April 18, 2001

VIA FACSIMILIE (281) 364-4919

St. Mary’s Production, LLC
Attn:  Jay Hartman
1717 Woodstead Court, Suite 207
The Woodlands, Texas 77380

Re:	Processing of Southern Louisiana production at the Eunice Gas Processing Plant (“Eunice Plant”) located in Acadia Parish, Louisiana.

Gentlemen:
	Outlined below is the processing arrangement between St. Mary’s Production, LLC (“St. Mary’s”) and Enron North America Corp. (“ENA”) for St. Mary’s wellhead production transported to the Eunice Plant that is delivered into Texas Gas Transmission Corp.’s (“TXGT”) gas pipeline system at the Taylor Point meter #9437 and at the East Taylor Point meter #9502 during periods TXGT calls a Gas Btu Content and Gas Quality OFO.
1)	Term:  March 1, 2001 through April 30, 2001[, and for so long thereafter and during such other subsequent periods from time to time prior to the Termination Time (as such term is defined in the Amended and Restated Conveyance of Overriding Royalty Interest from St. Mary’s to Brazos VPP Limited Partnership, as amended from time to time), during which TXGT has called a Gas Btu Content and Gas Quality OFO].
2)	Assignment of Processing Rights:  St. Mary’s hereby assigns to ENA all processing rights relative to St. Mary’s {Southern Louisiana} production that is delivered into TXGT’s gas pipeline system at the Taylor Point meter #9437 and at the East Taylor Point meter #9502{, irrespective of whether all or any part of such Southern Louisiana production is or may be} [(the “Subject Production”), including, with the consent of Brazos VPP Limited Partnership (“Brazos”), Subject Production that is ]sold by St. Mary’s upstream of the Eunice Plant{.} [to Brazos pursuant to the Conveyance described above.  With the consent of Brazos,] St. Mary’s specifically gives ENA the right to sell any liquids and liquefiable hydrocarbons recovered at the Eunice Plant that is attributable to {St. Mary’s Southern Louisiana production} [the Subject Production].
3)	St. Mary’s shall cause {its Southern Louisiana production} [the Subject Production] to be transported to the Eunice Plant for the extraction of liquids and liquefiable hydrocarbons.  St. Mary’s will {bare} [bear] all of the {PVR} [plant volume reduction (“PVR”)] relative to the liquefiable shrinkage and plant fuel that is attributable to {St. Mary’s Southern Louisiana production} [the Subject Production].
4)	ENA shall pay St. Mary’s one hundred percent (100%) of {the ENA} [ENA’s] net proceeds {received by ENA}, where “ENA’s net proceeds” shall mean the {percentage} [gross proceeds] received by ENA {of the gross receipts for} [from] the sale of {product’s} [products] attributable to {St. Mary’s Southern Louisiana production} [the Subject Production] less any actual processing fees or charges and/or PVR cashouts associated with {such} processing {as outlined in} [the Subject Production pursuant to] ENA’s Gas Processing Agreement with El Paso Field Services {to process St. Mary’s Southern Louisiana production}. 
5)	In the event ENA’s net proceeds are negative with regard to any monthly accounting period, St. Mary’s shall pay such {negative} amount to ENA.
6)	St. Mary’s retains the right to audit ENA’s Eunice settlement schedules and related payments applicable to the processing of {St. Mary’s gas} [the Subject Production] through the term of this agreement.
7)	ENA shall remit payments to St. Mary’s within seven (7) business days after ENA receives the Eunice Plant monthly gas processing settlement statements and payments for the sale of any liquids and liquefiable hydrocarbons that are attributable to {St. Mary’s Southern Louisiana production} [the Subject Production] for such month.  Likewise, in the event ENA’s net proceeds are negative for any period, St. Mary’s shall pay such {negative} amount to ENA within seven (7) business days after St. Mary’s receives ENA’s statement therefor.
If the foregoing is in accordance with your understanding of the processing arrangements please execute below.  Please feel free to call Charlie Otto at (713) 853-5518 should you have any questions.

					Sincerely,
	
				ENRON NORTH AMERICA CORP.

					By:					
					{__________________________}[Name:					]
	{Title:______________________}[Title:					]

ACCEPTED AND AGREED TO this
{___day}[_____ day] of ________________, 2001.

ST. MARY’S PRODUCTION, LLC

By:					
{___________________________}[Name:				]
{Title:_______________________}[Title:					

Joining in the execution hereof to evidence
its consent to the foregoing:
	
BRAZOS VPP LIMITED PARTNERSHIP
By:	Agave VPP, LLC, its General Partner

	By:					
	Name:					
	Title:]					

---------------------- REVISION LIST ----------------------

The bracketed numbers refer to the Page and Paragraph for the start of the paragraph in both the old and the new documents.

[1:10 1:10] Changed	"2001." to "2001, and  ...  Quality OFO."
[1:11 1:11] Changed	"St. Mary’s  ...  production that" to "St. Mary’s production that"
[1:11 1:11] Changed	", irrespective  ...  or may be " to "(the “Subject  ...  Production that is "
[1:11 1:11] Changed	"Plant. St." to "Plant to Brazos  ...  Brazos, St."
[1:11 1:11] Changed	"to St. Mary’s  ...  production." to "to the Subject Production."
[1:12 1:12] Changed	"its Southern  ...  production " to "the Subject Production "
[1:12 1:12] Changed	"bare " to "bear "
[1:12 1:12] Changed	"PVR " to "plant volume reduction (“PVR”) "
[1:12 1:12] Changed	"St. Mary’s  ...  production" to "the Subject Production"
[1:13 1:13] Changed	"the ENA " to "ENA’s "
[1:13 1:13] Changed	"proceeds received by ENA," to "proceeds,"
[1:13 1:13] Changed	"percentage " to "gross proceeds "
[1:13 1:13] Changed	"of the gross receipts for " to "from "
[1:13 1:13] Changed	"product’s " to "products "
[1:13 1:13] Changed	"St. Mary’s  ...  production " to "the Subject Production "
[1:13 1:13] Changed	"with such  ...  outlined in" to "with processing  ...  pursuant to"
[1:13 1:13] Changed	"Services to  ...  production." to "Services."
[1:14 1:14] Changed	"such negative amount" to "such amount"
[1:15 1:15] Changed	"St. Mary’s gas " to "the Subject Production "
[1:16 1:16] Changed	"St. Mary’s  ...  production " to "the Subject Production "
[1:16 1:16] Changed	"such negative amount" to "such amount"
[1:20 1:21] Changed	"__________________________" to "Name: "
[1:21 1:22] Changed	"Title:______________________" to "Title: "
[1:23 1:24] Changed	"___day " to "_____ day "
[1:25 1:27] Changed	"___________________________" to "Name: "
[1:26 1:28] Add Paras	"Title:  ... Title: "
[1:26 1:35] Del Para	"Title:_______________________"

This redlined draft, generated by CompareRite (TM) - The Instant Redliner, shows the differences between - 
original document   : O:\LEGAL\TBUSHMAN\ST. MARY'S\ST. MARY'S PROCESSING DRAFT.DOC
and revised document: O:\LEGAL\TBUSHMAN\ST. MARY'S\ST. MARY'S PROCESSING REIMBURSEMENT AGREEMENT.DOC

CompareRite found   27 change(s) in the text

Deletions appear as Overstrike text surrounded by {}
Additions appear as Underline text surrounded by []