hereto (whether by operation of
law or otherwise) without the prior written consent of the other party;
provided that, in the case of any assignment as described above, no such
assignment shall relieve the assigning party of any of its obligations under
this Agreement and the non-assigning party shall have the right to seek
remedies directly from the assigning party without seeking the same from the
assignee. Subject to the preceding sentence, this Agreement will be binding
upon and inure to the benefit of, and be enforceable by, the parties and their
respective successors and permitted assigns.

13. GOVERNING LAW . This Agreement shall be governed and construed in
accordance with the laws of the State of Texas without giving effect to any
principles of conflicts of laws. The validity of the various conveyances
affecting the title to real property shall be governed by and construed in
accordance with the laws of the jurisdiction in which such 



                                     -11-
<PAGE>   16

property is situated. The representations and warranties contained in such
conveyances and the remedies available because of a breach of such
representations and warranties shall be governed by and construed in accordance
with the laws of the State of Texas without giving effect to the principles of
conflict of laws.

14. EXPENSES AND FEES . (i) Each of the parties hereto shall pay the fees and
expenses of their respective counsel, accountants and other experts incident to
the negotiation and preparation of this Agreement and consummation of the
transactions contemplated hereby, (ii) Flextrend and the Company shall each pay
one half of (x) the cost of all fees for the recording of transfer documents
described in Section 5.2 and (y) any sales, transfer, stamp or other excise
taxes resulting from the transfer of the Properties to Flextrend, and (iii) all
other costs shall be borne by the party incurring such costs.

15. INTEGRATION . This Agreement, the exhibits hereto and the other agreements
to be entered into by the parties under the provisions of this Agreement set
forth the entire agreement and understanding of the parties in respect of the
transactions contemplated hereby and supersede all prior agreements, prior
arrangements and prior understandings relating to the subject matter hereof.

16. WAIVER OR MODIFICATION . This Agreement may be amended, modified,
superseded or cancelled, and any of the terms, covenants, representations,
warranties or conditions hereof may be waived, only by a written instrument
executed by a duly authorized officer of Flextrend and the Company, or, in the
case of a waiver or consent, by or on behalf of the party or parties waiving
compliance or giving such consent. No waiver by any party of any condition, or
of any breach of any covenant, agreement, representation or warranty contained
in this Agreement, in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such condition or breach or
waiver of any other condition or of any breach of any other covenant,
agreement, representation or warranty.

17. HEADINGS . The Section headings contained in this Agreement are for
convenient reference only and shall not in any way affect the meaning or
interpretation of this Agreement.

18. INVALID PROVISIONS . If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable; this Agreement shall
be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance from
this Agreement.




                                     -12-
<PAGE>   17

19. MULTIPLE COUNTERPARTS . This Agreement may be executed in a number of
identical counterparts, each of which for all purposes is to be deemed as
original, and all of which constitute, collectively, one agreement; but in
making proof of this Agreement, it shall not be necessary to produce or account
for more than one such counterpart.

20. TERMINATION . This Agreement may be terminated by mutual written consent of
the parties hereto.

21. GUARANTEE . All obligations of Flextrend hereunder shall be unconditionally
guaranteed by the Partnership pursuant to that certain form of Guarantee
attached hereto as Exhibit 21.

22. CERTAIN DEFINITIONS . As used in this Agreement, the following terms shall
have the following meanings:

    "AFEs" shall have the meaning set out in Section 3.13 above.

    "Agreement" shall mean this Redemption Agreement, as the same may from time
to time be amended or supplemented.

    "Business Day" shall mean a day other than the days that banking
institutions are required or permitted to be closed under the laws of the State
of Texas.

    "Closing" shall have the meaning set out in Section 5.1(a) above.

    "Contracts" shall have the meaning set out in Section 3.6.

    "Contribution Agreement" shall mean the Contribution and Distribution
Agreement made as of the date hereof among DeepTech International Inc., a
Delaware corporation, the Company, DeepFlex Production Services, Inc., a
Delaware corporation, and El Paso Natural Gas Company, a Delaware corporation.

    "Data" shall mean all (i) abstracts, title opinions, title reports, title
policies, lease and land files, surveys, analyses, compilations,
correspondence, filings with regulatory agencies, other documents and
instruments that relate to the Properties; (ii) geological, engineering,
exploration, production, and other technical data, magnetic field recordings,
digital processing tapes, field prints, summaries, reports and maps, whether
written or in an electronically reproducible form, that are in the possession
or control of the Company, and relate to the Oil and Gas Properties; and (iii)
all other books, records, files and magnetic tapes containing financial, title
or other information that are in the possession or control of the Company, or
any affiliate of the Company (excluding Flextrend), and in any manner relate to
the Properties; provided that "Data" shall not include any of the 



                                     -13-
<PAGE>   18


foregoing to the extent such Data is subject to a licensing agreement that does
not permit access to Flextrend.

    "Employee" shall mean any current, former, or retired employee, consultant
or director of the Company whose duties relate or related to the business
conducted with the Properties.

    "Encumbrances" shall refer to each and all of the following items:
mortgages, claims, charges, security interests, liens, obligations,
encumbrances, imperfections of title or other matters affecting title, and any
rights of third parties whatsoever.

    "Equipment" shall mean all equipment, fixtures, physical facilities or
interests therein of every type and description to the extent that the same are
used or held for use in connection with the ownership, development or operation
of the Properties, whether located on or off the Properties.

    "Equitable Limitations" shall mean applicable bankruptcy, reorganization or
moratorium statutes, equitable principles or other similar laws affecting the
rights of creditors generally.

    "Laws" shall refer to each and all of the following: domestic (federal,
state or local) or foreign laws, statutes, ordinances, rules, regulations,
decrees or orders.

    "Liability" shall have the meaning set out in Section 9.2.

    "Liens" shall mean all encumbrances, liens, claim, easements, rights,
agreements, instruments, obligations, burdens or defects.

    "Marketable Title" shall mean such title as (i) will enable Flextrend, as
the Company's successor in title, to receive from a particular Oil and Gas
Property at least the Net Revenue Interests for the leases identified in
Exhibit 1, without reduction, suspension or termination throughout the term of
such lease, except for any reduction, suspension or termination (a) caused by
Flextrend, any of its affiliates (other than the Company), successors in title
or assigns, (b) caused by orders of the appropriate regulatory agency having
jurisdiction over such Oil and Gas Property that are promulgated after January
1, 1998 and that concern pooling, unitization, communitization or spacing
matters affecting such Oil and Gas Property, (c) or otherwise set forth in
Exhibit 1; (ii) will obligate Flextrend, as the Company's successor in title,
to bear no greater Working Interests other than the Working Interests for each
of the leases identified in Exhibit 1, without increase throughout the term of
such lease, except for any increase (a) caused by Flextrend, any of its
affiliates (other than the Company), successors in title or assigns, (b) that
also results in the Net Revenue Interests associated with such lease being
proportionately increased, (c) caused by contribution requirements provided for
under provisions similar to those 




                                     -14-
<PAGE>   19

contained in Article VII.B. of the A.A.P.L. Form 610-1982 Model Form Operating
Agreement, (d) caused by orders of the appropriate regulatory agency having
jurisdiction over an Oil and Gas Property that are promulgated after January 1,
1998, and that concern pooling, unitization, communitization or spacing matters
affecting a particular Oil and Gas Property, or (e) otherwise set forth in
Exhibit 1; and (iii) is free and clear of all Liens except for Permitted
Encumbrances.

    "MMS" shall mean the Minerals Management Service.

    "MMS Assignment" shall mean both the Assignment of Leases and Bill of Sale
for filing with the MMS in the form of Annex IB.

    "Net Revenue Interest" shall mean that interest in the gross production of
oil and gas and other minerals from the Properties subject to the oil, gas and
mineral leases to which Flextrend will be entitled to by virtue of its
acquisition of the Working Interests after deducting all landowner royalties,
overriding royalties and similar burdens attributable to the Working Interest.

    "Oil and Gas Properties" shall mean all properties described in Exhibit 1
whether such properties are in the nature of fee interests, leasehold
interests, working interests, farmout rights, royalty, overriding royalty or
other non-working or carried interests, operating rights or other mineral
rights of every nature and any rights that arise by operation of law or
otherwise in all properties and lands pooled, unitized, communitized or
consolidated with such properties.

    "Partnership" shall mean Leviathan Gas Pipeline Partners, L.P. and any
affiliate or subsidiary thereof.

    "Payment Rights" shall mean all (i) accounts, instruments and general
intangibles (as such terms are defined in the Uniform Commercial Code of Texas)
attributable to the Properties with respect to any period of time on or after
January 1, 1998 and (ii) liens and security interests in favor of the Company,
whether choate or inchoate, under any law, rule or regulation or under the
Contracts (a) arising from the ownership, operation, sale or other disposition
on or after January 1, 1998 of any of the Properties and (b) arising in favor
of the Company as the operator of certain of the Oil and Gas Properties.

    "Permitted Encumbrances" shall mean (i) liens for taxes not yet delinquent,
(ii) lessors' royalties, overriding royalties, division orders, reversionary
interests, and similar burdens that do not operate to reduce the net revenue
interests of the Company in any of the Oil and Gas Properties to less than the
amount set forth therefor in Exhibit 1, (iii) the consents and rights described
in Exhibit 3.8, (iv) the Contracts, (v) except to the extent any amounts
related thereto are due and payable, any mechanic and materialmen, operator,
non-operator, contractor and subcontractor or similar liens created by the



                                     -15-
<PAGE>   20

Contracts or operation of law, and (vi) the Liens created by the documents
contemplated hereby.

    "Person" shall include an individual, a partnership, a limited liability
company, a corporation, a trust, an unincorporated organization, a government
or any department or agency thereof and any other entity.

    "Properties" shall mean the Oil and Gas Properties, Wells, Substances,
Equipment, Data, Contracts and Payment Rights. "Properties" shall include any
additional interests acquired by Flextrend in a particular operation as a
result of one or more working interest owners electing to go non-consent under
the applicable operating agreements.

    "State Assignment" shall mean an Assignment of Leases and Bill of Sale for
recordation in the appropriate real property records of the appropriate
parishes and/or counties in Louisiana, Alabama and Mississippi where the
Assignment needs to be recorded in the form of Annex IA.

    "Substances" shall mean all severed crude oil, natural gas, casinghead gas,
drip gasoline, natural gasoline, petroleum, natural gas liquids, condensate,
products, liquids and other hydrocarbons and other minerals or materials of
every kind and description produced from the Oil and Gas Properties on or after
January 1, 1998.

    "Wells" shall mean all oil, condensate or natural gas wells, water source
wells, and water and other types of injection wells either located on the Oil
and Gas Properties or held for use in connection with the Oil and Gas
Properties, whether producing, operating, shut-in or temporarily abandoned.

    "Working Interest" shall mean the interest that Flextrend will be acquiring
pursuant to the terms of this Agreement upon which will be calculated
Flextrend's proportionate share of the costs, expenses and liabilities
attributable to the oil, gas and mineral leases described herein.




                                     -16-
<PAGE>   21




         This Agreement has been executed as of the date first set forth above.

                                           FLEXTREND DEVELOPMENT COMPANY, L.L.C.


                                           By:
                                               ---------------------------------
                                                  Name:
                                                  Title:

                                           TATHAM OFFSHORE, INC.


                                           By:
                                               ---------------------------------
                                                  Name:
                                                  Title:


                                     -17-
<PAGE>   22
                                  EXHIBIT 1

                                 PROPERTIES

A.  Any and all interests presently shown to be owned by Company by instruments
recorded in the official records of the Parishes of the State of Louisiana, the
Counties of Mississippi and Alabama or the United States of America, together
with all other right, title and interest of Company of whatever kind or
character, whether legal or equitable, vested or contingent, in and to the oil
and gas leases described below:

1. OCS-G 13631, BLOCK 331, SHIP SHOAL AREA, OFFSHORE LOUISIANA

Overriding Royalty Interest in Oil and Gas Lease dated September 1, 1992,
between the United States of America, as Lessor, and Company, as Lessee,
covering all of Block 331, Ship Shoal Area, South Addition, containing
approximately 5277.82 acres.

Overriding Royalty Interest:  2.49962%

2. OCS-G 13641, BLOCK 35, WEST DELTA AREA, OFFSHORE LOUISIANA

Oil and Gas Lease dated July 1, 1992, between the United States of America, as
Lessor, and Company, as Lessee, covering that portion of Block 35, West Delta
Area, OCS Leasing Map, Louisiana Map No. 8, seaward of the 1975 Supreme Court
Decree Line, containing approximately 4984.81 acres.

Working Interest:  38%            Net Revenue Interest: 29.76666%

Overriding Royalty Interest:  1%

3. (a) OCS-G 9743, BLOCK 817, VIOSCA KNOLL AREA, OFFSHORE LOUISIANA1

Oil and Gas Lease dated August 1, 1988, between the United States of America,
as Lessor, and Petrofina Delaware, Inc., as Lessee, covering all of Block 817,
Viosca Knoll Area, containing approximately 5, 760 acres.  All of Block 817
from the seafloor down to the stratigraphic equivalent of the base of the Tex
X-6 Sand as encountered in the Viosca Knoll 817 Sohio #1 Well at a log depth of
4,450 feet:

Working Interest:  25%            Net Revenue Interest:  18.75%

Overriding Royalty Interest: 1.25%





__________________________________
                                  
1 The interest owned by Company in Block 817, Viosca Knoll Area, is subject to
that certain (a) Production  Payment Agreement, dated September 19, 1995,
between Company and J. Ray McDermott Properties, Inc. and (b) Production
Payment Agreement, dated September 19, 1995,  between Company and F-W Oil
Interests, Inc.
<PAGE>   23

All of Block 817 below the base of the Tex X-6 Sand as encountered in the
Viosca Knoll 817 Sohio #1 Well at a log depth of 4,450 feet, SAVE AND EXCEPT
the E/2 of the E/2 and the E/2 of the E/2 of the W/2 of the E/2 of said Block
817 below the stratigraphic equivalent of the top of the Tex (L) Formation as
encountered in the OCS-G 13063 #1 Well at a depth of 12,150 feet:

Working Interest:  100%           Net Revenue Interest:  75%

Overriding Royalty Interest: 5%

The E/2 of the E/2 and the E/2 of the E/2 of the W/2 of the E/2 of Block 817
below the stratigraphic equivalent of the top of the Tex (L) Formation as
encountered in the OCS-G 13063 #1 Well at a depth of 12,150 feet:

Working Interest:  50%            Net Revenue Interest:  37.5%

Overriding Royalty Interest: 5%

(b) OCS-G 10939, BLOCKS 772/773, VIOSCA KNOLL AREA, OFFSHORE LOUISIANA

Oil and Gas Lease dated July 1, 1989, between the United States of America, as
Lessor, and Petrofina Delaware, Inc., as Lessee, covering all of Blocks
772/773, Viosca Knoll Area,  containing approximately 5,304 acres.  Working
Interest:  100%           Net Revenue Interest:  75%

Overriding Royalty Interest: 5%

(c) OCS-G 10940, BLOCK 774, VIOSCA KNOLL AREA, OFFSHORE LOUISIANA

Oil and Gas Lease dated July 1, 1989, between the United States of America, as
Lessor, and Petrofina Delaware, Inc., as Lessee, covering all of Block 774,
Viosca Knoll Area, containing approximately 4,239 acres.

The N/2 of Block 774 and from the seafloor down to the stratigraphic equivalent
of the top of the Tex (L) Formation in the S/2 of Block 774 as encountered in
the OCS-G 13063 #1 Well at a depth of 12,150 feet:

Working Interest:  100%           Net Revenue Interest:  75%

Overriding Royalty Interest: 5%

The S/2 of Block 774 below the stratigraphic equivalent of the top of the Tex
(L) Formation as encountered in the OCS-G 13063 #1 Well at a depth of 12,150
feet:

Working Interest:  50%            Net Revenue Interest:  37.5%

Overriding Royalty Interest: 5%
<PAGE>   24
(d) OCS-G 13063, BLOCK 818, VIOSCA KNOLL AREA, OFFSHORE LOUISIANA

Oil and Gas Lease dated May 1, 1991 between the United States of America, as
Lessor, and Fina Oil and Chemical Company, as Lessee, covering all of Block
818, Viosca Knoll Area, containing approximately 5, 760 acres.

All of Block 818, less and except the wellbore and all production from the
OCS-G 13063 #1 Well:

Working Interest:  50%            Net Revenue Interest:  37.5%

Overriding Royalty Interest: 5%

The wellbore and all production from the OCS-G 13063 #1 Well:

Working Interest:  100%           Net Revenue Interest:  75%

Overriding Royalty Interest: 5%

(e) OCS-G 10945, BLOCK 861, VIOSCA KNOLL AREA, OFFSHORE LOUISIANA
Oil and Gas Lease dated June 1, 1989, between the United States of America, as
Lessor, and Petrofina Delaware, Inc., as Lessee, covering all of Block 861,
Viosca Knoll Area, containing approximately 5, 760 acres.

All of Block 861 from the seafloor down to the stratigraphic equivalent of the
top of the Tex (L) Formation as encountered in the OCS-G 13063 #1 Well at a
depth of 12,150 feet:

Working Interest:  100%           Net Revenue Interest:  75%

Overriding Royalty Interest: 5%

All of Block 861 below the stratigraphic equivalent of the top of the Tex (L)
Formation as encountered in the OCS-G 13063 #1 Well at a depth of 12,150 feet:

Working Interest:  50%            Net Revenue Interest:  37.5%

Overriding Royalty Interest: 5%

4. (a)  OCS-G 5804, BLOCK 914, EWING BANK AREA, OFFSHORE LOUISIANA

Oil and Gas Lease dated July 1, 1983, between the United States of America, as
Lessor, and Mobil Oil Exploration & Producing Southeast, Inc., Sohio Petroleum
Company, Kerr-McGee Corporation, as Lessee, covering all of Block 914, Ewing
Bank Area, containing approximately 5, 760 acres.

Working Interest:  100%           Net Revenue Interest:  73.567%
<PAGE>   25
(b) OCS-G 5805, BLOCK 915, EWING BANK AREA, OFFSHORE LOUISIANA

Oil and Gas Lease dated July 1, 1983, between the United States of America, as
Lessor, and Mobil Oil Exploration & Producing Southeast, Inc., Sohio Petroleum
Company, Kerr-McGee Corporation, as Lessee, covering all of Block 915, Ewing
Bank Area, containing approximately 5, 760 acres.

W/2 of Block 915:

Working Interest:  100%           Net Revenue Interest:  73.567%

E/2 of Block 915:

Working Interest:  100%           Net Revenue Interest:  73.667%

(c) OCS-G 5806, BLOCK 916, EWING BANK AREA, OFFSHORE LOUISIANA

Oil and Gas Lease dated July 1, 1983, between the United States of America, as
Lessor, and Mobil Oil Exploration & Producing Southeast, Inc., Sohio Petroleum
Company, Kerr-McGee Corporation, as Lessee, covering all of Block 916, Ewing
Bank Area, containing approximately 5, 760 acres.

Working Interest:  100%           Net Revenue Interest:  75%

(d) OCS-G 5801, BLOCK 871, EWING BANK AREA, OFFSHORE LOUISIANA

Oil and Gas Lease dated July 1, 1983, between the United States of America, as
Lessor, and Mobil Oil Exploration & Producing Southeast, Inc., Sohio Petroleum
Company, Kerr-McGee Corporation, as Lessee, covering all of Block 871, Ewing
Bank Area, containing approximately 5, 760 acres.

Working Interest:  100%           Net Revenue Interest:  75%

B.  A four pile platform located on the oil and gas lease OCS-G 13631 which
covers Block 331 of the Ship Shoal Area, offshore Louisiana.  The platform is
located at the following coordinates: x = 2,182,617        y = -188, 358.  The
four pile platform has an 89', 10  3/4" by 78' drilling deck and a 99', 10 3/4"
by 78' production deck.
<PAGE>   26
                                  EXHIBIT 3.6

                                   CONTRACTS

OCS-G 9743, BLOCK 817, VIOSCA KNOLL AREA, OFFSHORE LOUISIANA

1.       To the extent, but only to the extent, related to the Properties,
         Company's rights in that Letter Agreement dated July 2, 1993 between
         Fina Oil and Chemical Company and Petrofina Delaware, Inc. and Company
         concerning the drilling and development of Viosca Knoll Area, Blocks
         772/773, 774, 817, 818 and 861, as amended by Amendment Letter of
         December 6, 1993 between Fina Oil and Chemical Company and Petrofina
         Delaware, Inc.  (collectively, "PDI") and Company.  The rights
         acquired by Flextrend in the foregoing Letter Agreement, as amended,
         shall include, without limitation, all of Company's right to acquire
         the override retained by PDI, which acquisition rights are subject to
         the terms of that certain Agreement to Purchase and Sale Oil and Gas
         Properties between ELF Exploration, Inc., and Company, J. Ray
         McDermott Properties, Inc., J. Ray McDermott, Inc. and F-W Oil
         Interest, Inc., effective April 12, 1995.  Company shall retain all
         rights and obligations established pursuant to the Letter Agreement,
         as amended, that do not pertain to the Properties.

2.       To the extent, but only to the extent, related to the Properties,
         Company's rights in that Unit Agreement For Outer Continental Shelf
         Exploration, Development and Production Operations on Viosca Knoll
         Block 817 Unit, Blocks 772/773, 774, 817, 818 and 861 Viosca Knoll
         Area, Offshore Louisiana, Contract No. 754393018, approved by the
         Regional Supervisor Production and Development, Minerals Management
         Service, Gulf of Mexico OCS Region on July 26, 1993 and accepted by
         Company, Unit Operator, on July 7, 1993, and Petrofina Delaware, Inc.
         and Fina Oil and Chemical Company on July 7, 1993.

3.       To the extent, but only to the extent, related to the Properties,
         Company's rights in that Farmout Agreement dated October 31, 1994
         between Company, as Operator, and F-W Oil Interests, Inc. and O.P.I.
         International, Inc.  and J. Ray McDermott Properties, Inc., as
         Non-Operators, pertaining to Viosca Knoll Block 817 Unit Area, Blocks,
         772/773, 774, 817, 818 and 861, Viosca Knoll Area, Gulf of Mexico
         ("Farmout Agreement").  The rights acquired by Flextrend in the
         Farmout Agreement shall include, without limitation, (i) the
         reimbursement rights granted to Company pursuant to Section 4.2 of the
         Farmout Agreement; and (ii) the right and obligation to file the Joint
         Operating Agreement with the MMS as provided for in Section 6.2.  The
         interests received by Flextrend in the Properties are free and clear
         of any conveyance obligations provided for in the Farmout Agreement.
         Company shall retain all rights and obligations established pursuant
         to the Farmout Agreement that do not pertain to the Properties.  In
         addition, Company shall retain all rights to the Initial Payment (as
         defined in the Farmout Agreement), and shall be solely responsible, as
         between Company and Flextrend, as to all costs, expenses and indemnity
         obligations relating to the Initial Earning Well (as defined in the
         Farmout Agreement) or any substitute well.
<PAGE>   27

4.       Platform Limited Right of Use and Processing Agreement dated June 30,
         1995 between VK-Main and Company pertaining to platform use and
         processing of Viosca Knoll Area Block 817 production with demand
         payments due thereunder to commence on July 1, 1995.

5.       Service Agreement between VK-Main and Company dated June 30, 1995.

6.       Letter from the United States Department of the Interior, Minerals
         Management Service dated January 7, 1994 addressed to Company.

7.       Gas Dedication Agreement dated April 21, 1995 between Flextrend, as
         successor in interest to a portion of Company's  interest, Company,
         Leviathan, F-W Oil Interests, Inc., J. Ray McDermott Properties, Inc.,
         J. Ray McDermott, Inc. and ELF Exploration, Inc.

8.       Agreement for Purchase and Sale between Company and Flextrend and
         related agreements dated June 30, 1995.

9.        Oil and Condensate Purchase Agreement dated October 1, 1995 between
          OGM and Company.

10.      Gas and Purchase Agreement dated October 1, 1995 between OGM and
         Company.

11.      Master Gas Dedication Agreement between Company and Leviathan dated
         December 10, 1993.

12.      Agreement to Purchase and Sale Oil and Gas Properties, effective April
         12, 1995, between ELF Exploration, Inc., and Company, J. Ray McDermott
         Properties, Inc., J. Ray McDermott, Inc. and F-W Oil Interest, Inc.


OCS-G 13631, BLOCK 331, SHIP SHOAL AREA, OFFSHORE LOUISIANA

1.       Master Gas Dedication Agreement dated December 10, 1993, as amended
         between Company and Leviathan.

2.       Platform Use Agreement dated December 31, 1997 between Offshore, Pogo
         Producing Company, Samedan Oil Corporation, Seagull Energy E&P Inc.,
         and Manta Ray Gathering Company, L.L.C.

OCS-G 5804, BLOCKS 871, 914, 915, 916, EWING BANK AREA, OFFSHORE, LOUISIANA

1.       Gathering Agreement, as amended, dated July 1, 1992 between Company,
         DeepTech International, Inc. and Ewing Bank Gathering Co., L.L.C.

2.       Oil and Condensate Purchase Agreement dated October 1, 1992 between
         OGM and Company.

3.       Gas Purchase Agreement dated October 1, 1995 between OGM and Company.
<PAGE>   28
4.       Condensate Separation Agreement dated July 1, 1993 between Trunkline
         Gas Company and Company.

5.       Facility Sharing Agreement dated October 21, 1992 between BP
         Exploration Inc. and Company.

6.       Gathering Agreement dated May 6, 1988 between Trunkline Gas Company
         and Standard Gas Marketing Co., Mobil Natural Gas Inc., Mobil Oil E&P
         Southeast Inc., Kerr-McGee Corporation and Kerr-McGee Federal Limited
         Partnership I - 1981.

7.       Unit Agreement, effective June 1, 1988, No. 754388019, issued by the
         United States Department of the Interior, Minerals Management Service
         in favor of Mobil Oil E&P Southeast Inc., Sohio Petroleum Company, and
         Kerr-McGee Corporation, and Kerr-McGee Federal Limited Partnership
         I-1981 conditioned to cover Blocks 871, 914, 915, 996, and one-half of
         Blocks 958 and 959, Ewing Banks Area.

MASTER GAS DEDICATION AGREEMENT RELATING TO OCS-G 13362, 12631 AND OCS-G 9743,
AMONG OTHER PROPERTIES:

To the extent, but only to the extent, related to the Properties, Company's
rights in that Master Gas Dedication Agreement dated December 10, 1993 between
Leviathan and Company, as amended by (i) letter of November 8, 1994, between
Leviathan and Company, F-W Oil Interests, Inc., O.P.I. International, Inc. and
J. Ray McDermott Properties, Inc. and (ii) Amendment to Master Gas Dedication
Agreement effective April 21, 1995 between Leviathan and Company, F-W Oil
Interests, Inc., J. Ray McDermott Properties, Inc. and J. Ray McDermott, Inc.
<PAGE>   29
                                  EXHIBIT 3.7

                             LITIGATION AND CLAIMS


<TABLE>
<CAPTION>
                       STYLE                                JURISDICTION                 CASE NO.
                       -----                                ------------                 --------
 <S>                                                 <C>                               <C>
 1.  Gerard Quirk, et ux.  v. Mustang Engineering,   U.S.     District    Court,        CV94-1030
     Inc.  and Deepwater  Production Systems, Inc.   Western     District     of
     and Tatham Offshore, Inc.                       Louisiana
 2.  Kenneth  W.  Fanguy  v.  Ambar,  Inc.,  Water   32nd    Judicial   District          116380
     Ways, Inc., Trico Marine Operators, Inc.  and   Court,         Parish    of
     Flextrend Development Company, L.L.C.           Terrebonne,     State    of
                                                     Louisiana
 3.  Roch Baillargeon  v. Schlumberger  Technology   U.S.     District    Court,        CV96-2403
     Corporation,  Flextrend  Development Company,   Western     District     of
     L.L.C.,  Deepwater Port  Services, Inc., Deep   Louisiana
     Tech  International,  Inc.   d/b/a  Deepwater
     Production Systems, Inc., and Sedco-Forex.
 4.  Rickie Thompson v. Trico Marine Assets, Inc.    32nd    Judicial   District        No. 119646
                                                     Court,       Parish      of
                                                     Terrebonne,     State    of
                                                     Louisiana
 5.  David Wade  Lavergne  v. Pool  Company,  Pool   U.S.     District    Court,       No. 97-3216
     Energy Services Company                         Eastern     District     of
                                                     Louisiana
</TABLE>
<PAGE>   30
                                  EXHIBIT 3.8

                       APPROVALS AND PREFERENTIAL RIGHTS


Except for certain governmental consents which cannot be obtained prior to
Closing, the following is, to the best of Company's knowledge, a complete and
accurate list of all approvals required to be obtained by Company for the
assignment of the Properties to Flextrend and all preferential rights that
affect the Properties:

                                   CONSENTS:

         1.      Consent to assignment is required from VK-Main under the terms
of that certain Service Agreement effective June 30, 1995 between VK-Main and
Company pertaining to Viosca Knoll Area, Block 817, Offshore Louisiana.

         2.      Consent to assignment is required from VK-Main under the terms
of that certain Platform Limited Right of Use and Processing Agreement dated
June 30, 1995, between VK-Main on the one hand, and Company, F-W Oil Interests,
Inc., J. Ray McDermott, Inc. and J. Ray McDermott Properties, Inc., on the
other hand.

         3.      Consent to assignment is required from Pogo Producing Company,
Samedan Oil Corporation, and Seagull Energy E&P, Inc. under the terms of that
certain Platform Use Agreement (SS Block 331, MRY-2-2022) dated December 31,
1997, between Pogo Producing Company, Samedan Oil Corporation and Seagull
Energy E&P, Inc., on the one hand, and Company, on the other hand.

         4. Consent to assignment is required from ELF Exploration, Inc. under
the terms of that certain Agreement to Purchase and Sale Oil and Gas
Properties, effective April 12, 1995, between ELF Exploration, Inc., and
Company, J. Ray McDermott Properties, Inc., J. Ray McDermott, Inc. and F-W Oil
Interest, Inc.


                              PREFERENTIAL RIGHTS:


                                      NONE
<PAGE>   31
                                  EXHIBIT 3.13

                                  COMMITMENTS


1.  AFE for workover of Well A-1

         Total commitment:  $625,000

         Company's share of commitment:  $156,250

2.  AFE for plugging back of Well A-6

         Total commitment:  $15,500

         Company's share of commitment:  $3,878
<PAGE>   32
                                  EXHIBIT 3.14

                                PAYOUT BALANCES


<TABLE>
 <S>                                                              <C>
 1)  Production  Payment   Agreement  dated                       $5,721,114.45
 September 19,  1995 between   Company  and
 J. Ray McDermott Properties, Inc.

 2)  Production  Payment   Agreement  dated                       $5,721,114.45
 September 19, 1995 between  Company and F-
 W Oil Interests, Inc.
</TABLE>
<PAGE>   33


                                   EXHIBIT 21


                                    GUARANTY

      THIS GUARANTY (this "Guaranty") dated February 27, 1998, but effective as
of January 1, 1998, is issued by LEVIATHAN GAS PIPELINE PARTNERS, L.P., a
Delaware limited partnership (the "Guarantor"), in favor and for the benefit
of TATHAM OFFSHORE, INC., a Delaware corporation ("TOFF").

      WHEREAS, Flextrend Development Company, L.L.C. (("Flextrend"), a wholly
owned subsidiary of Guarantor, and TOFF have entered into that certain
Redemption Agreement dated February 27, 1998 ("Redemption Agreement"); and

      WHEREAS, Guarantor believes it is in its best interest for Flextrend and
TOFF to enter into the Redemption Agreement; and

      WHEREAS, TOFF desires for Guarantor to guarantee the performance of
Flextrend under the Redemption Agreement and Guarantor is willing to do so
as an inducement for TOFF entering into such Agreement; and

      WHEREAS, the obligations of Guarantor hereunder are being incurred
concurrently with the obligations of Flextrend under the Redemption
Agreement.

      NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), subject to the terms and conditions of this Guaranty,
Guarantor hereby unconditionally and absolutely guarantees the punctual and
complete performance of all of the terms, covenants and conditions to be
complied with or performed by Flextrend (but not its assignees or other
transferees) under the Redemption Agreement (herein collectively the
"Obligations"), whether arising heretofore or hereafter.

      This Guaranty shall be a continuing Guaranty and shall remain in full
force and effect until such time as all of the Obligations have been
performed.

      This Guaranty shall be enforceable upon notice by TOFF and without prior
resort to any demands, possessory remedies or proceedings for collection of
any nature against Flextrend or any other entity. Notwithstanding anything
to the contrary contained herein, the Guarantor shall be entitled to raise
as a defense to its performance hereunder any defense that Guarantor would
be entitled to raise under the Redemption Agreement if the Guarantor was the
party executing and delivering the Redemption Agreement in lieu of
Flextrend.




                                     -1-
<PAGE>   34


      This Guaranty shall be deemed to be a contract under, and shall be
construed, interpreted and governed by and according to, the laws of the
State of Texas, excluding any conflict of laws principles which, if applied,
might permit or require the application of the laws of another jurisdiction.
The parties further agree that the jurisdiction and venue for any dispute or
claim arising out of or related to this Guaranty shall be brought and remain
in the federal or state courts located in the State of Texas. Guarantor
shall be liable to TOFF for all attorneys' fees and costs incurred by TOFF
in enforcing the provisions of this Guaranty and in collecting any amounts
due hereunder.

      If any provision of this Guaranty or the application thereof to any
person or circumstances shall for any reason and for any extent be invalid
or unenforceable, neither the remainder of this Guaranty nor the application
of such provisions to any other persons or circumstances shall be affected
thereby but shall be enforced to the extent permitted by applicable law.
This writing is intended by the parties to be an integrated and final
expression of this Guaranty. No course of prior dealing between the parties,
no usage of trade, and no parol or extrinsic evidence of any nature shall be
used to supplement, modify or vary any of the terms hereof. There are no
conditions to the effectiveness of this Guaranty.

      IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty as of the
date first set forth in the preamble.



LEVIATHAN GAS PIPELINE PARTNERS, L.P.


By:
   -----------------------------------
     Name:
     Title:





                                      -2-