WEST BROUSSARD EXPLORATION AGREEMENT

This Agreement is made and entered into between PLEDGER OPERATING COMPANY, INC.
(“Pledger”), a Mississippi corporation, and BETA OIL &amp; GAS, INC. a Nevada
corporation (“Beta”), Pledger and Beta are sometimes hereinafter referred to
individually as a “Party” and collectively as the “Parties”.

RECITALS

WHEREAS, Beta desires to acquire oil, gas and mineral leases, interests and
geological data in the West Broussard Prospect Area (the “Prospect”) subsequent
to reviewing proprietary geological data and interpretations presented to Beta
by Pledger, in accordance with the terms and provisions set forth in this
Agreement.

NOW, THEREFORE, in consideration of the premises, mutual covenants and agreement
herein contained, the Parties agree as follows:

ARTICLE I DEFINITIONS

        As used in the Agreement, the following terms have the meaning ascribed
hereunder:

a. "Agreement" means this West Broussard Exploration Agreement between Pledger
and Beta. b. "Pledger ORRI" means that interest to be conveyed to Pledger
pursuant to Article V of this Agreement.

  c. “Prospect Area” means the area outlined on the map attached hereto and made
a part hereof as EXHIBIT “A” defining the Area of Mutual Interest, located in
T10S-R5E of Lafayette, Parish Louisiana.

d. "Effective Date" means February 28, 2001. e. "Term of Agreement" means for
the duration of two (2) years after the i) Termination of the JOA, or ii)
expiration of the last Lease acquired through leasing in the AMI or acreage
acquired through purchase or farmout in the AMI, whichever last occurs.

  f. “JOA” or “Operating Agreement” means the agreement attached to this
Agreement as Exhibit “B” hereto, made a part hereof for all purposes, and naming
Beta, as Operator.

  g. “ORRI Form Of Assignment” means the type and format attached to this
Agreement as Exhibit “C” hereto, and made a part hereof for the purpose of
assigning the Pledger ORRI.

  h. “Leasehold Acquisition Costs” means all out of pocket costs incurred by
Beta incident to or in connection with the acquisition of Leasehold Interest
with respect to the Prospect Area including, but not limited to, lease bonuses,
delay rentals, brokerage fees, geological consulting fees and legal expenses
incurred for preparation of documents, title examination in the Prospect Area
and preparation for unitization hearings.

  i. “Leasehold Interests” or “Leases” means any seismic option, oil, gas and
mineral lease or interest therein, fee interest, unleased mineral interest or
other oil, gas or mineral right acquired by the Parties pursuant to this
Agreement, including any such lease, right or interest acquired or subject to
acquisition by the Parties under the terms of any farmout agreement, lease
purchase agreement, assignment from third parties, options, fee purchase or any
other type of agreement.

  j. “Payout” means that point in time when Beta’s interest in cumulative
revenues from production from any well or wells drilled in the Prospect Area
during the term of this Agreement, after deducting applicable royalties,
overriding royalties which are not solely the burden of Beta, the Pledger ORRI,
any production payments, shut-in payments, delay rentals, non-participating
royalties and/or mineral interests and/or other similar burdens attributable to
Beta’s interest, production taxes or severance taxes and any other taxes
provided by law (excluding income taxes), shall first equal the sum of (i)
Beta’s share of all Leasehold Acquisition Costs, (ii) Beta’s share of 100% of
the costs and expenses incurred in drilling, testing, completing, equipping and
operating, inclusive of Beta’s share of any workover or recompletion of any well
or wells drilled on the Prospect Area by Beta before Payout, and (iii) Beta’s
share of other expenses incurred by Beta as same are directly attributable and

  applicable to Beta’s cost bearing interest in the Prospect Area. Payout shall
become effective at 7:00 AM of the first day of the month after Payout occurs.
It is agreed that after Payout on any well, Beta will pay in arrears any amount
of earned revenue accruing to Pledger’s interest beginning on the day actual
Payout is achieved, and will be tendered within 30 days of Beta having received
production payment covering this period.

  k. “Royalty” or “Royalties” shall mean lessor’s royalty under the terms of a
Lease, or overriding royalties in favor of a third party under a Lease.

ARTICLE II OWNERSHIP

2.1 Except as otherwise provided in this Agreement, the Parties agree to share
all future costs, liabilities and benefits (except the Pledger ORRI)
attributable to, or derived from this Agreement with respect to each well
drilled under the terms of this Agreement in the following percentages before
Payout:

Pledger 0% Beta 100%

2.2 The foregoing notwithstanding, upon well by well Payout, 12.50% of the
interest credited above to Beta shall revert to Pledger, such that effective
upon Payout of each well, the Parties shall share all costs, liabilities and
benefits (including the Pledger ORRI) attributable to or to be derived from this
Agreement, and Rentals, in the following percentages:

Pledger 12.50% Beta 87.50%

2.3 If after the Effective Date a Party creates any lease burden, including, but
not limited to, any overriding royalty interest, production payment, net profits
interest, or assignment of production, but excluding the royalty or other
interest which the Leases provide for lessors, such burden shall be deemed the
sole and absolute responsibility, obligation and liability of the Party creating
such burden, and such Party shall indemnify, defend and hold harmless the other
Party from and against any liability therefor.

2.4 It is agreed and understood that the Beta will notify Pledger and will
furnish all necessary conveyances to vest Pledger with its after Payout
interest. Beta shall furnish Pledger with monthly payout statements prior to
Payout and all monthly accounting data as it applies to operations of any well
in the AMI.

2.5 The assignment by and from Beta of Pledger’s 12.5% interest shall occur
within twenty days after the date upon which Well Payout of each well becomes
effective as defined herein by Article 1.1 Pledger’s interest shall be free and
clear of any liens and encumbrances at the time that the assignment is executed.

2.6 “WI Form Of Assignment” means the type and format of assignment, attached to
this Agreement as Exhibit “D” hereto, and made a part hereof for the purpose of
assigning a Working Interest in the prospect to Pledger, as provided for in this
Agreement.

2.7 Beta agrees to fully defend, protect and indemnify and hold harmless
Pledger, its subsidiaries and affiliates and their respective directors,
officers, executives, supervisors, employees, agents, successors and assigns
from and against each and every claim, demand, action, cause of action, or
lawsuit and any liability cost, damage, or loss, including, but not limited to,
court costs and attorney’s fees that may be asserted against Pledger by any
party, including Beta’s subsidiaries and affiliates and their respective
directors, officers, executives, supervisors, employees, agents, successors and
assigns, arising from or on account of any operation conducted by Beta or for
the benefit of Beta prior to the effective date of the assignment of working
interest by Beta to Pledger.

ARTICLE III CONSIDERATION

        Pledger shall be paid a cumulative total of Seventy Five Thousand and
No/100 Dollars ($75,000) in cash and two thousand Warrants to Purchase Beta
Common Stock at Nine and 50/100 Dollars ($9.50) per share, as consideration for
generating the geological concept under the following timetable: (i) $30,000, in
cash upon closing and execution of this Agreement, and (ii) $45,000 in cash and
the said Warrants to Purchase Beta Common Stock after the acquisition of Leases
within the Prospect Area covering 500 net mineral acres.

ARTICLE IV DUTIES AND RESPONSIBILITIES OF THE PARTIES

4.1 Concurrent with the execution of this Agreement, the Parties shall enter
into the Operating Agreement. Except as otherwise provided for herein, Beta
shall be designated as “Operator” of the Prospect Area and shall conduct or
cause to be conducted all operations within the Prospect Area. To the extent of
any conflict between the terms of this Agreement and the Operating Agreement,
the terms of this Agreement shall be controlling, except as otherwise provided
in this Agreement. All operations in the Prospect Area shall otherwise be
subject to, and conducted in accordance with, the terms and conditions of the
Operating Agreement.

4.2 Should Beta or Pledger desire to surrender in whole or in part, any
Leasehold Interests within the Prospect Area (including any Leases, extensions,
farm ins or lease renewals) the other Party shall be notified of their intent 90
days prior to expiration of each Lease and / or 30 days prior to any rental
obligation. The Party receiving such notice shall in turn give the other Party
written notice, no later than 10 days before the Lease expiration or rental
date, of the interest it desires to preserve, and shall be entitled to an
assignment of such interest. Beta and Pledger shall make a good faith effort to
comply with the provisions of this Paragraph 4.2 but in the event of failure to
do so, through oversight or otherwise, Beta and/or Pledger shall not be liable
for any default or loss of Lease.

4.3 This letter shall be binding through the term of any Lease renewals,
extensions, farm-ins, farm-outs or acquisitions that Beta or Pledger may be a
part of, involving the Leases within the Prospect Area, so long as actions to
extend the term of the Leases are made during the term of this Agreement.

ARTICLE V PLEDGER OVERRIDING ROYALTY INTEREST

5.1 In addition to the 12.5% interests provided for above, Pledger shall be
assigned an overriding royalty interest in all Leases and lease agreements as
follows: (i) in the event the net revenue acquired is 75% or greater, the
Pledger ORRI shall be 3% of 8/8ths, (ii) in the event the net revenue acquired
is less than 75% and greater than 70%, the Pledger ORRI shall be 2% of 8/8ths,
and (iii) in the event the net revenue is equal to or less than 70%, the Pledger
ORRI shall be 1% of 8/8ths.

5.2 If a Lease covers less than the full undivided fee estate in the oil, gas,
sulphur and associated hydrocarbons in any lands covered by the Lease, or in the
event less than one hundred percent (100%) of the leasehold estate in any such
Lease is acquired by the Parties as to any of the lands covered by the Lease,
then as to such Lease, insofar as it covers such lands, the Pledger ORRI shall
be proportionately reduced. The Pledger ORRI shall not apply if already
applicable to a conveyed interest, avoiding duplication of burden on the same
interest, and will likewise not apply to the acquisition of any Royalties,
production payments, net profits interests and/or other expense-free interests
acquired in wells already producing and/or capable of producing hydrocarbons.

5.3 In the event all or a part of the lands covered by a Lease are pooled or
unitized with other Leasehold Interests, the Pledger ORRI shall be further
reduced in the proportion that the surface acreage of the land covered by the
Lease and included in the unit, bears to the total surface acreage of such unit.

5.4 No interest in a Lease burdened by the Pledger ORRI, whether or not jointly
owned, shall be surrendered in whole or in part unless and to the extent allowed
by the Operating Agreement or this Agreement with respect to surrender of Leases
acquired for the joint account of the Parties.

5.5 Pledger shall be assigned the ORRI on any and all acreage leased, purchased,
farmed-in, or acquired through any means, by Beta or Pledger. Assignment of such
ORRI shall be made by Beta or Pledger within thirty (30) days after either, 1.)
the acquisition of any Lease, or 2.) acquisition of an interest in any Lease or
3.) within thirty (30) days after the recordation by Beta or Pledger, of any
affected interest assignments and within five (5) business days if any
assignment or Lease is acquired during the thirty (30) day period prior to
drilling any well to which the Lease pertains. The Assignment of Overriding
Royalty shall utilize the form of assignment which is attached hereto as,
EXHIBIT “C”.

5.6 The Pledger ORRI shall apply to and burden all renewals, extensions, top
Leases and amendments of Leases burdened by the Pledger ORRI acquired within 2
year (s) after the expiration of each such Lease.

5.7 In the event Beta’s or Pledger’s working interest in a Lease is subsequently
reduced by virtue of a reversionary, carried or other working interest in favor
of a third party, then the Pledger ORRI shall be reduced proportionately at the
time Beta and/or Pledger’s working interest is so reduced.

ARTICLE VI DATA

6.1 Beta will give notice (via telephone) fax or e-mail) twenty-four (24) hours
in advance of the spudding of a well, logging of a well and completion of any
well to the following Parties:

Pledger Operating Company, Inc., 606 Washington Street, Natchez, Mississippi
391120, (601) 442-9871, E-Mail - pledger1@earthlink.net; -----------------------
Alton Miller, Post Office Box 314, Jackson, Mississippi, (601)821-4863, E-Mail -
Strataexpl@cs.com; Research Petroleum, Inc., 25025 I-45 North, Suite 400, The
Woodlands, Texas 77380, (281) 363-4474,(281)363-0045 Fax,
E-Mail-megaxplor@pdq.net -----------------

6.2 The same parties shall have complete access to the rig floor at it’s sole
cost, risk and expense, open hold logging truck and cased hole perforating
truck. The same parties will receive a copy of all electronic digital data,
including though not limited to, field prints of all open and cased hole logs
and a final print of all open and cased hold logs, a copy of all core evaluation
reports simultaneous to the time Beta receives same, as well as all formation
test results, pressure or build-up surveys, mud logs, samples and driller’s
logs, inclusive of copies of any geophysical data and tapes acquired within the
AMI, vsp surveys, velocity surveys, cased hole logs, or any other open or cased
hole surveys conducted on wells in the AMI of which Beta has an interest. The
same parties shall also be furnished a copy of any core studies and reservoir
evaluations, test data, regulatory reports, daily drilling and completion
reports provided on daily fax basis during conduct of field operations, in
addition to copies of monthly accounting data as it applies to operations
expenses.

ARTICLE VII COST OF OPERATIONS

        Except as expressly provided in paragraph 2.1, all costs incurred after
the Effective Date by Pledger or Beta, if authorized by this Agreement, in the
furtherance of the acquisition or maintenance of Leasehold Interests in the
Prospect Area, including Leasehold Acquisition Costs, will be shared by the
Parties in the proportions provided in paragraph 2.1 prior to Payout, and
paragraph 2.2 after Payout.

ARTICLE VIII TERM The Term of Agreement is as defined in Section 1.1 e. above.
ARTICLE IX ASSIGNMENT OF INTEREST

9.1 Any assignment or transfer by any Party of any Leasehold Interest in the
Prospect Area shall be subject to this Agreement and the Operating Agreement.
This Agreement shall accompany the sale and assignment of any interest within
the AMI in whole or in part.

9.2 Subject to the foregoing and to the Operating Agreement, the terms,
covenants and conditions of this Agreement shall be binding upon and shall inure
to the benefit of the Parties and their respective legal representatives,
successors and assigns.

ARTICLE X REMEDIES

        The Parties shall be entitled to any remedy available at law or equity
for any breach of this Agreement.

ARTICLE XI MISCELLANEOUS PROVISIONS

11.1 In connection with the transactions contemplated by this Agreement, Pledger
represents and warrants that: (i) Pledger is a corporation duly organized,
existing, and in good standing under the laws of the State of Mississippi, with
full power and authority to conduct its business as now conducted and to own and
operate its properties and other assets; (ii) Pledger has all requisite power
authority to execute and deliver this Agreement and (iii) this Agreement has
been duly and validly executed and delivered by Pledger and, assuming its due
authorization, execution, and delivery by the purchaser, constitutes the legal,
valid, and binding obligation of Pledger, enforceable against Pledger in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, or similar laws now or
hereafter in effect relating to or limiting creditors’ rights or by legal
principles of general applicability governing the availability of equitable
remedies.

11.2 In connection with the transactions contemplated by this Agreement, Beta
represents and warrants that: (i) it is a corporation duly organized, existing,
and in good standing under the laws of the State of Nevada, with full power and
authority to conduct its business as now conducted and to own and operate its
properties and other assets; (ii) it has all the requisite power and authority
to execute and deliver this Agreement and (iii) this Agreement has been duly and
validly executed and delivered by Beta and, assuming its due authorization,
execution, and delivery by Beta, constitutes the legal, valid, and binding
obligation of Beta, enforceable against Beta in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, or similar laws now or hereafter in effect relating
to or limiting creditors’ rights or by legal principles of general applicability
governing the availability of equitable remedies.

11.3 The Parties do not intend to create, nor shall this Agreement be construed
to create, a partnership, mining partnership, joint venture, or other
relationship of mutual agency between Parties, their relation with respect to
this Agreement and all rights, interests, and obligations hereunder being solely
one of co-owners or co-tenants. Nothing herein shall be construed as
authorization of one Party hereto to act as general agent of the other Party nor
to permit either Party to act for or on behalf of the other Party outside the
terms of this Agreement.

11.4 Time is of the essence for each and every provision of this Agreement. If
Beta can not acquire an interest in the prospect acreage within 90 days, this
Agreement shall terminate unless otherwise agreed upon in writing, however Beta
shall be prohibited from acquiring any interest in the Prospect AMI for five
years after the Effective Date of this Agreement, and furthermore in any oil,
gas, or mineral lease. Pledger shall not be required to refund any monies which
it previously received and Beta shall assign free of cost it’s entire mineral
interest or farmout agreements which it had acquired as of the termination date.

11.5 The Parties hereto agree to execute, acknowledge, and deliver, as
appropriate such other and further instruments, documents, and assurances as the
other of them may reasonably require to effectuate the purpose and intent of
this Agreement

11.6 All notices, requests, and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand (including, without limitation, by overnight courier),
transmitted by facsimile, or mailed, certified or registered mail (return
receipt requested) with postage prepaid to the applicable party as follows:

Pledger Operating Company, Inc. Attn: Mr. Tim G. Chesteen, Pres. 606 Washington
Street Natchez, Mississippi 39120 Telephone: (601)442-9871 Telecopier: (601)442-
9872 E-mail: pledger1@earthlink.net Beta Oil & Gas, Inc. Attn: Robert S. Spahr
Tulsa, Oklahoma 74136 Telephone: (918) 495-1011 Telecopier: (918) 495-1077
E-mail: robs@betaoil.com

or to such other persons or entities or addresses as the applicable Party shall
furnish to the other Party in writing in accordance with this Section 11.6.
Delivery of notices shall be effective only upon actual receipt by the intended
recipient (or in the case of facsimile transmission the completion of such
transmission during the recipient’s normal business hours).

11.7 This Agreement, and the legal relations among the Parties hereto arising
from this Agreement, shall be governed by and construed in accordance with the
laws of the State of Louisiana.

11.8 This Agreement (including the Exhibits hereto and the other instruments
referred to herein) embodies the entire agreement and understanding of the
Parties hereto in respect of the subject matter contained herein; there are no
restrictions, promises, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein, and this Agreement supercedes all
prior agreements and understandings among the Parties with respect to such
subject matter.

11.9 Neither this Agreement nor any other agreements between the Parties nor any
uncertainty or ambiguity herein or therein shall be construed or resolved using
any presumption against any Party hereto or thereto, whether under any rule of
construction or otherwise. On the contrary, this Agreement has been reviewed by
the Parties and their counsel and, in the case of any ambiguity or

uncertainty, shall be construed accordingly to the ordinary meaning of the words
used so as to fairly accomplish the purposes and intentions of all Parties
hereto.

11.10 The headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretations of this
Agreement.

11.11 The Parties shall make no press release or other public announcement or
public disclosure relating to this Agreement or the subject matter of this
Agreement, without consulting with each other in advance.

11.12 Beta shall manage the acquisition of the acreage within the AMI, under
terms mutually satisfactory to Pledger.

11.13 A memorandum of this Agreement may be recorded in the public record of the
Parish of Lafayette Louisiana.

11.14 Pledger shall be allowed to name the wells and will be drafted to meet
with Beta's approval.

11.15 Pledger, through no obligation, reserves the option to purchase at ground
floor cost, up to a five percent (5.0% of 8/8‘ths) working interest, on a well
by well basis, in each well and drilling unit created within the AMI. Beta shall
give Pledger at least 30 days notice on the first well and 60 days notice on all
subsequent wells, prior to initiating operations. The election period by Pledger
shall be within 30 days of having received notice and AFE Beta.

11.16 Pledger, reserves the right to market any available interest for sale by
Beta to industry parties that have expressed a desire to Pledger in
participating in their West Broussard Field Prospect, as long as the terms under
which the interest is offered to Pledger by Beta are met by the purchasing party
in full. Interest will be sold on a first come basis.

11.17 Pledger shall be reimbursed for all land related expenses invoiced by Paul
Monju &Associates, Inc. Associates as incurred prior to the date of execution of
this agreement. Currently this equals approximately $45,000. (02/12/01).

11.18 Monju and Associates, Inc shall be retained as the lead broker during the
acquisition of Leases within the AMI, so as to not dilute the land knowledge
thus far acquired. Leases shall be acquired in the name of Paul Monju &amp;
Associates, Inc. as Lessee, subject to the terms of an agency agreement between
Paul Monju &amp; Associates, Inc. and Beta, whereby Monju will be required to
assign all interest in any such Leases to Beta upon demand without reservation
of economic interest whatsoever. Paul Monju &amp;Associates, Inc. shall not be
authorized to assign Leases or any interest therein directly to Pledger, whether
in the form of overriding royalty or working interest effective at Payout.

ARTICLE XII BINDING EFFECT

12.1 This Agreement is entered into by Beta, whose legal name is “Beta Oil &amp;
Gas, Inc.,” and shall be binding to their officers, directors, employees,
agents, attorneys, partners, designees, and representatives. If any part of this
Agreement is breached, declared void or unenforceable, the Parties agree to be
bound by the remaining part of this Agreement.

ARTICLE XIII ROYALTY ACQUISITION

        After, in the sole opinion of Beta, sufficient Leases have been acquired
within the AMI, the officers of Pledger, namely Tim Chesteen and Al Miller, will
attempt to purchase Royalty within the AMI. Any Royalty acquired under the terms
of this Paragraph shall be offered to Beta under Paragraph XV AREA OF MUTUAL
INTEREST of the Operating Agreement.

* * *

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date of the individual acknowledgments, but same shall be effective as of the
Effective Date.

PLEDGER OPERATING COMPANY, INC. _______________________
By:_________________________ Witness: Tim G. Chesteen

__________ Witness: BETA OIL & GAS, INC. _______________________
By:__________________________ Witness Robert S. Spahr Manager of Land and
Marketing

__________ Witness STATE OF MISSISSIPPI COUNTY OF _____________

On this ____ day of _________________, 2001, before me appeared TIM G. CHESTEEN,
to me personally known, who, being by me duly sworn, did say that he is the
PRESIDENT of PLEDGER OPERATING COMPANY, INC. and that the foregoing instrument
was signed and delivered by him on behalf of said corporation by authority of
its Board of Directors and said appear acknowledged said instrument to be the
free act and deed of said corporation.

----------------------------------- Notary Public STATE OF OKLAHOMA COUNTY OF
_____________

On this ____ day of _________________, 2001, before me appeared ROBERT S. SPAHR,
to me personally known, who, being by me duly sworn, did say that he is the
MANAGER OF LAND AND MARKETING of BETA OIL &amp;GAS, INC. and that the foregoing
instrument was signed and delivered by him on behalf of said corporation by
authority of its Board of Directors and said appear acknowledged said instrument
to be the free act and deed of said corporation.

----------------------------------- Notary Public