EXHIBIT 20.3


                         [ZYDECO LETTERHEAD APPEARS HERE]



                             FOR IMMEDIATE RELEASE



CONTACT:  MR. SAM B. MYERS, JR.
          CHIEF EXECUTIVE OFFICER
          (713) 659-2222


                      ZYDECO ANNOUNCES ARBITRATION RULING

     December 11, 1998 (Houston) -- Zydeco Energy, Inc. (NASDAQ National Market
System trading symbol "ZNRG") announced today that the three-member arbitration
panel has issued its decision in the arbitration proceedings brought by Zydeco
Energy, Inc. ("Zydeco"), against Cheniere Energy, Inc. ("Cheniere") NASDAQ:
"CHEX"). The arbitration claim and counterclaim, as both were amended before the
American Arbitration Association, sought resolution of differences between the
two companies over funding obligations, current ownership interests in various
leases and prospects, the scope of pre-drilling activities in the Project Area
and a variety of related issues. In its ruling, the panel confirmed Zydeco's
position as program manager but recognized Cheniere's independent right to
identify prospects and acquire leases in the West Cameron Seismic Project area.
The arbitration panel directed that Cheniere has the right to participate with a
50% working interest in most of the leases acquired by Zydeco or in prospects
designated by Zydeco. Cheniere, however, must exercise its right of
participation and pay its share of such costs within a thirty-day period
following Zydeco's formal notice of prospect designation. For each prospect,
Zydeco has the sole right to undertake the management and control of all
prospect development for a reasonable period not to exceed 90 days following
such formal notice.

     The arbitration panel also ruled that project seismic costs incurred after
December 31, 1997 are not reimbursable to Zydeco as seismic costs. Zydeco
believes that these costs, in whole or in part, may be reimbursable as prospect
costs. Zydeco had previously billed Cheniere $1.1 million as their share of such
costs. In addition if certain criteria are met, then sale proceeds from certain
marketing activities would be paid to Cheniere until Cheniere recoups $13.5
million of its investment in the project. Zydeco and Cheniere would share any
such sales above that amount equally. Neither party received any damage awards
or recovery of legal costs.

     This news release may contain forward-looking statements that are based on
assumptions that in the future may prove not to be accurate. Those statements,
and Zydeco Energy, Inc.'s business and prospects, are subject to a number of
risks including, but not limited to, the volatility of oil and gas prices,
environmental risks, operating risks and hazards, risks related to exploration
and development drilling, uncertainties about reserve estimates, competition,
governmental regulation and the ability of the Company to implement its business
strategy. These and other risks are described in the Company's periodic reports
that are filed with and available from the United States Securities and Exchange
Commission.

     Zydeco Energy, Inc. is an independent oil and gas exploration company
engaged in acquiring leases, drilling and producing reserves utilizing focused
geologic concepts and advanced 3D seismic and computer-aided exploration (CAEX)
technology, including enhanced structural and stratigraphic depth imaging and
attribute analysis. Zydeco's efforts are focused primarily in the Louisiana
Transition Zone.