QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.6    
    


	TO:
	ELLORA
OPERATING, LP 



Attention:        Floyd
Trujillo 


FROM:              Donna
Posthauer 


SUBJ:
NGP-SPOTNG                    -300688                   
 17676 ELLORA 


LOUIS DREYFUS ENERGY SERVICES LP

CONFIRMATION LETTER

DATE: November 29, 2006 


REFERENCE NUMBER:              300688 


CONTRACT DATE:    11/28/2006 



	PERFORMANCE OBLIGATION

INTERRUPTIBLE	 	 
	PIPELINE:	 	TEXAS EASTERN TRANSMISSION CO.	 	 
	
DELIVERY PERIOD:                    12/01/2006 TIM 12/31/2006	
 	

 
	
BUYER:	
 	

LOUIS DREYFUS ENERGY SERVICES LP (LD)	
 	

 
	TRADER:	 	Billy Raster	 	 
	
SELLER:	
 	

ELLORA OPERATING, LP	
 	

 
	TRADER:	 	Floyd Trujillo	 	 
	
BROKER:	
 	

Direct—No Broker involved.	
 	

 
	
TOTAL QUANTITY: Natural Gas (dry):            310000 MMBTU Total	
 	

 
	
PRICE:	
 	

 	
 	

 
	During the delivery period, the price for each such calendar day being the "Flow date(s): Midpoint as quoted in Platts Gas Daily in the section titled "Daily price survey
($/MMbtu) under the heading East Texas-North Louisiana Area: Texas Eastern, ETX" MINUS USD 0.012500 per MMBTU.
	

DELIVERY LOCATION:	
 	

 
	

TRANSPORTER: TEXAS EASTERN TRANSMISSION CO.	
 	

 





   





	FROM
	 	TO
	 	DAILY

QUANTITY
	 	PERIOD

TOTAL
	 	DELIVERY POINT
	 	USD/MMBTU

FIXED PRICE

	12/01/06	 	12/31/06	 	3,000	 	93,000	 	TETC-72176	 	 
	12/01/06	 	12/31/06	 	4,000	 	124,000	 	TETC-73315	 	 
	12/01/06	 	12/31/06	 	3,000	 	93,000	 	TETC-73222	 	 





PAYMENT TERMS:                    25th of the month following delivery 


NOMINATION/SCHEDULING: All nominations must be made sufficiently in advance of the time designated in the pipeline tariff. Nomination and scheduling
changes cannot be made after 1/2 hour prior to the deadline designated by the transporting pipeline. 


CREDIT
TERMS:

Open credit within established credit lines. 



CREDIT
DEPT.:                    Justice
Awuku                    Tel: (203) 761-8135 








Invoices
shall be sent to: 




LOUIS
DREYFUS ENERGY SERVICES L.P.

20 Westport Road

Wilton, CT 06897

Fax: (203) 761-8478 


ATTN:
MARIA ARNOLDY

TEL: 203-761-8031 





Notices
and all other correspondence shall be mailed of faxed to: 




Louis
Dreyfus Energy Services L.P.

20 Westport Road

P.O. Box 810

Wilton, CT 06897-0810

Fax: (203) 761-8182 


Contract
Administration,:

Brenda Strickland: Tel (203) 761-8017 





GENERAL
TERMS AND CONDITIONS: This Transaction Confirmation shall be governed by the General Terms and Conditions of the Base Contract for Sale and Purchase of Natural Gas (NAESB Standard 6.3.1 dated
April 19, 2002) ("Base Contract"). The Base Contract is incorporated into this Transaction Confirmation by reference. In the event of any inconsistency between this Transaction Confirmation and
the Base Contract, this Transaction Confirmation will govern. This Transaction Confirmation evidences a complete binding agreement between the parties as to the terms of the Transaction set forth
above and, subject to any special terms, the parties' agreement to have this Transaction governed by the Base Contract. All provisions contained or incorporated by reference in the Base Contract will
govern this Transaction Confirmation including the following provisions offered in the Base Contract which the parties hereby select: 



	Section 1.2	 	Transaction Procedure:	 	Oral
	Section 2.5	 	Confirm Deadline:	 	2 Business Days
	Section 3.2	 	Performance Obligation:	 	SPOT Standard
	Section 2.26	 	Spot Price Publication	 	Gas Daily Midpoint
	Section 6	 	Taxes:	 	(See Below)
	Section 7.2	 	Payment Date:	 	25th Day of Month following Month of Delivery
	Section 7.7	 	Netting	 	Netting Applies
	Section 10.3.1	 	Early Termination Damages	 	Early Termination Damages Apply
	Section 10.3.2	 	Other Agreement Setoffs:	 	Other Agreement Setoffs Apply
	Section 14.5	 	Choice of Law:	 	New York
	Section 14.10	 	Confidentiality	 	Confidentiality Applies





In
addition to the above, the parties agree amendments to the NAESB Base Contract: 


Section 2.8 ("Contract Price") is amended by adding the following sentence at the end thereof: "Contract Price shall include all Taxes which
Seller is obligated to pay on or with respect to the Gas pursuant to Section 6." 


Section 3.2 (both Cover Standard and Spot Price standard) is amended by substituting as the
beginning of the first sentence the words: In addition to any liability for Imbalance Charges, which shall not be recovered twice by the following remedy, the exclusive and sole remedy of the parties
in the event of a breach of a Firm or Interruptible obligation to deliver or receive gas shall be recovery of the following:" 


Section 3.2 (Spot Price Standard) is amended by inserting "or Keep Whole Interruptible" after "a Firm" in the first line. 


"Keep
Whole Interruptible" means that either party may interrupt its performance at any time for any reason, whether or not caused by an event of Force Majeure, except such interrupting party may be
responsible for (i) any Imbalance Charges as set forth in Sections 2.20 and 4.3 of the Base Contract; 










and
(ii) the amount that would be calculated pursuant to the Spot Price Standard and Section 2.26 as amended for the period that such party interrupted the delivery of receipt of Gas. 


Section 6 (Buyer Pays At and After Delivery Point) is amended by deleting the third sentence in its entirety and inserting the following
language: "However, if Buyer is required by law to pay Taxes imposed on the Gas at and prior to the Delivery Points, Buyer shall make such payment and shall reduce the Contract Price payable to Seller
by a like amount. If Buyer is legally required to remit such Taxes to the collecting authority, then Buyer shall do so and shall withhold the Taxes so paid on Seller's behalf from payments otherwise
due to Seller hereunder." 


Section 6 (Seller Pays Before and At Delivery Point) is amended by deleting the third sentence in its entirety and inserting the following
language in its place: "However, where Buyer is required by law to pay such Taxes, Buyer shall make such payment and shall reduce the Contract Price payable to Seller by a like amount. If Buyer is
legally required to remit such Taxes to the collecting authority, then Buyer shall do so and shall withhold the Taxes so paid on Seller's behalf from payments otherwise due to Seller hereunder." 



14.12 INDEX TRANSACTIONS. The following provisions shall be applicable to Transactions where the Contract Price for a Transaction is determined by
reference to a third-party information source or where the Spot Price is applied: 


to
the following 


14.12.1 MARKET DISRUPTION. If a Market Disruption Event (as defined below) occurs during the Determination Period (as defined below), the Floating Price
(as defined below) for the affected Trading Days) (as defined below) shall be determined pursuant to the Floating Price specified in the Transaction for the first Trading Day thereafter on which no
Market Disruption Event exists; provided, however, that if the Floating Price is not so determined within three Business Days after the first Trading Day on which the Market Disruption Event occurred
or existed, then the Parties shall negotiate in good faith to agree on a Floating Price (or a method for determining a Floating Price), and if the Parties have not so agreed on or before the twelfth
Business Day following the first Trading Day on which the Market Disruption Event occurred or existed, the Floating Price shall be determined in good faith by LDES by taking the average of two or more
dealer quotes. "Market Disruption Event" means, with respect to any Price Source (as defined below), any of the following events (the existence of which shall be determined in good faith by LDES).
(i) the failure of the Price Source to announce or publish information necessary for determining the Floating Price; (ii) the failure of trading to commence or the permanent
discontinuation or material suspension of trading in the relevant options contract or commodity on the Exchange (as defined below) or in the market specified for determining a Floating Price;
(iii) the temporary or permanent discontinuance or unavailability of the Price Source; (iv) the temporary or permanent closing of any Exchange specified for determining a Floating Price;
or (v) a material change in the formula for or the method of determining the Floating Price. "Price Source" means, in respect of a Transaction, the publication (or such other origin of
reference, including an Exchange) containing (or reporting) the specified price (or prices from which the specified price is calculated) in the relevant Transaction. "Floating Price" means the
Contract Price specified in a Transaction that is based upon a Price Source. "Exchange" means, in respect of a Transaction, the exchange or principal trading market specified in the relevant
Transaction. "Determination Period" means each calendar Month a part or all of which is within the Delivery Period of a Transaction. "Trading Day" means a day in respect of which the relevant Price
Source published the Floating Price. 


14.12.2 CORRECTIONS TO PUBLISHED PRICES. For purposes of determining the relevant prices for any day, if the price published or announced on a given day
and used or to be used to determine a relevant price is subsequently corrected and the correction is published or announced by the person responsible for that publication or announcement, either Party
may notify the other Party of (i) that correction and (ii) the amount (if any) that is payable as a result of that correction. If a Party gives Notice that an amount is so payable, the
Party that originally either received or retained such amount will, not later than two Business Days after the effectiveness of that Notice, pay subject to any applicable conditions precedent, to the
other Party that amount, together with interest at the Interest Rate for the period from and including the day on which payment originally was (or was not) made to but excluding the day of payment of
the refund or payment resulting from that correction. 










Section 14.13 (Arbitration) Any controversy or claim arising out of or relating to this contract or the breach hereof shall be settled by
arbitration in New York, New York before three arbitrators. The arbitration shall be administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment upon the
award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Each Party shall appoint an arbitrator and the third arbitrator, who shall chair the tribunal, shall be
selected by the party-appointed arbitrators. Each arbitrator shall possess the experience, education and knowledge required to competently determine the matters
involved in the dispute or claim. The arbitration award shall be final and binding. Any interim or final award shall be rendered by written decision with a reasoned explanation of the basis of the
decision. The arbitrators are not empowered to render any award other than monetary damages or to award damages inconsistent with the provisions of his Contract, any Transaction or in excess of
compensatory damages. Each Party shall bear its own costs and attorneys* fees in connection with the arbitration and the Parties shall share equally the costs of the arbitrators and any hearing
expenses. 


Please
confirm that the foregoing correctly sets forth the terms of our agreement by executing a copy of this Transaction Confirmation and returning it to us. 


If
this description is contrary to our verbal agreement, please notify LD immediately. Please confirm your agreement by signing and returning this confirmation to fax
(203) 761-8182. 


Your
failure to notify LD of any discrepancy within 48 hours of receipt of this notice constitutes your agreement to the transaction as described above. 



If
applicable to the parties to this Contract, the Equal Opportunity Clause set forth in 41 C.F.R. 60-1.4(a) and the Affirmative Action clauses for Disabled Veterans and Veterans of the
Vietnam Era and for Individuals with Disabilities set forth at 41 C.F.R. 60-250.4 and 60-741.5 are incorporated by
reference as part of this contract.". 



	 LOUIS DREYFUS ENERGY SERVICES L.P.	 
	BY:	LOUIS DREYFUS ES GP LLC

ITS GENERAL PARTNER	 	 	 
	
 BY:	

Deemed Signed	
 	

 	

 
	
  Accepted and confirmed:	
 	

 	

 
	
  ELLORA OPERATING, LP	
 	

 	

 
	
 By:	

/s/  FLOYD TRUJILLO      
	
 	

 	

 
	 Name: Floyd Trujillo	 	 	 
	 Title: Gas Marketing Manager	 	 	 
	 Date: 11/30/06	 	 	 













QuickLinks



Exhibit 10.6