EEX CORP
LETTER AGREEMENT DATED MAY 8, 2002
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>5
<FILENAME>dex103.txt
<DESCRIPTION>LETTER AGREEMENT DATED MAY 8, 2002
<TEXT>
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                                                                    Exhibit 10.3

                                [EEX LETTERHEAD]





                                   May 8, 2002


Mr. O. Kirk Wardlaw
BP Exploration & Production Inc.
501 WestLake Park Blvd.
Houston, Texas 77079

                                    Re:      AREA OF MUTUAL INTEREST
                                             AGREEMENT
                                             Asset Purchase, Farmout & Joint
                                             Exploration Agreement dated 3/1/02
                                             Treasure Island Project
                                             OCS Gulf of Mexico

Dear Kirk:

Reference is made to that certain Asset Purchase, Farmout and Joint Exploration
Agreement ("Agreement") dated as of March 1, 2002, and entered into by and
between BP Exploration & Production Inc. ("BP") and EEX Corporation ("EEX").

Article 26.4 (Area of Mutual Interest) of Exhibit "D" to the Agreement provides
for the creation of an area of mutual interest ("AMI") for each Prospect as set
forth therein.

EEX has advised BP that certain circumstances may arise prior to August 15, 2002
that would cause EEX to desire a revision to the provisions of the Agreement
pertaining to the AMI ("AMI Provisions"), so as to limit the AMI to apply to
only those depths below a stratigraphic depth to be determined by the parties
(the "Weld").

In recognition of such circumstances, BP and EEX agree as follows:

     1. On or before August 15, 2002, EEX may provide written notification to BP
        of its desire to revise the AMI Provisions to limit the AMI depths.
        Failure by EEX to timely provide such notification shall result in the
        Agreement and the AMI Provisions remaining unchanged.
     2. If EEX delivers the notice described in Paragraph 1. above, BP and EEX
        will enter into discussions to determine a mutually agreeable definition
        of the "Weld", so as to amend the AMI Provisions to set forth the depths
        that will be covered subsequent to August 15, 2002, by the amended AMI
        Provisions. However, EEX acknowledges and agrees that such negotiations
        are an accommodation by BP, and that neither party shall have any
        obligation to agree with respect to the

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        definition of the Weld. In the event BP and EEX are unable to mutually
        agree in writing on a definition of the "Weld" within twenty (20) days
        of August 15, 2002, the AMI Provisions shall be deemed to be terminated
        and Exhibit "D" of the Agreement amended to delete Article 26.4,
        effective as of August 15, 2002, unless otherwise mutually agreed by EEX
        and BP that the AMI will remain as originally drafted.
     3. Upon mutual written agreement for the definition of the "Weld", the
        parties shall substitute the language shown in Exhibit "A" for Article
        26.4 (Area of Mutual Interest) of Exhibit "D" to the Agreement.

Please execute one original of this Agreement to evidence our understanding in
this matter.

                                            Sincerely yours,

                                            EEX CORPORATION

                                            /s/ Ben Davis

                                            Ben Davis

AGREED TO THIS 21/st/ DAY OF MAY, 2002.

BP EXPLORATION & PRODUCTION INC.

By:      /s/ O. Kirk Wardlaw
Title:   Attorney-in-Fact

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                                   EXHIBIT "A"

        Attached to and made a part of that certain Letter Agreement dated May
        8, 2002, by and between BP Exploration & Production Inc. and EEX
        Corporation.

      26.4 Area of Mutual Interest. The Parties establish an Area of Mutual
Interest ("AMI ") for each of the Prospects as set forth in Exhibit "A". The AMI
shall be limited as to depths below the base of the "Weld". For purposes of this
provision, the "Weld" is defined as
_______________________________________________________________________________.

Subsequent to the execution of the APA or this Agreement, if any Party hereto
("Acquiring Party") acquires either an oil and gas lease (or any interest
therein) or any other mineral interest covering lands and/or water bottoms
and/or seabeds lying within an AMI, or if the Acquiring Party is offered the
opportunity to enter into any type of agreement by which such an interest may be
earned or otherwise acquired by conducting drilling, seismic, or other
operations on the lands lying within an AMI, then the Acquiring Party shall
promptly notify the other Party(ies) ("Non-Acquiring Party(ies)") of such
acquisition or such opportunity. Any interest acquired by a Party hereto in
lands outside of the AMI, however, shall not be subject to the terms of this
Section. The notification provided for in this Section shall contain all
available title information, and copies of leases, agreements by which the
interests may be acquired, and all other pertinent instruments. It shall also
describe in detail the cost and expense of such acquisition and any other
obligation which may be incurred pursuant thereto.

The Non-acquiring Party(ies) shall have the opportunity to participate in any
acquisition hereunder, and in the working interest proportion set out under
Exhibit "A" for the Prospect in which the acquisition of interest was made. As
of the date of this Agreement, the interests of the Parties in the Leases, each
Prospect, and each AMI, are BP-seventy-five percent (75%), and EEX-twenty-five
percent (25%).

If the interest offered is a non-producing interest, and covers lands within the
geographic confines of the AMI, and covers depths both above and below the Weld,
and such interest was acquired at an OCS lease sale or via cash purchase from a
third party, then a Non-acquiring Party may participate in the acquisition of
such interest (as to depths below the base of the Weld) by bearing its
proportionate share of one-half of the total costs incurred by the Acquiring
Party.

If the interest offered was acquired via a purchase of producing properties, and
such properties produce from depths below the base of the Weld, then a
Non-acquiring Party may participate in the acquisition of

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such interest by paying its proportionate share of the total costs incurred by
the Acquiring Party. However, such acquisition shall not apply to interests
acquired as to depths above the base of the Weld (if any).

If the interest offered was acquired via a purchase of producing properties
wherein such properties produce only from depths above the base of the Weld,
then a Non-acquiring Party may participate in the acquisition of such interest
(as to those depths below the base of the Weld only) by paying its proportionate
share of the lesser of, i) one-half of the original bonus paid the Minerals
Management Service for the OCS lease, (or portion thereof), being offered by the
Acquiring Party or one-half of those costs actually incurred in the drilling of
that wellbore or wellbores acquired by the Acquiring Party (exclusive of any
Export Pipelines, Platforms or Processing Facilities ) pursuant to its purchase
agreement for the producing properties.

If drilling, seismic, or other operations are not required to acquire the
interest, Non-acquiring Party(ies) shall have fifteen (15) days from receipt of
notice thereof in which to elect to participate in such acquisition. Failure to
notify the Acquiring Party of its election within fifteen (15) days shall be
deemed an election by the Non-acquiring Party(ies) not to participate.

If the acquisition requires drilling, seismic, or other operations to depths
below the base of the Weld, the election of a Non-acquiring Party(ies) to
participate in such operations shall be deemed an election to participate in all
of the terms and conditions of the agreement governing such operations, to the
extent necessary to acquire the interest. No party shall be required to make
such election more than one hundred fifty (150) days nor less than fifteen (15)
days prior to commencement of initial operations.

If the acquisition requires drilling, seismic, or other operations to depths
above the base of the Weld, which operations shall result in the Acquiring Party
earning interest as to depths below the base of the Weld, then the interest
acquired thereby shall not be offered pursuant to this Article 26.4. This
provision shall apply even if the Acquiring Party earns an interest in lands
below the base of the Weld as a result of operations conducted only to depths
above the base of the Weld.

To receive an assignment of its proportionate share of the interest acquired as
a result of conducting drilling, seismic, or other operations on the AMI, a
Non-acquiring Party must have: (1) participated in all operations necessary for
the acquisition of the interest, including, but not limited to, completion
operations and also must have paid all costs and expenses incurred in connection
therewith; and (2) participated in accordance with the terms, provisions,
covenants, and conditions of the agreements governing the acquisition of
interest. At such time the Non-acquiring Party(ies) shall become an Acquiring
Party(ies). The Acquiring Parties shall then share in the acquisition in the
proportion that each such Acquiring Party's respective working interest, as set
forth in the JOA bears to the sum of the working interests of the all Acquiring
Parties. On receipt of an invoice from the Acquiring Party setting forth in
detail the cost and

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expense of the acquisition, the other Acquiring Party(ies) shall promptly
reimburse the original Acquiring Party for its proportionate share thereof. The
original Acquiring Party shall then promptly assign to the other Acquiring
Party(ies) its proportionate interest in the acquisition.

If all Parties to this Agreement elect to participate in any acquisition, then
any such acquired interest shall thereafter be subject to the JOA and the
Parties shall amend Exhibit "A" thereof, to reflect the newly acquired interest.
Such amendment shall be effective with the award of a lease or the effective
date of any such transfer; and shall be executed by the Parties within ninety
(90) days from lease issuance or the effective date of the assignment of
interest. If less than all Parties elect to participate in an acquisition, the
Acquiring Party or Parties will execute an agreement to cover such acquisition
in substantially the same form as this Agreement.

In the event that the lease acquisition involves a third party (not a Party to
this Agreement), the Parties agree to utilize the form of JOA as the starting
point for negotiation of a mutually acceptable form of operating agreement with
the third party.

The AMI for each Prospect shall be in effect until the date of commencement of
the Third Well or upon termination of the APA (on a Prospect by Prospect basis),
whichever occurs first, but in no case to go beyond June 1, 2006.

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