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EXHIBIT 10.27
[NATIONAL ENERGY GROUP, INC. LETTERHEAD]
March 27,1997
Mr. ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Atocha Exploration, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Oil and Gas
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ Oil and Gas
Two Houston Center
Suite ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Re: Memorandum of Amendment
to (i) Agreement dated January 1, 1996
and (ii) Consulting Agreement
dated January 1, 1996
Gentlemen:
This Memorandum shall act to express the mutual understanding and
agreement by and between National Energy Group, Inc. ("NEG") and Atocha
Exploration, Inc. ("Atocha"), ▇▇▇▇▇▇▇ Oil and Gas Company ("POG") and ▇▇▇▇▇▇▇▇
Oil & Gas, Inc. ("SOG") with respect to amending that certain Agreement by and
between NEG and SOG dated January 1, 1996 (the "Agreement") and that certain
Consulting Agreement between SOG, Atocha and POG dated January 1, 1996 (the
"Consulting Agreement") which provides for the services of ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
("▇▇▇▇▇▇") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇").
In consideration of the mutual covenants and agreements contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Paragraph 3 of the Agreement and Paragraph 4 of the Consulting
Agreement, Initial Term, shall be amended to provide that the period
of January 1, 1998 through December 31, 1998 shall be defined as the
"Secondary Term".
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Atocha Exploration, Inc.
▇▇▇▇▇▇▇ Oil and Gas Company
▇▇▇▇▇▇▇▇ Oil & Gas, Inc.
March 27, 1997
Page Two
2. Paragraph 4 of the Agreement and Paragraph 6 of the Consulting
Agreement, Prospect Generation By SOG and Obligations of ▇▇▇▇▇▇▇ and
Atocha, respectively, shall be amended to provide that ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ shall generate Prospects exclusively for NEG; provided that in
the event any such Prospect is declined by NEG, Atocha and POG shall
be free to offer the Prospect to any other party as described in
Paragraph 11 of the Agreement, Rejection of Proposals, etc.. ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ further agree that they shall not provide consulting work
or services to others without the prior written consent of NEG, which
consent shall not be unreasonably withheld.
3. Paragraph 6 of the Agreement and Paragraph 7 of the Consulting
Agreement, Compensation, shall be amended to provide that effective
April 1, 1997 through the end of the Secondary Term and any renewals
and/or extensions thereof, the monthly fee paid to Atocha and POG
shall (i) be paid on or before the fifteenth day of each month, (ii)
be increased to the amount of $29,000.00 per month and (iii) include
all expenses incurred by Atocha and POG.
4. Paragraph 8 of the Consulting Agreement, Reimbursement or Payment of
Costs etc., shall be amended to provide that the $29,000.00 monthly
fee paid to Atocha and POG shall be inclusive of all expenses incurred
by ▇▇▇▇▇▇ and POG; provided that direct expenses related to Prospect
generation, which have been approved in writing by the Company prior
to expenditure, shall be reimbursed to Atocha and POG.
5. Paragraph 4 of the Agreement, Prospect Generation by SOG, shall be
amended to provide that the following Prospects, together with any
additional Prospects generated prior to December 31, 1997, shall be
those Prospects which shall determine cost reimbursement to NEG as
applied to the Initial Term Program with respect to the provisions of
Paragraph 12 of the Agreement, Disbursement of Proceeds:
(a) South Lake ▇▇▇▇▇▇ (e) West Grand Bayou
(b) Southeast Gueydon (f) Northwest Bayou Sorrel
(c) Tiger Bayou (g) ▇▇▇▇▇ Bayou
(d) South Tiger Bayou (h) Mushroom
6. Paragraph 12 of the Agreement, Disbursement of Proceeds, shall be
amended to provide that cost reimbursement to NEG with respect to any
Prospects generated during the Secondary Term shall be separate and
distinct from any Prospects generated during the Initial Term.
7. In the event there is an election to accept a Deferred Leasehold
Interest as described in Paragraph 17 of the Agreement, ▇▇▇ agrees
that it shall timely execute and deliver to ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ et al.
an Assignment substantially in the form of Exhibit "A", attached
hereto.
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Atocha Exploration, Inc.
▇▇▇▇▇▇▇ Oil and Gas Company
▇▇▇▇▇▇▇▇ Oil & Gas, Inc.
March 27, 1997
Page Three
8. ▇▇▇▇▇▇, POG, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ agree to execute, and shall cause SOG
to execute, that certain Letter Agreement dated December 20, 1996,
attached hereto as Exhibit "B" with respect to the definition of the
respective ORRI's and Back-In Interests as such apply to the PANACO,
Inc. transaction described in such Letter Agreement.
9. NEG agrees that it shall provide office space for Atocha and POG in
Houston, Texas at the Wedge International Tower and shall execute a
Lease agreement, substantially in the form of Exhibit "C", attached
hereto.
10. NEG shall make available to each of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ through the end
of the Secondary Term and any renewals and/or extensions thereof, the
health and dental benefits available to employees of NEG; provided
that the amount described in Paragraph 3 hereof shall be reduced by an
amount equal to $615.00 per month for each of ▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇ in
any month either of them are participants in NEG's medical and/or
dental plan.
11. In the event NEG requests Atocha and POG to perform services with
respect to the interpretation of 3-D data incidental to Prospect
development of Bayou Sorrel or any other Prospect, NEG shall provide
them with the use of a 3-D station for such time that their
interpretive services are requested by NEG; provided that such use
shall be exclusively for the benefit of NEG and shall not exceed the
expiration of the Secondary Term and any renewals and/or extensions
thereof.
12. Miscellaneous:
(a) CHOICE OF LAW. THIS MEMORANDUM AND ALL OF THE RIGHTS
AND OBLIGATIONS OF THE PARTIES ARISING FROM OR
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING THE
CONFLICT OF LAWS AND RULES OF SUCH STATE.
(b) Other Agreements. This Memorandum supersedes any
prior agreements between the parties with respect to
the subject matter of hereof.
(c) Confidentiality. SOG, Atocha, Willig, POG and/or
▇▇▇▇▇▇▇ shall not disclose the terms of this
Memorandum to any third party, except to the extent
required by law, rule, regulation or court order.
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Atocha Exploration, Inc.
▇▇▇▇▇▇▇ Oil and Gas Company
▇▇▇▇▇▇▇▇ Oil & Gas, Inc.
March 27, 1997
Page Four
(d) Mediation. In the event any dispute regarding this
Memorandum cannot be reconciled by the parties, then
they shall attempt to resolve any such dispute
through (i) mediation, using a mutually acceptable
mediator, and if necessary through (ii) binding
arbitration, using a mutually acceptable arbitrator.
No dispute related to this Agreement shall be brought
before any court of law or equity. Any arbitration
will be conducted in Houston, ▇▇▇▇▇▇ County, Texas
using the commercial rules of the American
Arbitration Association.
The parties agree that this Memorandum shall be reduced to a formal
amendment of the Agreement and the Consulting Agreement with respect to those
provisions relevant thereto.
If the foregoing reflects our mutual understanding and agreement of
the subject matter contained herein, please so indicate by executing in the
appropriate space below. This Memorandum shall be effective as of the date
first written hereinabove.
Sincerely,
National Energy Group, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and CEO
ATOCHA EXPLORATION, INC.
By: /s/ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇ OIL AND GAS COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇▇ OIL & GAS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
