Jay Resources Corporation
                               One Houston Center
                            1221 McKinney, Suite 3100
                                Houston TX 77010
                                 (713) 759-1122



                                                                February 4, 1997



Isramco, Inc.
Shavit House, 4 Raoul Wallenberg St.
Tel Aviv, ISRAEL 69174
Attn:  Yossi Levy

Dear Yossi:

     This  letter is  written  to set  forth  our  agreement  to  transfer  7.9%
Membership Interest and 13.81% After Payout Percentage in Jay Petroleum,  L.L.C.
("Transferred Interest") to Isramco, Inc. The consideration for said transfer of
interest is the $132,640  additional capital  contribution made to Jay Petroleum
L.L.C. by Isramco, Inc.

     Upon the  execution of this letter  agreement,  Jay  Resources  Corporation
automatically  assigns and transfers the Transferred  Interest to Isramco,  Inc.
Jay Resources Corporation  represents to Isramco, Inc. that it has the requisite
corporate  approval and  authority to transfer the  Transferred  Interest and it
further represents and warrants that the Transferred  Interest is free and clear
of any liens.

     Isramco,  Inc.  agrees to become a Member of the LLC and to be bound by and
comply with the First Restated  Regulations of the LLC, a copy of which Isramco,
Inc. has reviewed. The effective date of this transaction is February 4, 1997.

     If the foregoing  represents your understanding and agreement,  please sign
in the space provided.

                                             Sincerely,

                                             JAY RESOURCES CORPORATION



                                             By:  /S/  REUVEN HOLLO
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Accepted and Agreed to this 4  day of February , 1997.

ISRAMCO, INC.



By:  /S/  Y. LEVY
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