Document:

<PAGE>   1
PORTIONS OF THIS EXHIBIT IDENTIFIED BY "***" HAVE BEEN DELETED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
AND THE FREEDOM OF INFORMATION ACT.

                                                                 EXHIBIT 10(e)-4

                         GAS SALE AND PURCHASE CONTRACT

                                     BETWEEN

                          CORAL ENERGY RESOURCES, L.P.

                                    AS SELLER

                                       AND

                         MOBILE GAS SERVICE CORPORATION

                                    AS BUYER

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                         <C>
ARTICLE I.

         DEFINITIONS .........................................................1

ARTICLE II.

         SOURCES OF GAS ......................................................2

ARTICLE III.

         RESERVATIONS ........................................................2

ARTICLE IV.

         QUANTITY ............................................................3

ARTICLE V.

         PRICES ..............................................................4

ARTICLE VI.

         DELIVERY POINTS .....................................................5

ARTICLE VII.

         DELIVERY CONDITIONS .................................................5

ARTICLE VIII.

         FORCE MAJEURE .......................................................6

ARTICLE IX.

         ACCOUNTING ..........................................................7

ARTICLE X.

         TERM ................................................................8

ARTICLE XI

         INDEMNIFICATION .....................................................8

ARTICLE XII

         WARRANTY ............................................................8

ARTICLE XIII.

         ADDRESSES AND NOTICES ...............................................8

ARTICLE XIV.

         SUCCESSORS AND ASSIGNS ..............................................9

ARTICLE XV.

         MISCELLANEOUS ......................................................10

ARTICLE XVI.

         CONFIDENTIALITY ....................................................11
</TABLE>

<PAGE>   3

                         GAS SALE AND PURCHASE CONTRACT

         THIS CONTRACT, entered into as of July 1, 2000, by and between CORAL
ENERGY RESOURCES, L.P. ("Seller") and MOBILE GAS SERVICE CORPORATION ("Buyer").

                                   WITNESSETH:

         WHEREAS, Seller desires to sell and deliver natural gas to Buyer and
Buyer desires to purchase and receive natural gas from Seller upon the terms and
conditions set out herein.

         NOW, THEREFORE, in consideration of the mutual benefits and covenants
contained herein, Seller and Buyer agree as follows:

                                   ARTICLE I.
                                   DEFINITIONS

                  1.1 DEFINITIONS. Except where the context otherwise indicates
         another or different meaning or intent, the following words and terms
         as used herein shall be construed to have the meanings indicated:

                  (a) "Btu" means British Thermal Unit and, if appropriate, also
         means the plural thereof.

                  (b) "Commodity Price" means the base price per MMBtu as
         determined pursuant to Sections 5.2, 5.3, 5.4, hereof.

                  (c) "Daily Contract Entitlement" or "DCE" means the daily
         quantity of gas to be made available to Buyer for nomination pursuant
         to Section 4.1 hereof.

                  (d) The word "day" means 24 consecutive hours, coextensive
         with a "day" as defined by the Transporter. The date of a day shall be
         that of its beginning.

                  (e) "FERC" means the Federal Energy Regulatory Commission and
         any successor thereto.

                  (f) The word "gas" means natural gas, whether produced with
         oil or from gas or gas-condensate wells.

                  (g) "MMBtu" means 1,000,000 Btu.

                  (h) The word "month" means a period beginning on the first day
         of a calendar month and ending immediately prior to the first day of
         the next succeeding calendar month.

                  (i) "Nominated Quantity" means the quantity of gas, in MMBtu
         per day, nominated by Buyer for a given month pursuant to Section 4.3
         hereof.

<PAGE>   4

                  (j) "Reservation Charge" means the fee paid Seller to make
         available for Buyer's nomination a quantity of gas equal to the DCE for
         the term of this Contract. Such fee shall be calculated pursuant to the
         provisions of Section 5.1 hereof.

                  (k) "Transporter" means the pipeline used by Buyer to
         transport gas delivered hereunder.

                  (l) The word "year" means a period of 365 consecutive days
         from the first day of the month following the month in which the
         initial nomination is made hereunder, provided that any year which
         contains the date February 29 shall consist of 366 days.

                  (m) "Yellowhammer Plant" means the Yellowhammer Treating Plant
         located approximately fifteen miles south of Interstate 10 or state
         road 193 near Mobile, Alabama.

                                   ARTICLE II.
                                 SOURCES OF GAS

                  2.1 POOL COMPOSITION. The gas delivered hereunder will be
         provided from any or all of Seller's sources of gas (the "Pool"). Buyer
         understands and agrees that Seller may, at any time and from time to
         time, add to or subtract from the sources comprising the Pool, at
         Seller's sole discretion and for any reason. Buyer shall have no rights
         whatsoever with respect to any particular source of gas in the Pool at
         any time.

                  2.2 SUPPLY SHORTAGE MITIGATION. Notwithstanding the provisions
         of Section 2.1, the parties intend that deliveries hereunder will be
         made at the Yellowhammer Plant. Each party agrees to work to mitigate
         the effect of any reduction in deliveries at the Yellowhammer Plant
         resulting from force majeure events by seeking alternate supplies and
         by seeking to arrange for deliveries at other locations on Buyer's
         pipeline system. Seller may, but shall not be obligated, to deliver gas
         at any other delivery locations.

                  2.3 REMEDY. Anything in this Contract to the contrary
         notwithstanding, Buyer's sole and exclusive remedy, whether at law or
         in equity, against Seller for Seller's failure to tender gas for
         delivery under this Contract shall be for the remedies set forth in
         Section 4.4 hereof.

                                  ARTICLE III.
                                  RESERVATIONS

                  3.1 RIGHTS. With respect to any lands from which gas in the
         Pool is produced, Seller expressly reserves to itself, its successors
         and assigns, and to each of its gas suppliers, the following rights and
         such quantities of gas sufficient to satisfy such rights:

                  (a) The right to operate such lands free from any control by
         Buyer, including, without limitation, the right (but never the
         obligation) to drill new wells, to repair and rework

                                        2
<PAGE>   5

         old wells, to abandon any well and to renew, surrender, release or
         terminate any lease (in whole or in part), covering such lands,

                  (b) The right to deliver gas to lessors of leases on such
         lands in quantities sufficient to fulfill lease obligations from time
         to time,

                  (c) The right to use gas for development and operation of such
         lands, including (but not limited to) the use of gas for fuel, drilling
         (including gas drilling), deepening, reworking, compressing, gas
         lifting, processing, treating, cycling, repressuring or other
         supplemental recovery operations,

                  (d) The right to form or participate in the formation of any
         unit or units, including (but not limited to) any fieldwide unit or
         units, and thereafter to increase or decrease the size of any unit so
         formed and to dissolve any unit or units so formed.

                  (e) The right to process gas prior to delivery and to extract
         components other than methane.

                                   ARTICLE IV.
                                    QUANTITY

                  4.1 DAILY CONTRACT ENTITLEMENT. Seller agrees that it shall
         have available for nomination by Buyer each month a Daily Contract
         Entitlement of *** MMBtu's per day ***. Seller's obligation to deliver
         gas shall not exceed, on any day, the Nominated Quantity.

                  4.2 MINIMUM QUANTITY. Subject to the provisions of Sections
         4.3, 4.4, and 4.5, Buyer shall, on each day during the term hereof,
         take the Nominated Quantity.

                  4.3 NOMINATION. Buyer shall notify Seller, at least six work
         days prior to the beginning of each month in which deliveries are to
         occur, of the quantity of gas in MMBtu per day Buyer desires to take
         delivery of during the succeeding month ("Nominated Quantity") not to
         exceed the DCE. *** Buyer may, on any *** days of each month, at its
         sole option and on 24 hours' prior notice to Seller, request an
         increase in the Nominated Quantity by an amount up to*** ("Call
         Quantity"). Buyer shall not have the right to vary the Nominated
         Quantity ***.

                  4.4 FAILURE TO DELIVER. If Seller fails to tender for delivery
         all or part of the Nominated Quantity and if such failure is not the
         result of force majeure, then the parties shall remedy the failure to
         tender for delivery solely and exclusively through the actions set out
         below:

                  (a) Buyer may charge Seller, and Seller shall pay after
         billing thereof, the difference between the Commodity Price or the
         Alternate Commodity Price, as applicable, which would have been paid
         hereunder for the undelivered gas and such higher price, if any,

                                        3
<PAGE>   6

         which Buyer reasonably paid to obtain gas supplies to replace the
         undelivered gas from third party suppliers.

                  4.5 FAILURE TO TAKE. If Buyer fails to take delivery, when
         available, of the Nominated Quantity and if such failure is not the
         result of force majeure, then:

                  (a) as to any *** during any month of *** of the Nominated
         Quantity, *** shall *** to ***, *** of the Nominated Quantity and the
         quantities actually delivered *** of the Commodity Price or Alternate
         Commodity Price, whichever is applicable;

                  (b) as to failures to nominate the maximum DCE and failures to
         take the Nominated Quantity, any and all such gas shall be deemed
         released for the month or the remainder thereof by Buyer for Seller to
         dispose of as Seller sees fit.

                  4.6 LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING TO THE
         CONTRARY, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL,
         PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES, LOST PROFITS, OR OTHER
         BUSINESS INTERRUPTION DAMAGES, IN TORT OR CONTRACT.

                                   ARTICLE V.
                                     PRICES

                  5.1 RESERVATION CHARGE. Buyer shall pay Seller each month a
         Reservation Charge calculated as *** multiplied by the DCE for the
         relevant month, multiplied by the number of days in the month.

                  5.2 COMMODITY PRICE. Subject to the further provisions hereof,
         for each MMBtu of gas delivered or for which payment is due hereunder,
         Buyer shall pay Seller a price to be agreed upon between the parties on
         or before the sixth working day prior to the end of a month preceding
         deliveries ("Commodity Price"), provided that if the parties fail to
         reach agreement as to a Commodity Price, such price shall be determined
         in accordance with Section 5.3.

                  5.3 ALTERNATE COMMODITY PRICE. If the parties fail to agree on
         a Commodity Price pursuant to Section 5.2, Buyer and Seller agree to
         use an alternate price ("Alternate Commodity Price") to be determined
         monthly for the Nominated Quantity which shall be based on the index of
         *** as published by *** in the first issue of each month of deliveries.
         Buyer and Seller also agree to use an alternate price for the Call
         Quantity ("Call Quantity Alternate Commodity Price") to be determined
         daily based on the average of the high and low common prices of the***
         as published by *** in the issue on the day of delivery***.

                  5.4 REDETERMINATION OF ALTERNATE COMMODITY PRICE OR CALL
         QUANTITY ALTERNATE COMMODITY PRICE. If at any time and from time to
         time *** ceases publication or materially changes the index of prices
         on which the Alternate Commodity Price or Call Quantity Alternate
         Commodity Price is based, then the Parties agree to select a different

                                       4

<PAGE>   7

          publication or index from which to derive a pricing index, as similar
          as possible to the indices selected under this Contract.

                  5.5 BUYER'S PRICE OPTION. If, at any time and from time to
         time, any regulatory agency having jurisdiction over Buyer specifically
         disallows the inclusion in Buyer's resale rates of an amount per MMBtu
         paid for gas hereunder, then Buyer may elect to terminate this Contract
         effective upon a date at least 30 days after written notice to Seller.
         If Buyer's election to terminate falls between November 1 and the next
         succeeding April 1, the parties agree to continue performance of this
         Contract until April 1, or such earlier date as is set forth in notice
         from Buyer to Seller. In no event, however, shall Seller be required to
         reduce any price, to refund any amount paid, or to bear any interest or
         other cost as a result of any such disallowance.

                  5.6 SELLER'S PRICE OPTION. If, at any time, Seller is not
         permitted by applicable law, order or rule to collect any part of a
         price effective hereunder or any part of such price is subject to a
         possible refund obligation, then Seller may reduce such price, or part
         thereof, to that which is collectible without refund or Seller may
         terminate this Contract by giving 30 days' prior written notice to
         Buyer. If Seller's election to terminate falls between November 1 of a
         year and April 1 of the next succeeding year, the parties agree to
         continue performance of this Contract until April 1, provided, however,
         if the applicable law, order or rule is from an Alabama regulatory or
         legislative body, this Contract shall be terminable, on Seller's
         notice, effective as of the date of such law, order or rule.

                                   ARTICLE VI.
                                 DELIVERY POINTS

                  6.1 DELIVERY POINTS. Gas shall be delivered at the
         interconnection of the facilities of Transporter and Shell's
         Yellowhammer Plant or at such other points as are agreed (each of which
         shall be a "Delivery Point").

                  6.2 TITLE. Title to the gas delivered, sold, and purchased
         hereunder shall pass from Seller to Buyer at the Delivery Point.

                                  ARTICLE VII.
                               DELIVERY CONDITIONS

                  7.1 FACILITIES. Neither Seller nor Buyer shall be required to
         construct additional facilities at the Delivery Point.

                  7.2 CONDITIONS OF DELIVERY. Gas delivered hereunder shall meet
         the applicable conditions of quality as defined in *** pipeline tariff
         and pressure as required from time to time by the operator of the
         facilities at the Delivery Point. Neither Party has the obligation to
         compress gas for delivery or receipt hereunder. EXCEPT FOR THE
         FOREGOING EXPRESS QUALITY SPECIFICATIONS OF THIS SECTION BUYER ACCEPTS
         THE

                                        5
<PAGE>   8

          GAS "AS-IS" AND "WITH ALL FAULTS" AND SELLER EXPRESSLY NEGATES ALL
          OTHER WARRANTIES, INCLUDING MERCHANTABILITY OR FITNESS FOR A
          PARTICULAR PURPOSE, EXPRESS OR IMPLIED WITH RESPECT TO THE GAS."

                  7.3 METERING. Gas delivered hereunder shall be measured in
         accordance with the standards used by the operator of the facilities at
         the Delivery Point.

                  7.4 BTU CONTENT. The Btu content of the gas delivered
         hereunder shall be determined at the Delivery Point each month based
         upon the average Btu content per cubic foot of all gas delivered during
         such month. The results of tests for Btu content per cubic foot of gas
         shall be adjusted to reflect actual conditions of gas at the Delivery
         Point. The parties agree to rely upon the results of tests conducted by
         Transporter.

                                  ARTICLE VIII.
                                  FORCE MAJEURE

                  8.1 DEFINITION. The term "force majeure" means acts of God,
         strikes, lockouts or other industrial disturbances, acts of the public
         enemy, wars, blockades, insurrections, riots, epidemics, landslides,
         lightning, earthquakes, fires, hurricanes, (and evacuations of
         platforms due to threats of hurricanes) storms, floods, washouts, civil
         disturbances, explosions, breakage, accidents to machinery or lines of
         pipe, freezing of wells or lines of pipe, delay in obtaining or failure
         to obtain materials, equipment, easements, franchises, or permits,
         failure or refusal of any person to transport gas delivered or to be
         delivered hereunder, and any other causes, (except financial), whether
         of a kind herein enumerated or otherwise, not reasonably within the
         control of the party claiming suspension by reason of force majeure and
         which, by exercise of due diligence, such party is unable to prevent or
         overcome. The term "force majeure" also means actions of any
         governmental authority having jurisdiction over Buyer or Seller (or
         over a person transporting gas for or selling gas to either of them)
         which result in conditions, limitations, rules, or regulations that
         materially impair either Buyer's or Seller's ability to perform,
         including, but not limited to, actions effecting the emergency
         diversion of gas or limiting uses of gas, but such term does not
         include actions of any governmental authority affecting the price or
         prices paid or payable hereunder.

                  8.2 EFFECT. If either party is rendered unable, wholly or in
         part, by force majeure to carry out its obligations (other than
         financial obligations) under this Contract, it is agreed that, on such
         party's giving notice and reasonably full particulars of such force
         majeure in writing or by telegram or telecopy to the other party within
         a reasonable time after the occurrence of the cause relied upon, the
         obligations of both parties, insofar as they are affected by such force
         majeure, shall be suspended during the continuance of any inability so
         caused, but for no longer period, and such cause shall so far as
         possible be remedied with all reasonable dispatch. When Seller gives
         notice of force majeure, the obligation of Buyer to pay a portion of
         the Reservation Charge under Section 5.1 shall be waived in an amount

                                        6
<PAGE>   9

         equal to the Reservation Charge multiplied by the Nominated Quantity
         which was scheduled but not delivered.

                  8.3 STRIKES AND LOCKOUTS. The settlement of strikes, lockouts,
         or industrial disputes or disturbances shall be entirely within the
         discretion of the party having the difficulty, and the above
         requirement that any force majeure shall be remedied with all
         reasonable dispatch shall not require the settlement of strikes,
         lockouts, or industrial disturbances by acceding to the demands of any
         opposing party therein when that course is deemed inadvisable in the
         sole discretion of the party having the difficulty.

                                   ARTICLE IX.
                                   ACCOUNTING

                  9.1 PAYMENTS FOR GAS. Seller shall furnish or cause to be
         furnished, by the 15th day of the month next following the month in
         which a charge is incurred, a bill setting forth the Reservation
         Charge, the quantity of gas nominated and the amount due therefor, and
         any other charges or fees owed by Buyer. Not later than the 25th day of
         the month in which Seller has so billed Buyer, Buyer shall pay Seller
         by wire transfer all undisputed amounts; provided, if Seller's bill is
         delayed beyond the 15th day of such month, Buyer's payment of such bill
         shall not be due until ten days after receipt of such bill. All
         disputed amounts shall be resolved and paid or credited as soon as
         possible.

                  9.2 AUDITING. Each party shall have the right at reasonable
         hours to examine the books, records, and charts of the other party to
         the extent necessary to verify the accuracy of any statement, payment,
         calculation or determination made pursuant to the provisions of this
         Contract provided that neither party shall be required to reveal
         documents or information which it deems confidential. If any such
         examination shall reveal, or if either party shall discover, any error
         or inaccuracy in its own or the other party's statement, payment,
         calculation or determination, then proper adjustment and correction
         thereof shall be made as promptly as practicable after notice thereof,
         except that no adjustment or correction shall be made unless notice of
         any such error or inaccuracy is given within twelve months of the end
         of the year during which such error or inaccuracy occurred.

                  9.3 FAILURE TO PAY. Unless based on a good faith dispute, if
         either party fails to pay the full amount payable to the other party
         hereunder when due, interest on undisputed amounts shall accrue and be
         payable from the date on which payment was due until the date payment
         is made. The rate of such interest shall be two percent above the prime
         rate quoted from time to time by the Chase Manhattan Bank, N.A., or
         successor thereto, provided that the interest rate hereunder shall
         never exceed the highest rate of interest permitted by applicable law.
         If any such failure to pay continues for 30 days after written protest
         by the party entitled to such payment, such party may suspend its
         deliveries or receipts of gas hereunder, as the case may be, and may
         terminate this Contract with prior written notice to the non-paying
         party, provided that such termination shall not be effective prior to
         the date of suspension of deliveries or receipts of gas. Subject to
         Article II Section 2.3, the exercise

                                        7
<PAGE>   10

          of any such right shall be in addition to any and all remedies
          available to the party to which payment is due.

                                   ARTICLE X.
                                      TERM

                  10.1 CONTRACT TERM. This Contract shall be effective on July
         1, 2000, and shall extend through ***.

                  10.2 TERMINATION RIGHTS. If, at any time, either party or its
         parent or affiliate is materially affected by any law, order or rule in
         a manner which such affected party, in its sole discretion, finds
         unacceptable, then the party so affected may suspend performance under
         this Contract for the duration of such law, order, or rule by written
         notice to the other party. The party receiving notice of suspended
         performance shall have the right, on thirty days' prior written notice,
         to cancel this Contract.

                  10.3 NOTICES OF CANCELLATION. Notwithstanding any provision to
         the contrary, any notice of cancellation by either party hereto shall
         be effective on the first day of the month following the end of any
         specified notice period.

                                   ARTICLE XI.
                                 INDEMNIFICATION

                  11.1 INDEMNIFICATION. As between the parties hereto, Seller
         shall be in control and possession of gas and responsible for any
         injuries, claims, liabilities or damages caused thereby until the gas
         has been delivered to Buyer at the Delivery Point, and, after such
         delivery, Buyer shall be in control and possession of the gas and
         responsible for any injuries, claims, liabilities or damages caused
         thereby. The party so in possession and control of the gas shall
         indemnify the other party in respect to any injuries, claims,
         liabilities or damages occurring while the gas is in the former party's
         possession and control.

                                  ARTICLE XII.
                                    WARRANTY

                  12.1 WARRANTY. Seller warrants title to the gas delivered
         hereunder, the right to sell the same, and that it is free from all
         liens and adverse claims.

                                  ARTICLE XIII.
                              ADDRESSES AND NOTICES

                  13.1 ADDRESSES. All notices to be given hereunder shall be in
         writing via mail or fax and shall be addressed to the respective
         parties at the addresses stated below or to such other addresses as
         they shall respectively designate hereafter in writing from time to
         time:

                                        8
<PAGE>   11

                  To Seller:                Coral Energy Resources, L.P.
                                            909 Fannin, Suite 700
                                            Houston, Texas, 77010
                                            Attention: Trading Administration
                                              & Analysis
                                            Facsimile: (713) 767-5644

                  To Buyer:                 Mobile Gas Service Corporation
                                            ATTN.  Mr. J. Harris Oswalt
                                            P.O. Box 2248
                                            Mobile, AL  36652
                                            Facsimile: (334) 476-8292

For the purpose of payments as described in Section 9.1:

                  To Seller:                Coral Energy Resources, L.P.
                  by wire transfer:         Chase Manhattan Bank, NY
                                            ABA Number  021000021
                                            Account No. 323863876

                  To Buyer:                 Mobile Gas Service Corporation
                                            P.O. Box 2248
                                            Mobile, AL  36652

                  13.2 NOTICES. All notices required or permitted to be given
         under this Contract shall be in writing and addressed as set forth
         above or to such other address as either party may designate by like
         notice and shall be given by personal delivery or transmitted by telex,
         or other electronic medium, or by mail, postage prepaid, to the
         addresses of the parties shown above. Notice by personal delivery or
         electronic medium shall be effective when received, and notice by mail
         shall be effective when deposited, postage prepaid, with the United
         States Postal Service.

                                  ARTICLE XIV.
                             SUCCESSORS AND ASSIGNS

                  14.1 BINDING OF TERMS. All the terms and conditions of this
         Contract shall extend to and be binding upon the respective successors
         and assigns of the parties hereto.

                                        9

<PAGE>   12

                  14.2 ASSIGNMENTS. The rights and obligations of either party
         hereunder shall not be assigned without the prior written consent of
         the other party, which consent shall not be unreasonably withheld.

                                   ARTICLE XV.
                                  MISCELLANEOUS

                  15.1 WAIVER. No waiver by Buyer or Seller of any default of
         the other party under this Contract shall operate as a waiver of any
         subsequent default, whether of a like or a different character.

                  15.2 PERFORMANCE. Any provision herein which requires action
         by either party where a performance date is not specified shall require
         performance of such action within a reasonable time.

                  15.3 DRAFTING. As between the parties hereto, it shall be
         conclusively presumed that each and every provision of this Contract
         was drafted jointly by Seller and Buyer.

                  15.4 PARTIES' AGENTS. The parties recognize that persons other
         than Seller or Buyer may perform some of the obligations imposed upon
         Seller or Buyer in this Contract. Any reference to either Buyer or
         Seller herein shall be deemed to include such other persons, but each
         party hereto shall remain at all times responsible to the other for the
         performance of all obligations. Notwithstanding the above, in the event
         that Buyer should at any time during the term of the Contract allow a
         third party, whether an affiliate or otherwise, to manage the Contract
         on Buyer's behalf, then Seller at its sole option, may demand a
         redetermination of the Reservation Charge upon prior written notice to
         Buyer. The parties agree to negotiate in good faith to arrive at a
         mutually agreeable redetermined Reservation Charge within thirty (30)
         days of Seller's demand.

                  15.5 MERGER. This Contract sets forth all understandings
         between the parties respecting the subject matter of this transaction,
         and all prior agreements, understandings,

                                       10
<PAGE>   13

          and representations, whether oral or written, representing this
          subject matter are merged into and superseded by this Contract. No
          modifications or amendment of this Contract shall be binding on either
          party unless in writing and signed by the party to be bound.

                                  ARTICLE XVI.
                                 CONFIDENTIALITY

                  16.1 CONFIDENTIALITY. Each Party agrees that it will maintain
         this Contract and all parts and contents thereof in strictest
         confidence and that it will not cause or permit disclosure to any third
         party of this Contract or of the contents thereof, except for such
         information as may be necessary to arrange for transportation, without
         the prior express written consent of the other party; provided,
         however, that such third party restriction does not apply to an
         affiliated company of either party. Disclosure to a third party is
         restricted by and permitted only to the extent to which either party is
         required to disclose all or part of this specific Contract by a statute
         or by a court, or agency, or other governmental body exercising
         jurisdiction over the subject matter hereof, by order, or by regulation
         or other compulsory process (including, but not limited to, deposition,
         subpoena, interrogatory, or request for production of documents). A
         party may file the contract with its Form 10-K and other applicable
         filings with the Security and Exchange Commission of the United States
         of America to the extent the disclosure is required by applicable laws
         or regulations; provided, however, such party shall delete pricing and
         volume information from the filing if allowed by such applicable laws
         and regulations.

                  16.2 NOTICE. If either party is or becomes aware of a statute,
         regulation, order, other compulsory process, or a judicial or
         governmental proceeding that has resulted or may result in such
         compulsory disclosure, it shall so notify the other party immediately
         and shall provide a copy of the order, regulation or compulsory process
         as soon as it is available. Each party further agrees to cooperate to
         the fullest extent in seeking confidential status to protect any
         material so disclosed.

                                       11

<PAGE>   14

                  16.3 COUNSEL. The parties hereto acknowledge that independent
         legal counsel may, from time to time, be provided with a copy of the
         Contract and agree that such disclosure does not require express
         written consent, provided that such counsel affirms in writing to its
         client that it agrees to abide by the terms and conditions of this
         Article XVI.

                  16.4 This Agreement is subject to approval by the Alabama
         Public Service Commission ("APSC") . Buyer shall notify Seller of such
         APSC approval or disapproval with ten (10) days of Buyer's
         notification. Seller and Buyer shall each have the opportunity for
         (thirty) 30 days after receipt of Buyer's notice to offer to the other
         changes to the Contract to remedy the reasons for the disapproval. If
         no mutual agreement is reached within such thirty (30) days, then this
         Contract shall terminate on the last day of the month following one
         month after receipt of such notification from Buyer. Buyer shall remain
         liable to seller in accordance with all provisions of the Contract
         prior to such termination.

                     REMAINING PAGE LEFT BLANK INTENTIONALLY

                                       12

<PAGE>   15

         IN WITNESS WHEREOF, this Contract is executed as of the date first
above written.

                                          CORAL ENERGY RESOURCES L.P.

                                        By:  /s/ Steve Widener
                                             Vice President

                                         MOBILE GAS SERVICE CORPORATION

                                        By:  /s/ Gerald S. Keen
                                             Vice President, Operations

      Signature page to Gas Sale and Purchase Contract dated July 1, 2000.

                                       13<PAGE>   1
                                                                 EXHIBIT 10(z)-1

                     AMENDED AND RESTATED ENERGYSOUTH, INC.

                    NON-EMPLOYEE DIRECTORS DEFERRED FEE PLAN

                 (Amended and restated effective July 28, 2000)

                       1. History and Purpose of the Plan

         The Amended Mobile Gas Service Corporation Non-Employee Directors
Deferred Fee Plan ("Plan") was adopted as of May 19, 1995 by the Board of
Directors of Mobile Gas Service Corporation ("Mobile Gas"), incorporating
amendments to the Plan as it was originally adopted on January 27, 1995. The
Plan was adopted to provide a method for attracting and retaining qualified
non-employee directors of Mobile Gas, and to encourage them to devote their best
efforts to the business of Mobile Gas thereby advancing the interests of Mobile
Gas and its stockholders. In connection with the reorganization of Mobile Gas
and its subsidiaries into a holding company structure in which Mobile Gas became
a wholly-owned subsidiary of EnergySouth, Inc. (the "Company"), Mobile Gas and
the Company entered into an Amendment and Agreement of Assignment and Assumption
effective as of February 7, 1998, pursuant to which the Plan thereafter utilized
Company common stock instead of Mobile Gas common stock and the Company assumed
the rights and obligations of Mobile Gas under the Plan. As of July 28, 2000,
the Plan was further amended and restated in its entirety as set forth herein.

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                          2. Administration of the Plan

         (a) The Plan shall be administered by the Executive Committee or such
other Committee (the "Committee"), which shall consist solely of "non-employee
directors" as such term is defined in Section 16 of the Securities Exchange Act
of 1934, as amended ("Section 16"), as may be from time to time appointed by the
Board of Directors of the Company (the "Board"). The Committee is authorized to
interpret the Plan and may from time to time adopt such rules and regulations,
consistent with the provisions of the Plan, as it may deem advisable to carry
out the Plan. The Plan shall be interpreted in view of the intention that the
acquisition and disposition of phantom stock through the Plan is intended to
qualify as exempt transactions under Rule 16b-3 promulgated pursuant to Section
16 (said rule, as it may be amended from time to time, being referred to herein
as "Rule 16b-3"). All decisions made by the Committee shall be final. All
expenses incurred in connection with the administration of the Plan shall be
borne by the Company.

         (b) The General Counsel of the Company shall have complete power from
time to time to adopt, amend, and rescind such rules or policies as the General
Counsel shall deem necessary, appropriate, or prudent in order to comply with or
avoid liability under Section 16 or the rules promulgated thereunder from time
to time. Without limiting the generality of such authority, the General Counsel
may adopt, amend, and rescind rules or policies which may have the effect of
adding to, deleting from, or otherwise modifying the terms of the Plan in any
respect, provided only that the General Counsel in good faith determines that
such

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rules or policies (which may include delaying transactions up to six months) are
reasonably likely to further the objective of complying with or lawfully
avoiding liability under Section 16 or the rules thereunder. In addition, from
time to time the General Counsel may (but need not) adopt, amend, and rescind
rules or policies which relax Plan restrictions if and to the extent the General
Counsel determines that such restrictions no longer are necessary to conform the
Plan to any applicable legal requirements and no longer are appropriate to the
prudent and convenient administration of the Plan. Any rules or policies
adopted, amended, or rescinded by the General Counsel hereunder shall become
effective at such times as the General Counsel may determine, provided that
prior to such determination the General Counsel shall consult with the
Committee. The General Counsel shall notify the Board promptly of any rules or
policies adopted, amended, or rescinded hereunder. The Committee and the Board
shall at all times retain the power to annul in whole or part any action taken
by the General Counsel hereunder.

                          3. Participation in the Plan

         (a) Participation. Each director of the Company who is not an employee
of the Company or any of its subsidiaries ("Outside Directors") may become a
participant in the Plan ("Participant").

         (b) Deferral of Director's Fees. An Outside Director may elect to defer
all or a designated portion of fees (whether quarterly, per-meeting, special or
otherwise) to be paid to such Outside Director for services as a member of the
Board by filing with the Committee

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an election to defer receipt of such fees. A Participant may elect to have such
deferred fees credited to his or her Plan Account, as described in Section 4(a),
in either or both of: (i) Phantom Stock as described in Section 5, or (ii) cash
as described in Section 6.

         (c) Time and Manner of Making Elections. (i) Any deferral election
which may be made by a Participant under the Plan shall be made prospectively
with respect to calendar years (each a "Service Year") and must be made not
later than June 30 of any year. Any election shall relate only to fees earned by
the Participant after the date of such election. All elections shall be made in
the manner and on the form prescribed by the Committee ("Election Form"), and
shall become effective on the first day of the first fiscal quarter immediately
following such election. (ii) Notwithstanding anything in Section 3(c)(i) to the
contrary, a newly elected Outside Director not already a Participant shall have
thirty days from the date on which he or she is elected, and any Outside
Director shall have thirty days from the effective date of this Amended and
Restated Plan, to deliver an Election Form, which shall be effective
immediately.

         (d) Nature of Elections. A Participant's election to defer receipt of
all or part of his or her director fees shall continue in force and effect for
future Service Years unless modified or revoked by such Participant. Any such
modification or revocation shall be made not later than December 31, shall be
effective as of the first day of the following Service Year, and shall be
effective only as to fees earned by the Participant after such modification or
revocation. A modification or revocation of an existing deferral election shall
be made

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in the manner and form prescribed by the Committee. Notwithstanding the
foregoing, a Participant may at any time submit a request to the Committee to
modify such Participant's election pursuant to Section 9(a), which request shall
be subject to the approval of the Board, which may grant or deny such approval
in its sole discretion. Subject to the foregoing, any deferral election (whether
in the nature of an initial election, an unrevised continuing election or a
revised continuing election) shall become irrevocable upon becoming effective.

                 4. Crediting of Deferred Fees to Plan Accounts

         (a) Establishment of Plan Accounts. The Committee shall cause to be
established a memorandum bookkeeping account (the "Plan Account") for each
Participant in the Plan. During each fiscal quarter within a Service Year, there
shall be credited to each Participant's Plan Account the Participant's deferred
fees as of the date director's fees are payable to the Participant, with such
deferred fees allocated to cash and/or Phantom Stock as elected by the
Participant. Such Plan Account shall also be credited with interest and/or
dividend credits, as described in Sections 5 and 6, and debited for payments
made as described in Section 8(h).

         (b) Subaccounts. Within each Participant's Plan Account, separate
subaccounts shall be maintained to the extent necessary for the administration
of the Plan. For example, it may be necessary to maintain separate subaccounts
where the Participant has specified different payment commencement dates,
different modes of payment, or different elections of Phantom Stock and/or cash.

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         (c) Statement of Account. At least once per year, each Participant
shall be provided with a statement of his or her Plan Account.

                       5. Stock Election; Dividend Credits

         (a) Election of Phantom Stock Units. To the extent a Participant has
elected to defer fees in the form of Phantom Stock, there shall be credited to
such Participant's Plan Account as of the date such fees are payable a number of
hypothetical shares of stock ("Phantom Stock Units") equal to the number of
shares (rounded to the fourth decimal place) of $.01 par value common stock of
the Company ("Common Stock") which could have been purchased with such deferred
fees, based upon the average of the closing price of Common Stock on the ten
trading days preceding such date.

         (b) Cash Dividend Credits. As of each date on which dividends other
than stock dividends are paid to holders of Common Stock, there shall be
credited to a Participant's Plan Account that number of additional Phantom Stock
Units which is equal to the number of shares of Common Stock (rounded to the
fourth decimal place) which could have been purchased with such cash dividends
(or the fair market value of dividends paid in property other than dividends
payable in Common Stock of the Company), based upon the average of the closing
price of Common Stock on the ten trading days preceding such date, which the
Participant would have received if the Participant had been the owner of a
number of shares of Common Stock equal to the number of Phantom Stock Units in
the Participant's Plan Account.

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         (c) Changes in Capitalization. If the outstanding shares of Common
Stock are increased, decreased or exchanged for a different number or kind of
shares or other securities, or if additional shares or other property (other
than ordinary dividends) are distributed with respect to such shares of Common
Stock or other securities, through merger, consolidation, sale of all or
substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, dividend, stock split, spin-off, split-off
or other distribution with respect to such shares of Common Stock, an
appropriate and proportionate adjustment shall be made in the number of Phantom
Stock Units in Participant's Plan Accounts.

                           6. Cash Election; Interest

         To the extent a Participant has elected to defer fees in the form of
cash, as of the last day of each fiscal quarter in which a Participant has a
cash balance credited to his or her Plan Account, there shall be credited to
such Participant's Plan Account a dollar amount equal to simple interest on the
cash amount then in such Plan Account (excluding any amounts credited during
such quarter) computed at a per annum rate equal to the prime rate published in
The Wall Street Journal under the caption "Money Rates" on the last business day
of such quarter (or, if such publication is discontinued, such other rate or
index as may be selected by the Board in its sole discretion).

                       7. Transfer of Subaccount Balances

         Beginning six months after termination of Board service, a Participant
may elect to transfer all or part of such Participant's Plan Account balance
from cash to Phantom Stock,

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or vice-versa, by filing notice with the Committee of such election on the form
prescribed by the Committee ("Transfer Notice"). Such transfer shall be effected
as of the end of the month following the filing of the Transfer Notice. A
transfer may also be effected at the request of a Participant upon such terms
and conditions as may be imposed by the Committee, if the Committee determines,
after consultation with counsel, that such transaction would qualify as an
exempt transaction under Rule 16b-3. Cash transferred pursuant to this Section
shall be credited as Phantom Stock Units in accordance with Section 5(a), and
Phantom Stock Units transferred shall be valued in accordance with Section
8(d)(ii).

                           8. Payment of Deferred Fees

         (a) Payment Election Generally. A Participant may elect the time and
the mode (which may either be monthly installment payments not to exceed 120,
quarterly installment payments not to exceed 40, annual installment payments not
to exceed 10, or a lump sum payment) for payment of amounts credited to his or
her Plan Account. Any such elections regarding the time and mode of payment of
amounts credited to a Participant's Plan Account shall be irrevocable once made.
In the absence of direction by a Participant regarding the time or mode of
payment of amounts credited to his or her Plan Accounts, such amounts shall be
distributed in a lump sum within three months of the date such amounts become
payable. Subject to the provisions of Section 8(b) and Section 8(c),
distribution shall be made at the time and in the mode elected by the
Participant in his or her Election Form.

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         (b) Payment Upon Death. In the event of a Participant's death, the
balance of such Participant's Plan Account, computed as of the date of his
death, shall be paid in one lump sum to his or her designated beneficiary within
the first three months following the date of such Participant's death. A
Participant, by written instrument filed with the Committee in such manner and
form as it may prescribe, may designate one or more beneficiaries to receive
payment of the amounts credited to his Plan Accounts in the event of his death.
Any such beneficiary designation may be changed from time to time prior to the
death of the Participant without the consent of any prior beneficiaries. In the
absence of a beneficiary designation on file with the Committee at the time of a
Participant's death or the death of a designated beneficiary without a
designated successor, Participant's estate shall be deemed to be the
Participant's designated beneficiary.

         (c) Payment Upon Plan Termination. In the event the Plan is terminated
by the Company, the balance of each Participant's Plan Accounts, computed as of
the date of such Plan termination, shall be paid to such Participant within
three months of such date.

         (d) Valuation of Plan Accounts. For purposes of payment from or
transfer between subaccounts of a Plan Account: (i) to the extent a Participant
has cash in his or her Plan Account, the value of his or her Plan Account shall
be determined by crediting interest on the cash portion of the Plan Account
through the day before the date payment is due to the Participant; and (ii) to
the extent a Participant has Phantom Stock in his or her Plan Account,

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the value of his or her Plan Account shall be based upon the average of the
closing prices of Common Stock on the ten trading days preceding such date.

         (e) Lump Sum Payments. To the extent a Participant elects to have his
or her Plan Account distributed in a lump sum, such payment shall be made not
more than three months after the date of the event giving rise to such payment.

         (f) Installment Payments. To the extent a Participant elects to have
his or her Plan Account distributed in installments, the amount of the first
installment shall be a fraction of the value of the Participant's Plan Account,
the numerator of which shall be one and the denominator of which shall be the
total number of installments elected, and the amount of each subsequent
installment shall be a fraction of the value of the Participant's Plan Account
(including interest and/or dividends credited pursuant to Sections 5 and 6) on
the date preceding each subsequent payment, the numerator of which shall be one
and the denominator of which shall be the number of unpaid installments.

         (g) Form of Payment. All payments under the Plan shall be solely in the
form of cash. Without limiting the generality of the foregoing, nothing in the
Plan shall be construed as giving any Participant any rights as a holder of
Common Stock or any other equity security of the Company as a result of such
Participant's participation in this Plan or his or her election to credit his or
her Plan Account with Phantom Stock.

         (h) Debiting of Plan Accounts. Once an amount has been paid to a
Participant or his or her beneficiary, such amount or the Phantom Stock
equivalent thereof shall be debited

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from the Participant's Plan Account. In the case of installment payments or
other distribution of less than all of the balance of a Plan Account, interest
and/or dividend credits shall continue to be credited on the balance remaining
in the Plan Account in accordance with Sections 5 and 6.

                              9. Change of Control

         (a) If a Participant so elects in his or her Election Form, upon the
occurrence of a "Change of Control" (as such term is defined in the Amended and
Restated Stock Option Plan of EnergySouth, Inc.), the balance of such
Participant's Plan Accounts shall become immediately payable.

         (b) Notwithstanding any provision of the Plan to the contrary, no
amendment, suspension, or termination of the Plan effected after a Change in
Control shall operate to reduce, eliminate, or otherwise adversely affect any
Participant's or beneficiary's right to receive any payment under the Plan as in
effect on the date immediately preceding the date on which the Change in Control
occurs. Upon and after a Change in Control, the rights of Participants hereunder
shall be fully vested, nonforfeitable contractual rights enforceable by or on
behalf of any Participant against the Company or any successor to all or
substantially all of the business or assets of the Company.

          10. Prohibition Against Attachment, Assignment or Encumbrance

         To the extent permitted by law, no right, title, interest or benefit
hereunder shall ever be liable for or charged with any of the torts or
obligations of a Participant or a person

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claiming under a Participant, or be subject to attachment, seizure or other
legal process by any creditor of a Participant or any person claiming under a
Participant. Except as specifically provided by the Plan, no Participant or any
person claiming under a Participant shall have the power to transfer, assign,
mortgage, pledge, grant a security interest in, encumber, anticipate or dispose
of any right, title, interest or benefit hereunder.

                             11. Nature of the Plan

         (a) The Plan and any election agreements executed thereunder constitute
an unfunded, unsecured liability of the Company to make payments in accordance
with the provisions hereof. Neither a Participant nor any person claiming under
the Participant shall have any security or other interest in any specific assets
of the Company by virtue of this Plan, and the right of any person to receive
any distribution hereunder shall be no greater than the right of any unsecured
general creditor of the Company. Neither the establishment of the Plan, the
crediting of amounts to Plan Accounts nor the setting aside of any funds shall
be deemed to create a trust of any kind or create any fiduciary relationship on
the part of the Company. The Company at its election may, but shall not be
required to, fund the payment of benefits under the Plan by setting aside and
investing, in an account on the Company's books, such funds as the Company may
from time to time determine. Legal and equitable title to any funds so set aside
shall remain in the Company, and no Participant shall have any security or other
interest in such funds, and any funds so set aside shall remain subject to the
claims of the general creditors of the Company, present and future.

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         (b) Neither the Plan nor any action taken pursuant to the Plan shall
constitute evidence of any agreement or understanding, express or implied, that
the Company will retain a Participant as a director for any period of time, or
at any particular rate of compensation.

         (c) No member of the Board or the Committee and no officer or employee
of the Company shall be liable to any person for any action taken or omitted in
connection with the administration of the Plan, unless attributable to his or
her own fraud or willful misconduct, nor shall the Company be liable to any
person for any such action unless attributable to fraud or willful misconduct on
the part of a director, officer or employee of the Company.

                      12. Amendment and Termination of Plan

         The Company shall have the right to alter or amend the Plan or any part
thereof from time to time (including without limitation as provided in Section
2(b)), except the Company shall not make any alteration or amendment which would
impair the rights of a Participant with respect to amounts theretofore credited
to that Participant's Plan Account. Notice of any such change shall be given to
each Participant. The Company may terminate the Plan at any time.

                                13. Miscellaneous

         (a) The Plan and any documents executed in connection therewith shall
be construed in accordance with and governed by the laws of the State of
Alabama.

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         (b) Failure to insist upon strict compliance with any of the terms,
covenants, or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition, nor shall any waiver or relinquishment of any right or
power hereunder at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.

         (c) The invalidity or unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other provision.

         (d) Except as otherwise provided herein, this Plan shall inure to the
benefit of and be binding upon each Participant, his or her heirs, executors,
and administrators and upon the Company, its successors and assigns, including
but not limited to any corporation which may acquire all or substantially all of
the Company's assets and business or with or into which the Company may be
consolidated or merged.

         This Amended and Restated Plan adopted by the Board of EnergySouth,
Inc. on the 28th day of July, 2000.

                                 ENERGYSOUTH, INC.

                                 By  /s/ William J. Hearin
                                    ---------------------------------------
                                    Chairman of the Board of Directors

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