Exhibit 99.3
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Letter to Beneficial Holders
Regarding the Offer to Exchange
Any and All Outstanding 7 1/8% Series A Senior Notes due 2011
for
7 1/8% Series B Senior Notes due 2011
of
Pure Resources, Inc.
Pursuant to the prospectus dated ____________, 2001
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THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
_____________, 2001 UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE
EXTENDED FROM TIME TO TIME, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN
AND AT ANY TIME PRIOR TO THE EXPIRATION DATE.
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____________, 2001 To Our Clients:
Enclosed for your consideration is the prospectus dated __________, 2001 and
the accompanying Letter of Transmittal (the "Letter of Transmittal") that
together constitute the offer (the "Exchange Offer") by Pure Resources, Inc., to
exchange new 7 1/8% Series B Senior Notes due 2011 ("Exchange Notes") that have
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), for all of its outstanding 7 1/8% Series A Senior Notes due 2011 (the
"Old Notes"), upon the terms and subject to the conditions set forth in the
prospectus. The prospectus and the Letter of Transmittal more fully describe
the Exchange Offer. Capitalized terms used but not defined herein have the
respective meanings ascribed to them in the prospectus.
To participate in the Exchange Offer, persons in whose names Old Notes are
registered on the books of the registrar ("Registered Holders") must either:
. cause to be delivered to First Union National Bank (the "Exchange
Agent") at the address set forth in the Letter of Transmittal, Old
Notes in proper form for transfer, together with a properly executed
Letter of Transmittal; or
. cause a DTC Participant to tender such holder's Old Notes to the
Exchange Agent's account maintained at the Depository Trust Company
("DTC") for the benefit of the Exchange Agent through the DTC's
Automated Tender Offer Program ("ATOP"), including transmission of an
agent's message in which the Registered Holder acknowledges and agrees
to be bound by the terms of the Letter of Transmittal.
By complying with DTC's ATOP procedures with respect to the Exchange Offer,
the DTC Participant confirms on behalf of itself and the beneficial owners of
tendered Old Notes all provisions of the Letter of Transmittal applicable to it
and such beneficial owners as fully as if it completed, executed and returned
the Letter of Transmittal to the Exchange Agent.
We are the holder of Old Notes held for your account. A tender of such Old
Notes can be made only by us as the holder for your account and pursuant to your
instructions. The enclosed Letter of Transmittal is furnished to you for your
information only and cannot be used to tender Old Notes.
We request instructions as to whether you wish to tender any or all of the
Old Notes held by us for your account, pursuant to the terms and subject to the
conditions set forth in the prospectus and the Letter of Transmittal.
Your instructions to us should be forwarded as promptly as possible in
order to permit us to tender your Old Notes on your behalf in accordance with
the provisions of the prospectus and the Letter of Transmittal. The Exchange
Offer will expire at 5:00 p.m., New York City time, on ___________, 2001, unless
extended by Pure. Old Notes properly tendered may be withdrawn at any time on
or prior to the Expiration Date.
The Exchange Offer is not conditioned upon any minimum number of Old Notes
being tendered.
Pursuant to the Letter of Transmittal, each holder of Old Notes must
represent to Pure that:
. the Exchange Notes to be acquired by such holder pursuant to the
Exchange Offer are being acquired in the ordinary course of business
of the holder;
. such holder is not participating, does not intend to participate, and
has no arrangement or understanding with any person to participate, in
a distribution of the Exchange Notes;
. such holder is not an "affiliate," as defined under Rule 405 of the
Securities Act, of Pure;
. such holder acknowledges that any person who is a broker-dealer
registered under the Securities Exchange Act of 1934, as amended, or
who tenders Old Notes in the Exchange Offer for the purpose of
participating in a distribution of the Exchange Notes must comply with
the registration and prospectus delivery requirements of the
Securities Act in connection with any secondary resale transaction of
the Exchange Notes and cannot rely on the position of the staff of the
Securities and Exchange Commission enunciated in its series of
interpretive "no-action" letters with respect to exchange offers; and
. if the holder is a broker-dealer that will receive Exchange Notes for
its own account in exchange for Old Notes, it must represent that the
Old Notes to be exchanged for Exchange Notes were acquired as a result
of market-making activities or other trading activities and must
acknowledge that it will deliver a prospectus meeting the requirements
of the Securities Act in connection with any resale of Exchange Notes
received in respect of such Old Notes pursuant to the Exchange Offer;
however, by so acknowledging and by delivering a prospectus in
connection with the exchange of Old Notes, the holder will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
The enclosed "Instruction to Registered Holder or DTC Participant from
Beneficial Owner" form contains an authorization by you, as the beneficial owner
of Old Notes, for us to make the foregoing representations on your behalf.
We urge you to read the enclosed Letter of Transmittal in conjunction with
the Exchange Offer carefully before instructing us to tender your Old Notes.
Your attention is directed to the following:
1. The Exchange Offer is described in and subject to the terms and
conditions set forth in the prospectus dated _________, 2001.
2. Subject to the terms and conditions of the Exchange Offer, Pure will
accept for exchange on the Expiration Date all Old Notes properly tendered and
will issue Exchange Notes promptly after such acceptance.
3. If you desire to tender any Old Notes pursuant to the Exchange Offer,
we must receive your instructions in ample time to permit us to effect a tender
of the Old Notes on your behalf prior to the Expiration Date.
4. Any brokerage fees, commissions or transfer taxes will be borne by
Pure, except as otherwise provided in Instruction 7 of the Letter of
Transmittal.
If you wish to tender any or all of the Old Notes held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form attached hereto. If you authorize the tender of your
Old Notes, all such Old Notes will be tendered unless otherwise specified on the
instruction form. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf on or prior to the Expiration Date.
The specimen Letter of Transmittal is furnished to you for your information only
and cannot be used by you to tender Old Notes held by us for your account.
Pure is not aware of any jurisdiction in which the making of the Exchange
Offer or the tender of Old Notes in connection therewith would not be in
compliance with the laws of such jurisdiction. If Pure becomes aware of any
jurisdiction in which the making of the Exchange Offer would not be in
compliance with such laws, Pure will make a good faith effort to comply with any
such laws or seek to have such laws declared inapplicable to the Exchange Offer.
If, after such good faith effort, Pure cannot comply with any such laws, the
Exchange Offer will not be made to the Registered Holders residing in such
jurisdiction.
Instructions to Registered Holder or DTC Participant from Beneficial Owner of
7 1/8% Series A Senior Notes due 2011
of
Pure Resources, Inc.
The undersigned hereby acknowledges receipt of the prospectus dated
_________, 2001 of Pure Resources, Inc. ("Pure") and the accompanying Letter of
Transmittal, that together constitute Pure's offer (the "Exchange Offer").
This will instruct you, the registered holder, as to the action to be taken
by you relating to the Exchange Offer with respect to the 7 1/8% Series A Senior
Notes due 2011 (the "Old Notes") held by you for the account of the undersigned,
on the terms and subject to the conditions in the prospectus and Letter of
Transmittal.
The aggregate face amount of the Old Notes held by you for the account of
the undersigned is (fill in the amount):
$_______________ of the Old Notes.
With respect to the Exchange Offer, the undersigned hereby instructs you
(check appropriate box):
[_] To TENDER the following Old Notes held by you for the account of the
undersigned (insert principal amount of Old Notes to be tendered, if
any):
$_______________ of the Old Notes.
[_] NOT to TENDER any Old Notes held by you for the account of the
undersigned.
If the undersigned instructs you to tender the Old Notes held by you for
the account of the undersigned, it is understood that you are authorized:
. to make, on behalf of the undersigned (and the undersigned, by its
signature below, hereby makes to you), the representations and
warranties contained in the Letter of Transmittal that are to be made
with respect to the undersigned as a beneficial owner of the Old
Notes, including but not limited to the representations that:
. the undersigned is acquiring the Exchange Notes in the ordinary course
of business of the undersigned;
. the undersigned is not participating, does not intend to participate,
and has no arrangement or understanding with any person to
participate, in the distribution of the Exchange Notes;
. the undersigned is not an "affiliate," as defined under Rule 405 of
the Securities Act of 1933, as amended ("Securities Act"), of Pure;
the undersigned acknowledges that any person who is a broker-dealer
registered under the Securities Exchange Act of 1934, as amended, or
is participating in the Exchange Offer for the purpose of distributing
the Exchange Notes must comply with the registration and prospectus
delivery requirements of the Securities Act, in connection with a
secondary resale transaction of the Exchange Notes acquired by such
person and cannot rely on the position of the staff of the Securities
and Exchange Commission enunciated in its series of interpretative no-
action letter with respect to exchange offers; and
. if the undersigned is a broker dealer that will receive Exchange Notes
for its own account in exchange for Old Notes, it represents that the
Old Notes to be exchanged for the Exchange Notes were acquired by it
as a result of market-making activities or other trading activities
and acknowledges that it will deliver a prospectus in connection with
any resale of such Exchange Notes; however, by so acknowledging and by
delivering a prospectus, the undersigned will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act.
. to agree, on behalf of the undersigned, as set forth in the Letter of
Transmittal; and
. to take such other action as necessary under the prospectus or the
Letter of Transmittal to effect the valid tender of Old Notes.
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SIGN HERE
Name of Beneficial
Owner(s):_______________________________________________________________________
________________________________________________________________________________
Signature(s):___________________________________________________________________
________________________________________________________________________________
Name(s) (please print):_________________________________________________________
________________________________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________________
Telephone Number(s):____________________________________________________________
________________________________________________________________________________
Taxpayer Identification or Social Security Number(s):___________________________
________________________________________________________________________________
Date:___________________________________________________________________________