QuickLinks -- Click here to rapidly navigate through this document
Redwood Energy Production, L.P.
One Maritime Plaza, Suite 400
San Francisco, CA 94111
FAX (415) 398-9227
June 14, 2001
Panther Rodessa, L.P.
1021 Main Street, Suite 1290
Houston, TX 77002
Newstar Energy U.S.A., Inc.
1905 Abbott Road
East Lansing, MI 48826-1799
Frederick R. McCord, Trustee
1021 Main Street, Suite 1400
Houston, TX 77002
Re: Clarification of Purchase and Sale Agreement / Ratification of Pending Transaction
Reference is made to that Purchase and Sale Agreement (the "PSA") made and entered into December 29, 2000 by and
between Panther Rodessa, L.P., Newstar Energy U.S.A., Inc., and Frederick R. McCord, Trustee (collectively, "Seller") and
Redwood Energy Production, L.P. ("Buyer"). Buyer is preparing to enter into agreements with various third parties in order to
(1) re-enter the Ruby Magness Well in the Madisonville Field, (ii) drill or recomplete an injection well, (iii) install a gas treatment
plant, (iv) and provide a gas gathering/transportation system (i), (ii), (iii), and (iv), collectively, the "Project"). In order to move
forward with the Project, Buyer desires to amend and clarify the PSA to delete the last sentence of the first paragraph of
Section 11 (a)(iv) and provide in its place the following:
"At eighteen (18) months after Closing, should Buyer, directly or through any third party contractor, be constructing the
facilities, plant, and/or pipelines to begin actual sales of gas from the Rodessa/Sligo Interval on the Properties, Buyer shall have
thirty (30) months after Closing to commence actual sales of gas from the Rodessa/S1igo Interval on the Properties."
Buyer has furnished to Seller unexecuted copies of the Gas Purchase Contract between Gateway Processing Company and
Buyer (the "GPA"). The GPA provides for a sale of Rodessa/Sligo Interval gas at the wellhead with Buyer's sales price to be
determined by "netti