STEPHENS ENERGY CORP. - The Railroad Commission of Texas

hGy 29,2003
Page 2
bltcla's IWWI~ gm 111~ keti~lg ~xpwiu~w cur~flnna Ulc Mlm uf these lndrx Prices as a basis
for establishing a reasonable mnrkct price. Even in the absence of the proven flaws in the
publisllod lndcx Prices, the Nonh Texas gur market is now independent of and substantially
diITmt from Ule HSC md the Wok lndex Mces.
Section 5.1 (b) of the referenced contract cctnblishcs rho Residue Gnc Value each month boood
on the Indcx Price published in the firsl-opthe-nionth edition of Inslde F.E.RC 's GUJ Market
Xeporr, tbr "Dcllvcrcd Spot Gas Prices, Houston Ship ChannelBcaumont, Texas" (HSC lnda
Pricc) under the heading "index (Large packages only)" per MMBTU. This dcfined price tam in
the conlroct has failed due to tlie ohvioucly unrclinhlc nahlrc of p~ihlish~A HSC. Tndsx Prices and
the tart there Index Prices no lollgcr rcfiect the North Texas gas nirul;etr. In these
circumstances, Section 5.1 @) further provides Buyer, in IS sole discretion, shdl be entitled to
uoc u outstiluls illdc~.
Bccause the HSC lndex Yncc has becon~c umliablc and thcrc is no alternative published
Index Price which accurately rcflects the North Tcxa gas market. Canlen proposes sibstitutiryl
Cultera's Weichtcd - Avcmc - Sales Price received each month for North Texas sales C'WASP'I. .
which wit1 bo not of all omtc inourrd in oelling the gas. Cnncsm proporor to make thia o h ~ o
cffwtivc as of Junq 1 2003. This WASP reflects Cantera's pod faith cffort lo cstnblidr a new
benchmurk lbr the pricing under thls conuact and wc bclicvc It provides the mosl ccrmmmiPly
reasonable priw we can establish for Konh Tcxas gas production.
Cantera valua its continued busincss relationship with your company and hnpea thd the
fongoing is accqtablc to you. Enclosed, please find two (2) originals of the Amendmeat To
GPI Puroha$c Contracl rcflccting this changc. Plcarc: cxccutc both originals, retain one (1)
original for your records ad rehM ono (I) original tc Cnntao al the uddrcs6 d d d bolow. Rr
further discussion concerning them maim, please contact me at (972-367.2639).
Robed Shiplay
Senior Gar Buyer
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