Exhibit 10.11
[McMoRan Letterhead]
February 28, 1997
Xx. Xxxxxx X. Xxxxxxxx
Freeport-McMoRan Resource Partners
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
re: OCS Lease Sale No. 166
Dear Xx. Xxxxxxxx:
This will confirm our telephone conversation whereby we
discussed the participation of Freeport-McMoRan Resource
Partners ("FMRP") in the several bids that McMoRan Oil & Gas
Co. ("MOXY") proposes to submit at the captioned lease sale
to be held on March 5, 1997. This letter agreement will not
apply to any blocks that lie within an area of mutual
interest between MOXY and CoEnergy Central Exploration, Inc.
FMRP has agreed to participate in such proposed bids on the
following basis:
1. Any lease acquired by such bids will be owned
equally by MOXY and FMRP.
2. FMRP will bear 60% and MOXY will bear 40% of all
costs involved in generating such bids and/or
acquiring leases thereon. Such costs will include
related general and administrative costs,
geological and geophysical costs and the bonus
cost and first year rental of any leases so
acquired at such lease sale.
3. The expenditure anticipated to be incurred in
attempting to acquire these leases is estimated to
be in the range of $9,000,000.00 and such
expenditure shall not exceed $10,000,000.00
without further review by FMRP.
4. The cost and ownership relating to these leases
will be handled in substantially the same manner
as set forth in the proposed MOXY 1997
Participating Agreement for the acquisition of
leasehold interests, copy of which agreement we
recently provided to Xxxxx Xxxxx.
5. FMRP will promptly reimburse MOXY for its 60%
share of the costs and expenses described above.
6. Notwithstanding the foregoing, if MOXY acquires a
lease with a third party, the rights and
obligations of FMRP as to such lease will be
reduced in proportion to the interest acquired by
such third party.
If this is in accordance with your understanding,
please so indicate by signing and returning to us one copy
of this letter agreement.
McMoRan Oil & Gas Co.
By: /s/ Xxxxx X. Xxxxxxxx
__________________________
Xxxxx X. Xxxxxxxx
Agreed to and accepted this 1st
day of March 1997
Freeport-McMoRan Resource Partners
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxx Xxxxxxxxx
_____________________________ __________________________
Xxxxxx X. Xxxxxxxx Xxxx Xxxxxxxxx
