<PAGE>   1
                                                                    EXHIBIT 10.3

                         FIFTH SUPPLEMENT TO PRODUCTION
                               PAYMENT CONVEYANCE

     THIS FIFTH SUPPLEMENT TO PRODUCTION PAYMENT CONVEYANCE (this "Supplement"),
dated as of the date set out at the end hereof, is made by TransTexas Gas
Corporation, a Delaware corporation ("Grantor"), Mirant Americas Energy Capital,
LP, formerly named Southern Producer Services, L.P. ("SPS"), and TCW DR VI
Investment Partnership, L.P. ("Fund VI"). SPS and Fund VI are herein
collectively called "Grantee".

                                    RECITALS:

A.   Effective as of March 1, 2000, Grantor executed in favor of Grantee that
     certain Production Payment Conveyance dated as of March 14, 2000 (as
     heretofore amended or supplemented, the "Original Conveyance"). The
     Original Conveyance has been recorded as set forth in Schedule 1 hereto;
     all capitalized terms used but not defined herein shall have the meanings
     assigned to them in the Original Conveyance.

B.   Pursuant to the Original Conveyance, TCW Portfolio No. 1555 DR V
     Sub-Custody Partnership, L.P. ("Fund V") was originally included within
     "Grantee". Effective as of December 1, 2000, Fund V assigned all of its
     right, title, and interest under the Original Conveyance to SPS pursuant to
     that certain Conveyance of Interest in Production Payment dated as of
     February 7, 2001.

C.   Effective as of February 7, 2001, SPS conveyed to Fund VI a 46.10825%
     undivided interest in and to the Production Payment, resulting in Fund VI
     now owing an aggregate 49.82233% interest in the Production Payment and SPS
     now owning a 50.17767% interest in the Production Payment (in each case
     prior to giving effect to this supplement)

D.   Grantee and Grantor desire to supplement and amend the Original Conveyance,
     as set forth herein, to account for the payment by SPS of additional funds
     to Grantor.

E.   As described in Section 8.7 of the Original Conveyance, and pursuant to the
     Purchase Agreement referred to in the Original Conveyance, Fund VI has
     appointed TCW Asset Management Company to act as its agent in connection
     with supplements and amendments to the Original Conveyance.

                           SUPPLEMENTS AND AGREEMENTS:

     FOR A GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which
are hereby acknowledged, Grantor and Grantee do hereby agree, act and covenant
as follows:

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     1. Effective as of 9:00 a.m. Houston, Texas time, on July 9, 2001 (the
"Effective Time"), the Original Conveyance is amended in order to add the amount
of Fifteen Million Dollars ($15,000,000) to the unliquidated balance of the
Primary Sum, as such unliquidated balance stood as of the Effective Time after
giving effect to all applications of PP Proceeds made before the Effective Time.
After giving effect to such amendment (and to such application of PP Proceeds),
the unliquidated balance of the Primary Sum as of the Effective Time is
$41,300,111. (Any PP Proceeds received after the Effective Time on July 9, 2001
shall be deemed to have been received on the next following Business Day.)

     2. All of the terms and provisions of the Original Conveyance, as the same
is amended and supplemented hereby, are ratified, adopted, affirmed and renewed,
and remain in full force and effect for the benefit of Grantee, the
Beneficiaries, Funds Agent, and their respective successors and assigns.

     3. The definition of "Dedication Percentage" in Section 1.1 of the Original
Conveyance is hereby amended in its entirety to read as follows:

     " 'Dedication Percentage' means:

          (a) fifty percent (50%) from the Initial Time until 9:00 a.m., Texas
     time, on September 1, 2000;

          (b) sixty-two percent (62%) from 9:00 a.m., Texas time, on September
     1, 2000 until 9:00 a.m., Texas time, on December 1, 2000;

          (c) thirty percent (30%) from and after 9:00 a.m., Texas time, on
     December 1, 2000 until 9:00 a.m., Texas time, on August 1, 2001;

          (d) forty-five percent (45%) from and after 9:00 a.m., Texas time, on
     August 1, 2001 until 9:00 a.m., Texas time, on November 1, 2001; and

          (e) seventy percent (70%) from and after 9:00 a.m., Texas time, on
     November 1, 2001."

     4. The definition of "Percentage Share" in Section 1.1 of the Original
Conveyance is hereby amended in its entirety to read as follows:

          " 'Percentage Share' means, with respect to each Person included in
     Grantee, the fractional undivided interest which it owns in the Production
     Payment at the time in question. From the initial grant of the Production
     Payment until June 7, 2000, the Percentage Share of each Person included in
     Grantee was as follows:

          Fund V   42.859594%
          Fund VI  21.429797%
          SPS      35.710609%

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<PAGE>   3

     From and after June 7, 2000, until September 8, 2000, the Percentage Share
     of each Person included in Grantee was as follows:

          Fund V   33.048697%
          Fund VI  16.524349%
          SPS      50.426954%

     From and after September 8, 2000, until November 7, 2000, the Percentage
     Share of each Person included in Grantee was as follows:

          Fund V   22.863142%
          Fund VI  11.431571%
          SPS      65.705287%

     From and after November 7, 2000, until December 1, 2000, the Percentage
     Share of each Person included in Grantee was as follows:

          Fund V    19.08294%
          Fund VI    9.54147%
          SPS       71.37559%

     From and after December 1, 2000, until February 7, 2001, the Percentage
     Share of each Person included in Grantee was as follows:

          Fund VI    9.54147%
          SPS       90.45853%

     From and after February 7, 2001, until July 9, 2001, the Percentage Share
     of each Person included in Grantee was as follows:

          Fund VI   49.82233%
          SPS       51.17767%

     As of 9:00 a.m. Houston, Texas time, on July 9, 2001, and thereafter, the
     Percentage Share of each Person included in Grantee is as follows:

          Fund VI   31.72711%
          SPS       68.27289%"

The foregoing Percentage Shares of Fund VI and SPS, respectively, taking effect
as of July 9, 2001, are in this Amendment called their "amended Percentage
Shares".

     5. The definition of "Operating Costs" in Section 1.1 of the Conveyance is
amended by deleting the phrase "all Direct Taxes," in the second line thereof
and by amending the phrase at the end thereof that presently reads "do not
include and costs of handling, treating or

                                       3
<PAGE>   4

transporting" to read "do not include any Direct Taxes or any costs of handling,
treating or transporting". The effect of these amendments is to exclude Direct
Taxes from Operating Costs.

     6. The definition of "Reimbursable Expenses" in Section 1.1 of the
Conveyance is amended by amending the phrase at the beginning thereof that
presently reads "means all costs and expenses paid or incurred" to read "means
all costs and expenses, other than Operating Costs, that are paid or incurred".
The effect of this amendment is to exclude Operating Costs from Reimbursable
Expenses.

     7. Section 2.2 of the Conveyance is amended by (a) deleting subsection (e)
thereof; (b) adding a period at the end of subsection (d) thereof in place of
the phrase "; plus"; and (c) changing the reference in the last sentence thereof
to "subsections (c), (d) and (e) of this section" to refer instead to
"subsections (c) and (d) of this section". Section 2.3 of the Conveyance is
amended by changing the reference in subsection (a)(i) thereof to "subsections
(b), (c), (d) and (e) of Section 2.2" to refer instead to "subsections (b), (c)
and (d) of Section 2.2". The effect of these amendments is to delete Section
2.2(e) of the Conveyance and various references thereto.

     8. Section 2.4 of the Conveyance is amended in its entirety to read as
follows:

          Section 2.4. Non-Cost-Bearing Interest. The Production Payment shall
     be free and clear of, and Grantee shall have no liability for, any
     Operating Costs or Direct Taxes other than PP Severance Taxes. All
     Operating Costs and Direct Taxes (other than PP Severance Taxes) shall be
     borne by the Retained Interests and paid by Grantor promptly, on or before
     the dates the same become due and owing (except to the extent payment
     thereof is discharged or the time for payment is extended pursuant to the
     Bankruptcy Court Order), and Grantor will promptly (and in any event within
     10 days after receiving any notice or statement for the same) reimburse
     Grantee for any Operating Costs or Direct Taxes (other than PP Severance
     Taxes) that Grantee may elect to pay upon Grantor's failure to do so. In
     addition, Grantor will promptly (and in any event within 30 days after
     receiving any notice or statement for the same) pay all Reimbursable
     Expenses which have been incurred and are unpaid and reimburse Grantee or
     Beneficiaries for any Reimbursable Expenses which have been paid by Grantee
     or Beneficiaries. Each amount which is to be paid by Grantor pursuant to
     this Section 2.4 which is instead paid by Grantee or Beneficiaries shall
     bear interest at the Agreed Rate on each day from and including the date of
     such payment until but not including the date repaid by Grantor.

     9. Section 3.1(b) of the Conveyance is amended in its entirety to read as
follows:

          (b) promptly pay all Operating Costs and Direct Taxes (other than PP
     Severance Taxes) with respect to the Subject Interests (except to the
     extent that (i) Grantor is contesting any such Operating Costs or Direct
     Taxes in good faith by appropriate proceedings, (ii) Grantor has reserved
     adequate funds for the payment thereof, and (iii) if any such Operating
     Costs or Direct Taxes are owed to any lessor of any lease under which any
     of the Subject Interests are held, failure to win such contest would not
     result in termination or cancellation of such lease);

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<PAGE>   5

     10. In consideration of the additional purchase price payment made by SPS
to Grantor and the foregoing increase in the unliquidated balance of the Primary
Sum:

          (a) Fund VI does hereby GRANT, BARGAIN, SELL, CONVEY, ASSIGN,
     TRANSFER, SET OVER and DELIVER unto SPS such additional undivided interests
     in the Production Payment as are necessary in order to cause SPS and Fund
     VI to own the Production Payment, at and after the Effective Time, in
     undivided interests in proportion to their respective amended Percentage
     Shares, and

          (b) Fund VI does further assign unto SPS such undivided interests in
     SPS's accounts receivable from the sale of PP Hydrocarbons - to the extent
     such accounts receivable exist and are unpaid at the Effective Time and
     arise from the sale of PP Hydrocarbons before the Effective Time - as are
     necessary in order to cause SPS and Fund VI to share in all collections of
     such accounts receivable after the Effective Time in proportion to their
     respective amended Percentage Shares.

     TO HAVE AND TO HOLD the same, upon and subject to the terms of the Original
Conveyance, as amended hereby, unto SPS and its successors and Permitted
Assigns, until the Termination Time.

     11. All of the terms and provisions of the Original Conveyance, as the same
is amended and supplemented hereby, are ratified, adopted, affirmed and renewed,
and remain in full force and effect for the benefit of Grantee, the
Beneficiaries, Funds Agent, and their respective successors and assigns.

     12. This Supplement may be executed in multiple counterparts, all of which
are identical.

     13. This Supplement shall be binding upon and shall inure to the benefit of
the parties hereto, and their respective successors and assigns, and all of the
covenants and agreements contained in the Original Conveyance, as amended
hereby, shall be deemed to be covenants and agreements running with the lands
affected thereby.

     14. This Supplement shall be governed by and construed in accordance with
the laws of the State of Texas, without regard to principles of conflicts of
laws.

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<PAGE>   6

     IN WITNESS WHEREOF, this Supplement is executed by the parties hereto on
the dates set out below in their respective acknowledgments, but effective as of
the Effective Time.

                                       TRANSTEXAS GAS CORPORATION


                                       By:
                                           -------------------------------------
                                           Simon Ward
                                           Vice President and Treasurer

Grantor's address:                     1300 North Sam Houston Parkway East
                                       Suite 310
                                       Houston, Texas 77032-2949
                                       Attention: Ed Donahue, Vice President
                                       Telephone: 281/987-8600
                                       Telecopy: 281/986-8865


                                       MIRANT AMERICAS ENERGY CAPITAL, LP

                                       By: Mirant Americas Development, Inc.,
                                           its general partner


                                       By:
                                           -------------------------------------
                                           John A. Rigas
                                           Attorney-in-Fact

SPS's address:                         1200 Smith Street
                                       Suite 2890
                                       Houston, Texas 77002
                                       Attention: David W. Stewart
                                       Telephone: 713/276-1902
                                       Telecopy: 713/276-1990

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<PAGE>   7

                                      TCW DR VI INVESTMENT PARTNERSHIP, L.P.

                                      By: TCW ASSET MANAGEMENT COMPANY, as Agent


                                      By:
                                          --------------------------------------
                                          Kurt A. Talbot
                                          Senior Vice President


Fund VI's address:                    c/o Trust Company of the West
                                      865 South Figueroa
                                      Los Angeles, California  90017
                                      Attention: Thomas F. Mehlberg
                                      Telephone: 213/244-0702
                                      Telecopy: 213/244-0604

This document prepared by:

John W. Rain
Thompson & Knight L.L.P.
1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201

                                       7
<PAGE>   8

STATE OF TEXAS                    )
                                  )
COUNTY OF HARRIS                  )

     The foregoing instrument was acknowledged before me on this ___ day of
July, 2001, by Simon Ward, the Vice President and Treasurer of TransTexas Gas
Corporation, a Delaware corporation, on behalf of such corporation.


                                       -----------------------------------------
        [SEAL]                         Notary Public, State of Texas

STATE OF TEXAS                    )
                                  )
COUNTY OF HARRIS                  )

     The foregoing instrument was acknowledged before me on this ___ day of
July, 2001, by John A. Rigas, the Attorney-in-Fact of Mirant Americas
Development, Inc., a Georgia corporation, on behalf of such corporation acting
as general partner of Mirant Americas Energy Capital, LP, a Delaware limited
partnership, and on behalf of such limited partnership.


                                       -----------------------------------------
        [SEAL]                         Notary Public, State of Texas


STATE OF TEXAS                    )
                                  )
COUNTY OF HARRIS                  )

     The foregoing instrument was acknowledged before me on this ___ day of
July, 2001, by Kurt A. Talbot, the Senior Vice President of TCW Asset Management
Company, a California corporation, on behalf of such corporation acting as agent
as aforesaid.


                                       -----------------------------------------
        [SEAL]                         Notary Public, State of Texas

                                       8
<PAGE>   9

                                                                      SCHEDULE 1

                               RECORDING SCHEDULE

1.   Production Payment Conveyance among TCW Portfolio No. 1555 DR V Sub-Custody
     Partnership, L.P., TCW DR VI Investment Partnership, L.P., Southern
     Producer Services, L.P. and TransTexas Gas Corporation.

<Table>
<Caption>
     Recording Jurisdiction                    Recording Data
     ----------------------                    --------------

<S>                                            <C>
     Calhoun County, TX                        Volume 262, Page 33,
                                               Filed 9/19/2000

     Chambers County, TX                       Document No. 00-448-604,
                                               Filed 3/17/2000

     Galveston County, TX                      Film Code #014-39-1028,
                                               Filed 3/17/2000

     Jim Hogg County, TX                       Volume 17, Page 362,
                                               Filed 3/20/2000

     Live Oak County, TX                       Volume 449, Page 135,
                                               Filed 3/20/2000

     Wharton County, TX                        Volume 360, Page 596,
                                               Filed 3/17/2000

     Zapata County, TX                         Volume 629, Page 471,
                                               Filed 3/17/2000

     General Land Office of Texas              Sent for filing
</Table>

2.   First Supplement to Production Payment Conveyance among TransTexas Gas
     Corporation, Southern Producer Services, L.P., TCW Portfolio No. 1555 DR V
     Sub-Custody Partnership, L.P. and TCW DR VI Investment Partnership, L.P.

                                       1
<PAGE>   10

<Table>
     Recording Jurisdiction                    Recording Data
     ----------------------                    --------------

<S>                                            <C>
     Calhoun County, TX                        Volume 262, Page 114,
                                               Filed 9/19/2000

     Chambers County, TX                       Document No. 00-459-630
                                               Filed 6/9/2000

     Galveston County, TX                      Film Code 014-62-1617
                                               Filed 6/9/2000

     Jim Hogg County, TX                       Volume 19, Page 526,
                                               Filed 6/9/2000

     Live Oak County, TX                       Volume 450, Page 428,
                                               Filed 6/12/2000

     Wharton County, TX                        Volume 371, Page 458,
                                               Filed 6/9/2000

     Zapata County, TX                         Volume 634, Page 110,
                                               Filed 6/9/2000
</Table>

3.   Second Supplement to Production Payment Conveyance among TransTexas Gas
     Corporation, Southern Producer Services, L.P., TCW Portfolio No. 1555 DR V
     Sub-Custody Partnership, L.P. and TCW DR VI Investment Partnership, L.P.

<Table>
<Caption>
     Recording Jurisdiction                    Recording Data
     ----------------------                    --------------

<S>                                            <C>
     Calhoun County, TX                        Volume 262, Page 132
                                               Filed 9/19/2000

     Chambers County, TX                       Document No. 00-470-562
                                               Filed 9/18/2000

     Galveston County, TX                      File Number 2000046945
                                               Filed 9/15/2000

     Jim Hogg County, TX                       File Number 65210
                                               Filed 9/22/2000

     Live Oak County, TX                       File Number 00149214
                                               Filed 9/19/2000

     Wharton County, TX                        Volume 383, Page 740,
                                               Filed 9/19/2000
</Table>

                                       2
<PAGE>   11

<Table>
<S>                                            <C>
     Zapata County, TX                         Volume 638, Page 642,
                                               Filed 9/22/2000
</Table>

4.   Third Supplement to Production Payment Conveyance among TransTexas Gas
     Corporation, Southern Producer Services, L.P., TCW Portfolio No. 1555 DR V
     Sub-Custody Partnership, L.P. and TCW DR VI Investment Partnership, L.P.

<Table>
<Caption>
     Recording Jurisdiction                    Recording Data
     ----------------------                    --------------

<S>                                            <C>
     Calhoun County, TX                        Volume 266, Page 205,
                                               Filed 11/13/00

     Chambers County, TX                       Document No. 00-477-116,
                                               Filed 11/14/00

     Galveston County, TX                      Film Code 015-08-1029
                                               Filed 11/13/00

     Jim Hogg County, TX                       Volume 22, Page 256,
                                               Filed 11/13/00

     Live Oak County, TX                       Volume 454, Page 239,
                                               Filed 11/14/00

     Wharton County, TX                        Volume 390, Page 480,
                                               Filed 11/13/00

     Zapata County, TX                         Volume 641, Page 169,
                                               Filed 11/13/00

     General Land Office of Texas              Filed 12/22/00
</Table>

5.   Fourth Supplement to Production Payment Conveyance among TransTexas Gas
     Corporation, Mirant Americas Energy Capital, LP, formerly named Southern
     Producer Services, L.P., and TCW DR VI Investment Partnership, L.P.

<Table>
<Caption>
     Recording Jurisdiction                    Recording Data
     ----------------------                    --------------

<S>                                            <C>
     Calhoun County, TX                        Volume 272, Page 114,
                                               Filed 2/12/01

     Chambers County, TX                       Document No. 01-486-620
                                               Filed 2/12/01
</Table>

                                       3
<PAGE>   12

<Table>
<S>                                            <C>
     Galveston County, TX                      Film Code 015-31-0563
                                               Filed 2/12/01

     Jim Hogg County, TX                       Volume 23, Page 769,
                                               Filed 2/12/01

     Live Oak County, TX                       Volume 456, Page 400,
                                               Filed 2/12/01

     Wharton County, TX                        Volume 400, Page 418,
                                               Filed 2/12/01

     Zapata County, TX                         Volume 645, Page 328,
                                               Filed 2/12/01

     General Land Office of Texas              Filed
</Table>

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