EXHIBIT 10.66
October 15, 1999
Via Regular Mail
Xx. Xxxxxxx X. Xxxxxxx
Xxxxxxx Land Management Company
X.X. Xxx 000000
Xxxxxxxx Xxxx, XX 00000
Re: Amendment to Consulting Agreement
Work Performed Within Angleton Project
Dear Xxxxxxx:
This letter agreement shall set forth the agreement between Xxxxxxx Oil &
Gas, L.P.'s ("BOG") and Xxxxxxx Land Management Company, Inc. ("BLM") to amend
that certain Consulting Agreement dated August 1, 1998, by and between BOG and
BLM (the "Consulting Agreement") with respect to certain work that is to be
performed by Xxxxxxx X. Xxxxxxx within BOG's Angleton Project (as described on
Exhibit "A" which is attached hereto).
Anything to the contrary contained in the Consulting Agreement
notwithstanding, BOG and BLM (BOG and BLM being sometimes collectively referred
to herein as the "Parties") agree that any land work performed by Xxxxxxx X.
Xxxxxxx related to BOG's Angleton Project, between September 6, 1999 and the
earlier to occur of such time as either BOG or BLM notifies the other that this
amendment is terminated or December 6, 1999 (such time period being hereinafter
referred to as the "Amendment Term"), shall be governed by the following terms:
(1) The Fee (as defined in the Consulting Agreement) for any work performed by
Xxxxxxx X. Xxxxxxx shall be $357.50 per day.
(2) BOG shall not be required to pay the Fees, costs or expenses related to
consulting services provided by Xxxxxxx X. Xxxxxxx, before December 15,
1999; however, BLM shall continue to invoice BOG on a bi-monthly basis for
all work performed and all costs and expenses incurred in performing such
work in accordance with the terms of the Consulting Agreement. On or before
December 6, 1999, BOG shall elect whether to pay BLM for the consulting
services and expenses which have been provided and incurred by BLM during
the Amendment Term with cash or with an equivalent overriding royalty as
set forth below:
(A) In the event that BOG elects to pay for such consulting services and
expenses with cash, BOG will pay BLM for such consulting services
within 15 days of BOG's receipt of BLM's invoices for all of the
consulting services and expenses provided and incurred by Xxxxxxx X.
Xxxxxxx during the Amendment Term.
(B) In the event that BOG elects to pay for such consulting services and
expenses with an equivalent overriding royalty, the BOG Participants
(as defined below) shall grant BLM an overriding royalty (the "BLM
ORRI") burdening the BOG Participants' interests in the first 4 Net
Xxxxx (as defined below), if any, that are drilled by the BOG
Participants within the Angleton Project within 10 years from the date
of this letter amendment. The amount of the BLM ORRI shall equal the
product obtained by multiplying (i) the product obtained by dividing
(a) the total of the Fees and expenses for the consulting services
performed by Xxxxxxx X. Xxxxxxx during the Amendment Term by (b)
$10,000, times (ii) .25. The assignment of the BLM ORRI for each well
shall be in the form which is attached hereto as Exhibit B, but shall
not be required to be completed and executed until immediately
preceding the commencement of actual drilling operations for the well.
The Parties recognize that the BLM ORRI only burdens the BOG
Participants' interests in the first 4 Net Xxxxx, if any, which are
drilled within the Angleton Project within such 10 year period. As
such, in the event that any other party participates in the drilling
of any the subject xxxxx, the BLM ORRI will be proportionately reduced
to the total of the BOG Participants' working interest in the well.
(C) For purposes of this letter agreement, a "BOG Participant" shall be
anyone that BOG assigns part of its interest in oil and gas leasehold
or mineral interests that are located within the Angleton Project,
insofar and only insofar as the interest which is assigned by BOG to
such party. For example, in the event that BOG assigns to hypothetical
ABC Company an undivided 25% of BOG's interest in hypothetical Lease A
covering an undivided 50% of the minerals in hypothetical Tract 1
which covers 100 gross acres in the Angleton Project, for purposes of
this letter agreement, ABC Company would be deemed to be a BOG
Participant with respect to such 25% of BOG's interest in Lease A.
However, in the event that ABC Company already owned or subsequently
acquired hypothetical Lease B which covers the remaining undivided 50%
of the minerals in Tract 1 from someone other than BOG, ABC Company
would not be deemed to be a BOG Participant with respect to its
interest in Lease B.
(D) For purposes of this letter agreement, the number of Net Xxxxx shall
be calculated by the BOG Participants total working interest in the
xxxxx drilled to date. For every 100% of working interest held by BOG
Participants in xxxxx, one Net Well shall be deemed to have existed.
For example, in the event that at a given point in time, the BOG
Participants have participated in the drilling of 3 xxxxx within the
Angleton Project, the BOG Participants having a total of a 40% working
interest in the first well, 15% working interest in the second well,
and 70% working interest in the third well, in such event, for
purposes of this letter agreement, 1.25 Net Xxxxx would have been
drilled by BOG and BLM's ORRI would burden the BOG Participants'
interest in each of those 3 xxxxx. In the event that BOG participates
in more than 4 Net Xxxxx prior to the expiration of 10 years from the
date hereof, BLM's ORRI would burden all of the BOG Participants'
interests in the first xxxxx that are spud by the BOG Participants
within the Angleton Project which are necessary to cause BLM's ORRI to
burden 4 Net Xxxxx and in the event that the last well which would be
burdened by the BLM ORRI would cause the BLM ORRI to burden more than
4 Net Xxxxx, the BLM ORRI in the last well necessary to cause the BLM
ORRI to burden 4 Net Xxxxx would be proportionately reduced such that
the BLM ORRI burdens exactly 4 Net Xxxxx. For example, in the event
that the BOG Participants have a 50% working interest in the first
well, a 75% working interest in the second well, an 85% interest in
the third well, a 90% working interest in the fourth well, a 70%
working interest in the fifth well and a 65% working interest in the
sixth well drilled by the BOG Participants within the Angleton
Project, the BLM ORRI would burden all of the BOG Participants'
interests in the first 5 xxxxx drilled and would burden only 46.154%
of the BOG Participants' interests in the sixth well drilled,
calculated as follows:
2
First 5 xxxxx = 3.7 Net Xxxxx
.3 Net Xxxxx needed out of the 6th well to equal exactly 4 Net Xxxxx
.65X=.3
X=.3/.65
X=46.154%.
These terms replace all compensation provisions contained in the Consulting
Agreement insofar as they would apply to work related to BOG's Angleton Project
performed by Xxxxxxx X. Xxxxxxx during the Amendment Term. These terms shall not
apply to any work performed by other employees, agents or contractors of BLM,
which work, if any, shall continue to be governed by the terms of the Consulting
Agreement as originally drafted. Anything to the contrary contained in the
Consulting Agreement notwithstanding, during the Amendment Term, BLM shall not
have the right to have anyone other than Xxxxxxx X. Xxxxxxx perform consulting
services within the Angleton Project without BOG's prior written consent.
All other terms of the Consulting Agreement, except as specifically
modified herein, shall continue in full force and effect.
If this letter agreement correctly sets forth the agreement between BOG and
BLM with respect to the amendment to the Consulting Agreement, we ask that BLM
execute the duplicate originals of same below.
Sincerely,
XXXXXXX OIL & GAS, L.P.
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Vice President
AGREED AND ACCEPTED EFFECTIVE AS OF SEPTEMBER 6, 1999:
XXXXXXX LAND MANAGEMENT COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, President
