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                          EXHIBIT 10.26

                     WESTERN ENERGY RESOURCES LIMITED
                            c/o Nadeem Babar
                       1600 Smith Street, Suite 4300
                          Houston, Texas  77002

                            February 28, 1997

Capco Resources, Inc.
216 16th Street, No. 730
Denver, Colorado  80202

Gentlemen:

     Western Energy Resources Limited ("Western") understands that Capco
Resources, Inc. ("Capco") has been approved by the State Bank of Pakistan to
have issued to Capco 2,675,426 shares of stock (the "Saba Shares") of Saba
Power Company Limited ("Saba") against certain approved project development
expenses in the amount of US$848,877.  Saba is the owner of a power plant
which is contemplated to be constructed near Mandi Farouqabad, Province of
Punjab, Pakistan.  Western is currently a limited partner in a partnership
which owns and controls directly or indirectly one of the "Initial
Shareholders" (as defined in the Amended and Restated Implementation Agreement
between Saba and the Government of Pakistan dated March 31, 1996, as the same
may be amended from time to time) in Saba.  Saba is in the process of
negotiating construction financing for its power plant under the loan
documentation more generally described in the Amended and Restated Common Debt
agreement dated as of June 15, 1996, by and among Saba Export-Import Bank of
the United States, The Sanwa Bank, Limited, as Eurocurrency Facility Agent,
ABN AMRO Bank N.V., Singapore Branch, as Inter-Creditor Agent, ABN AMRO Bank
N.V., Chicago Branch, as Eximbank Facility Agent and the Financial
Institutions who may become the parties Lender thereto, as amended from time
to time (the "CDA").  All terms used herein but not otherwise defined herein
shall have the meaning ascribed thereto in the CDA.

     For and in consideration of the mutual promises herein set forth and
other good and valuable consideration, by notice given by Capco to Western
between 240 and 360 days from and after the date hereof, Capco shall have the
right to cause Western to acquire all of the Saba Shares, or if such shares
have not been issued, to cause Western to acquire such future right to acquire
shares (in either case herein called the "Capco Interest") for a purchase
price (the "Purchase Price") equal to $848,877 plus an additional amount equal
to interest upon such $848,877 at a rate equal to ten percent (10%) per annum
accruing from and after the date hereof through and including the date of
closing of such sale and purchase (the "Put Option").  Western shall have the
right to direct Capco to sell the Capco Interest to a third party nominee. 
The closing of such sale and purchase shall be held at the offices of
Fulbright & Jaworski L.L.P. in Houston, Texas, or at such other address as the
parties may agree, at 10:00 a.m. local time on the date which is 30 days after
such notice has been given by Capco to Western.  Notice for purposes hereof
must be in writing and sent to Western (to the attention of Nadeem Babar (fax
no. (713) 651-7803) at the address set forth on this letterhead (or such other
address as may be designated by Cogen to Capco) and shall be sent by telecopy
(confirmed by overnight messenger delivery) or by messenger delivery, and will
be effective upon receipt.  At such closing, Western or its nominee, shall pay
the Purchase Price to Capco in immediately available U.S. funds and Capco
shall deliver to Western the Capco interest free and clear of any and all
liens and encumbrances other than those under the loan documentation referred
to in the first paragraph of this letter agreement).  Capco's Put Option is
subject to obtaining all requisite governmental approvals, 
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including those of the Government of Pakistan, so as to avoid causing
violation of laws or agreements binding upon Saba or Western, and to obtaining
the approval by the Lenders.

     If at the time Capco should exercise its Put Option, the Saba Shares are
still "Special Shares" (as defined in that certain Shareholders' Agreement
dated as of ________, 1997 executed or contemplated to be executed by and
among Cogen Technologies Saba Capital Company, L.L.C. ("Cogen"), Capco and
Coastal Saba Power Ltd. (the "Sponsors' Shareholder Agreement"), Cogen agrees
to transfer to Western an equal number of such Special Shares as were covered
by the Put Option for no additional consideration.  Cogen also agrees that so
long as there are Special Shares still in existence that Western solely (as
among Cogen, Capco and Western) shall be entitled to pursue the occurrence of
"Enhancement Events" as defined in the Sponsor's Shareholders Agreement with
full authority but cooperation from Cogen and Capco.

     This letter agreement and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with the laws of
the State of Texas, without regard to its conflicts of law principles.

     Any controversy, dispute or claim of any nature between or involving any
party hereto, regardless of whether the controversy, dispute or claim is based
upon an action or omission taken in an individual or representative capacity,
and whether or not arising from, relating to or on account of, this Agreement,
or any breach or cancellation or it or any default under it, shall be subject
to and settled by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, as amended from time to time,
before a panel of three neutral arbitrators.  Each party shall appoint one
arbitrator within 30 days after demand for arbitration is made pursuant to the
next succeeding paragraph hereof, and the two appointed arbitrators shall
appoint the third arbitrator within 30 days of their appointment.  The
arbitration proceedings shall take place in Houston, Texas as soon as
reasonably possible after the appointment of the third arbitrator and
thereafter shall be conducted as expeditiously as reasonably possible.  The
award rendered by the arbitration shall be final and binding on the parties,
and judgement may be entered upon it in accordance with Texas law in any court
having jurisdiction of it.

     Demand for arbitration shall be filed in writing with the other party or
parties to this Agreement.  A demand for arbitration shall be made within a
reasonable time after the claim, dispute or other matter in question has
arisen.  In no event shall the demand for arbitration be made after the date
when institution of legal or equitable proceedings based on the claim, dispute
or other matter in question would be barred by applicable statutes of
limitations.

     Cogen joins in the execution hereof to evidence its agreement and the
terms hereof.

     If the foregoing sets forth your agreement and understanding, please so
indicate by executing a copy hereof in the appropriate place set forth below
and returning an executed counterpart to the undersigned.

     This letter shall become effective upon the actual disbursement of loan
proceeds out of the Distribution Account to Saba under the loan documentation
referred to in the first paragraph of this letter agreement.
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                               Very truly yours,

                               WESTERN ENERGY RESOURCES LIMITED

                               By:/s/ Nadeem Babar
                               Name:  Nadeem Babar
                               Title: Managing Director

ACCEPTED AND AGREED TO:

CAPCO RESOURCES, INC.

By:/s/ Edward J. Names
Name:  Edward J. Names
Title: President
Date:  February 28, 1997

COGEN TECHNOLOGIES SABA
CAPITAL COMPANY, L.L.C.

By:  Cogen Technologies
     Saba Power GP, Inc., Member

By:/s/ Nadeem Babar
Name:  Nadeem Babar
Title: Vice President
Date:  February 28, 1997

and

By:  Cogen Technologies Saba
     Power, L.P., Member

     By:  Cogen Technologies Saba
          Power GP, Inc., its
          General Partner

By:/s/ Nadeem Babar
Name:  Nadeem Babar
Title: Vice President
Date:  February 28, 1997
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