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                                                                   EXHIBIT 10.12

                            ENCAP INVESTMENTS L.L.C.
                              1100 LOUISIANA STREET
                                   SUITE 3150
                              HOUSTON, TEXAS 77002


                                 April 14, 2003


Energy Capital Investment Company PLC
One Bow Churchyard
London EC4M 9HH

         RE: Modifications to Investment Advisory Agreement

Ladies and Gentlemen:

         Reference is herein made to that certain Investment Advisory Agreement
dated February 4, 1994, by and between Energy Capital Investment Company PLC and
EnCap Investments L.C. (now known as EnCap Investments L.L.C.), as heretofore
amended (the "Agreement"). Capitalized terms used but not otherwise defined
herein shall have the respective meanings assigned to them in the Agreement.

         Subject to the terms of the Agreement, the Company appointed EnCap to
act as an advisor, manager and agent with respect to the negotiation, purchase
and sale of Investments. Currently included in the Investments made by the
Company (or its Affiliate, ECIC Corporation) pursuant to the Agreement are the
U.S. securities described more particularly in Annex I hereto (the
"Securities").

         The Company and EnCap hereby agree that, notwithstanding anything in
the Agreement to the contrary, EnCap, on and after the date the Company accepts
and agrees to this letter agreement (the "Effective Date"), will no longer have
(i) any voting power with respect to the Securities, including the power to vote
or direct the voting of the Securities, (ii) any investment power with respect
to the Securities, including the power to dispose or direct the disposition of
the Securities, or (iii) any other powers, rights, duties or obligations with
respect to the Securities, including any powers or rights that would in any way
attribute "beneficial ownership" of the Securities to EnCap, as defined in and
for purposes of Rule 13d-3 promulgated pursuant to the Securities Exchange Act
of 1934, as amended ("Rule 13d-3"), it being the express intention and agreement
of the parties hereto that all such powers, rights, duties and obligations of
EnCap with respect to the Securities will be revoked in all respects and that
all such powers, rights, duties and obligations with respect to the Securities
will be retained by, and vested solely in, the Company or ECIC Corporation, as
applicable. As such, on and after the Effective Date, (i) the Securities will no
longer be deemed Investments under, or otherwise subject to the Agreement, and
(ii) without limiting the foregoing provisions of this paragraph,

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EnCap will not provide the Company or its Affiliates with any information
regarding the Securities.

         In connection with the foregoing, the Company and EnCap further agree,
notwithstanding anything in the Agreement to the contrary, as follows:

         1.       The Company acknowledges and affirms that (i) it has reviewed
                  Annex II hereto prepared by EnCap's U.S. legal counsel,
                  Thompson & Knight LLP, (ii) it has been furnished the
                  documents listed in Annex III attached hereto, (iii) it has
                  furnished and reviewed both this letter agreement (and the
                  attached Annexes) and the documents listed in Annex III with
                  its own legal counsel, and (iv) assuming the accuracy of the
                  facts set forth in Annex I, the genuineness, authenticity, and
                  completeness of the documents listed in Annex II, and that no
                  other material agreements or documents affect the Securities,
                  it understands and agrees with, based on such review and the
                  advice of its own legal counsel, the conclusions set forth in
                  Annex II. The Company also acknowledges and affirms that (a)
                  the Company understands Annex II was prepared solely for the
                  benefit of EnCap by EnCap's U.S. legal counsel and (b) the
                  Company has relied solely upon its own legal counsel for
                  purposes of its above agreement with the conclusions set forth
                  in Annex II and not upon EnCap or EnCap's U.S. legal counsel.

         2.       EnCap agrees that as promptly as reasonably practicable and,
                  in any event, within 10 days of the Effective Date, it will
                  file amendments to the Schedule 13Ds previously filed by it
                  with the U.S. Securities and Exchange Commission with respect
                  to the Securities reflecting that EnCap no longer has
                  "beneficial ownership" of the Securities, as defined in and
                  for purposes of Rule 13d-3. The Company agrees that EnCap may
                  specifically rely upon this letter agreement for purposes of
                  filing the above-mentioned amendments and that EnCap may file
                  a copy of this letter agreement with such amendments if
                  necessary to comply with the provisions of Rule 13d-3.

         3.       EnCap agrees that within two business days of the Effective
                  Date, it will file any Form 4s required to be filed by it with
                  the U.S. Securities and Exchange Commission with respect to
                  the Securities reflecting a change in EnCap's "beneficial
                  ownership" of the Securities.

         4.       EnCap agrees to forward to the Company, within 10 days of the
                  Effective Date all certificates that it has in its possession
                  representing the Securities.

         5.       Subject to the terms of this paragraph 5, the Company shall
                  indemnify, defend and hold harmless EnCap, its affiliates, and
                  each managing director, director, officer, member,
                  stockholder, owner, employee or agent of EnCap or any
                  affiliate thereof and their respective heirs, legal
                  representatives, successors and assigns (an "Indemnified
                  Party"), from and against any and all claims, actions, causes
                  of action, demands, assessments, losses, damages, liabilities,
                  judgments, settlements,


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                  penalties, costs and expenses (including reasonable
                  attorneys', consultants' or experts' fees and expenses)
                  (collectively "Losses"), asserted against, relating to,
                  imposed upon or incurred by any of them, directly or
                  indirectly, based upon, arising out of or otherwise in respect
                  of any breach of or non-compliance by the Company with
                  applicable laws governing the ownership and resale of the
                  Securities after the Effective Date, including applicable U.S.
                  Federal and state securities laws, rules and regulations;
                  provided, however, that the Company shall not be liable for
                  any Losses that arise from or relate to fraud, negligence,
                  willful default, bad faith or misconduct of an Indemnified
                  Party. In the event that any claim or demand for which the
                  Company would be liable under this paragraph 5 is asserted
                  against or sought to be collected from an Indemnified Party by
                  a third party, the Indemnified Party shall with reasonable
                  promptness notify the Company of such claim or demand, but the
                  failure so to notify the Company shall not relieve the Company
                  except to the extent the Company demonstrates that the defense
                  of such claim or demand is prejudiced thereby. The Company
                  shall have 30 days from receipt of the above notice from the
                  Indemnified Party (the "Notice Period") to notify the
                  Indemnified Party whether or not the Company desires, at the
                  Company's sole cost and expense, to defend the Indemnified
                  Party against such claim or demand; provided, that the
                  Indemnified Party is hereby authorized prior to and during the
                  Notice Period to file any motion, answer or other pleading
                  that it shall deem necessary or appropriate to protect its
                  interests or those of the Company and not prejudicial to the
                  Company. If the Company elects to assume the defense of any
                  such claim or demand, the Indemnified Party shall have the
                  right to employ separate counsel at its own expense and to
                  participate in the defense thereof. If the Company elects not
                  to assume the defense of such claim or demand (or fails to
                  give notice to the Indemnified Party during the Notice
                  Period), the Indemnified Party shall be entitled to assume the
                  defense of such claim or demand with counsel of its own
                  choice, at the expense of the Company. If the claim or demand
                  is asserted against both the Company and the Indemnified Party
                  and there is a conflict of interest which renders it
                  inappropriate for the same counsel to represent both the
                  Company and the Indemnified Party, the Company shall be
                  responsible for paying separate counsel for the Indemnified
                  Party; provided, however, that if there is more than one
                  Indemnified Party, the Company shall not be responsible for
                  paying for more than one separate firm of attorneys to
                  represent the Indemnified Parties, regardless of the number of
                  Indemnified Parties. If the Company elects to assume the
                  defense of such claim or demand, (i) no compromise or
                  settlement thereof may be effected by the Company without the
                  Indemnified Party's written consent (which shall not be
                  unreasonably withheld) unless the sole relief provided is
                  monetary damages that are paid in full by the Company and (ii)
                  the Company shall have no liability with respect to any
                  compromise or settlement thereof effected without its written
                  consent (which shall not be unreasonably withheld).

         6.       The Company agrees to promptly reimburse EnCap up to $7,000.00
                  for all reasonable third party out-of-pocket costs and
                  expenses (including attorney's fees

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                  and printing expenses) incurred by EnCap in the preparation of
                  this letter agreement and any amendments or modifications
                  hereto, the filing of amendments to the Schedule 13Ds as
                  referenced in Section 2 above, the filing of Form 4s as
                  referenced in Section 3 above, the transfer of the Securities,
                  and in otherwise performing its obligations hereunder.

         7.       EnCap shall not be entitled to any compensation with respect
                  to the transactions contemplated by this letter agreement
                  (except to the extent of the reimbursement provided in Section
                  6 above) and EnCap waives its right under the Agreement to
                  receive three (3) months notice in respect of the termination
                  hereby of its appointment as advisor in respect of the
                  Securities.

         8.       EnCap agrees that from and after the Effective Date, the value
                  of the Securities shall not be included in calculating NAV
                  pursuant to Clause 5 of the Agreement.

         9.       EnCap covenants and agrees that if, after the Effective Date,
                  any of the securities included in the Investments (other than
                  the Securities) are exchanged for or become securities of an
                  issuer that is required to file periodic and other reports
                  pursuant to Section 13 of the Securities Exchange Act of 1934,
                  as amended, this letter will be appropriately amended by EnCap
                  and the Company to include such securities in the definition
                  of "Securities" as used herein, and to supplement Annexes I,
                  II, and III hereto.

         10.      EnCap agrees that it will not, directly or indirectly, enter
                  into any lock-up or other similar agreement after the
                  Effective Date restricting the rights or transferability of
                  any of the Investments for a period of 180 days or more
                  without the prior written consent of the Company, which
                  consent shall not be unreasonably withheld by the Company.
                  Further, EnCap agrees that if it enters into any lock-up or
                  other similar agreement after the Effective Date restricting
                  the rights or transferability of any of the Investments for a
                  period of less than 180 days, it will promptly notify the
                  Company of such agreement and will provide the Company with a
                  copy of such agreement.

         All notices or other communications required or permitted to be given
to a party hereto pursuant to this Agreement shall be in writing and shall be
given either (i) in person, (ii) by mail, postage prepaid, (iii) by facsimile
(with signed confirmed copy to follow by mail in the same manner as provided in
clause (ii) above) or (iv) by expedited delivery service with proof of delivery,
to the address listed below such party's signature block hereto (or at such
other address as shall be specified by such party by like notice). Notices sent
by hand delivery shall be deemed to have been given when received; notices
mailed in accordance with the foregoing shall be deemed to have been given five
business days following the date mailed; and notices sent by overnight courier
service shall be deemed to have been given on the next business day following
the date so sent.

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         This letter agreement may be executed in multiple counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been signed by each of the parties hereto and
delivered to the other party. In making proof of this letter agreement, it shall
not be necessary to produce or account for more than one counterpart. A
telecopied facsimile of an executed counterpart of this letter agreement shall
be sufficient to evidence the binding agreement of a party to the terms hereof.

         This letter agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, beneficiaries, legal
representatives, successors and assigns; provided that the Company may not
assign its indemnification obligations hereunder without the written consent of
EnCap.

         If any provision of this letter agreement is held to be unenforceable,
this letter agreement shall be considered divisible and such provision shall be
deemed inoperative to the extent it is deemed unenforceable, and in all other
respects this letter agreement shall remain in full force and effect; provided,
however, that if any such provision may be made enforceable by limitation
thereof, then such provision shall be deemed to be so limited and shall be
enforceable to the maximum extent permitted by applicable law.

         The failure of any party hereto to insist upon strict performance of a
covenant hereunder or of any obligation hereunder, irrespective of the length of
time for which such failure continues, shall not be a waiver of such party's
right to demand strict compliance in the future. No consent or waiver, express
or implied, to or of any breach or default in the performance of any obligation
hereunder shall constitute a consent or waiver to or of any other breach or
default in the performance of the same or any other obligation hereunder.

         The word "includes" and its derivatives shall mean "includes, but is
not limited to" and corresponding derivative expressions.

         THIS LETTER AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

         The Agreement, as amended or modified by this letter agreement, is
hereby ratified and confirmed in all respects.

                  -REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
                             SIGNATURE PAGE FOLLOWS-

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                                                Yours very truly,

                                                ENCAP INVESTMENTS L.L.C.

                                                By:
                                                    ----------------------------
                                                    Managing Director

                                                ADDRESS FOR NOTICE PURPOSES:

                                                EnCap Investments L.L.C.
                                                1100 Louisiana Street
                                                Suite 3150
                                                Houston, Texas 77002
                                                Fax:  713-659-6100
                                                Attention:  Managing Director


         AGREED AND ACCEPTED
         AS OF THIS 16th DAY OF
         APRIL, 2003:


         ENERGY CAPITAL INVESTMENT COMPANY PLC

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

         ADDRESS FOR NOTICE PURPOSES:

         One Bow Churchyard
         London EC4M 9HH
         Fax:
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         Attention:
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