BETA OIL & GAS INC
EXHIBIT 10.30
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<TYPE>EX-10.30
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<FILENAME>starboard.htm
<DESCRIPTION>EXHIBIT 10.30
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<TITLE> Exhibit 10.30 HTML 10-K</TITLE>
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                                                                           STB.68R




                                                    June 16, 2000



South Coast Exploration Company
Esenjay Exploration, Inc.
Beta Oil "&amp;"Gas, Inc.
Kelley Oil Corporation
Denbury Resources Inc.
The Matagorda Company, L.L.C.
Lannie Mecom 1981 Partnership
Joe C. Richardson, Jr. Trust
Coastal Sun Development, Inc.
LMD Investments Ltd.
LMD Petroleum Corporation
Mr. John R. D'Anna
Icarus, Inc.
Xplor Energy Operating Company, Inc.

                                                     Re:      Starboard Area
                                                              Terrebonne Parish,
                                                              L O U I S I A N A

Ladies and Gentlemen:

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
will evidence our latest Agreement relative to operations in the subject area.
The parties to this Agreement are sometimes hereinafter referred to as
&#147;Parties&#148; and sometimes individually by only a portion of their proper
name. </FONT></P>

                                                         1.

         Heretofore, certain of the Parties executed the following:

         (a)Exploration  Agreement-Starboard  dated  February 19, 1996, as amended,  hereinafter  referred to as  "Exploration
                  Agreement-Starboard";

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)3-D
Seismic Participation Agreement dated May 30, 1996, as amended, hereinafter
referred to as &#147;3-D Seismic Participation Agreement&#148;; </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Well
Proposal dated September 22, 1998 for the No. 1 Landry Well, as amended,
hereinafter referred to as the &#147;Landry Well Proposal&#148;. </FONT></P>

                                                         2.

2.1      Concurrently with the execution of this Agreement:

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The
Parties to Exploration Agreement-Starboard are executing STB.101 Second
Amendment - Exploration Agreement-Starboard, attached hereto as Exhibit
&#147;A&#148;, to include Esenjay, Beta, Mecom, Richardson and Coastal Sun. </FONT></P>

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<TD WIDTH=5%><FONT SIZE=3>(b)The</FONT></TD>
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Parties to the 3-D Seismic Participation Agreement are executing STB.102 Second
Amendment -3-D Seismic Participation Agreement, attached hereto as Exhibit
&#147;B&#148;, to include Esenjay, Beta, Mecom, Richardson and Coastal Sun, to
change the non-consent penalty on Initial Test Wells so that the
&#147;consequence&#148; for failure to participate in an Initial Test Well shall
be the total forfeiture of all the non-participating parties&#146; interest in
the Prospect Area for the well, in lieu of the &#147;Farmout Terms&#148;, and to
revise the interests of Denbury, Kelley and the Frontier Group as to all depths.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT SIZE=3></FONT></TD>
<TD WIDTH=5%><FONT SIZE=3>(c)The</FONT></TD>
<TD WIDTH=90%><FONT SIZE=3>
Parties to the 3-D Seismic Participation Agreement, as amended, are amending the
Landry Well Proposal by deleting the Authority For Expenditure attached thereto,
and in lieu thereof, inserting the Authority For Expenditure attached hereto as
Exhibit &#147;C&#148;, hereinafter referred to as &#147;AFE&#148;.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT SIZE=3>(d)The</FONT></TD>
<TD WIDTH=90%><FONT SIZE=3>
Parties to the 3-D Seismic Participation Agreement, as amended, are executing
STB.74R Stipulation of Interest and Assignment attached hereto as Exhibit
&#147;D&#148; to revise the interests of the Parties in recordable form.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT SIZE=3>(e)All</FONT></TD>
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Parties are executing the Operating Agreement, attached hereto as Exhibit
&#147;E&#148;, which designates Xplor as &#147;Operator&#148; and shall govern
all operations on the following described Initial Well and the Contract Area
delineated therein.</FONT></TD>
</TR>
</TABLE>
<BR>

         (f)All  Parties  agree to change the names of the No. 1 Landry Well and the Landry Well  Proposal to the "No. 1 Cenac
                  Well" and the "Cenac Well Proposal".

         (g)All Parties do hereby approve the AFE for the No. 1 Cenac Well.

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.2 In the event of a
conflict between this Agreement and any of the Agreements or the AFE described
in Article 1 or Section 2.1 above, the terms and provisions of this Agreement
shall take precedence. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.3 The terms capitalized
in this Agreement shall have the same meanings ascribed to them in the 3-D
Seismic Participation Agreement, including the Operating Agreement attached
thereto, and the term &#147;Initial Well&#148; shall mean the No. 1 Cenac Well. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.4 All Parties do hereby
ratify, confirm and adopt the Cenac Well Proposal, as amended, and the Cenac
Well Proposal shall remain in full force and effect. </FONT></P>

                                                         3.

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.1 Heretofore, all Parties
to the 3-D Seismic Participation Agreement, except Fina, elected to participate
in the Initial Well, and Fina elected &#147;No Participation&#148; under Section
9.4 <U>Election Options</U> of the 3-D Seismic Participation Agreement. Any
obligation due Fina within the entire Area of Mutual Interest-Starboard under
the 3-D Seismic Participation Agreement shall be shared by the Parties as their
interests appear in the Stipulation of Interest. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.2 The following Parties,
hereinafter referred to as &#147;Non-Operators&#148;, agree to assume and bear
the cost, risk, expense and liability of drilling, evaluating, completing and
equipping the Initial Well, subject to the provisions of this Agreement and the
Operating Agreement, as follows: </FONT></P>

<PRE>
         South Coast                                               25.500%
         Esenjay                                                   17.500%
         Beta                                                      15.894%
         Kelley                                                    14.000%
         Denbury                                                    9.500%
         Matagorda                                                  5.000%
         Mecom                                                      4.000%
         Richardson                                                 2.500%
         Coastal Sun                                                2.000%
         LMD Ltd.                                                   2.000%
         LMD Corp.                                                  2.000%
         D'Anna                                                      .006%
         Icarus                                                      .100%
                                                                  --------
                                                                  100.000%
</PRE>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.3 All costs incurred for
the acquisition of surface leases, subsurface right-of-way agreements, title
opinions and curative, abstracts of title, and related expenses associated with
the Initial Well, hereinafter referred to as &#147;Pre-Drill Land Costs&#148;,
in the amount of $571,677, more or less, under the terms of that certain Letter
Agreement dated October 27, 1998 between the Fina Group, Kelley and the Frontier
Group, shall be shared as follows: </FONT></P>
<PRE>
         South Coast                                              23.000%
         Esenjay                                                  30.000%
         Beta                                                     14.394%
         Kelley                                                   14.000%
         Denbury                                                   9.500%
         Matagorda                                                 5.000%
         Mecom                                                     2.000%
         LMD, Ltd.                                                 2.000%
         LMD Corp.                                                  -0-
         Richardson                                                 -0-
         Coastal                                                    -0-
         D'Anna                                                     .006%
         Icarus                                                     .100%
                                                                 --------
                                                                  100.000%</PRE>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Heretofore, the Frontier
Group paid Fina for 25.0% of the amount due, and Kelley and Denbury paid more
than their share of the amount due. The amounts due Fina, adjusted for such
under and overpayments, are reflected on the invoices accompanying this
Agreement. With the execution of this Agreement, the Parties are delivering to
Fina their checks for their respective share of Pre-Drill Land Costs. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All other Pre-Drill Land
Costs incurred or accrued before February 28, 2000 have been billed, and all
Pre-Drill Land Costs incurred or accrued subsequent to February 28, 2000 shall
be billed to Non-Operators as their interests appear in the Initial Well. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.4 Upon call by Operator,
Non-Operators shall advance, to Operator, each Non-Operator&#146;s share of the
estimated dry hole cost of the Initial Well according to the AFE, in the
following amounts: </FONT></P>
<PRE>
         South Coast                                      $  941,236
         Esenjay                                          $  645,947
         Beta                                             $  586,666
         Kelley                                           $  516,758
         Denbury                                          $  350,657
         Matagorda                                        $  184,556
         Richardson                                       $   92,278
         Coastal Sun                                      $   73,822
         Mecom                                            $  147,645
         LMD, Ltd.                                        $   73,822
         LMD Corp.                                        $   73,822
         D'Anna                                           $      221
         Icarus                                           $    3,691
                                                          ----------
                                                          $3,691,121</PRE>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.5 Operator shall open an
interest bearing account at a bank of Operator&#146;s choice in Houston with the
deposit of the estimated dry hole cost of the Initial Well advanced by
Non-Operators under Section 3.4 above so that such funds shall not be commingled
with any of Operator&#146;s other funds. Bank records and statements pertaining
to the account shall be made available to Non-Opertors at all reasonable times.
Interest earned shall be owned by Non-Operators as their interests appear in the
Initial Well. </FONT></P>

                                                         4.

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1 On or before August 15,
2000, subject to events of force majeure, receipt by Operator of the estimated
dry hole cost of the well and availability of a suitable drilling rig at the
drill site location, Operator shall commence operations for drilling of the
Initial Well from a surface location in Sections 63 and 64, Township 20 South,
Range 18 East, having Lambert Plane Coordinate values of X = 2,223,867 and Y =
250,255, to a bottom hole location in Section 68, having Lambert Plane
Coordinate values of X = 2,221,328 and Y = 247,616. Operator shall thereafter
drill said well with due diligence and in a workmanlike manner to: </FONT></P>

         (a)a total vertical depth of 15,000.0 feet below the surface, or

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<TD WIDTH=5%><FONT SIZE=3>(b)a</FONT></TD>
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depth, in route to the depth and bottom hole location described above,
sufficient to drill through and fully evaluate that certain sand or formation
encountered between the depths of 15,320.0 feet and 15,485.0 feet in the Placid
Oil Company No. B-5 Louisiana Land and Exploration Company Well located in
Section 23, Township 20 South, Range 18 East, hereinafter referred to as
&#147;Duval Sand&#148;, or</FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT SIZE=3></FONT></TD>
<TD WIDTH=5%><FONT SIZE=3>(c)a</FONT></TD>
<TD WIDTH=90%><FONT SIZE=3>
depth at which mechanical difficulty, loss of circulation, water flow, abnormal
pressure, heaving shale, salt or other conditions are encountered which make
drilling abnormally difficult or hazardous, causes sticking of drill pipe or
casing or any other similar difficulties which preclude drilling ahead under
normal procedures, hereinafter referred to as &#147;Gulf Coast Conditions&#148;,</FONT></TD>
</TR>
</TABLE>
<BR>

whichever is the lesser depth, hereinafter referred to as "Objective Depth".

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.2 At such time as the
Initial Well has been drilled to the Objective Depth, Operator will run a Dual
Induction or other equivalent open hole electrical log from the total depth
drilled to the bottom of the surface casing, and such other methods and tools of
evaluation that will ensure a proper evaluation of all formations in the well
indicating hydrocarbons, if under the then existing conditions, such methods of
evaluation are prudent, hereinafter referred to as &#147;First Completion
Point&#148;. </FONT></P>

4.3      Within 48 hours following First Completion Point, Non-Operators shall elect to:

         (a)deepen the well to:

         (i)               a depth of 16,100.0 feet below the surface, or

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)a
depth sufficient to drill through and fully evaluate that certain sand or
formation encountered between the depths of 16,280.0 feet and 16,400.0 feet in
the said Placid Oil Company No. B-5 Louisiana Land and Exploration Company Well,
hereinafter referred to as &#147;Dularge Sand&#148;, or </FONT></P>

         (iii)    a depth at which Gulf Coast Conditions are encountered,

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<TD WIDTH=5%><FONT SIZE=3>and</FONT></TD>
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run an electric log over the unlogged portion of the hole and such other methods
and tools of evaluation to ensure a proper evaluation of all formations in the
well indicating hydrocarbons, if under the then existing conditions, such
methods of evaluation are prudent, hereinafter referred to as &#147;Second
Completion Point&#148;, or</FONT></TD>
</TR>
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         (b)complete the well as an oil or gas well, or

         (c)sidetrack the well, or

         (d)      plug and abandon the well.

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.4 At First Completion
Point, an election by any Non-Operator or Non-Operators owning or representing
more than 50.0% interest in the Initial Well <U>to deepen</U> the well shall
take precedence over an election to complete the well as an oil or gas well,
which shall take precedence over an election to sidetrack the well, which shall
take precedence over an election to plug and abandon the well. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.5 At Second Completion
Point, an election by any Non-Operator or Non-Operators owning or representing
more than 50.0% interest in the Initial Well <U>to complete</U> the well as an
oil or gas well shall take precedence over an election to deepen the well, which
shall take precedence over an election to sidetrack the well, which shall take
precedence over an election to plug and abandon the well. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.6 At First or Second
Completion Point, an election by any Non-Operator or Non-Operators owning or
representing more than 50.0% interest in the Initial Well to complete in a
deeper sand or formation shall take precedence over an election to complete in a
shallower sand or formation. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.7 At First or Second
Completion Point, if less than all Non-Operators elect to deepen, sidetrack or
complete the Initial Well, Article VI B. 2. of the Operating Agreement shall not
apply to such operations and the non-consenting Non-Operators shall immediately
assign, to the consenting Non-Operators, the following rights of the
non-consenting Non-Operators in the Initial Well and all Oil and Gas Leases
within the Contract Area for the Operating Agreement: </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)In
the event of an election to deepen, all rights below the total depth logged in
the Initial Well at the time of election. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)In
the event of an election to sidetrack, all rights below the stratigraphic
equivalent of the total depth logged in the Initial Well at the time of
election. </FONT></P>

         (c)In the event of an election to complete, all rights to all depths.

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Provided, however, Mecom
and LMD shall not forfeit their interest in 6,800.0 foot RA SUA and D&#146;Anna
shall not forfeit his interest in 7,320.0 foot RA SUA above the base of the Unit
Sands for said units. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.8 All operations on the
Initial Well, after completion as an oil or gas well or plugged and abandoned as
a dry hole, shall be subject to the Operating Agreement. </FONT></P>

                                                         5.

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.1 Heretofore, the
Frontier Group elected to participate in those certain Letter Agreements dated
October 26 and 30, 1996 between South Oak Production Company, et al and Jolen
Operating Company, et al and Fina. The Fina Group, Kelley and the Frontier Group
disagree as to the consideration charged by Fina for 3-D seismic associated with
such Agreements. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.2 If the Initial Well is
completed as a dry hole, the amount heretofore paid by the Frontier Group
satisfies all obligations and that the matter is settled. If the Initial Well is
completed as an oil or gas well, the Fina Group, Kelley and the Frontier Group
agree to submit the matter to arbitration, unless such Parties can mutually
agree on an amount to satisfy the matter within one hundred eighty (180) days
following completion of said well. </FONT></P>


<PAGE>












                                            Signature Page 12 to STB.68R
                                                         6.

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6.1 This Agreement may be
executed in counterparts and each executed counterpart shall be deemed an
original and the signature pages of each counterpart may be compiled to form one
original and shall have the same effect as if one original had been executed by
all Parties. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6.2 This Agreement shall be
binding upon those Parties that sign a counterpart, whether or not all Parties
sign a counterpart. </FONT></P>

                                                      *   *   *


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the foregoing correctly reflects your understanding of our Agreement, kindly
sign one copy in the space provided below and return the same to Polaris
Exploration Corporation on or before August 1, 2000. </FONT></P>

EXECUTED this _____ day of July, 2000.

SOUTH COAST EXPLORATION COMPANY



By:________________________
Name:
Title:


EXECUTED this _____ day of July, 2000.

ESENJAY EXPLORATION, INC.



By:________________________
Name:
Title:

EXECUTED this _____ day of July, 2000.

BETA OIL "&amp;" GAS, INC.



By:________________________
   Steve Antry
   President




EXECUTED this _____ day of July, 2000.

KELLEY OIL CORPORATION



By:________________________
   Dennis D. Ritter, Jr.
   Attorney-in-Fact




EXECUTED this _____ day of July, 2000.

DENBURY RESOURCES INC.



By:________________________
   Lynda F. Perrard
   Vice President, Land




EXECUTED this _____ day of July, 2000.

THE MATAGORDA COMPANY, L.L.C.



By:________________________
   H. C. Ferguson, Jr.
   President


EXECUTED this _____ day of July, 2000.

JOE C. RICHARDSON, JR. TRUST



By:________________________
   Joe C. Richardson, Jr.
   Trustee




EXECUTED this _____ day of July, 2000.

COASTAL SUN DEVELOPMENT, INC.



By:________________________
   R. B. Ferguson
   President




EXECUTED this _____ day of July, 2000.

LANNIE MECOM 1981 PARTNERSHIP,



By:_________________________
   Lannie Mecom
   General Partner




EXECUTED this _____ day of July, 2000.

LMD INVESTMENTS LTD.



By:________________________
   Betsy Mecom
   General Partner


EXECUTED this _____ day of July, 2000.

LMD PETROLEUM CORPORATION
By: Los Corralitos, Inc.



By:________________________
   Betsy Mecom
   President





EXECUTED this _____ day of July, 2000.


<P>__________

John R. D'Anna





EXECUTED this _____ day of July, 2000.

ICARUS, INC.



By:__________________________
Name:
Title:





EXECUTED this _____ day of July, 2000.

XPLOR ENERGY OPERATING COMPANY, INC.



By:________________________
Name:
Title:


EXECUTED this _____ day of July, 2000.

POLARIS EXPLORATION CORPORATION



By:________________________
   Ken Savage
   Vice President


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