EXHIBIT 10.20
THIRD AMENDMENT TO MANAGEMENT AGREEMENT
          This Agreement is being entered into as of October 30, 2006 (this
“Agreement”), between National Energy Group, Inc. (the “Company”) and NEG
Operating LLC (the “LLC”). All capitalized terms used but not defined herein
shall have the meanings given such terms in the Management Agreement dated as of
May 1, 2001, as amended on December 31, 2002 and April 1, 2004, respectively
(the “Management Agreement”), between the Company and the LLC.
          WHEREAS, Section 4 of that certain Agreement dated as of October 25,
2006 (the “Agreement”), by and among the Company, NEG Oil & Gas LLC, NEG, Inc.
and American Real Estate Holdings Limited Partnership, provides, among other
things, that, at the time the Payment (as such term is defined in the Agreement)
is delivered, automatically and without any further action necessary, the
Management Agreement will be terminated.
          NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the Company and the LLC hereby agree as
follows:
          1. Notwithstanding any provisions to the contrary contained in the
Management Agreement, subject to earlier termination pursuant to the Agreement
or the Management Agreement, the Management Agreement shall be and remain in
effect until December 15, 2006.
          2. This Agreement may be executed through the use of separate
signature pages or in any number of counterparts and all such counterparts shall
be deemed one and the same instrument.
          3. This Agreement shall be deemed to be made in and in all respects
shall be interpreted, construed and governed by and in accordance with the law
of the State of Delaware without regard to the conflict of law principles
thereof.
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     IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of
the date first written above.

                      NATIONAL ENERGY GROUP, INC.        
 
               
 
  By:   /s/ Bob G. Alexander
 
Name: Bob G. Alexander        
 
      Title: President        
 
                    NEG OPERATING LLC         By: NEG Holding LLC, its sole
member         By: NEG Oil & Gas LLC, its sole member         By: AREP O & G
Holding LLC, its sole member         By: AREP Oil & Gas Holding LLC, its sole
member         By: American Real Estate Holdings Limited Partnership, its sole
member         By: American Property Investors, Inc., its general partner    
 
               
 
  By:   /s/ Keith Meister
 
Name: Keith Meister        
 
      Title: Principal Executive Officer        

[Signature page to Agreement between National Energy Group, Inc. and
NEG Operating LLC regarding Management Agreement]