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                           CHALLENGER MINERALS INC.
                      A Subsidiary of Global Marine Inc.
  [LOGO]
                      777 N. Eldridge Parkway, Suite 600
                             Houston, Texas 77079
                      713-266-9050      Fax 713-266-0557



October 30, 2001

REEF PARTNERS LLC
1901 N. Central Expressway, Suite 300
Richardson, Texas  75080

Attn:  Mr. H. Walt Dunagin
       Land Manager

Re:    CMI Joint Venture Agreement
       Offshore, U.S. Gulf of Mexico

Gentlemen:

Challenger Minerals Inc. ("CMI") and Reef Partners LLC, a Nevada Limited
Liability Company ("Reef") desire to enter into an agreement ("Agreement") to
facilitate the review of, and participation in, Opportunities in the U.S.
Gulf of Mexico located in water depths less than 450 feet.  The terms and
conditions governing this Agreement are as follows:

1.     TERM:  The term of this Agreement shall be for a period of three (3)
       years commencing January 31, 2002 ("Effective Date") and expiring
       January 30, 2005 ("Termination Date"), each of which years shall be
       deemed a "Participation Year"; PROVIDED, HOWEVER, that the
       confidentiality and non-competition provisions hereof shall survive
       termination of this Agreement for the contractual time period provided
       herein or in any applicable agreement with a third party or, if no such
       period is provided for, then for a period of one (1) year after the
       Termination Date.

2.     OPPORTUNITIES:  Reef shall have the right and option, but not the
       obligation, to acquire up to twelve and one-half percent (12.5%) of the
       interest made available to CMI in all Opportunities located in water
       depths less than 450 feet in the U.S. Gulf of Mexico ("Gulf of Mexico
       Shelf Program") in Prospects identified and initially reviewed by CMI
       during the term of this Agreement.  For purposes of this Agreement, an
       "Opportunity," sometimes herein also referred to as a "Prospect," is
       defined as a specific geographic area which is related to the same
       geologic structure and/or stratigraphic interval or other hydrocarbon
       trapping mechanism, and which can be commercially developed for
       hydrocarbons in accordance with standard oil and gas industry practices
       from an open

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       water drilling location or platform.  All existing Prospects
       previously or currently under review by CMI and leases currently owned
       in whole or part by CMI are excluded from this Agreement.

3.     PARTICIPATION FEE:

       A.  In consideration of its rights hereunder to consider participation
           in Prospects, Reef shall pay CMI as a Participation Fee the total sum
           of $1,125,000.00 during the term of this Agreement, with the first
           annual payment in the amount of $375,000.00 due on or before
           November 1, 2001, a second annual payment in the same amount due on
           or before January 30, 2003 and a third annual payment in the same
           amount due on or before January 30, 2004; PROVIDED, that the first
           such payment shall not be due until a date ten (10) working days
           after Reef's timely acceptance of this proposal.  Other than such
           Participation Fee, there shall be no fees or burdens in favor of CMI
           as to the interest Reef may elect to acquire in any Prospect, and no
           obligation upon Reef to acquire an interest in any particular
           Prospect or in a minimum number of Prospects during the term of this
           Agreement.

       B.  During each Participation Year (commencing from the Effective Date)
           of the term of this Agreement, CMI shall present to Reef a minimum of
           fifty (50) separate Prospects, as to which a working interest is
           available for Reef's participation.  If during any such Participation
           Year the number of Prospects presented by CMI to Reef should be less
           than such minimum number of Prospects for Reef to consider for
           participation, Reef's Participation Fee provided for the above shall
           be proportionately reduced such that CMI would REFUND to Reef a
           portion of the fee in an amount based on the full annual fee amount
           times the deficiency number of Prospects divided by the 50 Prospect
           minimum, if requested by Reef in writing within thirty (30) days
           after the end of the applicable Participation Year.

4.     OPPORTUNITY EVALUATION:  Upon CMI being presented with potential
       opportunities to participate in Prospects generated by third parties
       ("Selling Parties"), CMI shall determine when or if a potential Prospect
       may be worthy of further consideration, and as to each potential
       Prospect, CMI shall immediately notify Reef, providing a brief
       description of the Prospect, to include when available, location,
       Operator, estimated leasehold and seismic costs and initial well costs,
       water depth and reserve potential (collectively, the "Initial Prospect
       Information").  Reef shall then promptly advise CMI whether Reef is
       already pursuing the Prospect; and, if such is the case, Reef shall
       advise CMI as to whether it will continue to pursue the Prospect on its
       own or jointly with CMI under either the terms of this Agreement or on
       other mutually acceptable terms.  If Reef elects to continue to pursue
       the Prospect on its own, the parties shall endeavor in good faith to
       resolve any areas of competition, if possible.  If Reef does not so
       notify CMI of its separate pursuit of any such potential Prospect(s)
       within ten (10) days after such initial notice by CMI (or such shorter
       period for Reef's decision as is required to prevent loss of
       opportunity), CMI and Reef shall jointly proceed as set forth in this
       Agreement.  WITH RESPECT TO ANY EVALUATIONS TO BE CONDUCTED BY EITHER
       PARTY HEREUNDER, EITHER INDIVIDUALLY

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       OR JOINTLY, INCLUDING AN INITIAL PROSPECT REVIEW OR A FURTHER REVIEW
       UNDER THIS PARAGRAPH 4, EACH PARTY HEREBY ACKNOWLEDGES THAT ANY SUCH
       REVIEW, AND THE METHODOLOGIES EMPLOYED THEREIN, ARE NECESSARILY
       SUBJECTIVE.  ACCORDINGLY, EXCEPT AS PROVIDED IN PARAGRAPH 4.B. BELOW,
       NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY (WHETHER EXPRESS,
       IMPLIED, STATUTORY OR OTHERWISE) AS TO THE ACCURACY, COMPLETENESS OR
       SUFFICIENCY OF ANY SUCH EVALUATION, AND EACH PARTY DISCLAIMS ANY
       LIABILITY FOR ACCURACY OF ANY PROSPECT EVALUATION CONDUCTED BY THE
       OTHER PARTY DURING THE TERM OF THIS AGREEMENT.  EACH PARTY ACKNOWLEDGES
       AND WARRANTS THAT IT IS INDEPENDENTLY QUALIFIED TO MAKE A DECISION
       WHETHER TO INVEST IN ANY PARTICULAR PROSPECT REGARDLESS OF WHETHER IT
       PARTICIPATES IN OR CONDUCTS A REVIEW EVALUATION.

       A.  Once CMI determines that a Prospect merits a detailed geo-technical
           review with the Selling Party ("Initial Prospect Review"), it shall
           promptly so notify Reef and coordinate with Reef's technical
           personnel in scheduling the Initial Prospect Review as soon as
           practicable.

       B.  In conducting the Initial Prospect Review, and all subsequent
           geo-technical evaluations, CMI and Reef shall make a good faith
           effort to share data, knowledge, expertise and work product except
           as, and to the extent, restricted or prohibited by third-party
           Confidentiality Agreements ("CAs") and/or Area of Mutual Interest
           Agreements ("AMIAs"), to which both CMI and Reef are not similarly
           bound.  In such cases, Reef will be requested to sign and return
           expeditiously the CA or AMIA to CMI before prospect reports or data
           will be sent to Reef.  In the event that Reef is unable to
           participate in an Initial Prospect Review, CMI, as soon as
           practicable thereafter, shall make a good faith effort to review with
           Reef the Selling Party's data and interpretations and CMI's data and
           interpretations regarding the Prospect in question, subject to any
           restraints posed by such third party CAs and/or AMIs.

       C.  Following the Initial Prospect Review or other review, if conducted,
           and if not, as soon as practicable after Reef's receipt of the
           initial prospect summary from CMI, either CMI or Reef may propose
           pursuing participation in a Prospect by providing written notice of
           such intent to the other party.  The party receiving such written
           notification shall have no less than five (5) business days (or such
           shorter response time as required to prevent a loss of opportunity)
           within which to advise the other party as to whether it wishes to
           pursue the Prospect and if so, at what level of working interest,
           whether or not the parties have conducted an Initial Prospect Review
           or other review.  In the event that CMI and the Other Participants,
           (as defined in Paragraph 7) do not wish to pursue the Prospect, then
           Reef shall have the right to pursue the Prospect for its own account.
           Upon CMI's request, Reef shall advise CMI the status of its pursuit
           of such opportunity.  In the event that Reef decides to submit a
           formal participation offer to the Selling Party, Reef shall submit a
           copy thereof to CMI, and CMI shall have twenty-four (24) hours within
           which to elect to pursue the Prospect jointly with Reef in accordance
           with this Agreement.  If the participation opportunity originated
           through a request

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           by the Selling Party for a turnkey bid from CMI's affiliate company,
           Applied Drilling Technology, Inc. ("ADTI"), then CMI, subject to the
           exercise of its reasonable business judgment and the terms and
           conditions of  Reef's proposed offer, shall control the timing and
           content of offers to participate in the Prospect.

       D.  In the event that both CMI and Reef desire to pursue participation in
           a Prospect, they shall jointly develop and agree as to the terms and
           conditions of a written participation offer to the Selling Party.
           CMI shall have sole responsibility for direct negotiations with the
           Selling Party unless it requests the assistance of Reef.  Reef agrees
           not to directly contact the Selling Party regarding the Prospect
           during the negotiation process unless otherwise agreed to by CMI.
           However, CMI shall keep Reef advised of the progress of ongoing
           negotiations and shall solicit Reef's input and suggestions regarding
           counter-offers or subsequent revisions to original offers.
           Notwithstanding any provision to the contrary herein, if CMI
           determines any situation merits negotiation with a Selling Party
           sooner than the response time periods provided for herein in order
           to avoid a loss of opportunity to acquire an interest in a Prospect,
           CMI shall have the right to do so and shall advise Reef of the
           progress thereof.

       E.  Reef shall be an active participant with CMI in drafting, reviewing,
           and formalizing participation agreements, joint operating agreements,
           farmout agreements and all other contracts relating to its
           participation in Prospects under this Agreement.  In the event of
           disagreement between CMI and Reef as to contract terms and
           provisions, however, CMI will make the final decision as to what is
           ultimately included in all agreements, with each party reserving the
           right not to participate in the Prospect as outlined in Paragraph 5.
           CMI shall advise the Selling Party of Reef's involvement with CMI
           prior to the formulation of any such contracts, and Reef shall be a
           signatory party to all agreements executed between CMI and Selling
           Party.  CMI and Reef shall each be entitled to concurrently receive,
           directly from the Selling Party, an assignment of any ownership
           interest acquired in a Prospect.

       F.  In the event that a Selling Party does not wish to include Reef as a
           candidate for working interest participation, then CMI shall so
           advise Reef, giving the reasons given by the Selling Party.  If the
           concerns raised by the Selling Party cannot be amicably resolved, CMI
           shall have the right to pursue the Prospect for its own account and
           the Prospect shall not be covered by this Agreement.

       G.  Except for Reef's obligation to pay to CMI the Participation Fee as
           provided in Paragraph 3 above, and for CMI's obligation at its
           expense to furnish to Reef the Initial Prospect Information and
           other reports and data as provided in this Agreement, each party
           shall bear its own costs and expenses associated with the evaluation
           of each Prospect and any subsequent negotiation of a participation
           agreement or other agreement with a Selling Party.

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5.     RIGHT TO WITHDRAW:  CMI and Reef acknowledge that, at any time and for
       any reason during the process contemplated by Paragraph 4 (prior to the
       execution of a binding participation agreement with a Selling Party),
       either party may elect to discontinue the effort to participate in a
       Prospect.  In the event either CMI or Reef elects not to participate in
       a Prospect, the other party shall be free to continue to pursue the
       Prospect for its own account (subject to the similar rights of Other
       Participants), and the non-participating party shall not compete
       directly or indirectly against the other party in pursuing the Prospect
       for a period of one (1) year from the date of such election not to
       participate.

6.     PERSONNEL:  During the term of this Agreement, CMI will provide and
       maintain a technically proficient, multi-disciplined, veteran staff
       comprising geology, geophysics, reservoir engineering and land expertise
       to screen and evaluate Opportunities.

7.     OTHER PARTICIPANTS:  To facilitate the review of and participation in
       Prospects in the U.S. Gulf of Mexico, CMI has entered into similar joint
       venture agreements with other participants ("Other Participants")
       covering Prospects as provided for herein.  The joint venture agreements
       entered into by CMI with Reef and with the Other Participants shall be
       collectively referred to as the "CMI Joint Venture."  CMI and Reef agree
       that CMI reserves the right to terminate or amend its joint venture
       agreement with any of the Other Participants and to enter into new joint
       venture agreements with third parties.  The mention within this Agreement
       of Other Participants in the CMI Joint Venture is solely to provide Reef
       with notice of the existence of such Other Participants and their right
       to be allocated interests in Prospects under similar joint venture
       agreements with CMI.  The only relationship created pursuant to this
       Agreement, express or implied, is between Reef and CMI.   In no event
       shall it be construed that this Agreement has created any relationship,
       obligation or liability between Reef and any of the Other Participants.
       The joint participation of Reef and any of the Other Participants shall
       be pursuant to separate joint venture agreements, and any rights,
       liabilities or obligations relating to such Prospect participation shall
       be strictly limited to those as may be created by such separate joint
       venture agreements.  The term "Other Participants" in this Agreement
       shall also include CMI as to its own interest in the CMI Joint Venture,
       the CMI interest being defined as the percentage interest in the CMI
       Joint Venture remaining after crediting the sum of respective percentage
       interests in the CMI Joint Venture held by Reef, under this Agreement,
       and by Other Participants (for this purpose, excluding CMI), under their
       separate but similar joint venture agreements with CMI.

8.     WEEKLY SUMMARIES:  In order to provide for a smooth flow of information
       between the parties, CMI shall timely provide to Reef a weekly prospect
       summary.  Such weekly prospect summaries shall be subject to the
       confidentiality provisions of Paragraph 14 of this Agreement.  CMI may
       provide to Reef additional prospect summaries or updates, or additional
       prospect data, as it deems appropriate, subject to the same
       confidentiality provisions.

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9.     ELECTIONS AND CONFIDENTIAL INFORMATION:

       A.  CMI and Reef shall provide each other with copies of all elections
           made pursuant to joint operating agreements or any other agreements
           governing the drilling, development and operation of Prospects.
           CMI and Reef agree to freely share geological, geophysical,
           engineering and other technical data and information concerning the
           exploration, development and production of the Prospects except
           when prohibited by third party confidentiality agreements.  All
           such data shall be held strictly confidential by Reef and CMI, and
           both parties agree to abide by the terms and conditions of any
           confidentiality agreements with the Selling Party and other
           Prospect participants. Subject to the provisions of governing
           confidentiality and similar agreements (as described in Paragraph
           4.B. above) with Selling Party, all data and information regarding
           Prospects that are disclosed by one party to the other under this
           Agreement shall be held strictly confidential by the non-disclosing
           party; PROVIDED, HOWEVER, that this provision shall not apply to
           data and information that is (a) already in the public domain, (b)
           already in a party's possession at the time of disclosure, (c)
           developed by a party without the benefit or use of the confidential
           data, (d) disclosed by a third party who has the lawful right to
           make such disclosure, or (e) required to be disclosed in response
           to a judicial or administrative process from a court or
           governmental body with lawful authority to demand the production of
           same.  IN THE EVENT THAT A CLAIM IS ASSERTED AGAINST CMI OR REEF AS
           A RESULT OF AN ALLEGED VIOLATION OF THIS PROVISION BY THE OTHER
           PARTY, THE PARTY AGAINST WHOM VIOLATION IS ALLEGED SHALL DEFEND,
           INDEMNIFY AND HOLD HARMLESS THE OTHER PARTY FROM AND AGAINST ANY
           AND ALL CLAIMS, CAUSES OF ACTION AND JUDGMENTS ARISING THEREFROM,
           INCLUDING LEGAL FEES AND COURT COSTS.

       B.  Reef and its affiliates may, from time to time, provide CMI with
           certain confidential information regarding among other things,
           trade secrets, customer lists, client information, including names,
           addresses and financial information, securities brokerage firms and
           other financial institutions with which Reef and its affiliates
           transact business and certain other information regarding
           operations and business conducted by Reef (collectively, the "Reef
           Confidential Information").  CMI agrees that any confidential
           information provided to it by Reef and designated as "Reef
           Confidential Information" shall be held strictly confidential by
           CMI. CMI further agrees that, except for the benefit of Reef, it
           will not use the Reef Confidential Information or, for the term of
           this agreement and for a period of two (2) years thereafter,
           contact any persons, firms or entities designated in the Reef
           Confidential Information; PROVIDED, that this provision shall not
           relate to data and information that is already in CMI's possession
           at the time of disclosure, disclosed to CMI by a third party who
           has a lawful right to make such disclosure, or required to be
           disclosed in response to a judicial or administrative process from
           a court or governmental body with lawful authority to demand
           production of same; AND PROVIDED FURTHER, that nothing herein shall
           restrict in any way CMI's right to continue or to initiate a
           business relationship of any nature with any third party doing
           business with Reef, where such third party is already in a past or

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           present business relationship with CMI or where CMI obtains Reef's
           written permission, which permission shall not be unreasonably
           withheld, to discuss a business relationship with such third party.

10.    ADDITIONAL INTEREST:  Reef acknowledges that, as provided in Paragraph
       7 herein, the Other Participants (including CMI) in the CMI Joint Venture
       are also entitled to purchase certain interest in Prospects.  Reef
       shall have preferential right to acquire its proportionate share of
       an interest greater than its own original interest (i.e., the maximum
       Reef interest stated in Paragraph 2 above) out of the available
       interest in a Prospect, in the event CMI or any of the Other
       Participants elect to participate for a lesser interest or no
       interest at all in a Prospect.  The non-participating party's(ies')
       interest shall be available to the participating parties on a
       proportionate basis relative to each participating party's interest
       in the CMI Joint Venture.

11.    DISCLAIMER OF JOINT LIABILITY:  References herein to "partners" or to
       any "partnership," or references herein to any "joint venture," are
       solely for the convenience of the parties.  It is not the purpose or
       intention of this Agreement to create, and this Agreement shall never
       be construed as creating, a joint venture, a partnership, a mining
       partnership or any other legal relationship whereby CMI or Reef shall
       be held liable for the acts, either by commission or omission, of the
       other.  The liabilities and obligations of CMI and Reef arising
       hereunder shall be several, and not joint or collective.

12.    NOTICES:  All notices required herein to be given by one party to the
       other shall be given to the other party in writing by personal
       delivery, by U.S. Postal Service mail or by fax, or by telephone if
       written confirmation is sent in a manner provided above within
       twenty-four (24) hours. Notice shall be deemed to be effective upon
       actual receipt by the party to whom notice is directed; however, any
       fax received after 5:00 PM CST shall be deemed to be received on the
       following business day, excluding legal holidays. Each party's
       address, telephone and fax number shall remain as stated below (or as
       subsequently changed under the procedure set out in this paragraph)
       until such party shall give proper written notice to the other party
       of different contact information to be used for the purposes of this
       Agreement:

             REEF PARTNERS LLC
             1901 N. Central Expressway, Suite 300
             Richardson, TX 75080
             Attn:  Mr. H. Walt Dunagin, Land Manager
             Phone: (972) 437-6792
             Fax:  (972) 994-0369





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             CHALLENGER MINERALS INC.
             777 N. Eldridge Parkway, Suite 600
             Houston, TX 77079-4425
             Attn:  Mr. Ron Symecko, Exploration Manager, or
                    Mr. Jack D. Downing, V.P. - Field Development/East, or
                    Mr. Charles B. Hauf, V.P. - Field Development/West
             Telephone:  (713) 266-9050
             Fax:  (713) 266-0557

13.    TURNKEY BIDS:  Reef shall encourage drilling and completion turnkey bids
       in its dealings with Selling Parties, but it will not be obligated or
       penalized for any failure to do so.  Although Reef is free to pursue
       participation in any Prospect hereunder on any basis of participation
       other than under a turnkey contract with ADTI (or other turnkey
       affiliate of CMI), the parties acknowledge that mutual commitments
       herein contemplate ADTI's (or other CMI affiliate's) continuation in
       the business of providing turnkey drilling services in the Gulf of
       Mexico.  However, nothing herein shall imply that ADTI (or other CMI
       affiliate) must make a turnkey drilling bid for any particular well
       relating to any Prospect, or a bid therefor with any particular terms
       or conditions.

14.    CONFIDENTIALITY:

       A.  This Agreement is strictly confidential and shall not be shared
           with nor copies made available to  any third party, other than
           third party professional consultants retained by Reef in connection
           with the evaluation of the Opportunity or Prospect (the
           responsibility for each such consultant's compliance with the
           confidentiality and other provisions hereof being assumed by Reef),
           in whole or part, without the prior written consent of the other
           party.

       B.  Neither party shall release or distribute any information, data or
           photographs to the press, media or other parties without prior
           written approval of the other party.  When both parties have reviewed
           and approved release or distribution of the material under review,
           the party requesting release or distribution shall have the principal
           responsibility for issuance, but each party may thereafter release
           or distribute such approved material without restriction.

       C.  Nothing in this Agreement shall preclude either party from making
           such disclosures as may be required by any applicable law or
           governmental order, rule, regulation or ordinance.

15.    TRANSFER OF INTEREST:

       A.  This Agreement shall extend to and be binding upon and inure to the
           benefit of CMI and Reef and their respective successors, assigns and
           legal representatives.  However, it is understood by the parties
           hereto that this Agreement represents a "personal" covenant between
           them, and consequently that Reef may not assign in

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           whole or part its interest in this Agreement itself, or in its right
           hereunder to acquire any interest in any Prospect, without the
           advance written consent of CMI; PROVIDED, that such consent not to
           be unreasonably withheld; and PROVIDED FURTHER, that nothing
           herein shall preclude Reef from assigning any such interest
           hereunder if such transfer of interest is to any joint venture of
           which Reef or an affiliate is managing venturer, any partnership
           of which Reef or an affiliate is the managing partner, including
           but not limited to any partnership formed as the result of, or
           contemplated by, the Reef Global Energy Ventures Partnerships
           Registration Statement filed with the United States Securities and
           Exchange Commission, or to any Reef affiliate due to corporate
           merger, reorganization of consolidation (collectively, "Reef's
           Affiliates").  Notwithstanding the foregoing, Reef shall have the
           right to assign all or part of its interest in any Prospect
           acquired hereunder AFTER Reef shall have earned assignment of its
           interest in the Prospect from the Selling Party, subject to
           applicable restrictions in any agreements binding the participants
           in such Prospect.  In the event of an assignment of any interest
           in a Prospect by Reef, other than as more fully set forth above
           regarding assignment to Reef's Affiliates, Reef shall preserve the
           confidentiality of this Agreement by not disclosing to assignee
           the contents hereof in any form.  If such assignment should be to
           Reef's Affiliates, Reef may disclose to assignee the contents
           hereof, but shall condition such assignment upon (a) provision
           that assignee accepts all obligations of this Agreement, including
           but not limited to the confidentiality provisions hereof, and (b)
           provision that any further assignments shall be subject to the
           same restrictions hereunder originally applicable to an assignment
           by Reef, if such further assignment is made to assignor's
           affiliate due to corporate merger, reorganization or
           consolidation; PROVIDED, HOWEVER, that such confidentiality
           provision shall not apply to disclosure by Reef if Reef believes
           it is legally obligated to make such disclosure, based upon
           written legal advice of its attorney.

       B.  In the event that CMI should be sold by its parent company, Global
           Marine Inc., or undergo any type of corporate merger,
           reorganization or consolidation resulting in Global Marine Inc.
           owning less than majority interest in CMI, then CMI shall have the
           option to terminate this Agreement, effective not less than thirty
           (30) days after its written notice of same to Reef, in which event
           CMI shall refund to Reef a portion of Reef's Participation Fee
           representing the remaining portion (if any) of the current Joint
           Venture Participation Year as to which Reef shall have already
           paid such fee to CMI under Paragraph 3 of the Agreement, i.e., a
           refund amount representing the base annual fee times the remaining
           days of such Participation Year after the effective termination
           date divided by the total number of days in such year (using 365
           days).  CMI and Reef agree that the pending merger of Global
           Marine Inc. and Santa Fe International Corporation, if
           accomplished as proposed, would not trigger this provision.

       C.  Nothing in this Agreement shall be construed to create in either
           party any preferential right to purchase the interest of the other
           party, in whole or part, in

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           any Prospect, after a party has acquired the interest in question
           in the Prospect under the provisions of this Agreement.

16.    MISCELLANEOUS:

       A.  IN THE EVENT OF ANY DISPUTE BETWEEN THE PARTIES AS TO THE PROVISIONS
           OF THIS AGREEMENT, THE MATTER SHALL BE SUBMITTED TO ARBITRATION OR
           OTHER FORM OF ALTERNATIVE DISPUTE RESOLUTION METHOD IN HOUSTON,
           HARRIS COUNTY, TEXAS, AT THE INSTANCE OF EITHER PARTY, UNDER SUCH
           PROCEDURES AS THE PARTIES MAY AGREE UPON, OR, IF THEY CANNOT
           AGREE, THEN UNDER THE APPLICABLE RULES OF THE AMERICAN ARBITRATION
           ASSOCIATION.

       B.  Failure of a party to enforce any or all of the provisions of this
           Agreement shall not constitute a waiver of such provisions(s) or
           preclude subsequent enforcement thereof.

       C.  No provision of this Agreement shall be altered or deleted except by
           written agreement duly executed by both parties.

       D.  Any provision of this Agreement found to be illegal or unenforceable
           shall be deemed stricken so as not to affect the legality or
           enforceability of the remaining provisions.

17.    DUE DILIGENCE:  As sophisticated participants in the oil and gas
       business, Reef and CMI agree that each party is responsible for the
       scope and evaluation of its own independent "due diligence" efforts as
       to whether the business relationship and transactions contemplated
       hereunder are appropriate and suitable to their respective business
       plans.  Reef acknowledges that, in entering into this Agreement, it is
       not relying upon any representations by CMI other than those expressly
       set out herein, and that the results of Reef's participation in the
       Joint Venture may vary significantly from past results of CMI and/or
       its Joint Venture participants, for numerous reasons, including but
       not limited to general industry conditions such as oil and gas
       production pricing, drilling rig availability and the availability of
       quality Prospects for CMI to consider hereunder, and Reef's right
       hereunder to select specific Prospects for participation, and the
       percentage interest of its participation, based on its own independent
       judgment, with no obligation to participate in any particular Prospect
       or any minimum number of Prospects.

18.    CMI PARTNER BUYOUT:  This proposal is subject to CMI's success in its
       attempt to buy out or buy down the interest of Other Participants in
       existing Joint Ventures, on or before January 31, 2002, for
       consideration NOT LESS THAN Reef's monetary commitment hereunder, in
       order to place Reef into the Joint Venture for the 12.5% participation
       interest described above in Paragraph 2. Also, CMI reserves the right
       to place any available interest in the Joint Venture with Other
       Participants before placing any interest with Reef.  If for any reason
       CMI should not succeed in timely placing such 12.5%

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REEF PARTNERS LLC
October 31, 2001


       interest in the Joint Venture with Reef, then the parties hereto agree
       that they would have no further obligation to each other under this
       proposal.

19.    INTRODUCTION OF REEF TO OTHER PARTICIPANTS:  Reef has previously agreed
       not to contact the Other Participants until CMI has introduced Reef to
       them as a possible participant in the  Joint Venture.  Upon execution
       of this Agreement, CMI shall promptly introduce Reef to the Other
       Participants.  Reef and CMI shall each have the option to terminate
       the Agreement during a period of ten (10) working days after CMI has
       given Reef written notice that CMI has introduced Reef to the Other
       Participants.  If either party has timely exercised such option to
       terminate the Agreement, by providing the other party with written
       notice of such election, the Agreement shall be considered null and
       void from inception, and each party shall be relieved of all
       obligations of any character hereunder, including but not limited to
       Reef's obligation to pay its Participation Fee provided for in
       Paragraph 3 above.

If the terms of this Agreement are acceptable to Reef, please confirm our
agreement by executing in the space provided below and returning to the
letterhead address one duplicate original to CMI's Business Development
Manager, Paul Nielsen, no later than November 7, 2001, otherwise this
proposal shall terminate and be null and void.

Very truly yours,
CHALLENGER MINERALS INC.

/s/ Tom Morrow
T. J. Morrow
President

ACCEPTED AND AGREED TO this 7 day of November, 2001:

REEF PARTNERS, LLC

By:  /s/ Michael J. Mauceli
     ----------------------
     Michael J. Mauceli
     Managing Member







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