July 18, 1997
Cheniere Energy Operating Co., Inc.
0000 Xxx Xxxxx Xxxxxx
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Re: Sixth Amendment
Gentlemen:
I am writing with respect to that certain Exploration Agreement dated April 4,
1996, between FX Energy, Inc. and Zydeco Exploration, Inc., as amended by that
certain First Amendment dated May 15, 1996, and that certain Second Amendment
dated August 5, 1996, and that certain Third Amendment dated October 31, 1996,
and that certain Fourth Amendment dated as of November 27, 1996, and that
certain Fifth Amendment dated as of April 28, 1997 (as amended, the
"Agreement"). For convenience, terms defined therein shall have the same
meaning when used herein. FX Energy, Inc. ("FX") has changed its name to
Cheniere Energy Operating Co., Inc. ("Cheniere").
Under Section 2 of the Agreement, Xxxxxxxx was to have paid $13,500,000 of
Seismic Funds. At the time of the Fourth Amendment. Xxxxxxxx had paid
$6,000,000, and the survey had been suspended. Further contributions of Seismic
Funds were suspended until the survey recommenced. It recommenced in March and
has been completed. Following XXX's Notice to Cheniere to resume payments,
Xxxxxxxx resumed payment of Seismic Funds. Through yesterday, Xxxxxxxx had paid
$12,000,000, leaving $1,500,000 of the $13,500,000 of contributions to be paid.
Xxxxxxxx has requested, and XXX has agreed, to extend the date by which Xxxxxxxx
is to make payment of the balance of its contribution. The rescheduled date is
July 31, 1997.
In addition, Seismic Costs have exceeded $13,500,000. Under the Agreement,
Seismic Costs over $13,500,000 ("Excess Costs") are borne equally by ZEI and
Xxxxxxxx. The parties have reached certain understandings on the manner of
payment of Excess Costs.
Accordingly, we agree as follows:
1. Cheniere shall pay the last installment of the $13,500,000 in Seismic
Funds on or before July 31, 1997. The amount of the payment is
$1,500,000. No grace period shall apply to this payment. Should the
funds not be paid by July 31, 1997, the default shall be treated as a
Discontinuance under Section 5.
2. At July 31, 1997, Excess Costs will have accumulated to approximately
$3,765,000 of which Xxxxxxxx's 50% share is $1,882,500. Accordingly,
ZEI hereby makes a cash call on Cheniere for $1,882,500. Cheniere
shall pay the requested cash call by August 8, 1997. No grace period
shall
Cheniere Energy Operating Co., Inc.
July 18, 1997
Page 2
apply to such payment. Should funds not be forwarded by August 8,
1997, the default shall be treated as a Discontinuance under
Section 5.
3. ZEI has advanced to date $2,305,000 toward Seismic Costs. As such, it
has already advanced its share of the current cash call.
4. ZEI estimates that Excess Costs to be incurred in August will be
approximately $422,000, which consist principally of the payment
required for a six-month extension of the Exclusive Seismic Permit.
ZEI estimates that additional Excess Costs for the period September
through December 1997 will be approximately $860,000. Assuming these
costs, total Excess Costs through December 31, 1997, would be
approximately $5,047,303, bringing total Seismic Costs to
approximately $18,500,000.
5. ZEI will make cash calls for payment of Excess Costs for the August
through December 1997 period. It shall do so periodically as required
to meet third party obligations timely. Each cash call shall be
payable by Xxxxxxxx thirty days after receipt. No grace periods shall
apply. To the extent that ZEI has not itself already advanced its
share of such sums, it shall do so at the same times required of
Cheniere. Should Cheniere or ZEI fail to forward a cash call within
thirty days of receipt of the cash call request under this paragraph,
the default shall be treated as a Discontinuance under Section 5.
6. In the event of a conflict between the terms of this amendment and the
Agreement as previously amended, the terms hereof shall control.
If I have correctly set forth our agreements, kindly so indicate by executing
one counterpart of this letter and returning it to the undersigned.
Yours very truly,
ZYDECO EXPLORATION, INC.
/s/ X. Xxxx Xxxxxx
X. Xxxx Xxxxxx
Vice President and Treasurer
ACCEPTED AND AGREED TO THIS
21ST DAY OF JULY, 1997.
CHENIERE ENERGY OPERATING CO., INC.
By: /s/ Xxxxxx Xxxxxxxx
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Its: Vice Chairman
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