**Exhibit10.2**

 
|   |  | **CHALLENGER MINERALS INC.**

A GlobalSantaFe Company |
|--------|--|-------------------------------------------------------|

 

15375 Memorial Drive,Suite 3200Houston, Texas 77079281-925-7200 Fax 281-925-7280

 

March 15, 2003

 
| **Millennium Offshore Group, Inc.**  Attn: Mr. Kent Singleton  5300 Memorial, Ste. 1070  Houston, TX 77007              |   | **Palace Exploration Company**Attn: Mr. Bob Zinke  1202 East 33rd St.  Tulsa, OK 74105-2048                                                              |
|-------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                    |   |                                                                                                                                                     |
| **Reef Global Energy I, L. P.**  Attn: Mr. Walt Dunagin  1901 N. Central Expressway, Ste. 300 Richardson, TX 75080 |   | **Continental Resources, Inc.**Attn: Mr. Phil Yancer  302 North Independence, Ste. 700  Enid, OK 73701                                                   |
|                                                                                                                    |   |                                                                                                                                                     |
| **Bright & Company I, Ltd.**Attn: Mr. Jack Carlile  4228 N. Central Expressway, Ste. 300  Dallas, TX 75206-6345     |   | **Cheyenne Petroleum Company**Attn: Mr. Richard Dixon  14000 Quail Springs Parkway, Ste. 2200  Oklahoma City, OK 72134                                   |
|                                                                                                                    |   |                                                                                                                                                     |
|                                                                                                                    |   | **Re:       Participation  Agreement and  Operating Agreement**

**Eugene  Island 190 Prospect  Offshore, Louisiana** |

 

Gentlemen:

 

This Participation Agreement is made and entered intoeffective March 15, 2003, by and between Challenger Minerals Inc. (“CMI”), ReefGlobal Energy I, L. P. (“Reef”), Bright & Company I, Ltd. (“Bright”),Palace Exploration Company (“Palace”), Continental Resources, Inc.(“Continental”) and Cheyenne Petroleum Company (“Cheyenne”), (collectively the“Participants” and individually as a “Participant”), and Millennium OffshoreGroup, Inc. (“Millennium”).  TheParticipants and Millennium are sometimes collectively referred to as the“Parties” or individually as a “Party”. This Participation Agreement sets forth the terms and conditions wherebyParticipants may earn, and Millennium shall assign, seventy-five percent (75%)of 6/6ths operating rights interest in all or a portion of EugeneIsland Block 190 (OCS-G 08434), as further described on Exhibit “A”, attachedhereto and made a part hereof (the “Lease”). In consideration of the mutual covenants and benefits to be derived herefrom the Parties hereto agree as follows:

 

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Millennium Offshore Group, Inc., et alEugene Island 190 Participation AgreementMarch 15, 2003

 

1.                                       **Shallow Test Well:**  Within thirty (30) days after finalexecution of this Participation Agreement by all Parties hereto subject to rigavailability and obtaining all necessary permits, Participants agree, subjectto the provisions of this Participation Agreement, to drill a well on the Leasefrom the EI 190 “A” Platform to a depth of (i) 8,558’ TVD (8,908’ MD), (ii)geo-pressure, (iii) salt or (iv) a depth sufficient to test the 8 Sand, as seenat a depth of 8,335’ MD on the 1” induction log in the Forest Oil (Millennium)– EI 190 A-2 Well, whichever is the lesser of such depths (the “Shallow TestWell”), by paying 100.0% of 6/6ths of all expenses incurred indrilling said well to Casing Point, including plugging and abandonment shouldsuch well be a dry hole, in the following proportions: Challenger 10.0%, Palace36.66%, Bright 5.0%, Reef 5.0%, Cheyenne 16.67%, and Continental 26.67%).  Challenger shall serve as Operator to drilland complete said well for production through the Wellhead or abandonment if adry hole.  An Authority for Expenditures(“AFE”) setting forth the bottom hole location and estimated costs of drillingthe Shallow Test Well to depth under a turnkey drilling contract from AppliedDrilling Technology Inc. (“ADTI”) is attached hereto as Exhibit “B” and made apart hereof.  In exchange forParticipants not assuming any liability for or obligation to plug, abandonand/or decommission any existing wells, pipelines, platforms and facilities notdrilled or installed by Participants, Participants shall pay 100.0% of 6/6thsof all costs to drill the Shallow Test Well to Casing Point and, shouldParticipants so elect, to complete said well through the Wellhead.  “Wellhead” shall be defined as the point atwhich a well has been drilled, production casing and tubing have been placed inthe wellbore and the wellhead to be used to produce the well has beeninstalled.  Subsequent to completion ofthe Shallow Test Well through the Wellhead, Millennium shall immediately becomeOperator of the Shallow Test Well, and Participants shall pay 75% of 6/6thsand Millennium shall pay 25% of 6/6ths of all costs for facilitieshookup and placing the Shallow Test Well on production.  Millennium represents that it owns 100%interest in the Lease and there are no title, environmental or accessimpediments restricting the operations proposed or contemplated herein.  The terms “Operator” and “Casing Point” asused in this Participation Agreement are defined in Articles 2.0 and 4.0 of theOffshore Operating Agreement (“OOA”) provided for in Paragraph 9 below.

 

2.                                       **Interest Earned:** A dry hole earns nointerest in the Lease.  However, if, andin the event, the Shallow Test Well is completed for production through theWellhead, Participants shall earn and Millennium shall assign 75.0% of 6/6thsof the operating rights interest (in the following proportions: Challenger7.5%, Palace 27.5%, Bright 3.75%, Reef 3.75%, Cheyenne 12.5%, Continental20.0%), with a corresponding 53.3125% of 8/8ths net revenue interest, in a ReservoirProtection Area (“RPA”) defined by aliquots covering tested fault blocks in anarea encompassing the entirety of all reservoirs found to be capable ofproducing oil and/or gas encountered in said well from surface of the earthdown to 100’ below the stratigraphic equivalent of the total depth drilled insaid well, SAVE AND EXCEPT THEREFROM all rights outside of the RPA to anyseparate oil and/or gas reservoirs, and production there from, from the surfaceof the earth down to a depth of 9,000’ TVD, up dip to and in the same faultblock in which the OCS-G 08434 #5 Well is located, such area to be defined byaliquot description (hereinafter referred to as the “Millennium RetainedArea”).  It is understood that the totalof all royalties, overriding royalties and other burdens on production from theLease shall not exceed 28.916667% of 8/8ths of production (i.e. a71.083333% of 8/8ths net revenue interest).

 

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3.                                       **Assignment of Operating Rights to RPA:**Once the Shallow Test Well has been completed for production through theWellhead, the Shallow Test Well and RPA attributable thereto shall be owned inthe following proportions: Challenger 7.5%, Palace 27.5%, Bright 3.75%, Reef3.75%, Cheyenne 12.5%, Continental 20.0% and Millennium 25.0%.  Millennium shall thereupon promptly deliveran assignment of the interest herein provided to be earned, on the form ofassignment attached hereto as Exhibit “C” and made a part hereof, warrantingtitle by, through and under Millennium, but not otherwise.  Said assignment shall specifically excludeall right, title, interests and liability associated with any presentlyexisting platform(s), pipeline(s), wellbore(s), and other personal propertyassociated with the Lease, it being understood and agreed that Participantsshall only be responsible for plugging and abandonment of the wellbore of theShallow Test Well and shall bear no plugging, abandonment or decommissioningexpense related to any well, facilities or pipelines which are not drilled orinstalled by Participants.

 

4.                                       **Deep Test Well:** Within six (6) monthsafter commencing initial sales of production from the Shallow Test Well, or 90days after drilling rig release if the Shallow Test Well is plugged andabandoned as a dry hole, whichever first occurs, Participants shall notifyMillennium whether or not Participants, or any of them, elect to drill a secondtest well (the “Deep Test Well”) on the Lease to a depth below 9,000’ TVD toearn additional operating rights in the Lease. In the event Participants elect to drill such Deep Test Well, such wellshall be spud within seven (7) months of such commencement of sales production,or one hundred twenty (120) days after drilling rig release if the Shallow TestWell is plugged and abandoned as a dry hole, subject to rig availability andobtaining all necessary permits, but in no event later than December 31,2003.  In the event the Participantsfail to spud the Deep Test Well within such period all rights and obligationsof the Parties with respect to the Deep Test Well shall be null and void andwithout further effect.  Challengershall serve as Operator to drill and complete said, Deep Test Well forproduction through the Wellhead, or abandonment if a dry hole, and Millenniumshall immediately become operator of the Deep Test Well.  The Participants shall pay 100% of 6/6thsof the cost to drill said well to Casing Point, as opposed to throughcompletion, in the following proportions: Challenger 10.0%, Palace 36.66%,Bright 5.0%, Reef 5.0%, Cheyenne 16.67% and Continental 26.67%, from and tosurface/bottomhole locations of Participants choice on the Lease.  Subsequent to reaching Casing Point, allcosts of completing the well, facilities hookup and placing the Deep Test Wellon production shall be shared in the proportions Millennium 25.0%, Challenger7.5%, Palace 27.5%, Bright 3.75%, Reef 3.75%, Cheyenne 12.5%, Continental 20.0%and Millennium 25%.  If less than allParticipants elect to participate in drilling the Deep Test Well, then, in suchevent, the Participants participating in such operations shall have the rightto assume any non-participating Participants share of costs under thisParagraph, in proportion to their participating interests and/or acquireadditional partners to drill such Deep Test Well.  Subsequent to completion of the Deep Test Well through theWellhead, Millennium shall immediately become Operator of the Deep Test Well.

 

5.                                       **Assignment of Rights Operating Rights Earned by DeepTest Well:** Upon reaching Casing Point in the Deep Test Well, theParticipants therein shall earn and Millennium shall assign 75.0% of 6/6thsof the operating rights with a corresponding 53.3125% of 6/6ths netrevenue interest to such Participants to all depths in that portion of theLease in which such

 

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Participants have not previously earned any interest SAVE AND EXCEPTTHEREFROM the Millennium Retained Area. Such assignment of the interest herein provided to be earned shall be onthe general form of assignment attached hereto as Exhibit “C” and made a parthereof, modified with the proper description, warranting title by, through andunder Millennium, but not otherwise.  Inthe event of any conflict between the RPA and rights hereinabove saved andexcepted, the rights to the RPA shall control. In the event a Party participating in drilling the Deep Test Well doesnot participate in completing such well for production, such non-participatingparty shall suffer the non-consent penalties specified in the attachedOOA.  It is understood that the total ofall royalties, overriding royalties and other burdens on production from theLease shall not exceed 28.916667% of 8/8ths of production (i.e. a71.083333% of 8/8ths net revenue interest).  Said assignment shall specifically excludeall rights, title, interests and liability associated with any presentlyexisting platform(s), pipeline(s), wellbore(s), and other personal propertyassociated with the Lease, it being understood and agreed that Participantsshall only be responsible for plugging and abandonment of wells drilledpursuant hereto and shall bear no plugging, abandonment or decommissioningexpense related to any well, facilities or pipelines which are not drilled orinstalled by Participants.  Nothingunder this Paragraph shall be construed as giving the Participants any rightsto production from completions existing prior to the effective date of thisParticipation Agreement.

 

6.                                       **Substitute Test Well:** If, during thedrilling of the any well provided for herein, the operator encountersimpenetrable substances or conditions, including the loss of the hole due tomechanical difficulties, which in the opinion of a reasonably prudent operatorunder the same or similar conditions would render further drilling impracticalor hazardous, and such conditions prevent further drilling of the well,Participants, or any of them, shall have the right, but not the obligation, toparticipate in drilling a “Substitute Well” in order to reach the objectivedepth, provided actual drilling of the Substitute Well is commenced withinninety (90) days after abandonment of the previous well. Any Substitute Wellshall be drilled pursuant to all the terms and conditions of this Agreement.

 

7.                                       **Cash Consideration:** Within five (5)days after commencement of actual drilling operations on the Shallow Test Well,Participants shall pay to Millennium the sum of $250,000.00, in the followingproportions: Challenger $25,000.00, Palace $91,658.00, Bright $12,500.00, Reef $12,500.00,Cheyenne $41,675.00, Continental $66,667.00, for all leasehold, geological andgeophysical costs attributable to the subject Prospect. Likewise, if saidShallow Test Well is completed for production to the wellhead, within five (5)days thereafter Participants therein shall pay to Millennium an additional sumof $250,000.00, in the following proportions: Challenger $25,000.00, Palace $91,658.00, Bright $12,500.00, Reef$12,500.00, Cheyenne $41,675.00, Continental $66,667.00, as a completion fee.If less than all Participants join in completing the Shallow Test Well to thewellhead, the Participants participating in such completion shall pay the$250,000 Completion Fee in proportion to their participating interests. In theevent that actual drilling operations on the Shallow Test Well are notcommenced within three (3) months from the date hereof, Participants, or any ofthem, shall have the option to withdraw from participation in this projectwithout any penalty or liability whatsoever.

 

8.                                       **Production Handling Agreement:** In theevent that Participants earn any interest in the Lease as herein provided, itis understood and agreed that such Participants and Millennium will

 

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enter into the Production Handling Agreement attachedhereto as Exhibit “D” and made a part hereof to process Participants’ share ofproduction earned pursuant to this Participation Agreement for the fees thereinprovided, including production from any Subsequent Wells as provided inParagraph 11 below. Such fees shall be in addition to any direct charges (asdefined in the COPAS Accounting Procedure attached as Exhibit “C” to the OOA,associated with any well drilled on the Lease in which any of the Participantsparticipate.  Without prejudice to aParty’s rights to market its own production under the OOA) the Operator shallmarket each Participant’s share of production with the Operator’s ownproduction, and on the same commercial basis, without any marketing fee payableto Operator. In the event Millennium markets a Participants production, itagrees not to commit a Participant’s production for any period in excess ofthirty (30) days without the written concurrence of such Participant.Millennium represents there is no existing marketing agreement covering futureproduction from the Lease to which it is bound, and consequently thatParticipants will not be bound by any such existing agreement as to itsinterest to be earned hereunder.

 

9.                                       **Offshore Operating Agreement:** Alloperations conducted pursuant to this Participation Agreement shall be governedby the terms and provisions of that certain Offshore Operating Agreement, datedMarch 15, 2003, attached hereto as Exhibit “E” and made a part hereof (the“OOA”).  In the event of a conflictbetween this Participation Agreement and said OOA, the terms and conditions ofthis Participation Agreement shall prevail, but only to the extent of suchconflict.  Notwithstanding anything tothe contrary herein, Millennium at all times shall remain Operator of theLease.  With respect to all operationsperformed by Challenger as Operator of the Shallow Test Well and Deep Test Wellunder the terms hereof, (i) Challenger shall have all of the rights, benefits,duties and obligations of the Operator under the OOA and (ii) Millennium shallhave all of the rights, benefits, duties and obligations of a Non-Operatorunder the OOA.  With respect to allother operations, (i) Millennium shall have all of the rights, benefits, dutiesand obligations of the Operator under the OOA, and (ii) Challenger shall haveall of the rights, benefits, duties and obligations of a Non-Operator under theOOA.

 

10.                                 **ADTI Turnkey Drilling Contract: **This Participation Agreement is subjectto and conditioned upon Operator entering into a turnkey drilling contract withADTI no later than April 14, 2003, to drill the Shallow Test Well.  It is understood that an election to drillthe Deep Test Well and the rights and obligations imposed under thisParticipation Agreement are separate and apart from the rights and obligationsrelated to the drilling of the Shallow Test Well.  An election to drill the Deep Test Well under this ParticipationAgreement in no way relieves the Parties of the rights and obligations relatingto the Shallow Test Well.  IfParticipants, or any of them, propose to timely drill the Deep Test Well, it isunderstood and agreed that such well shall be drilled under a turnkey drillingcontract with ADTI.  Operator shalltimely request ADTI to submit turnkey bids for (i) completing the aforesaidwells and (ii) drilling and completing any additional wells proposed to bedrilled on the lease.  Notwithstandinganything to the contrary herein, Operator shall not be required to accept anyADTI bid or contract to drill or complete any subsequent wells that are notacceptable to all Participants participating therein.

 

11.                                 **Subsequent Wells:**  The Parties hereto shall be entitled topropose the drilling of any well, or wells, drilled subsequent to the ShallowTest Well and the Deep Test Well (“Subsequent Wells”) in accordance with theterms and conditions of the OOA.  It isfurther agreed that

 

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Millennium shall serve as Operator for all SubsequentWells. Nothing contained in this Paragraph 11 is intended, or shall beconstrued, to change, alter or amend the designation of Operator for theShallow Test Well or the Deep Test Well as previously set forth in thisParticipation Agreement.

 

12.                                 **Laws:** THE PROVISIONS OF THIS AGREEMENT AND THE RELATIONSHIP OF THE PARTIESSHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATEOF LOUISIANA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS THAT WOULDREFER THE MATTER TO THE LAWS OF ANOTHER JURISDICTION.

 

**13.****                               Miscellaneous:**

 

A.                                   Allnotices, consents, requests, instructions. approvals and other communicationsprovided for herein shall be deemed to be validly given, made or served, if inwriting, and delivered personally or sent by courier service, telex, facsimileor certified mail, **however, in no event bye-mail,** to the addresses listed below:

 
| **Millennium Offshore Group, Inc.**Attn: Mr. Kent Singleton  5300 Memorial, Ste. 1070  Houston, TX 77007  Telephone: (713) 652-0137  Fax: (713) 652-0482  E-mail: ksingleton@millenniumogi.com      |   | **Palace Exploration Company**Attn: Mr. Bob Zinke  1202 East 33rd St.  Tulsa, OK 74105-2048  Telephone: (972) 743-5096  Fax: (972) 743-5159  E-mail: bzinke@ztienergy.com               |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                |   |                                                                                                                                                                                    |
| **Reef Global Energy I, L. P.**Attn: Mr. Walt Dunagin  1901 N. Central Expressway, Ste. 300  Richardson, TX 75080  Telephone: (972) 437-6792  Fax: (972) 994-0369  E-mail: walt@reefexploration.com |   | **Continental Resources, Inc.**Attn: Mr. Phil Yancer  302 North Independence, Ste. 700  Enid, OK 73701  Telephone: (580) 548-5174  Fax (580) 548-5182  E-mail: vancerpo@contres.com     |
|                                                                                                                                                                                                |   |                                                                                                                                                                                    |
| **Bright & Company I, Ltd.**Attn: Mr. Jack Carlile  4228 N. Central Exprwy, Ste. 300  Dallas, TX 75206-6345  Telephone: (214) 559-9200  Fax: (214) 559-0021  E-mail: jack.carlile(@brightco.com |   | **Cheyenne Petroleum Company**Attn: Mr. Richard Dixon  14000 Quail Springs Parkway  Oklahoma City, OK 72134  Telephone (405) 936-6220  Fax: (405) 936-6221  E-mail: rfdixon@cheypet.com |
|                                                                                                                                                                                                |   |                                                                                                                                                                                    |
| **Challenger Minerals Inc.**Attn: Mr. Reagan Newton  15375 Memorial Dr., Suite G-200  Houston, TX 77079  Telephone: (281) 925-7215  Fax: (281) 925-7281  E-mail: reagan.newton@gsfdrill.com         |   |                                                                                                                                                                                    |

 

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B.                                     ThisParticipation Agreement constitutes the entire agreement between the Partieswith respect to the transactions contemplated herein, and supersedes all priororal or written agreements, commitments, understanding. or informationotherwise furnished by Millennium to Participants with respect to suchmatters.  No amendment shall be bindingunless in writing and signed by representatives of each of the Parties.

 

C.                                     Aterm, provision. covenant representation, warranty, or condition of thisParticipation Agreement may be waived only by written instrument executed bythe Party waiving compliance.  Thefailure or delay of any Party in the enforcement or exercise of the rightsgranted under this Agreement shall not constitute a waiver of said rights norshall it be considered as a basis for estoppel.

 

D.                                    ThisParticipation Agreement together with all of its exhibits, is intended by theParties to be a complete and final statement of the agreement of the Partieswith respect to the subject matter hereof, and supersedes any prior oral orwritten statements or agreements between the Parties hereto.

 

E.                                      Theterms and provisions hereof shall be binding upon and inure to the benefit ofthe Parties hereto and their respective heirs, successors, legalrepresentatives and assigns, and shall be covenants running with the lands andLease.  The Parties hereto agree to executesuch other instruments as may be necessary or convenient to effectively conveythe interest in the Lease, transfer operatorship and all other rights andobligations as contemplated by this Participation Agreement and/or otherwiseeffectuate the terms hereof.

 

F.                                      Tothe extent permitted in its licensing agreement, Millennium shall allow theParticipants continued access to its geological and 3-D seismic data coveringthe Lease and any area contiguous thereto.

 

G.                                     Notwithstandinganything herein to the contrary, Participants shall never become liable for anygas or production imbalances affecting the Lease, except for its proportionateshare of any imbalances that might accrue between Millennium and Participantswith regard to any well(s) drilled pursuant to this Participation Agreement.

 

**IN WITNESSWHEREOF**, theparties hereto have caused this Participation Agreement to be executedeffective as of the date first set forth above.  This Participation Agreement may be signed in counterparts andshall be binding upon the Parties and upon their successors, representativesand assigns.  If these terms andconditions are acceptable, please indicate your agreement and acceptance bysigning and returning one copy of this Participation Agreement to

 

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Reagan Newton, on or before April 15, 2003, or this offer shall, atChallenger’s option, expire and be null and void.

 

Sincerely,

**Challenger Minerals Inc.**

 

 

Jack D. Downing

Vice President

 

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AGREED TO AND ACCEPTED

 
| **Millennium Offshore Group, Inc.**      |                  | **Reef Global Energy I, L. P.** |
|------------------------------------------|-----------------------|---------------------------------|
|                                     |                  |                            |
| By:                                      | /s/ D. Kent Singleton |                            | By: |   |
| Name:                                    | D. Kent Singleton     |                            | Name: |   |
| Title:                                   | Vice President        |                            | Title: |   |
| Date:                                    |                  |                            | Date: |   |
|                                     |                  |                            |
| **Bright & Company I, Ltd.**         |                  | **Continental Resources, Inc.** |
| By:  H.G.G., Inc.,  General Partner |                  |                            |
|                                     |                  |                            |
|                                     |                  | By:                             |   |
| By:                                      |                  |                            | Name: |   |
| Clay V.N.  Bright, President             |                  | Title:                          |   |
| Name:                                    | Clay V.N. Bright      |                            | Date: |   |
| Title:                                   | President             |                            |   |
| Date:                                    |                  |                            | **Cheyenne Petroleum Company** |
|                                     |                  |                            |
|                                     |                  |                            |
| **Palace Exploration Company**           |                  |                            |
|                                     |                  | By:                             |   |
| By:                                      |                  |                            | Name: | Richard D. Dixon |
| Name:                                    | Robert M. Zinke       |                            | Title: | Vice President |
| Title:                                   | Vice President        |                            | Date: |   |
| Date:                                    |                  |                            |   |
|                                          |                       |                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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AGREED TO AND ACCEPTED

 
| **Millennium Offshore Group, Inc.**      |                 | **Reef Global Energy I, L. P.** |
|------------------------------------------|----------------------|---------------------------------|
|                                     |                 |                            |
| By:                                      |                 |                            | By: |   |
| Name:                                    | D. Kent Singleton    |                            | Name: |   |
| Title:                                   | Vice President       |                            | Title: |   |
| Date:                                    |                 |                            | Date: |   |
|                                     |                 |                            |
| **Bright & Company I, Ltd.**         |                 | **Continental Resources, Inc.** |
| By:  H.G.G.,  Inc., General Partner |                 |                            |
|                                     |                 |                            |
|                                     |                 | By:                             |   |
| By:                                      | /s/ Clay V.N. Bright |                            | Name: |   |
| Clay V.N.  Bright, President             |                 | Title:                          |   |
| Name:                                    | Clay V.N. Bright     |                            | Date: |   |
| Title:                                   | President            |                            |   |
| Date:                                    |                 |                            | **Cheyenne Petroleum Company** |
|                                     |                 |                            |
|                                     |                 |                            |
| **Palace Exploration Company**           |                 |                            |
|                                     |                 | By:                             |   |
| By:                                      |                 |                            | Name: | Richard D. Dixon |
| Name:                                    | Robert M. Zinke      |                            | Title: | Vice President |
| Title:                                   | Vice President       |                            | Date: |   |
| Date:                                    |                 |                            |   |
|                                          |                      |                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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AGREED TO AND ACCEPTED

 
| **Millennium Offshore Group, Inc.**      |                | **Reef Global Energy I, L. P.** |
|------------------------------------------|---------------------|---------------------------------|
|                                     |                |                            |
| By:                                      |                |                            | By: |   |
| Name:                                    | D. Kent Singleton   |                            | Name: |   |
| Title:                                   | Vice President      |                            | Title: |   |
| Date:                                    |                |                            | Date: |   |
|                                     |                |                            |
| **Bright & Company I, Ltd.**         |                | **Continental Resources, Inc.** |
| By:  H.G.G.,  Inc., General Partner |                |                            |
|                                     |                |                            |
|                                     |                | By:                             |   |
| By:                                      |                |                            | Name: |   |
| Clay V.N.  Bright, President             |                | Title:                          |   |
| Name:                                    | Clay V.N. Bright    |                            | Date: |   |
| Title:                                   | President           |                            |   |
| Date:                                    |                |                            | **Cheyenne Petroleum Company** |
|                                     |                |                            |
|                                     |                |                            |
| **Palace Exploration Company**           |                |                            |
|                                     |                | By:                             |   |
| By:                                      | /s/ Robert M. Zinke |                            | Name: | Richard D. Dixon |
| Name:                                    | Robert M. Zinke     |                            | Title: | Vice President |
| Title:                                   | Vice President      |                            | Date: |   |
| Date:                                    |                |                            |   |
|                                          |                     |                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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AGREED TO AND ACCEPTED

 
| **Millennium Offshore Group, Inc.**      |              | **Reef Global Energy I, L. P.** |
|------------------------------------------|-------------------|---------------------------------|
|                                     |              |                            |
| By:                                      |              |                            | By: | /s/ Michael J. Mauceli |
| Name:                                    | D. Kent Singleton |                            | Name: | Manager Member |
| Title:                                   | Vice President    |                            | Title: | Managing Member of Reef Partners |
| Date:                                    | 4/15/2003         |                            | LLC, the General Partner of Reef Global |
|                                     |              |                            | Energy Ventures I, L.P. |
|                                     |              |                            | Date: | 4/15/03 |
|                                     |              |                            |
| **Bright & Company I, Ltd.**         |              | **Continental Resources, Inc.** |
| By:  H.G.G.,  Inc., General Partner |              |                            |
|                                     |              |                            |
|                                     |              | By:                             |   |
| By:                                      |              |                            | Name: |   |
| Clay V.N.  Bright, President             |              | Title:                          |   |
| Name:                                    | Clay V.N. Bright  |                            | Date: |   |
| Title:                                   | President         |                            |   |
| Date:                                    |              |                            | **Cheyenne Petroleum Company** |
|                                     |              |                            |
|                                     |              |                            |
| **Palace Exploration Company**           |              |                            |
|                                     |              | By:                             |   |
| By:                                      |              |                            | Name: | Richard D. Dixon |
| Name:                                    | Robert M. Zinke   |                            | Title: | Vice President |
| Title:                                   | Vice President    |                            | Date: |   |
| Date:                                    |              |                            |   |
|                                          |                   |                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

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AGREED TO AND ACCEPTED

 
| **Millennium Offshore Group, Inc.**      |              | **Reef Global Energy I, L. P.** |
|------------------------------------------|-------------------|---------------------------------|
|                                     |              |                            |
| By:                                      |              |                            | By: |   |
| Name:                                    | D. Kent Singleton |                            | Name: |   |
| Title:                                   | Vice President    |                            | Title: |   |
| Date:                                    |              |                            | Date: |   |
|                                     |              |                            |
| **Bright & Company I, Ltd.**         |              | **Continental Resources, Inc.** |
| By:  H.G.G.,  Inc., General Partner |              |                            |
|                                     |              |                            |
|                                     |              | By:                             | /s/ Jack Stark |
| By:                                      |              |                            | Name: | Jack Stark |
| Clay V.N.  Bright, President             |              | Title:                          | SVP, Exploration |
| Name:                                    | Clay V.N. Bright  |                            | Date: | April 16, 2003 |
| Title:                                   | President         |                            |   |
| Date:                                    |              |                            | **Cheyenne Petroleum Company** |
|                                     |              |                            |
|                                     |              |                            |
| **Palace Exploration Company**           |              |                            |
|                                     |              | By:                             |   |
| By:                                      |              |                            | Name: | Richard D. Dixon |
| Name:                                    | Robert M. Zinke   |                            | Title: | Vice President |
| Title:                                   | Vice President    |                            | Date: |   |
| Date:                                    |              |                            |   |
|                                          |                   |                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

13

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AGREED TO AND ACCEPTED

 
| **Millennium Offshore Group, Inc.**      |              | **Reef Global Energy I, L. P.** |
|------------------------------------------|-------------------|---------------------------------|
|                                     |              |                            |
| By:                                      |              |                            | By: |   |
| Name:                                    | D. Kent Singleton |                            | Name: |   |
| Title:                                   | Vice President    |                            | Title: |   |
| Date:                                    |              |                            | Date: |   |
|                                     |              |                            |
| **Bright & Company I, Ltd.**         |              | **Continental Resources, Inc.** |
| By:  H.G.G.,  Inc., General Partner |              |                            |
|                                     |              |                            |
|                                     |              | By:                             |   |
| By:                                      |              |                            | Name: |   |
| Clay V.N.  Bright, President             |              | Title:                          |   |
| Name:                                    | Clay V.N. Bright  |                            | Date: |   |
| Title:                                   | President         |                            |   |
| Date:                                    |              |                            | **Cheyenne Petroleum Company** |
|                                     |              |                            |
|                                     |              |                            |
| **Palace Exploration Company**           |              |                            |
|                                     |              | By:                             |  /s/ Richard  F. Dixon |
| By:                                      |              |                            | Name: | Richard F. Dixon |
| Name:                                    | Robert M. Zinke   |                            | Title: | Vice President |
| Title:                                   | Vice President    |                            | Date: | 4-17-03 |
| Date:                                    |              |                            |   |
|                                          |                   |                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

14

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