Exhibit 10.23


                   AMENDED AND RESTATED GAS PURCHASE AGREEMENT

                                 DATED EFFECTIVE

                                  JULY 1, 1998

                                  BY AND AMONG

                     ORYX GAS MARKETING LIMITED PARTNERSHIP
                       SUN OPERATING LIMITED PARTNERSHIP,
                                    AS SELLER
                                       AND
                         PRODUCERS ENERGY MARKETING, LLC
                                    AS BUYER









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                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I.                 DEFINITIONS                                         1

ARTICLE II.                SUBJECT MATTER                                      5
         2.1               Generally                                           5
         2.2               Covenant to Cooperate on Transportation             5
         2.3               Covenant to Cooperate on Production                 5

ARTICLE III.               COMMITMENT OF GAS                                   5
         3.1               Committed Gas                                       5
         3.2               Excluded Gas                                        6
         3.3               Disposition Gas                                     6
         3.4               Affiliates and Subsidiaries                         7
         3.5               Seller's Estimate' Scheduling                       7
         3.6               Operational Reservations                            8
         3.7               Lien Gas and Other Transactions                    10

ARTICLE IV.                QUANTITY; SCHEDULING AND TRANSPORTAITON OF
                           DAILY VOLUMES                                      11
         4.1               Purchase and Sale Obligation                       11
         4.2               Certain Events Related to the Delivery and
                             Taking of Committed Gas                          12
         4.3               Provision Regarding Output Contract Laws           14

ARTICLE V.                 DELIVERY POINT(S)                                  14
         5.1               Generally                                          14

ARTICLE VI.                QUALITY, PRESSURE AND MEASUREMENT                  15
         6.1               Generally                                          15
         6.2               Nonconforming Gas                                  15

ARTICLE VII.               PRICE                                              16
         7.1               Initial Price                                      16
         7.2               Alternate Price                                    16
         7.3               Payment for Delivery Arrangements                  17
         7.4               Redetermination of Index(es) and Index
                             Price Adjustments                                17
         7.5               Status of Exhibit A; Procedures for
                             Change of Exhibit                                17
         7.6               Fixed Price Gas                                    18

ARTICLE VIII.              BILLING AND PAYMENT                                18
         8.1               Seller's Invoice                                   18
         8.2               Monthly Payment                                    18
         8.3               Disputed Statements                                19
         8.4               Errors                                             20
         8.5               Overdue Payments                                   20
         8.6               Audits                                             20
         8.7               Indemnities                                        20

ARTICLE IX.                EFFECTIVE DATE AND TERM; RELEASE OF GAS            22
         9.1               Generally                                          22
         9.2               Restricted Gas; Release of Committed Gas           23
         9.3               Survival                                           30

ARTICLE X.                 FORCE MAJEURE                                      30
         10.1              Generally                                          30
         10.2              Exclusions                                         31
         10.3              Labor Disputes                                     31
         10.4              Marketing of Force Majeure Gas                     31

ARTICLE XI.                IMBALANCE RESOLUTION                               32
         11.1              Generally                                          32
         11.2              Cooperation of Parties                             32
         11.3              Liability for Imbalance Charges                    32
         11.4              Operational Flow Orders                            32

ARTICLE XII.               CERTAIN EVENTS AFFECTING PERFORMANCE               33
         12.1              Buyer and Seller Events                            33
         12.2              Offset Rights                                      35

ARTICLE XIII.              CERTAIN DEFINITIONS                                35
         13.1              Other Definitions                                  35

ARTICLE XIV.               MISCELLANEOUS                                      36
         14.1              Seller's Title Warranty                            36
         14.2              No Continuing Waiver                               36
         14.3              Government Regulation                              36
         14.4              Exclusion of Consequential Damages                 36
         14.5              Notices                                            36
         14.6              Assignability                                      38
         14.7              Choice of Law                                      38
         14.8              Integration                                        38
         14.9              Confidentiality                                    38
         14.10             Arbitration                                        39
         14.11             Taxes                                              40
         14.12             Construction of Agreement                          41
         14.13             Relationship of Parties                            41
         14.14             Representations and Warranties of the Seller       42
         14.15             Representations and Warranties of Buyer            42
         14.16             Seller's Agent                                     43
         14.17             No Third Party Beneficiaries                       43
         14.18             Further Assurances; Transition Matters             43
         14.19             Ancillary Agreements                               43

<PAGE>
                   AMENDED AND RESTATED GAS PURCHASE AGREEMENT


     THIS  AMENDED AND RESTATED GAS  PURCHASE  AGREEMENT  ("Agreement"),  by and
among ORYX GAS MARKETING LIMITED  PARTNERSHIP,  a Delaware limited  partnership,
SUN OPERATING LIMITED PARTNERSHIP, a Delaware limited partnership (together with
all Affiliates (as  hereinafter  defined),  collectively  herein  referred to as
"Seller") and PRODUCERS  ENERGY  MARKETING,  LLC ("Buyer"),  a Delaware  limited
liability company, is effective as of the Effective Date (hereinafter defined).

                                    RECITALS:

     WHEREAS,  Seller and Buyer entered into that certain Gas Purchase Agreement
effective as of April 1, 1996; and

     WHEREAS,  Seller and Buyer  desire to amend and restate  their Gas Purchase
Agreement due to a change in ownership of Buyer, and

     WHEREAS,  Buyer  acknowledges that Seller's intention in entering into this
Agreement is to have a market for its Committed Gas (as hereinafter  defined) at
market prices;

     WHEREAS,  Seller  acknowledges that Buyer's intention in entering into this
Agreement  is to have a  secure  source  of gas  supply  in  order  to meet  its
commitments  to its Gas  customers  and  otherwise  conduct its  business in the
physical and financial marketing and trading of Gas;

     WHEREAS, Seller desires to sell and Buyer desires to purchase Committed Gas
in accordance with the terms of this Agreement.

     NOW,  THEREFORE,  in consideration  of the covenants and agreements  herein
contained, Seller and Buyer do hereby contract and agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS
                                   -----------

     For the purposes hereof, the following words,  phrases and terms shall have
meanings as defined below. Other words,  phrases and terms are defined elsewhere
in this Agreement.

     1.1  "Affected  Party"  shall mean a party  whose  ability  to perform  its
obligations under this Agreement has been affected by an Event.

     1.2  "Affiliate"  shall  mean  any  individual,  partnership,  corporation,
limited  liability  company,  trust or other Entity or association,  directly or
indirectly, through one or more intermediaries,  controlling,  controlled by, or
under common control with a person or Entity. The term "control," as used in the
immediately preceding sentence, means, with respect to a corporation,  the right
to exercise, directly or indirectly, more than fifty (50%) percent of the voting
rights  attributable  to the  controlled  corporation;  and, with respect to any
individual,  partnership,  trust,  other Entity or association,  the possession,
directly or  indirectly,  of the power to direct or cause the  direction  of the
management or policies of the controlled Entity. For purposes of this Agreement,
field-wide and individual well units created  pursuant to 52 O.S. ss. 287.8 (and
like  statutes  in  jurisdictions  other  than  Oklahoma)  shall  not be  deemed
Affiliates of Buyer or Seller.

     1.3 "Aggregation Area" shall mean zones,  pooling points or other marketing
aggregation  areas  established by the Tariff of a Transporter.  The Aggregation
Area(s),  subject to revision in  accordance  with  Section  5.1,  are listed in
Exhibit A.

     1.4 "Alternate Price" shall have the meaning set forth in Section 7.2.

     1.5 "BTU" shall mean British Thermal Unit.

     1.6  "Business  Day" means a day other than a  Saturday,  Sunday or a legal
holiday or a day on which banking institutions are authorized by law to close in
Houston, Texas.

     1.7 "Committed Gas" shall have the meaning set forth in Section 3.1.

     1.8 "Contract Price" shall mean the Initial Price or the Alternate Price.

     1.9 "Costs of Delivery" means all reasonable  transportation expenses, fuel
charges,  costs,  deductions or other  charges  actually paid by or on behalf of
Buyer or, where notional,  representative  of such charges which would have been
reasonably  incurred  to  deliver  Gas from a  Delivery  Point to (a) a location
directly on a mainline  pipeline  system or (b) an Aggregation  Area,  either of
which  is  covered  by an  Index  and  subject  to any  applicable  Index  Price
Adjustment.  If  the  Delivery  Point  is at the  mainline  pipeline  system  or
Aggregation  Area,  then the Costs of Delivery as defined  herein shall be zero.
Where the Costs of Delivery are notional,  the Buyer shall,  on or  accompanying
the  statement  provided  pursuant to Section 8.2 hereof,  so indicate and shall
disclose the basis on which such Costs of Delivery are determined.

     1.10 "C.T." shall mean Central Time.

     1.11  "Day"  shall  mean a period of  twenty-four  (24)  consecutive  hours
commencing at 9:00 a.m. C.T. on one calendar day and ending at 9:00 a.m. C.T. on
the following calendar day.

     1.12 "Delivery  Point(s)" means the measuring  station or other measurement
facilities at the point of interconnection  between the facilities of Seller (or
Seller's  Transporter,  as the case  may be) and the  facilities  of  Buyer  (or
Buyer's  Transporter,  as the case may be) where Committed Gas is transferred by
Seller to Buyer. The Delivery  Point(s),  subject to revision in accordance with
Section 5.1, are described in Exhibit A.

     1.13 "Effective Date" shall mean 9:00 a.m. C.T. on July 1, 1998.

     1.14 "Event"  shall mean a Buyer Event,  as defined in Section  12.1(a),  a
Seller Event,  as defined in Section  12.1(b),  a Material Buyer Take Event,  as
defined in Section  4.2(c),  or a Material  Seller Delivery Event, as defined in
Section 4.2(d).

     1.15 "Entity" shall mean any association, corporation, general partnership,
limited partnership,  limited liability company, joint stock association,  joint
venture, firm, trust, business trust,  cooperative,  and foreign associations of
like structure.

     1.16 "Excluded Gas" shall have the meaning set forth in Section 3.2.

     1.17 "FERC" means the Federal Energy Regulatory Commission or any successor
thereto having jurisdiction.

     1.18  "Gas" or "gas"  shall  mean  natural  gas  produced  from gas  wells,
casinghead  gas  produced  from oil wells,  and residue gas  resulting  from the
processing of such gas well gas or casinghead gas.

     1.19  "Imbalance  Charges"  means,  for  Committed  Gas  delivered  to each
Delivery Point(s), any imbalance charges (including but not limited to imbalance
penalties and cash-out costs) assessed against Buyer or Seller by a Transporter.

     1.20  "Index"  for a  particular  source of  supply  in the area  where the
applicable  Delivery  Point(s) is/are located shall be that published  index(es)
which has been determined by mutual agreement (or if there is no published index
for the relevant Delivery Point(s), then such other index(es) as may be selected
by  mutual  agreement),  to best  represent  the  market  price  for Gas of like
quantities and quality at the Delivery Point(s),  after Index Price Adjustments.
The initial index(es) applicable to each Delivery Point(s) is (are) set forth on
Exhibit A.

     1.21 "Index  Price" for any  Delivery  Point(s)  shall be the price for Gas
determined by the applicable Index on the first Day of the applicable Month.

     1.22 "Index Price  Adjustments"  shall mean, with respect to an Index Price
for any  Delivery  Point(s),  differentials  reasonably  necessary to adjust the
Index Price for Gas to accurately reflect the market price for Gas (after taking
into account Costs of Delivery) of like  quantities  and quality at the Delivery
Point(s).  The  initial  Index Price  Adjustments  applicable  to each  Delivery
Point(s) are listed on Exhibit A.

     1.23 "Initial Price" shall have the meaning set forth in Section 7.1.

     1.24  "Material  Buyer  Take  Event"  shall have the  meaning  set forth in
Section 4.2(c).

     1.25 "Material  Seller  Delivery Event" shall have the meaning set forth in
Section 4.2(d).

     1.26  "Month," as  applicable,  shall mean (i) the period  beginning on the
first Day of each calendar month and ending at the beginning of the first Day of
the next succeeding calendar month or (ii) if the above-referenced definition of
"Month"  differs  from the meaning of such term in the Tariff of the  applicable
Transporter in a context where such difference is applicable to the provision in
question, then the term "Month" shall have the meaning set forth in such Tariff.

     1.27 "MMBtu"'shall mean one million (1,000,000) British Thermal Units.

     1.28  "Operational Flow Order" or "OFO" shall have the meaning set forth in
Section 11.4.

     1.29  "Reasonable,"  "reasonably,"  or  words  of  like  import  means  any
practice,  method or act generally  accepted in the natural gas  production  and
marketing industry at the time the decision was made.

     1.30  "Reference  Rate" shall mean the lesser of (i) two percent (2%) above
the per annum rate of interest  announced  from time to time as the "prime rate"
for commercial loans by Chase Manhattan Bank of New York (or its successor),  as
such "prime rate" may change from time to time,  or (ii) the maximum  applicable
nonusurious rate of interest.

     1.31 "Restricted Gas" shall have the meaning set forth in Section 9.2.

     1.32 "Seller's  Estimate"  means,  with respect to each Delivery  Point(s),
Seller's good faith  estimate under Section 3.5 of the quantity of Committed Gas
that Seller  expects to deliver at each such Delivery  Point(s) for the relevant
Month.

     1.33  "Seller's  Wells"  means the wells  described  on  Exhibit A, as such
Exhibit may be revised from time to time in accordance with this Agreement.

     1.34 "Tariff means (i) the currently effective tariff of a Transporter,  as
filed from time to time with the FERC or any other  governmental  authority,  or
(ii) if a Transporter  does not have a tariff on file with the FERC or any other
governmental   authority,   such  Transporter's  currently  effective  operating
policies and procedures, as such policies and procedures may change from time to
time.

     1.35  "Transporter"  shall  mean  an  interstate  or  intrastate  pipeline,
including,  without limitation,  a gathering pipeline, that transports Committed
Gas.

     1.36  "Unaffected  Party"  shall mean a party whose  ability to perform its
obligations under this Agreement has not been affected by an Event.

     1.37 "Year" shall be a period of twelve (12) consecutive Months.

                                   ARTICLE II.

                                 SUBJECT MATTER
                                 --------------

     2.1 Generally.  Subject to the other terms and conditions of this Agreement
(including,  without  limitation,  Article IV),  Seller hereby agrees to sell to
Buyer and Buyer hereby agrees to purchase from Seller Committed Gas.

     2.2 Covenant to Cooperate on Transportation. Subject to the other terms and
provisions of this Agreement,  the parties understand and agree that Buyer shall
nominate to third  parties,  dispatch  and make all other  arrangements  for the
resale and the  transportation of Committed Gas sold hereunder from the Delivery
Point(s) in a manner  consistent  with  Seller's  Estimate  and any  reforecasts
thereof in  accordance  with  Sections  3.5(b) and 3.5(c),  and Seller agrees to
provide reasonable cooperation as may be necessary to effectuate such resale and
transportation.  Notwithstanding the foregoing,  however, neither party shall be
obligated to build  pipelines or other  transportation  facilities to effect the
delivery or receipt of Committed Gas hereunder.

     2.3  Covenant to Cooperate  on  Production.  Subject to the other terms and
conditions of this Agreement,  Buyer will use commercially reasonable efforts to
take Gas from Seller in a manner  consistent with past practices,  with the goal
of taking the Committed  Gas in the manner that is least  disruptive to Seller's
operations.  Without limiting the generality of the foregoing,  Buyer shall give
priority,  to  the  fullest  extent  practicable,  to  accepting  deliveries  of
Committed  Gas (a) that is  casinghead  Gas and/or Gas that is produced from oil
wells,  (b) the production of which is necessary to maintain  Seller's leases in
full force and effect,  or (c) the  production  of which is  necessary  to avoid
injury to Seller's reservoirs or material diminution in the aggregate production
therefrom. Seller will notify Buyer of anticipated operational considerations at
the time Seller's  Estimate is provided to Buyer in accordance with Section 3.5.
Seller will notify Buyer of unanticipated  operational  considerations within 24
hours after Seller becomes aware of such considerations,  and Buyer will respond
to such notice as soon as it is commercially reasonable for Buyer to do so.

                                  ARTICLE III.

                                COMMITMENT OF GAS
                                -----------------

     3.1 Committed  Gas.  During the term hereof and subject to any  limitations
herein  set forth,  Seller  shall sell to Buyer and Buyer  shall  purchase  from
Seller all  deliverable  Gas owned or controlled (as defined in Article XIII) by
Seller  during  the  term  of this  Agreement  in  North  America  (onshore  and
offshore), excluding, however, Gas defined as Excluded Gas. All Gas described in
the preceding  sentence  shall be  hereinafter  referred to as "Committed  Gas."
Buyer and Seller  shall  agree on the  arrangements  for  delivery by Seller and
taking by Buyer of Committed  Gas presently  being  produced in Canada not later
than the last to occur of (a) 90 days  after the  Effective  Date or (b) 90 days
after a Seller's  initial  acquisition of Gas  production in Canada.  Until such
arrangements are in place, Canadian Gas shall not be considered "Committed Gas."
If Buyer and Seller cannot reach agreement on the foregoing  matters before such
date,  then the  differences  between  Buyer and Seller  shall be  submitted  to
arbitration in accordance with Section 14.10.

     3.2 Excluded  Gas.  "Excluded  Gas" shall mean and include (a) Gas owned or
controlled  by Seller  that is being  sold,  on the date of this  Agreement,  on
behalf of Seller under a joint operating agreement,  unit operating agreement or
similar  agreement to which Seller is a party, (b) Gas production  commencing or
acquired  from a new source after the date of this  Agreement  which is owned or
controlled  by Seller and which Seller elects to have sold on its behalf under a
joint  operating  agreement,  unit operating  agreement or similar  agreement to
which Seller is a party at any time after the date of this  Agreement,  provided
that the quantity of such Gas, when  available  for initial  delivery by Seller,
does not exceed  150,000 cubic feet per Day per well, (c) Gas sold under (i) Gas
sales contracts with third parties  existing on the date of this Agreement which
contracts  are listed on Schedule  3.2,  and (ii) any  binding  and  enforceable
contracts  burdening  or  affecting  properties  acquired  by  Seller  after the
Effective  Date  (insofar  as the same  existed  as of the date of  acquisition)
during the primary term  thereof,  and any  extensions  or renewals of contracts
described in (i) or (ii) above, (iii) applicable calls on production,  rights of
fast refusal or similar  rights in favor of third parties with respect to Gas of
the sort  customarily  found in joint operating  agreements,  unit agreements or
other agreements  typically  entered into in connection with Gas exploration and
production activities, to which agreements Seller is a party on the date of this
Agreement,  and working  interests in favor of third parties with respect to Gas
production  commencing or acquired  after the date of this  Agreement,  provided
that  such  rights  are of the  sort  customarily  found  in  farm-ins  or other
drill-to-earn  agreements,  (d) Gas  subject  to the  reservations  set forth in
Sections 3.6 and 3.7, (e)  Disposition  Gas (as defined in Section 3.3, but only
if released in accordance  with Sections 3.3 and 9.2),  (f) Lien Gas (as defined
in Section 3.7, but only if released in accordance  with such Section 3.7),  (g)
other  Committed  Gas released from this  Agreement  pursuant to the other terms
hereof, or (h) such other Gas as Buyer and Seller may mutually agree.

     3.3 Disposition Gas.

          (a)  Definition  of  Disposition  Gas.  "Disposition  Gas"  shall mean
Committed  Gas no  longer  owned or  controlled  by  Seller  as the  result of a
Disposition,  which Gas is not  Restricted  Gas under  Section 9.2. For purposes
hereof,  the term  "Disposition"  means,  with regard to Committed  Gas, a sale,
trade,  exchange  or other  transaction  (other  than  transactions  governed by
Section  3.7) whereby  title and  benefits of  ownership  of  Committed  Gas are
directly or  indirectly  transferred  to one or more third  parties,  including,
without  limitation,  (i) a sale or transfer of properties  from which Committed
Gas is produced, except to the extent the same is sold or transferred to another
Affiliate of such Seller (excluding,  however,  any Sold Company (as hereinafter
defined),  (ii) a sale or transfer of a  production  payment in and from (or any
other interest in or to the production from) properties from which Committed Gas
is  produced,  except to the extent the same is sold or  transferred  to another
Affiliate  of such  Seller,  (iii) a sale or transfer of all of the stock owned,
legally or  beneficially,  of an Affiliate of such Seller,  except to the extent
the same is sold or transferred to another Affiliate of such Seller, (iv) a sale
or transfer of all or so much of the equity  ownership,  legally or beneficially
owned or held,  in and to an  Affiliate  ("Sold  Company")  of such Seller that,
following the  consummation  of the sale or transfer,  the Sold Company would no
longer be an  Affiliate  of such  Seller.  For purposes of this Section 3.3, the
term  "third   party"   shall  not  include   any   Affiliate   of  any  Seller.
Notwithstanding  the  foregoing,  Committed Gas from  properties  sold,  traded,
exchanged or otherwise transferred in a Disposition (whether such Disposition is
consummated  in a single or in multiple  related  transactions)  in which Seller
receives  cash or other  consideration  having an  aggregate  value of less than
$1,000,000, shall not be subject the provisions of Section 3.3 or 9.2, shall not
be deemed  Restricted Gas under any  circumstances,  and shall be sold,  traded,
exchanged or otherwise  transferred  free and clear of the  requirements of this
Agreement, without Buyer's consent.

          (b) Notice and Determination.  Seller shall provide Buyer with written
notice of any intended  Disposition  as soon as  practicable,  but not less than
thirty (30) Days before  closing a Disposition.  In its notice to Buyer,  Seller
shall  provide  Buyer with a listing of the affected  Delivery  Point(s) and the
quantities of such  Committed Gas estimated in good faith to be producible  from
the  properties  to be subject  to the  Disposition.  Seller  will  endeavor  to
introduce Buyer to the proposed acquirer  regarding the marketing of Disposition
Gas after the  execution  and  delivery of a  definitive  agreement  between the
acquirer and the Seller.  Seller shall also provide  Buyer with such  additional
information regarding such Disposition as Buyer may reasonably request under the
circumstances,  but only if such  information  is  material to  determining  the
existence  of  Restricted  Gas  pursuant  to Section  9.2.  Upon  receipt of the
information  necessary to make its determination  pursuant to Section 9.2, Buyer
shall immediately begin considering  whether any of the Committed Gas subject to
such  contemplated  Disposition  shall be Restricted  Gas (as defined in Section
9.2), the existence of which shall be determined in accordance with Section 9.2.
Disposition Gas that is not Restricted Gas shall be sold,  traded,  exchanged or
otherwise  transferred free and clear of the requirements of this Agreement,  as
more particularly set forth in Section 9.2(f).

     3.4 Affiliates and  Subsidiaries.  Each party included in the term "Seller"
shall  cause  any and all of their  current  and  future  Affiliates  (including
subsidiaries)  which own or control Gas production in North America,  onshore or
offshore  (but  excluding  any Gas defined as Excluded  Gas),  to the extent not
already  parties to the Agreement  and to the extent this  Agreement is still in
full force and effect, to ratify,  approve,  assume and agree to be bound by all
of the terms, obligations, and provisions of this Agreement.


     3.5 Seller's Estimate: Scheduling.

          (a)  Seller's  Estimate  Generally.  For each Month during the term of
this Agreement,  Seller shall provide Buyer with Seller's  Estimate on or before
12 noon C.T.  on the fourth  Business  Day  preceding  the close of the New York
Mercantile  Exchange gas futures contract for the applicable Month.  Buyer shall
make  nominations  to  Transporters,  and generally make all  arrangements  in a
manner  consistent  with  Seller's  Estimate  and  any  reforecasts  thereof  in
accordance  with Sections  3.5(b) and 3.5(c) that are necessary for the receipt,
transportation  and delivery to market of the Committed  Gas for the  applicable
Month, all in accordance with Seller's  Estimate (it being understood that Buyer
shall have no obligation to make  arrangements  for firm  transportation  of the
Committed Gas unless  specifically agreed to in writing by Buyer and Seller). If
Seller  fails to update  Seller's  Estimate  for any  Delivery  Point(s) for the
applicable  Month, the Seller's  Estimate for such Delivery  Point(s) during the
previous Month will serve as Seller's Estimate for the Month in question.

          (b) Reforecasts by Seller.  The parties shall confer at either party's
initiative  during each Month to  reforecast  the  quantities  of Committed  Gas
scheduled  to be  delivered  or taken  pursuant  to Seller's  Estimate.  Without
limiting  the  generality  of the  foregoing,  Seller  shall advise Buyer of its
intention to exercise its rights under Section  3.6(e) by the deadline set forth
therein.  Seller shall  promptly  notify  Buyer of any  material  changes in the
quantities  of Committed  Gas  scheduled  to be  delivered or taken  pursuant to
Seller's  Estimate,  as well as any condition or event that is reasonably likely
to change such quantities in Seller's Estimate.

          (c) Estimates of Additional  Quantities of Committed  Gas.  Seller and
Buyer are aware that additional  quantities of Committed Gas from new sources of
supply not included in Seller's  Estimate will become  available for delivery to
Buyer at various times after the first Day of an applicable  Month. At least two
Business  Days before the Day that  Seller  wishes to begin  deliveries  of such
additional  quantities  of  Committed  Gas,  Seller shall  provide  Buyer with a
written  notice  setting  forth (i) the Delivery  Point(s) at which Seller shall
make such deliveries, (ii) the quantities of Committed Gas that Seller estimates
will be delivered to each such Delivery  Point during the Month in which initial
deliveries occur, (iii) the Index(es) proposed to be applicable to such Delivery
Point(s),  (iv) any Index Price  Adjustments  proposed to be  applicable  to the
price determined in accordance with such Index(es) and (v) any other information
set forth on Exhibit A. The Contract Price for such additional  quantities shall
be  determined  in accordance  with the  foregoing  information,  subject to the
provisions of Article VII,  including without  limitation the rights of Buyer to
propose other  Index(es) or Index Price  Adjustments in accordance  with Section
7.4. Buyer shall take such additional  quantities of Committed Gas in accordance
with, and subject to the terms of, Section 4.1.

     3.6 Operational Reservations.  Seller reserves unto itself, its successors,
assigns and Affiliates the following  rights and quantities of Gas sufficient to
satisfy such rights:

          (a) To operate Seller's  leaseholds,  lands and/or interests  therein,
free from any control by Buyer, in such manner as Seller deems advisable for the
development and operation of Seller's leases (or on any unit, including, without
limitation, field-wide units), including the right (but never the obligation) to
drill new wells,  enhance  production,  to repair and rework  Seller's Wells, to
renew and  extend  (in  whole or in part)  any  lease,  to  abandon  any well or
surrender  any lease (in whole or in part) for any reason,  to abandon,  modify,
extend or dispose of any production  facilities  owned or installed (in whole or
in part) by Seller,  to treat Gas, to use Gas as compressor  fuel, to use Gas to
generate  power  in  connection  with  leasehold  operations,  to  lift  oil  by
repressuring,  recycling or pressure  maintenance  operations,  and to otherwise
operate such leases and fields free from any control by Buyer.

          (b) To  deliver  Gas in  quantities  sufficient  to  fulfill  Seller's
royalty  or  lease  obligations  from  time to  time,  Seller's  agreements  for
easements, unit agreements,  unit operating agreements,  operating agreements or
any similar agreements affecting Seller's Wells.

          (c) To remove from its Gas all liquids, liquefiable hydrocarbons,  oil
and/or  condensate by (i) lease separation and/or processing in a plant prior to
delivery at the Delivery Point(s),  (ii) lease separation and/or processing in a
plant  after the  Delivery  Point,  but prior to  delivery of the residue Gas to
Buyer,  if the leases  from which  Committed  Gas is being  produced,  as of the
Effective Date, are committed, dedicated or otherwise burdened by obligations to
deliver such Gas for processing (a list of contracts evidencing such obligations
being  attached  hereto as  Schedule  3.6),  and (iii) lease  separation  and/or
processing of Gas  downstream of the Delivery  Point from sources of supply that
have been  acquired by Seller after the  Effective  Date,  provided that (A) any
available  residue Gas is  delivered  to Buyer at the  tailgate of the  relevant
plant and (B) (x) at the time of the closing of the  acquisition,  the  acquired
source of supply or any part thereof to the extent that such source of supply or
part thereof was  committed,  dedicated or otherwise  burdened by obligations to
deliver such Gas for processing,  or (y) negotiations for a contract  evidencing
obligations of the type  described in clause (B)(x) that Seller can  demonstrate
were  initiated  at the  initiative  of the prior  owner,  are  continuous,  are
underway at the time of the  closing of the  acquisition,  and such  contract is
executed  and  delivered  after  the date of  closing  of the  acquisition.  The
liquids,  liquefiable  hydrocarbons,  oil  and/or  condensate  removed  (or  the
propanes,   butanes,   motor  fuel  or  other   products   obtained)   therefrom
(collectively  "Removed  Products") shall not be deemed Committed Gas, nor shall
such Removed Products otherwise be subject to this Agreement. Wherever Seller is
causing the Gas to be  processed  for its own  account  prior to delivery at the
Delivery Point(s),  Seller shall use commercially  reasonable efforts to reserve
the right to take  residue Gas in kind,  and any residue Gas taken in kind shall
be deemed  Committed Gas subject to this  Agreement  with the Delivery Point for
same being at the tailgate of the plant.  With respect to the  processing of all
Committed Gas other than the categories  described in the foregoing clauses (i),
(ii) and  (iii),  Buyer  shall  retain  all rights to  separate  and/or  process
Committed Gas downstream of the Delivery Point; provided,  however, should Buyer
request and Seller agree to commit,  dedicate or otherwise  burden its leases in
support of processing  downstream of the Delivery Point,  Seller and Buyer shall
share  the  proceeds  of  sale  of the  Removed  Products  attributable  to such
processed Committed Gas on a mutually satisfactory basis.

          (d) To produce Gas without  waste and in  accordance  with prudent oil
and gas field  practices.  Seller shall not be required to produce any well at a
rate in excess of the rate fixed by law or  regulation  or in excess of the rate
of flow which Seller determines, in its discretion, exercised in good faith as a
prudent operator, should be produced from such well.

          (e) To curtail or shut-in Gas due to  operational  circumstances  that
require such  actions in  accordance  with prudent oil and gas field  practices.
Seller shall give Buyer notice of any  curtailment  or shut-in of Committed  Gas
before  delivery of Seller's  Estimate in Section 3.5. Each  curtailment  notice
shall be in writing and shall  identify the  quantities  of  Committed  Gas that
Seller intends to curtail or shut-in,  the Delivery Point(s)  affected,  and the
expected  duration of such  curtailment  or shut-in  period.  Seller  shall not,
however, shut-in or curtail any quantities of Committed Gas hereunder during any
Month in which such quantities have been included in Seller's  Estimate.  Seller
shall  notify  Buyer at least  two (2)  Business  Days  prior to any  applicable
deadline in Transporter(s)'  Tariffs for nominations (or nomination  changes) of
Seller's  intent  to  resume  sales of  Committed  Gas.  for  which  Seller  has
previously  given  Buyer  notice of  Seller's  intention  to  shut-in or curtail
deliveries  during the  current  applicable  Month  under this  Section  3.6(e).
Committed  Gas reserved  pursuant to this Section  3.6(e) shall not be sold to a
third party.

          (f) The right to pool or unitize  Seller's leases with other leases of
Seller or others  located in the field in which  Seller's  Wells are located (it
being understood that the Gas attributable or allocated to Seller's  interest in
the pool or unit so created will remain Committed Gas).

          (g) Gas required to be delivered to third parties under the common law
governing  relationships between cotenants, or under gas balancing agreements or
similar arrangements affecting any of Seller's Wells.

     3.7 Lien Gas and Other Transactions,.

          (a) Generally. Notwithstanding anything stated herein to the contrary,
Seller shall in no way be prohibited or precluded  from  assigning or granting a
security  interest,  lien or other  encumbrance  (collectively,  referred  to as
"Liens") to secure the repayment of  obligations  that Seller owes to commercial
banks, insurance companies or other financial or trade creditors  (collectively,
"Lenders") on any of the properties  owned by Seller from which Committed Gas is
produced.

          (b) Certain Rights.  Seller shall use commercially  reasonable efforts
to obtain from its Lenders an agreement that their Liens shall be subordinate or
otherwise  subject to Buyer's rights and obligations  under this  Agreement.  If
Seller notifies Buyer in writing that Seller has been  unsuccessful in obtaining
such an agreement  from its  Lenders,  Buyer hereby  agrees to  subordinate  its
rights and  interests  hereunder  and shall  execute and deliver to such Lenders
such instruments or agreements in form and substance reasonably  satisfactory to
Lenders and Buyer, as may be necessary to evidence Buyer's  subordination of its
rights and interests in such  Committed  Gas. The Committed Gas in which Buyer's
rights  are  so  subordinated  shall  be  herein  referred  to  as  "Lien  Gas."
Notwithstanding  anything  stated herein to the contrary,  Lien Gas shall remain
Committed Gas hereunder so long as Lenders  permit such Committed Gas to be sold
to Buyer, notwithstanding any provisions in the documents creating or evidencing
the Liens that assign or purport to assign the Committed  Gas to Lenders  Seller
shall  use  commercially  reasonable  efforts  to  include  a  provision  in the
financing  documents that if Lenders foreclose their Lien, or exercise any other
remedy that would  result in the transfer of the title and benefits of ownership
of the Lien Gas to such Lenders,  such Gas will remain  Committed Gas under this
Agreement as long as Buyer continues to make payments  therefor and to otherwise
perform under this  Agreement.  If Seller is not  successful in obtaining such a
provision,  Lien Gas  shall be  released  from the  terms of this  Agreement  if
Lenders  foreclose  their Lien, or exercise any other remedy under the documents
creating  the Lien  that  would  result  in the  transfer  of the  title and the
benefits of ownership of the Lien Gas to such Lenders.

          (c) Other  Transactions.  Seller's  sale of  Committed  Gas to a third
party in connection with a prepayment, financing transaction, or conveyance of a
production  payment or similar  transaction  in which  Committed  Gas is sold in
place prior to production,  shall not be subject to the  requirements of Section
9.2, so long as either (i) the contracts pursuant to which such Committed Gas is
sold are  administered by Buyer in accordance  with the Contract  Administration
Agreement or (ii) any Committed Gas burdened by such a transaction  continues to
be sold to Buyer under the terms and  conditions of this  Agreement.  Solely for
purposes  of  facilitating  Buyer's  performance  of its  obligations  under the
Contract  Administration  Agreement,  Seller  shall give Buyer thirty (30) Days'
written notice before the consummation of a transaction of the type described in
this Section 3.7(c).


                                   ARTICLE IV.

            QUANTITY: SCHEDULING AND TRANSPORTATION OF DAILY VOLUMES
            --------------------------------------------------------

     4.1 Purchase and Sale Obligation.

          (a) Seller's Delivery Obligation. Commencing on the Effective Date and
continuing through the term hereof,  Seller agrees to sell and deliver, or cause
to be  delivered  and sold  (excepting  an event of Force  Majeure  or any other
reason  excusing  the  performance  of Seller's  obligation  to sell and deliver
Committed  Gas  hereunder,  and  subject in all  respects to the  provisions  of
Sections  4.2(a)  and  4.2(e)) to Buyer at the  Delivery  Point(s)  one  hundred
percent (100%) of Committed Gas, including,  without limitation, (i) one hundred
percent (100%) of the quantities of Gas equal to Seller's  Estimate as set forth
in Section 3.5(a) and adjusted in accordance with Section  3.5(b),  and (ii) one
hundred  percent  (100%) of  additional  Committed  Gas as set forth in  Section
3.5(c).  It is  specifically  understood  and agreed that  Seller  shall have no
obligation  to deliver  quantities  of Committed  Gas for which Seller has given
notice of its intention to curtail or shut-in pursuant to Section 3.6(e).

          (b) Buyer's Take  Obligation.  Commencing  on the  Effective  Date and
continuing through the term hereof, Buyer agrees to take and purchase (excepting
an event of Force  Majeure  or any other  reason  excusing  the  performance  of
Buyer's obligation to purchase and take Committed Gas hereunder,  and subject in
all respects to the provisions of Sections  4.2(b) and 4.2(e) from Seller at the
Delivery  Point(s)  one hundred  percent  (100%) of  Committed  Gas,  including,
without  limitation (i) one hundred percent (100%) of Committed Gas delivered in
accordance with Seller's Estimate as set forth in Section 3.5(a) and adjusted in
accordance  with Section  3.5(b),  (ii) one hundred percent (100%) of additional
Committed Gas for which Seller has given written  notice as set forth in Section
3.5(c), and (iii) one hundred percent (100%) of Committed Gas previously shutin,
for which  Seller  has  notified  Buyer of  Seller's  intent to resume  sales as
provided in Section 3.6(e) It is  specifically  understood and agreed that Buyer
shall have no  obligation  to take  quantities of Committed Gas for which Seller
has given  notice of its  intention  to curtail or shut-in  pursuant  to Section
3.6(e).

     4.2 Certain Events Related to the Delivery and Taking of Committed Gas.

          (a) Seller Delivery Event.  If, during any Month, (i) Seller fails for
any reason (other than Force Majeure or any other reason excusing performance of
Seller's  obligation to deliver Committed Gas hereunder) to deliver  ninety-five
percent  (95%)  of the  quantities  set  forth  in  Seller's  Estimate  at  each
Aggregation Area (defined as a "Seller Delivery Event"),  and (ii) Buyer, acting
in a commercially  reasonable  manner to mitigate any damages,  purchases Gas to
replace such quantities in order to satisfy Buyer's Contractual  Obligations (as
defined in Section  9.2) to third  parties  for the Month in  question  existing
prior to Buyer's  knowledge of any  shortfalls,  then Seller shall pay Buyer, in
accordance  with the  provisions of Article VIII, an amount equal to the product
of (x) the positive  difference between (A) the price per MMBtu actually paid by
Buyer for the replacement quantities and (B) the Contract Price that Buyer would
have paid Seller for the quantities of Committed Gas not delivered by Seller and
(y) the quantities of such replacement Gas purchased by Buyer. Seller shall also
pay Buyer,  in accordance with the provisions of Article VIII, the amount of any
incidental  out-of-pocket costs reasonably incurred by Buyer (including,  by way
of  example  rather  than   enumeration,   brokers'  fees  and  any  incremental
transportation  costs),  less any expenses saved by Buyer,  as a result- of such
Seller  Delivery  Event.  Nothing herein shall be construed as relieving  Seller
from liability for an Imbalance Charge arising under Section 11.3.

          (b) Buyer Take Event. If, during any Month, Buyer fails for any reason
(other than Force  Majeure or any other reason  excusing  performance  of Buyers
obligation to take Committed Gas  hereunder) to take one hundred  percent (100%)
of the quantities set forth in Sellers  Estimate as adjusted in accordance  with
Sections  3.5(b) and 3.5(c) (defined as a "Buyer Take Event") and made available
for  delivery  by Seller,  then Buyer  shall give  Seller  such notice as may be
reasonably practicable under the circumstances to facilitate Seller's ability to
sell such untaken  Committed  Gas,  and, for the  remainder of such Month,  such
untaken Committed Gas shall be released to Seller and made available for sale to
third  parties.  In  addition,  Buyer  shall pay  Seller an amount  (the  "Buyer
Payment")  equal to the product of (i) the positive  difference  between (x) the
Contract Price that Buyer would have paid Seller for the quantities of Committed
Gas not taken by Buyer and (y) the price per MMBtu  received  by Seller from the
sale of such  quantities  and  (ii)  the  positive  difference  between  (x) the
quantities  of Committed  Gas included in Seller's  Estimate for such Month,  as
adjusted  pursuant to  Sections  3.5(b) and 3.5(c),  and (y) the  quantities  of
Committed Gas taken by Buyer during such Month. It is agreed that no standard of
"commercial  reasonableness"  (whether  express  or  implied at common law or by
statute)  shall be  required  of Seller in making any sale of untaken  Committed
Gas.  Seller's only commitment is to seek to contact by telephone or other means
three unaffiliated marketers or potential purchasers of gas, time permitting, in
an  endeavor  to achieve  the highest  prices  reasonably  obtainable  under the
circumstances, including without limitation, proposed sales volumes and location
of  Delivery  Points(s).  If Seller  is  unable to sell any part of the  untaken
Committed  Gas to a third party,  Seller shall  receive no Buyer Payment for the
quantities  of  untaken  Committed  Gas not sold.  All Buyer  Payments  shall be
payable as  provided in Article  VIII.  Nothing  herein  shall be  construed  as
relieving  Buyer from  liability for an Imbalance  Charge  arising under Section
11.3.

          (c)  Material  Buyer  Take  Event.  Seller  may,  in  its  discretion,
terminate  this Agreement if a Material Buyer Take Event occurs and Seller gives
Buyer written notice of Seller's intention to terminate this Agreement within 90
Days after the last Day of the twelve Month period or three Month period (as the
case may be) in which a Material Buyer Take Event occurs. Such termination shall
be  effective on the date set forth in Seller's  notice,  which  effective  date
shall be within 180 Days of the date of such  notice,  but not  earlier  than 90
Days after the date of such notice.  Seller's  right to terminate this Agreement
for a Material  Buyer Take Event  shall be waived if Seller  fails to deliver to
Buyer the notice described in the preceding grammatical sentence of this Section
4.2(c) within the 90-Day  period set forth  therein.  After the  occurrence of a
Material Buyer Take Event,  Seller's sole and exclusive  remedies for a Material
Buyer Take Event shall be (i) recovery of any accrued and unpaid  Buyer  Payment
through  the date of such  Material  Buyer Take  Event,  plus  interest  accrued
thereon in accordance  with Section 8.5, (ii) recovery of any unpaid  amounts in
respect  of  Committed  Gas  delivered  to Buyer  prior to  termination  of this
Agreement,  and (iii)  termination  of this  Agreement  pursuant to this Section
4.2(c).  Such termination shall not be subject to the provisions of Section 9.2.
"Material  Buyer Take Event"  shall mean Buyer's  failure for any reason  (other
than  Force  Majeure  or  any  other  reason  excusing  performance  of  Buyer's
obligation to take  Committed Gas hereunder) to take (i) 95% of Committed Gas as
set forth in Seller's  Estimate  during any rolling  twelve Month period or (ii)
90% of  Committed  Gas as set forth in  Seller's  Estimate  during any rolling 3
Month period.

          (d) Material Seller Delivery Event. Buyer may, in its discretion, seek
specific  performance of this Agreement on an expedited  basis or terminate this
Agreement,  if a Material  Seller  Delivery  Event occurs and Buyer gives Seller
written  notice of  Buyer's  intention  within 60 Days after the last Day of the
twelve  Month  period  or  three  Month  period  (as the case may be) in which a
Material  Seller  Delivery  Event  occurs.   Buyer's  rights  to  seek  specific
performance  and to terminate this  Agreement  shall be waived if Buyer fails to
deliver to Seller the notice described herein within the 60 Day period set forth
herein.  After the occurrence of a Material Seller Delivery Event,  Buyer's sole
and exclusive  remedies shall be (i) recovery of any accrued and unpaid payments
under Section 4.2(a),  plus interest  accrued thereon in accordance with Section
8.5, (ii) the right to seek specific performance pursuant to this Section 4.2(d)
and  (iii)  termination  of this  Agreement  pursuant  to this  Section  4.2(d).
"Material  Seller  Delivery  Event" shall mean  Seller's  failure for any reason
(other than Force Majeure or any other reason  excusing  performance of Seller's
obligation to deliver  Committed Gas  hereunder) to deliver (i) 92% of Committed
Gas as set forth in Seller's  Estimate,  as adjusted in accordance with Sections
3.5(b) and  3.5(c),  during any  rolling  twelve  Month  period,  or (ii) 90% of
Committed Gas, as adjusted in accordance with Sections 3.5(b) and 3.5(c), during
any rolling three Month period.

          (e) Exclusive Consequences of Seller Delivery Event, Buyer Take Event,
Material Buyer Take Event and Material  Seller  Delivery  Event:  Other Remedies
Cumulative.  The  sole  consequences  of a  Seller  Delivery  Event  under  this
Agreement are set forth in Section 4.2(a). The sole consequences of a Buyer Take
Event under this Agreement are set forth in Section 4.2(b);  provided,  however,
that if Buyer shall fail to make any Buyer  Payment when due, such failure shall
constitute  a Buyer  Payment  Event  as  provided  in  Section  12.1.  The  sole
consequences  of a Material  Buyer Take Event under this Agreement are set forth
in Section 4.2(c). The sole consequences of a Material Seller Delivery Event are
set forth in Section  4.2(d).  ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY
RELATING  TO A SELLER DELI VERY EVENT,  BUYER TAKE  EVENT,  MATERIAL  BUYER TAKE
EVENT,  AND MATERIAL SELLER DELIVERY EVENT ARE WAIVED IN RESPECT OF SUCH EVENTS.
THE PARTIES  ACKNOWLEDGE  THAT THE  CONSEQUENCES OF THE EVENTS  DESCRIBED IN THE
FIRST THREE  SENTENCES OF THIS SECTION  4.2(e) ARE  DIFFICULT OR  IMPOSSIBLE  TO
DETERMINE  AND THAT THE  CONSEQUENCES  SET FORTH HEREIN  RESPECTING  SUCH EVENTS
CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS THAT WOULD BE SUFFERED
BY EITHER PARTY AS A RESULT OF SUCH EVENT.  Remedies for other Events under this
Agreement shall be cumulative, as more particularly set forth in Article XII.

     4.3 Provision  Regarding Output Contract Laws. The parties acknowledge that
deliveries of Committed  Gas  hereunder  may increase or decrease  significantly
from Month to Month as a  consequence  of the  routine  conduct of the  parties'
operations  and a variety of  factors  affecting  the market for Gas  generally.
Accordingly,  the parties agree that (a) the  obligations  (i) of Seller to sell
and deliver  Committed  Gas and (ii) of Buyer to purchase and receive  Committed
Gas,  and (b) the  methods  used by Buyer and Seller  pursuant to Section 3.5 to
estimate the  quantities  of Committed  Gas to be sold by Buyer and purchased by
Seller from Month to Month  hereunder,  are all commercially  reasonable  means,
arrived at by both  parties,  acting in good faith,  to minimize the severity of
such  increases  and decreases in  deliveries,  consistent  with the  commercial
realities of producing  and marketing the Committed Gas and the realities of Gas
markets  generally.  The parties agree that Section 2.306 of the Texas  Business
and  Commerce  Code,  or  any  provision  of any  law  with  similar  provisions
(collectively,  "Output Contract  Laws"),  is inapplicable to this Agreement and
the  transactions  hereby  contemplated.  To the extent that any Output Contract
Laws  are  held  to  apply  to  this  Agreement  and  the  transactions   hereby
contemplated,  the  parties  hereby  WAIVE AND  RELINQUISH  any  defenses to the
enforcement  of this Agreement  arising from such output  Contract Laws, and any
claims that may be asserted by either party  arising  from such output  Contract
Laws.

                                   ARTICLE V.

                                DELIVERY POINT(S)
                                -----------------

     5.1  Generally.  Committed Gas shall be delivered at the Delivery  Point(s)
set forth on Exhibit A hereto (the "Delivery Point(s)"), as such Exhibit A shall
be updated from time to time by agreement of the parties,  consistent with their
obligations under this Agreement. Title to the Committed Gas shall pass to Buyer
at the  Delivery  Point(s).  As between  the  parties  hereto,  Seller  shall be
responsible  for any damage or injury  caused by the  Committed Gas until it has
been  delivered  to Buyer at the Delivery  Point(s),  after which Buyer shall be
responsible for any damage or injury caused thereby. Either party may request in
writing that the other party  change any Delivery  Point(s) set forth in Exhibit
A. The other party shall not  unreasonably  withhold its consent to the proposed
change  (it  being  specifically   understood  and  agreed,  however,  that  the
withholding of such consent shall be reasonable if such other party would suffer
economic  detriment as a result of the proposed change).  Changes in Aggregation
Area(s)  pursuant  to  changes  in the  Tariff of a  Transporter  shall  also be
reflected  on Exhibit A within 30 Days after  either Buyer or Seller has learned
of such change.

                                   ARTICLE VI.

                        QUALITY, PRESSURE AND MEASUREMENT
                        ---------------------------------

     6.1 Generally.  Unless otherwise provided elsewhere in this Agreement,  all
Committed  Gas  sold and  purchased  hereunder  shall  be of the  same  quality,
delivered at the same  pressure and measured in the same manner as provided from
time to time in the  then  effective  filed  Tariff  of the  applicable  Buyer's
Transporter  receiving and  transporting the Gas for the Buyer at the applicable
Delivery Point(s) (or such Transporter's other rules,  guidelines,  and policies
to the extent applicable and in effect).  EXCEPT AS MADE IN THIS SECTION 6.1 AND
IN SECTION 14.1 (REGARDING  SELLER'S TITLE),  SELLER MAKES NO OTHER  WARRANTIES,
EXPRESS,  IMPLIED,  STATUTORY OR OTHERWISE,  WITH RESPECT TO GAS SOLD HEREUNDER,
INCLUDING,  WITHOUT LIMITATION,  WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.

     6.2 Nonconforming  Gas. As to Committed Gas which fails to meet the quality
or pressure  or other  specifications  above set forth,  Buyer at its option may
refuse to accept any or all such Committed Gas (to be hereinafter referred to as
"Nonconforming  Gas").  Acceptance of any or all  Nonconforming Gas shall not be
deemed a waiver of Seller's  obligations  hereunder  with respect to such Gas or
Buyer's  rights with  respect to any future  deliveries  of  Nonconforming  Gas.
Seller shall bring such  Nonconforming Gas into conformity with the requirements
of Section 6.1 and, if such efforts are successful, such Nonconforming Gas shall
once  again be  Committed  Gas and  subject  in all  respects  to the  terms and
conditions of this Agreement.  If it would be  uneconomical  for Seller to bring
such  Nonconforming  Gas into conformity  with the  requirements of Section 6.1,
however,  Seller shall notify Buyer in writing of that fact (providing,  in such
notice,  Seller's reasons for such conclusion and the facts in support thereof),
whereupon  Buyer may, in its  discretion (a) accept such  Nonconforming  Gas for
delivery at a price mutually  acceptable to Buyer and Seller,  (b) have such Gas
brought  into  conformity  with  Section 6.1 at its sole cost and expense or (c)
release  such  Nonconforming  Gas from this  Agreement.  Where Buyer may ship or
redeliver  Committed  Gas to more than one  Transporter,  it will, if available,
select a  Transporter  under whose  standards  such  Committed  Gas would not be
Nonconforming   Gas.   Where  Seller   delivers  Gas  to  Buyer  that  would  be
Nonconforming  Gas  on  Buyer's  Transporter,  and  Buyer  selects  a  different
Transporter and takes the Gas, any increase in Buyer's  transportation  costs or
decrease in Buyer's resale price on such Gas resulting  therefrom shall be taken
into account in determining or redetermining  the Index.  Price Adjustments with
respect  to such  Gas.  Nonconforming  Gas that is  accepted  by Buyer  shall be
considered Committed Gas under this Agreement, and Nonconforming Gas that is not
accepted by Buyer shall be considered in determining  the occurrence of a Seller
Delivery Event and a Material Seller Delivery Event if such Nonconforming Gas is
not released as hereinafter  provided;  but not a Buyer Take Event or a Material
Buyer Take Event.  Without  limiting the generality of the foregoing  provision,
however,  it is  expressly  agreed and  understood  that either  party may,  but
neither shall be obligated to,  install and operate  facilities to bring the Gas
into  conformity  with  such  specifications.   Any  such  facilities  shall  be
installed,  operated and  maintained  at the sole cost,  risk and expense of the
party which elected to install such facilities. Either party may discontinue the
operation of such:  facilities if, in the sole judgment of the party  installing
same,  such  operation is  uneconomical.  If neither  party elects to install or
continue the operation of such facilities,  Nonconforming  Gas shall be released
from the terms  hereof  within  thirty (30) Days of Buyer's or Seller's  written
request for such a release.  The  provisions  of this  Section 6.2 set forth the
sole  remedies  for  the  delivery  or   non-acceptance,   as   applicable,   of
Nonconforming Gas.


                                  ARTICLE VII.

                                      PRICE
                                      -----

     7.1 Initial Price. Except as otherwise provided in Section 7.2, Buyer shall
pay Seller one hundred percent (100%) of the Initial Price for all Committed Gas
delivered  hereunder  during any  Month.  "Initial  Price"  shall mean the Index
Price, after any Index Price Adjustments and deduction of Costs of Delivery that
reflects a market price for Gas of like  quantities  and quality at the Delivery
Point. In the event more than one published index is listed on Exhibit A for use
in determining the Index Price for Gas at a Delivery Point, then the Index Price
will be calculated  using an average of the published  indices with  appropriate
Index Price Adjustments (hereinafter referred to as a "Basket Price").

     7.2 Alternate Price.

          (a)  Generally.  Notwithstanding  the provisions of Section 7.1, Buyer
shall pay Seller  100% of the  Alternate  Price  (hereinafter  defined)  for the
quantities of Committed Gas  delivered for such Month at each  Aggregation  Area
that exceed,  for any reason  (including,  without  limitation,  the delivery of
additional  quantities of Committed Gas in accordance  with Section 3.5(c)) 105%
of  Seller's  Estimate  for each  such  Aggregation  Area for such  Month.  Such
quantities of Committed Gas delivered in excess of 105% of Seller's Estimate for
such Month shall be hereinafter  referred to as the "Excess Quantities" for each
Aggregation Area. The Alternate Price, however, shall be paid for an Aggregation
Area only if, with respect to such Aggregation Area, the difference  between (i)
the  product of (a) the  Initial  Price and (b) the Excess  Quantities  for such
Aggregation  Area,  and (ii) the product of (a) the Alternate  Price and (b) the
Excess Quantities for such Aggregation Area, exceeds $5,000.

          (b)  Definition of Alternate  Price.  "Alternate  Price" means (i) the
arithmetical  average  of Daily  prices  (to be  computed  from the Day on which
initial deliveries of Excess Quantities first take place, until the final Day of
the applicable  Month) determined by the Gas Daily Index (Daily Midpoint column)
applicable to the Delivery Point(s) included in each Aggregation Area where such
Excess  Quantities  are  delivered,  after  (ii)  Index  Price  Adjustments  and
deductions  of Costs of  Delivery.  The delivery of Excess  Quantities  shall be
deemed to have first taken place on the first Day of the relevant Month when the
cumulative  Daily  quantities of Committed Gas delivered in an Aggregation  Area
for  such  Month  exceed  the  cumulative  Daily  Seller's   Estimate  for  such
Aggregation  Area by at least five (5)  percent,  and  continue to do so for the
remainder of the Month (it being  understood  and agreed that,  whenever  actual
Daily  deliveries  are  unavailable,  Daily  deliveries  will be  determined  by
allocating the actual Monthly deliveries based on actual nominations).

     7.3 Payment for Delivery  Arrangements.  Subject to the other provisions of
this  Agreement,  Seller shall be  responsible  for, and shall pay all costs and
expenses of, all arrangements necessary to deliver Committed Gas to the Delivery
Point(s)  and Buyer  shall be  responsible  for,  and shall  pay,  all costs and
expenses of, all  arrangements  necessary  for the receipt,  transportation  and
delivery to market of the  Committed Gas  downstream  of the Delivery  Point(s),
provided,  however,  as to any Delivery  Point (other than a Delivery Point at a
wellhead,  platform or plant tailgate), Seller shall have no responsibility for,
nor pay any costs or expenses associated with, gas control activities (including
but not limited to communicating  with pipelines or gatherers for the purpose of
nominating,  dispatching or confirming the flow of Gas) necessary to move gas to
such Delivery Point.

     7.4  Redetermination of Index(es) and Index Price  Adjustments.  If, during
the term of this  Agreement,  (a) an Index used to determine the Index Price for
any  Delivery  Point ceases to be  available,  (b) either  party  believes  that
another Index more accurately  reflects  existing market conditions with respect
to any Delivery  Point(s)  than the Index  currently  being used with respect to
such  Delivery  Point(s),  or (c) either  party  believes  that the Index  Price
Adjustments with respect to any Index Price for any Delivery  Point(s) no longer
accurately reflects all differentials  reasonably  necessary to adjust the Index
Price for Gas to accurately  reflect the market price for Gas of like quantities
and quality at such Delivery  Point(s),  then either party may request the other
to  reconsider  the  currently-applicable  Index or Index Price  Adjustment,  in
accordance with Section 7.5. The parties shall review the appropriateness of all
Index(es) and Index Price Adjustments used hereunder not less than annually.

     7.5 Status of Exhibit A:  Procedures  for Change of Exhibit.  The  attached
Exhibit A accurately  sets forth the parties'  agreement  regarding the Indexes,
Index Price  Adjustments and Delivery Points applicable to Committed Gas for the
Month in which this Agreement has been executed and delivered, and such Indexes,
Index Price  Adjustments and Delivery Points shall not change for a period of 60
Days after the Effective Date except for (a) the deletion of Delivery  points no
longer  needed for the delivery of  Committed  Gas, (b) the addition of Indexes,
Index Price  Adjustments  and  Delivery  Points for new sources of supply  added
during  such  period,  and (c) the  replacement  of any Index that  ceases to be
available  during such  period.  Either  party may propose a change in Exhibit A
after the end of such 60 Day  period  (including  but not  limited to changes in
Indexes and Index Price  Adjustments) by giving the other party not less than 30
Days written notice before the first Day of the Month such change is proposed to
be effective (the "Price Effective  Date"). If the other party agrees in writing
to the proposed  change,  the change  shall be effective on the Price  Effective
Date. If the other party does not agree in writing to the proposed change by the
10th Day prior to the proposed Price  Effective  Date,  then the proposed change
shall not be effective, and either party may seek to arbitrate, at any time, the
parties'  disagreement  pursuant  to  Section  14.10,  and the  decision  of the
arbitrators  thereunder  shall  become  effective  retroactively  on  the  Price
Effective Date.

     7.6 Fixed Price Gas. If Seller or any of its Affiliates  desires to receive
a Fixed  Price (as  defined  below)  for a portion  of the  Committed  Gas (such
Committed  Gas being  herein  called the "Fixed  Price  Gas"),  then Seller will
contact Buyer's Vice President of Marketing regarding such request.  The request
must include the proposed quantities,  Delivery Point(s) and effective period of
the Fixed  Price,  which  must be at least  three (3) months in  duration  (such
period  being  called  the  "Effective  Period").  Buyer  will use  commercially
reasonable  efforts to give  Seller a Fixed  Price quote in response to Seller's
request,  together  with an  assessment  of the range of Fixed  Prices and other
relevant  terms  available in the market for packages of Fixed Price Gas similar
to those being offered by Seller.  If Seller accepts the Fixed Price quote, this
Agreement will be amended to reflect the agreement of Buyer and Seller regarding
the sale of Fixed Price Gas to Buyer.  If Seller declines the Fixed Price quote,
then the Fixed Price Gas will remain Committed Gas, and will continue to be sold
to Buyer under the terms of this Agreement.

                                  ARTICLE VIII.

                               BILLING AND PAYMENT
                               -------------------

     8.1  Seller's  Invoice.  Seller may,  at its option,  provide an invoice to
Buyer hereunder by the fifteenth (15th) Day of each Month, in which event Seller
shall provide Buyer with a written or an electronically transmitted statement in
respect of the preceding Month setting forth (a) the quantities of Committed Gas
delivered at each Delivery  Point(s),  (b) the Contract Price applicable to such
Committed Gas at each such Delivery  Point(s),  (c) any Buyer Payment due Seller
under Section 4.2(b) (including  reasonably  satisfactory evidence of the amount
of such  Buyer  Payment),  and (d) any  amounts  due  Seller  in  respect  of an
Imbalance  Charge  or  violation  of an  OFO  for  which  Buyer  is  responsible
(including  reasonably  satisfactory  evidence of such  amounts),  together with
invoice for payment based  thereon.  If actual  quantities  delivered at each of
such  Delivery  Point(s) are not  available by the  fifteenth  (15th) Day of the
Month,  Seller may furnish  statements and invoices based on Seller's  Estimate,
which statements and invoices shall be adjusted to reflect actual  deliveries as
soon as practicable after such actual  deliveries become known.  Within five (5)
Business Days of the request of either party, the other party shall provide,  to
the extent it has a legal right of access  thereto and/or such statement is then
available,  a copy  of  the  Transporter's  allocation  or  imbalance  statement
applicable to the Committed Gas for the requested  period.  Buyer will cooperate
with Seller in helping Seller obtain all  information  necessary or desirable to
prepare Seller's statements and invoice in accordance with this Section 8.1.


     8.2 Monthly Payment.

          (a) If Seller has elected to provide  Buyer with a written  invoice in
accordance with Section 8.1, then by no later than the  twenty-fifth  (25th) Day
of the Month  following the Month in which  Committed Gas was  delivered,  Buyer
shall pay, in  immediately  available  funds via wire  transfer and otherwise in
accordance with Section 14.5, the amount stated in Seller's invoice,  net of any
amounts  due  Buyer in  accordance  with the  terms of this  Agreement.  Buyer's
obligation to make payment to Seller on or before the twenty-fifth (25th) Day of
the Month and the date for  payment  set forth in  Section  12.1(a)(i)  shall be
postponed  by one Day for each Day beyond the 15th Day of the Month that  Seller
delays in forwarding  an invoice to Buyer.  Buyer agrees to use-its best efforts
to cooperate with Seller in reconciling its monthly payment to Seller's invoice.

          (b) If Seller has  elected,  in  accordance  with  Section 8.1, not to
provide Buyer with a statement and accompanying invoice hereunder,  then Buyer's
payments  hereunder  (including  but not limited to any Buyer  Payment) shall be
payable  on or  before  the 25th Day of each  Month,  and  shall be based on (i)
applicable   Transporter   statements  or,  (ii)  Seller's  Estimate  (it  being
understood  that such  Seller's  Estimate  shall be adjusted  to reflect  actual
deliveries as soon as practicable  after such actual  deliveries  become known).
Buyer  shall  submit  to  Seller  with  each   Monthly   payment  a  written  or
electronically transmitted schedule showing, for each Delivery Point(s) for such
Month,  (A) the quantities of Committed Gas delivered to such Delivery  Point(s)
and any  reductions  thereto due to  downstream  processing  pursuant to Section
3.6(c),  (B) the Contract Price  applicable to such  Committed  Gas,  indicating
where appropriate the applicability of the Initial Price or the Alternate Price,
(C) the Index  Price,  (D) any  Index  Price  Adjustments,  and (E) any Costs of
Delivery.  In addition,  separate statements shall be provided by not later than
the 25th Day of the  Month to  reflect  (x) any  amounts  due Buyer or Seller in
respect of an Imbalance Charge for which either party is responsible  (including
reasonably  satisfactory  evidence of such  amounts) and (y) the quantity of any
shortfall in deliveries or takes due to a Seller  Delivery Event or a Buyer Take
Event, as applicable.  Any amounts due in accordance with the preceding sentence
shall be paid not later than 25 days after receipt of such statement. If the Day
on which  payment is due under this Section 8.2 does not fall on a Business Day,
then Buyer's  payment shall be due on the following  Business Day.  Seller shall
cooperate  with Buyer in helping  Seller  obtain all  information  necessary  or
desirable to prepare Buyer's payment  statements in accordance with this Section
8.2.

     8.3 Disputed Statements.  Should a statement be disputed by a party in good
faith,  the disputing  party will pay any undisputed  amount and will notify the
other  party in writing of the  disputed  amount and the basis for the  dispute.
Payment of the undisputed  portion of a statement will not be deemed a waiver of
the paying  party's  right to recoup any  overpayment,  and  acceptance  of such
payment will not be deemed a waiver of the  accepting  party's  right to recover
any underpayment.  The party that rendered the disputed  statement will promptly
investigate  the dispute and will submit a corrected  statement,  if  necessary,
within thirty (30) Days after  receiving  notice of the dispute.  If the parties
cannot agree on the disputed  amount  within such 30-Day  period,  then, if upon
resolution of the dispute,  a party is  determined to have  underpaid the amount
actually due, the party will remit the amount due,  plus  interest  thereon from
the date such amount  should have been paid until such amount has been  received
by the underpaid party,  calculated at the rate stated in Section 8.5 herein. If
upon  resolution  of the dispute,  a party is  determined  to have  overpaid the
amount actually due, the party to whom such overpayment was made will refund the
excess paid, plus interest thereon  calculated at the rate stated in Section 8.5
herein.

     8.4 Errors. If an error is discovered in any statement rendered  hereunder,
such  error  shall be  adjusted  within  thirty  (30) Days  after  notice of the
discovery  of the  error.  Any  dispute  which is not timely  resolved  shall be
subject to arbitration in accordance with Section 14.10.

     8.5 Overdue  Payments.  Subject in all  respects to Section  8.3, if either
party  fails to pay the amount due the other  party  when due  hereunder  as set
forth in Section 8.2, then interest on any such unpaid and overdue  amount shall
accrue until paid at the Reference Rate.

     8.6 Audits.  Each party  shall keep and  maintain  true and correct  books,
records,  files  and  accounts  of all  information  reasonably  related  to the
transactions contemplated by this Agreement,  including all measurement records,
all information used to determine prices and calculate  invoices,  all invoices,
statements,  and payment records,  and all third-party invoices or other records
reflecting   Costs  of   Delivery   deducted   in  making   payments  to  Seller
(collectively, the "Records"). All such Records shall be maintained for at least
thirty-six (36) Months after the Month to which they pertain.  Either party may,
at its own expense,  audit the other  party's  Records at any time during normal
business  hours upon at least fifteen (15) Days written  notice.  Any statement,
charge or payment under this Agreement  will be deemed final unless  disputed in
accordance  with  Section  8.3 within  twenty-four  (24)  Months  from the final
Business Day of the calendar Year in which such statement,  charge or payment is
made or  rendered,  except  for any  adjustments  to such  statement,  charge or
payment due to volume  adjustments  of Committed  Gas  delivered at the Delivery
Point(s) and other  adjustments  caused by  Transporters'  statements  affecting
payments for  Committed Gas or Imbalance  Charges.  All claims made or raised in
accordance with the preceding  grammatical  sentence shall survive such 24-month
period for the maximum period prescribed by applicable law.

     8.7 Indemnities.

          (a)  Seller's  Indemnities.  Seller  shall,  in  accordance  with this
Section 8.7, indemnify,  defend and hold Buyer harmless from and against any and
all claims  (including,  without  limitation,  personal injury  claims),  costs,
losses, causes of action, judgments,  penalties, fines, damages, liabilities and
expenses (including, without limitation, reasonable attorneys' fees and costs of
court) of any kind  whatsoever (all of the foregoing  being  hereinafter  called
"Losses")  arising from or associated  with (i) Gas prior to the delivery of the
same to Buyer at the Delivery  Point,  (ii) any  liabilities for which Seller is
responsible  and arising under  Sections 11.3 or 11.4 hereof,  (iii) a breach of
Seller's  warranties in Section 14.1, or (iv) Gas delivered by Seller hereunder,
in respect of which claims of any type  whatsoever  are asserted by or on behalf
of owners of landowners' royalties,  overriding royalties,  production payments,
net profits  interests,  working interests,  joint operating  interests or other
types of interests  in oil and gas leases.  Notwithstanding  anything  stated in
this Agreement to the contrary, the respective liability (under this Section 8.7
and under any other  provision  of this  Agreement)  of each of the  undersigned
parties  executing this Agreement as a Seller shall be several,  not joint,  and
shall be limited solely to those Losses (or the pro rata portion of such Losses)
arising from or attributable to Gas delivered by such Seller hereunder (and each
such  Seller  shall in no way be liable  under this  Section  8.7 for any Losses
arising from or attributable  to any Losses relating to Gas delivered  hereunder
by another Seller).

          (b) Buyer's Indemnities.  Buyer shall, in accordance with this Section
8.7,  indemnify,  defend and hold each Seller  harmless from and against any and
all Losses arising from or associated  with (i) Committed Gas after the delivery
and receipt of the same to Buyer at the Delivery Point, (ii) any liabilities for
which Buyer is  responsible  and arising under Section 11.3 or 11.4 or (iii) any
third-party  claims  that  Buyer,  either by itself or in  concert  with  others
(excluding Seller), has manipulated indexes or other factors that may materially
determine or influence prices for Gas.

          (c) Claims for Indemnification.  If either party seeks indemnification
hereunder,  the party seeking  indemnification (the "Indemnified.  Party") shall
give the party from whom indemnity is sought (the  "Indemnifying  Party") prompt
written notice of any matters which may give rise to a claim for indemnification
under this Section 8.7; provided, however, that failure or delay in notification
shall not relieve the  Indemnifying  Party from liability  hereunder unless (and
only to the extent) that delay in notifying the Indemnifying Party of such claim
hinders or prevents the Indemnifying Party's defense of such claim or hinders or
prevents  the  Indemnifying  Party  from  obtaining  the  benefits  of  existing
insurance coverage for some or all liability  attributable to a Loss which would
otherwise have been available to the Indemnifying  Party but for said delay), in
which case (and only to such  limited  extent),  the  Indemnified  Party  hereby
WAIVES AND RELEASES THE INDEMNIFYING PARTY FROM ANY LIABILITY ATTRIBUTABLE TO OR
ARISING FROM SUCH CLAIMS, REGARDLESS OF WHETHER SUCH CLAIMS WERE ATTRIBUTABLE TO
THE NEGLIGENCE OR STRICT LIABILITY OF THE  INDEMNIFYING  PARTY. The Indemnifying
Party shall have the right, in its own name or otherwise,  to contest and defend
by all  appropriate  legal or other  proceedings any claim,  provided,  however,
that:

               (i) Notice of the  Indemnifying  Party's  intention to so contest
     shall be delivered to the  Indemnified  Party within fifteen (15) Days from
     the date of the  Indemnifying  Party's receipt of the  Indemnified  Party's
     notice;

               (ii) The  Indemnifying  Party  shall pay all  costs and  expenses
     which it incurs in connection with such contest,  including but not limited
     to all attorneys',  accountants' and expert witnesses' fees and the cost of
     any  bond  which  the  Indemnifying  Party  is  required  by law to post in
     connection with such contest; and

               (iii) The  Indemnifying  Party shall  conduct  such  contest with
     attorneys  approved by the  Indemnified  Party (which approval shall not be
     unreasonably  withheld),  but the Indemnified Party shall have the right to
     participate in such  proceedings and to be represented by, attorneys of its
     own choosing,  at its own cost and expense.  If the Indemnified Party- does
     not elect to participate in any such proceedings,  it shall be bound by the
     results  obtained by the Indemnifying  Party,  but the  Indemnifying  Party
     shall not enter into any  settlement  or  compromise  of the  claims  being
     contested in such proceeding  without the consent of the Indemnified Party,
     which consent shall not be unreasonably withheld.

          (d) Payment and Consent. Amounts which the Indemnifying Party must pay
the  Indemnified  Party hereunder shall be due within thirty (30) Days after (i)
the Indemnified  Party has paid any Losses subject to the  Indemnifying  Party's
indemnity   hereunder  and  (ii)  the   Indemnified   Party  has  presented  the
Indemnifying Party with reasonably satisfactory evidence that the amount of such
Losses has been paid; provided,  however,  that notwithstanding  anything stated
herein to the contrary with regard to amounts paid in settlement of such Losses,
the Indemnifying  Party shall only be liable for Losses  attributable to amounts
paid in settlement of any claims to the extent that the  Indemnifying  Party has
consented thereto in writing,  and in the event the Indemnified Party settles or
otherwise  consents to liability on any claims without the prior written consent
of the  Indemnifying  Party  thereto,  the  Indemnified  Party hereby WAIVES AND
RELEASES  THE  INDEMNIFYING  PARTY FROM ANY  LIABILITY  FOR SUCH CLAIMS (AND ANY
LOSSES ATTRIBUTABLE TO AMOUNTS PAID IN SETTLEMENT THEREOF, REGARDLESS OF WHETHER
SUCH  LOSSES ARE  ATTRIBUTABLE  (IN WHOLE OR PART) TO THE  NEGLIGENCE  OR STRICT
LIABILITY OF THE INDEMNIFYING  PARTY).  Any amounts which the Indemnifying Party
owes but does not pay when due under this Section 8.7 shall bear interest  until
paid at the Reference Rate.

                                   ARTICLE IX.

                     EFFECTIVE DATE AND TERM; RELEASE OF GAS
                     ---------------------------------------

     9.1 Generally.  This Agreement  shall be effective as of the Effective Date
and shall  continue and remain in full force and effect until the first to occur
of the  following:  (a) the tenth (10th)  anniversary  of the Effective Date (it
being  understood that subject to the other terms and conditions of this Section
9.1, this Agreement shall be automatically extended for one Year, beginning with
the tenth (10th)  anniversary  of the  Effective  Date,  and  continuing on each
subsequent anniversary of the Effective Date thereafter,  unless one party gives
the other party written  notice of its intention to terminate  this Agreement at
least 180 Days prior to the end of the then current  term,  (b)  termination  of
this  Agreement  by Seller for a Material  Buyer Take Event in  accordance  with
Section  4.2(c),  (c)  termination of this Agreement upon  occurrence of a Buyer
Bankruptcy  Event  or a  Seller  Bankruptcy  Event in  accordance  with  Section
12.1(c)(i),  (d)  termination  of this  Agreement by Seller for a Buyer  Payment
Event in  accordance  with Section  12.1(c)(i),  (e)  dissolution  of the parent
company  in  Seller's  corporate  structure,  (F)  Buyer's  dissolution,  or (g)
termination  of this  Agreement,  effective  upon  twelve (12)  Months'  advance
written  notice  (with such  12-Month  period  beginning on the first Day of the
Month  following  the Month in which such notice is sent),  delivered  by either
party to the other at any time after the fifth (5th) anniversary, but before the
sixth (6th)  anniversary,  of the Effective Date, which notice shall convey such
party's election to terminate this Agreement and shall state the reason for such
termination, which reason may include any of the following: (i) changed economic
conditions; (ii) changes in applicable laws or regulations; (iii) changes in gas
market conditions;  or (iv) other changes not expected by such terminating party
as of the Effective Date (a termination by either party under this clause (g) to
be referred to as a "Permitted Termination").

     9.2 Restricted Gas: Release of Committed Gas.

          (a) Generally.

          (i) Conditions for Restricted Gas

               (A) Tier One Restricted Gas. If the Pro Forma  Throughput  equals
               or exceeds  .4945  TBtu/d  during  any  applicable  Test  Period,
               Committed Gas may be  determined to be Restricted  Gas under this
               Section 9.2 ("Tier One Restricted  Gas"). Tier One Restricted Gas
               shall  be sold  under a  Restricted  Gas  Purchase  Agreement  in
               respect of Sole  Source Gas or  Restricted  Disposition  Gas,  as
               applicable.  Such Restricted Gas Purchase  Agreement shall have a
               term of one year (with respect to Restricted  Disposition Gas) or
               two years (with  respect to Sole Source Gas) from the  applicable
               Restricted Gas Purchase  Agreement  Effective Date, in accordance
               with the terms of Section  9.2(b)(ii)  or  9.2(c)(ii).  If Seller
               pays Buyer the Tier One Restricted Gas Buyout Amount,  Seller may
               Dispose  of the  specified  properties  and  the  Gas  producible
               therefrom;  without restriction  pursuant to this Agreement.  The
               quantities bought out with Tier One Restricted Gas Buyout Amounts
               shall be deemed  Creditable  Gas (as deemed in the  Purchase  and
               Sale Agreement).

               (B) Tier Two Restricted Gas,. If the Pro Forma Throughput  equals
               or exceeds .3440 TBtu/d, but is less than .4945 TBtu/d during any
               applicable  Test Period,  Committed  Gas may be  determined to be
               Restricted  Gas under this  Section  9.2  ("Tier  Two  Restricted
               Gas").  Tier Two  Restricted Gas shall be sold under a Restricted
               Gas  Purchase   Agreement  in  respect  of  Sole  Source  Gas  or
               Restricted  Disposition  Gas, as applicable.  Such Restricted Gas
               Purchase Agreement shall have a term of one year (with respect to
               Restricted  Disposition  Gas) or two years (with  respect to Sole
               Source Gas) from the applicable Restricted Gas Purchase Agreement
               Effective   Date,  in  accordance   with  the  terms  of  Section
               9.2(b)(ii) or Section  9.2(c)(ii).  If Seller pays Buyer the Tier
               Two  Restricted  Gas Buyout  Amount,  Seller  may  Dispose of the
               specified  properties  and the Gas producible  therefrom  without
               restriction  pursuant to this Agreement.  Tier Two Restricted Gas
               Buyout  Amounts shall be creditable in dollars  against  Clawback
               Payments  for the year in which  the Tier Two  Restricted  Buyout
               Amount is paid or, if not utilized in full in such year,  carried
               forward and  credited  against  future  Clawback  Payments  until
               utilized  in full.  From the  Effective  Date  until  the  second
               anniversary  thereof,  Seller's  Dispositions  in  excess  of the
               Permitted   Annual   Disposition   Quantities   shall  be  deemed
               Restricted Disposition Gas, without need for a determination of a
               Loss of Margin under  Section  9.2(b),  and shall  continue to be
               sold to Buyer under a Restricted Gas Purchase  Agreement pursuant
               to  Section  9.2(c)(ii)  with a  termination  date of the  second
               anniversary of the Effective Date.

               (C) Burdened Gas. If the Pro Forma  Throughput is less than .3440
               TBtu/d during any applicable Test Period,  Committed Gas shall be
               Burdened Gas under this  Section 9.2.  Burdened Gas shall be sold
               under a Restricted Gas Purchase  Agreement having a term from the
               Burdened Gas Purchase  Agreement  Effective  Date until the sixth
               anniversary  of the Effective Date of this  Agreement.  If Seller
               pays Buyer the Burdened Gas Buyout Amount,  Seller may Dispose of
               the specified properties and the Gas producible therefrom without
               restriction  pursuant to this Agreement.  Restricted Burdened Gas
               Buyout  Amounts shall be creditable in dollars  against  Clawback
               Payments for the year in which the Restricted Burdened Gas Buyout
               Amount is paid or, if not utilized in full in such year,  carried
               forward and  credited  against  future  Clawback  Payments  until
               utilized in full.

               (D) Sole Source Gas.  Buyer may restrict Sole Source Gas pursuant
               to Section 9.2(b). Sole Source Gas shall be sold to Buyer under a
               Restricted Gas Purchase Agreement having a term of two years from
               the Restricted Sole Source Gas Purchase Agreement Effective Date,
               in accordance with the terms of Section 9.2(b)(ii).

               (E) Cumulative  Restricted Gas Payment  Ceiling.  Notwithstanding
               any other provision of this Agreement to the contrary, if the sum
               of (1) all  Cumulative  Restricted Gas Buyout Amounts and (2) all
               Clawback  Payments  equals or  exceeds  $18,275,000,  Seller  may
               dispose  of any  properties  and  the  Gas  producible  therefrom
               without  restriction  pursuant  to this  Agreement,  and  without
               further obligation to pay Clawback Payments.

          (ii) General Definitions. The following terms used in this Section 9.2
shall have the meanings set forth  below.  Other terms are defined  elsewhere in
this Section 9.2.

               (A)  "Throughput"  means the arithmetical  average,  expressed in
               MMBtus/d,  determined by dividing the quantity of Creditable  Gas
               by the number of Days in the relevant period.


               (B)  "Burdened  Gas" shall have the  meaning set forth in Section
               9.2(d).



               (C)  "Burdened Gas Buyout  Amount" shall mean an amount  mutually
               satisfactory to Buyer and Seller, paid by Seller to Buyer for the
               purpose  of  buying  out  Seller's  obligations  to enter  into a
               Restricted  Gas  Purchase  Agreement  with  Buyer for the sale of
               Burdened Gas.

               (D) "Clawback Payments" shall mean certain payments that could be
               made by Seller in accordance  with Section 2.3(b) of the Purchase
               and Sale Agreement.

               (E)  "Contractual  Obligations"  shall mean  Buyer's  obligations
               under one or more identified contracts, each of which (1) existed
               at the time Buyer became aware of Seller's intent through written
               communication  to  make  a  Disposition  and is  not  renewed  or
               extended thereafter, and (2) cannot be terminated without penalty
               within 30 Days,  or  performance  of which cannot be  interrupted
               without penalty.

               (F)  "Cumulative  Restricted  Gas Buyout  Amounts" shall mean the
               cumulative  sum of all Tier One Buyout  Amounts,  Tier Two Buyout
               Amounts and Burdened Gas Buyout Amounts.

               (G) "Loss of Margin" means the  elimination of Buyer's margin (or
               an increase in a negative margin) that would result from the loss
               of  Committed   Gas,  if  Buyer's  cost  of  replacing  such  Gas
               (including,   without  limitation,   increases  or  decreases  in
               transportation  costs)  exceeds  the  cost  of  such  Gas  at the
               Contract  Price  (as of the  date of a  relevant  Restricted  Gas
               determination)  in effect under this  Agreement on such date.  If
               the subject Committed Gas is being processed by Buyer at the time
               Buyer-became   aware   of   Seller's   intent   through   written
               communication to make a Disposition, the determination of Buyer's
               margin  shall  include the net revenue  allocated  to the subject
               Committed  Gas over the  preceding 12 months from the  processing
               thereof converted to a dollars per MMBtu basis, but only if Buyer
               cannot replace such Committed Gas with Gas of equal thermal value
               with no restriction on processing  rights.  For purposes  hereof,
               the phrase  "net  revenue"  shall mean the  remainder  of (a) the
               revenues  received from the sale of the Removed Products by Buyer
               or from the plant, as applicable,  minus (b) the sum of all costs
               of  processing  including  but  not  limited  to  (1)  the  total
               transportation    costs    incurred   by   Buyer   for   upstream
               transportation of the PVR or condensate, (2) all fees and charges
               paid to the plant for the processing services,  and (3) all taxes
               and other  charges  due on the Removed  Products.  The term "PVR"
               (Plant Volume  Reduction) shall mean, with respect to each Month,
               the  difference in (i) the quantity of Gas delivered by Seller to
               Buyer and  tendered to the plant for  processing,  as measured at
               the plant inlet, and (ii) the quantity of residue Gas redelivered
               to Buyer after  processing in the plant,  which  difference  will
               represent  the  fuel,  shrinkage  and  lost and  unaccounted  for
               quantities  allocated  to the  quantity of the Gas  tendered  for
               processing.

               (H) "Permitted Annual  Disposition  Quantities" means 150 BBtu/d,
               plus (1) quantities  attributable  to Committed Gas produced from
               new wellbores and  newly-acquired  sources of supply of Committed
               Gas minus (2) quantities attributable to Dispositions, net of the
               sum of (x) Restricted Gas quantities from such Dispositions which
               continue to be sold to Buyer and (y)  quantities  of  Disposition
               Gas released due to the payment of Tier One Buyout Amounts,  Tier
               Two Buyout  Amounts or Burdened  Gas Buyout  Amounts.  Quantities
               attributable to  Dispositions  shall never be less than zero. All
               quantities will be computed on the last full Month of uncurtailed
               production.

               (I) "Pro Forma  Throughput"  shall mean the  Throughput  less the
               Proposed Disposition Quantities.

               (J)  "Proposed  Disposition   Quantities"  means  the  Throughput
               expressed  in  MMBtus/d,   in  the  most  recent  full  Month  of
               uncurtailed  production  from  properties  subject  to a proposed
               Disposition.

               (K)  "Purchase  and Sale  Agreement"  shall mean the Purchase and
               Sale  Agreement  dated as of June 18,  1998,  by and among Apache
               Gathering  Company,  Oryx Gas Marketing  Limited  Partnership and
               Cinergy Corp.

               (L) "Restricted Disposition Gas" shall have the meaning set forth
               in Section 9.2(c)(i).

               (M)  "Restricted  Gas" shall  mean Sole  Source  Gas,  Restricted
               Disposition Gas and Burdened Gas.

               (N)  "Restricted  Gas Purchase  Agreement"  means an agreement in
               substantially  the  form  of  Exhibit  B,  carrying  forward  the
               Delivery Points,  Indexes, Index Price Adjustments and processing
               rights and  reservations of Buyer and Seller from this Agreement,
               but with the  effective  dates and  terms  set forth in  Sections
               9.2(b)(ii), 9.2(c)(ii) or 9.2(d)(ii), as applicable.

               (O) "Sole Source Gas" shall have the meaning set forth in Section
               9.2(b)(i).

               (P) "Test Period" shall mean (1) before the first  anniversary of
               the Effective  Date,  the period from the Effective  Date through
               the last Day of the Month  before the Month in which a Restricted
               Gas  determination  is  made  and  (2) on  and  after  the  first
               anniversary  of the  Effective  Date,  the rolling  retrospective
               twelve-month  period through the last Day of the Month before the
               Month in which a Restricted Gas determination is made.

               (Q) "Tier One Restricted Gas" shall have the meaning set forth in
               Section 9.2(a)(i)(A).

               (R) "Tier One  Restricted Gas Buyout Amount" shall mean an amount
               equal to Buyer's Loss of Margin (expressed in cents per MMBtu/d),
               multiplied  by  the  Proposed  Disposition  Quantities  from  the
               effective   date  of  the  relevant   Disposition  to  the  first
               anniversary thereof.

               (S) "Tier Two  Restricted  Gas" shall have the  meaning set forth
               inSection 9.2(a)(i)(B).

               (T) "Tier Two  Restricted Gas Buyout Amount" shall mean an amount
               equal  to  $0.024  per  MMBtu/d,   multiplied   by  the  Proposed
               Disposition  Quantities  from the effective  date of the relevant
               Disposition to the first anniversary thereof.

          (b) Sole Source Gas.

          (i) Sole Source Gas Defined:  Determination  of Sole Source Gas. "Sole
Source Gas" shall mean Committed Gas needed to satisfy  Contractual  Obligations
(A) that, after the exercise of reasonable efforts by Buyer,  cannot be released
and (B) no other Gas can be physically  delivered.  The existence of Sole Source
Gas shall be  determined  by Buyer as soon as  practicable,  and  notice of such
determination  shall be in  writing  and  delivered  to Seller not later than 10
Business  Days  following  receipt of Seller's  Disposition  notice  pursuant to
Section 3.3(b).  The notice of  determination  shall also indicate that (i) such
Gas shall be sold, traded,  exchanged or otherwise transferred free and clear of
the  requirements of this Agreement,  or (ii) a portion or all of such Gas shall
be Restricted  Gas, shall  indicate the Delivery  Point(s) and quantities of Gas
affected,  and shall otherwise comply with the applicable  provisions of Section
9.2. In  evidencing  that the loss of Committed Gas meets the  requirements  set
forth for Sole Source Gas,  Buyer's  notice must set forth  Buyer's  reasons for
concluding  that Sole Source Gas exists,  and identify all specific  Contractual
Obligations  in force and effect with its customers  evidencing the existence of
Sole Source Gas (providing  Seller with copies of such contracts,  redacted only
to the extent necessary to comply with applicable confidentiality agreements, if
any,  with the pricing and the  identity of the  purchaser to be redacted in all
cases),  together with any other written or electronic  information and analysis
supporting the conclusion that such Gas is Sole Source Gas.

          (ii) Terms of Sole Source Gas Contract. Committed Gas determined to be
Sole Source Gas under Section 9.2(b)(i) shall continue to be sold to Buyer under
the terms of a Restricted  Gas Purchase  Agreement,  which shall be executed and
delivered  by Buyer and Seller on or before the  closing of a  Disposition  with
respect to which it has been  determined  that  there is Sole  Source  Gas.  The
effective  date of the  Restricted  Gas Purchase  Agreement with respect to Sole
Source Gas shall be the  closing  date of the  relevant  Disposition  (the "Sole
Source Restricted Gas Purchase  Agreement  Effective Date").  The termination of
the Restricted  Gas Purchase  Agreement with respect to Sole Source Gas shall be
the first to occur of (1) the  termination of the Contractual  Obligations  that
evidenced the existence of Sole Source Gas or (2) two years from the Sole Source
Restricted  Gas  Purchase  Agreement  Effective  Date.  Seller  shall make as an
express condition to the consummation of the relevant Disposition the assumption
by the transferee of the Gas producing  properties of Seller's obligations under
the  Restricted  Gas  Purchase  Agreement  with  respect  to  Sole  Source  Gas.
Notwithstanding  anything  stated  herein to the  contrary,  to the extent  that
Seller fails to consummate  the proposed  Disposition  within one hundred eighty
(180) Days following  Buyer's  receipt of Seller's notice provided in accordance
with Section 3.3(b),  Seller shall be required to notify Buyer in writing of the
status of such  Disposition,  and shall continue to provide such notification to
Buyer at thirty (30) Day intervals  thereafter  until the  Disposition is either
consummated  or  abandoned  (it being  understood  and agreed that Seller  shall
notify  Buyer in  writing  within  thirty  (30)  Days of the date on which  such
Disposition is consummated or  abandoned).  If the  contemplated  Disposition is
abandoned,  or if Seller  fails to give the notices  required  by the  preceding
grammatical  sentence  in a timely  manner,  then  Buyer's  determination  under
Section 9.2 of the amounts of the Committed Gas covered by such Disposition that
are  Restricted  Gas and  Disposition  Gas,  respectively,  shall  automatically
terminate,  and Seller  shall once again be  obligated to comply with all notice
obligations  under  Section 3.3, and will be subject to a new  determination  by
Buyer under Section 9.2, in connection with any future  proposed  Disposition of
all or any part of such Committed Gas.

          (c) Restricted Disposition Gas.

          (i) Restricted  Disposition Gas Defined:  Determination of Restricted,
Disposition Gas. "Restricted Disposition Gas" shall mean Committed Gas needed to
satisfy Buyer's  Contractual  Obligations  that,  unless  restricted  under this
Section  9.2(c)(i),  cannot be replaced after the exercise of reasonable efforts
by Buyer  without  a Loss of Margin  for  Buyer.  The  existence  of  Restricted
Disposition Gas shall be determined as follows:

               (A) not later than 10  Business  Days after  receipt of  Seller's
               Disposition  notice  pursuant  to  Section  3.3(b),  Buyer  shall
               provide Seller with written notice (1)  identifying  all specific
               Contractual   Obligations   in  force  and  effect  with  Buyer's
               customers  that,  as  a  result  of  the  loss  of  the  relevant
               Disposition  Gas,  might  result in a Loss of  Margin  (providing
               Seller with copies of such contracts, redacted only to the extent
               necessary to comply with applicable confidentiality requirements,
               if any,  with the identity of the purchaser to be redacted in all
               cases),  (2)  identifying  the Delivery  Point(s) and  quantities
               required  to  source  the Gas  required  to meet the  Contractual
               Obligations  and (3)  providing  any other  written or electronic
               information and analysis indicating that the loss of the relevant
               Disposition Gas might result in a Loss of Margin;

               (B) Buyer shall  exercise all  reasonable  diligence,  for twenty
               (20) Business Days after receipt of Seller's  Disposition notice,
               to locate  alternative  sources  of Gas that  could  replace  the
               relevant  Disposition  Gas without Loss of Margin.  At the end of
               such twenty (20) Business Day period,  Buyer shall provide Seller
               with  written  notice  that (1)  Buyer  has  located  alternative
               sources of Gas that could  replace the relevant  Disposition  Gas
               without Loss of Margin (in which event such relevant  Disposition
               Gas shall be released  from this  Agreement  upon  closing of the
               relevant Disposition) or (2) Buyer has been unable to locate such
               alternative  sources  of Gas,  and shall  indicate  the  Delivery
               Point(s) and quantities of Committed Gas affected, in which event
               the relevant Disposition Gas shall become Restricted  Disposition
               Gas, subject to Seller's rights under Section 9.2(c)(i)(C).

               (C)  Seller  shall  have the  right,  exercisable  only once with
               respect to any proposed  Disposition,  to request in writing that
               Buyer reconsider a determination under Section  9.2(c)(i)(B) that
               Restricted  Disposition  Gas exists.  Buyer shall comply with the
               provisions  of  subsection  (B) above,  except that the period of
               time for such determination shall be reduced to ten (10) Business
               Days.

          (ii) Terms of  Restricted  Disposition  Gas  Contract.  Committed  Gas
determined  to be  Restricted  Disposition  Gas under  Section  9.2(c)(i)  shall
continue  to be sold to Buyer  under  the  terms of a  Restricted  Gas  Purchase
Agreement,  modified in accordance with the terms of this Section 9.2(c),  which
Restricted Gas Purchase  Agreement  shall be executed and delivered by Buyer and
Seller on or before the closing of a Disposition with respect to which Buyer has
determined that there is Restricted  Disposition  Gas. The effective date of the
Restricted  Gas Purchase  Agreement with respect to Restricted  Disposition  Gas
shall  be  the  closing  date  of  the  relevant  Disposition  (the  "Restricted
Disposition  Gas Purchase  Agreement  Effective  Date").  The termination of the
Restricted  Gas Purchase  Agreement with respect to Restricted  Disposition  Gas
shall  be  the  first  to  occur  of (1)  the  termination  of  the  Contractual
Obligations  that evidenced the existence of Restricted  Disposition Gas, or (2)
one year from the Restricted  Disposition Gas Purchase Agreement Effective Date.
Seller shall make as an express condition to the consummation of the Disposition
the  assumption by the  transferee  of the Gas producing  properties of Seller's
obligations  pursuant to such  Restricted  Disposition  Gas Purchase  Agreement.
Notwithstanding  anything  stated  herein to the  contrary,  to the extent  that
Seller fails to consummate  the proposed  Disposition  within one hundred eighty
(180) Days following  Buyer's  receipt of Seller's notice provided in accordance
with Section  33(b),  Seller shall be required to notify Buyer in writing of the
status of such  Disposition,  and shall continue to provide such notification to
Buyer at thirty (30) Day intervals  thereafter  until the  Disposition is either
consummated  or  abandoned  (it being  understood  and agreed that Seller  shall
notify  Buyer in  writing  within  thirty  (30)  Days of the date on which  such
Disposition is consummated or  abandoned).  If the  contemplated  Disposition is
abandoned,  or if Seller  fails to give the notices  required  by the  preceding
grammatical  sentence  in a timely  manner,  then  Buyer's  determination  under
Section 9.2 of the amounts of the Committed Gas covered by such Disposition that
are  Restricted  Gas and  Disposition  Gas,  respectively,  shall  automatically
terminate,  and Seller  shall once again be  obligated to comply with all notice
obligations  under  Section 3.3, and will be subject to a new  determination  by
Buyer under Section 9.2, in connection with any future  proposed  Disposition of
all or any part of such Committed Gas. Seller may buy out its obligations  under
a Restricted Gas Purchase Agreement in respect of Restricted  Disposition Gas by
paying a Tier One  Restricted  Gas Buyout  Amount or a Tier Two  Restricted  Gas
Buyout Amount, as applicable.

          (d) Burdened Gas.

          (i) Burdened Gas Defined:  Determination  of Burdened  Gas:  "Burdened
Gas" shall mean all  Disposition  Gas to the extent  that such  Disposition  Gas
causes the Pro Forma  Throughput  to fall below .3440  TBtu/d.  The existence of
Burdened Gas shall be determined as soon as  practicable,  but not later than 10
Business  Days  following  receipt of Seller's  Disposition  notice  pursuant to
Section 3.3(b).

          (ii) Burdened Gas Purchase  Agreement  Committed Gas  determined to be
Burdened Gas under this Section 9.2(d)(i) shall continue to be sold as Committed
Gas under the terms of a Restricted  Gas Purchase  Agreement  (the "Burdened Gas
Purchase  Agreement"),  modified in  accordance  with the terms of this  Section
9.2(d) which  Restricted Gas Purchase  Agreement shall be executed and delivered
by Buyer and Seller on or before the closing of a  Disposition  with  respect to
which it has been determined that Burdened Gas exists. The effective date of the
Restricted  Gas  Purchase  Agreement  with  respect to Burdened Gas shall be the
closing date of the relevant  Disposition (the "Burdened Gas Purchase  Agreement
Effective Date"). The term of the Restricted Gas Purchase Agreement with respect
to Burdened Gas shall expire on the sixth  anniversary  of the  Effective  Date.
Seller shall make as an express  condition to the  consummation  of the relevant
Disposition the assumption by the transferee of Seller's obligations pursuant to
such Burdened Gas Purchase Agreement.  Notwithstanding anything stated herein to
the  contrary,  to the extent  that  Seller  fails to  consummate  the  proposed
Disposition  within one hundred eighty (180) Days following  Buyer's  receipt of
Seller's  notice  provided in accordance  with Section  3.3(b),  Seller shall be
required to notify Buyer in writing of the status of such Disposition, and shall
continue to provide  such  notification  to Buyer at thirty  (30) Day  intervals
thereafter  until the  Disposition is either  consummated or abandoned (it being
understood  and agreed that Seller shall notify Buyer in writing  within  thirty
(30) Days of the date on which such Disposition is consummated or abandoned). If
the  contemplated  Disposition  is  abandoned,  or if  Seller  fails to give the
notices required by the preceding  grammatical sentence in a timely manner, then
Buyer's  determination  under  Section 9.2 of the amounts of the  Committed  Gas
covered  by such  Disposition  that  are  Restricted  Gas and  Disposition  Gas,
respectively,  shall  automatically  terminate,  and Seller  shall once again be
obligated to comply with all notice  obligations  under Section 3.3, and will be
subject to a new  determination  by Buyer under Section 9.2, in connection  with
any future proposed Disposition of all or any part of such Committed Gas. Seller
may buy out its obligations under a Restricted Gas Purchase  Agreement by paying
a Burdened Gas Buyout Amount.

          (e)  Arbitration  of  Differences  Over Sale of Restricted  Gas. It is
specifically  understood  and agreed that if Buyer and Seller  cannot agree that
Gas should be Restricted Gas, such disagreement  shall be subject to arbitration
in accordance with the terms of Section 14.10.

          (f) Release of Gas Other than Restricted Gas. If Buyer does not notify
Seller of Buyer's  determination  of the existence of Restricted  Gas within the
period  prescribed  in this Section 9.2, then all Committed Gas described in the
relevant  Disposition  notice shall be released from this Agreement,  subject to
the  provisions of Section 9.3,  effective on the effective date of the relevant
Disposition.  If part,  but not  all,  of the  Committed  Gas  described  in the
relevant  notice is determined  to be  Restricted  Gas, then the portion of such
Committed Gas not  determined  to be Restricted  Gas shall be released from this
Agreement.

     9.3  Survival.  Notwithstanding  anything  stated in this  Agreement to the
contrary,  termination of this Agreement  shall in no way relieve any party from
any obligations or liabilities  accrued as of the date of  termination,  and any
imbalances in receipts or  deliveries  shall be corrected to zero within 60 Days
after such date.  All  indemnity  obligations  of the parties  shall survive the
termination of this Agreement.  In addition,  the parties  acknowledge and agree
that the  termination  of this  Agreement,  whether  as a result of a  Permitted
Termination  Event or otherwise,  may require a transition period to ensure that
the  marketing  and  transportation  of the  Committed  Gas are  not  disrupted.
Accordingly, each party further agrees to use commercially reasonable efforts to
cooperate in the winding up of the  relationship  described  herein and to avoid
disrupting Seller's marketing of its Gas; provided, however, that nothing herein
will  require (i) Buyer to assign or  otherwise  provide  access to its software
licenses,  computer  hardware,  contract rights, or other assets used in its Gas
marketing  and  transportation  activities or (ii) Seller to assign or otherwise
provide  access to rights that had been used to  transport  Committed  Gas under
Seller's own contracts during the term of this Agreement.

                                   ARTICLE X.

                                  FORCE MAJEURE
                                  -------------

     10.1 Generally.  In the event of either party hereto being rendered unable,
wholly  or in part,  by Force  Majeure  (hereinafter  defined)  to carry out its
obligations under this Agreement, other than the obligation to make payments due
hereunder,  such party  shall  notify the other  party by  telephone  as soon as
possible of the Force  Majeure  event and  thereafter,  as soon as  practicable,
provide full particulars of such Force Majeure in writing, by facsimile or other
commercially reasonable means, to the other party within ten (10) Days after the
occurrence  of the cause relied on. The  obligations  of the parties,  so far as
they are affected by such Force  Majeure,  shall be suspended from the inception
of such Force Majeure during the  continuance of any inability so caused but for
no longer period, and such cause hall be remedied with all reasonable  dispatch.
Upon termination of the event of Force Majeure,  the party who had been affected
by such event shall notify the other party by telephone of such termination, and
thereafter,  as soon as  practicable,  provide  such other  party  with  written
notification of such termination by facsimile or other  commercially  reasonable
means, and the parties shall resume  performance under this Agreement as soon as
practicable (it being understood,  however,  that Seller's  obligation to resume
performance  hereunder is subject in all respects to the  provisions  of Section
10.4).  The term  "Force  Majeure" as  employed  herein  shall mean acts of God,
strikes,  lockouts or other industrial  disturbances,  acts of the public enemy,
wars,  blockades,   insurrection,   riots,  epidemics,  landslides,   lightning,
earthquakes,  fires, hurricanes,  tropical storms, floods, washouts, arrests and
restraints of the government (federal,  state or local),  inability of any party
hereto to obtain  necessary  materials,  supplies  or permits due to existing or
future rules,  orders and laws of governmental  authorities  (federal,  state or
local),  interruptions by government or court orders,  present and future orders
of  any  regulatory  body  having  proper   jurisdiction,   civil  disturbances,
explosions,  sabotage,  breakage or accident to machinery or lines of pipe,  the
necessity  for making  repairs or  alterations  to  machinery  or lines of pipe,
freezing  of  wells  or  lines  of pipe,  partial  or  entire  failure  of wells
(including,   without  limitation,  well  blowouts  and  well  craterings),  the
inability or refusal of any Transporter of Gas to receive,  transport or deliver
Gas sold or  purchased  hereunder  (but only if (x) such  inability  or  refusal
results from an event that is  interrupting  such  Transporter's  service to its
firm  customers  and  (y)  no  commercially   reasonable   alternative  for  the
transportation  of the affected  Committed  Gas exists),  and any other  causes,
whether of the kind herein  enumerated or  otherwise,  not within the control of
the party  claiming  suspension  and which by the exercise of due diligence such
party is unable to overcome.  Force  Majeure shall also include the inability to
acquire, or delays in acquiring any servitudes,  right-of-way grants, permits or
licenses  required  to be  obtained  to  enable a party  hereto to  fulfill  its
obligations hereunder.

     10.2 Exclusions.  The term "Force Majeure" does not include loss of markets
or a change in market prices for Gas.

     10.3  Labor  Disputes.  The  settlement  of strikes  or  lockouts  shall be
entirely  within the discretion of the party having the difficulty and the above
requirement  of the use of diligence in restoring  normal  operating  conditions
shall not require the settlement of strikes or lockouts by acceding to the terms
of the opposing  party when such course is  inadvisable in the discretion of the
party having the difficulty.

     10.4  Marketing of Force Majeure Gas. If Buyer is unable to take  Committed
Gas from any Delivery  Point(s) due to the occurrence of Force Majeure,  Seller,
acting in a commercially  reasonable  manner, may market and sell such Committed
Gas from the  affected  Delivery  Point(s) to any third  parties  free from this
Agreement  and without any  obligation  to Buyer during the  continuance  of the
Force  Majeure.  As soon as-the Force Majeure that rendered Buyer unable to take
Committed  Gas is remedied or  terminated,  Seller's  obligation  to  thereafter
commence  selling  the  Committed  Gas to Buyer  shall  commence  following  the
expiration of any agreement between Seller and third parties for the purchase of
Committed  Gas that  Buyer  was  unable  to take and  that  Seller  subsequently
marketed  and sold to such parties as  permitted  by this  Section  10.4.  It is
specifically  understood and agreed that any such  agreement  between Seller and
third  parties shall be  terminable  without  penalty to Seller on not more than
thirty (30) Days notice, and Seller shall use commercially reasonable efforts to
terminate any such  agreement  within a shorter period so that the Committed Gas
being sold thereunder  will be available for inclusion in the Seller's  Estimate
that follows the date on which  Seller  receives  notice from Buyer  pursuant to
this Section 10.4 that such Force Majeure has been remedied or terminated.

                                   ARTICLE XI.

                              IMBALANCE RESOLUTION
                              --------------------

     11.1  Generally.  Seller  agrees  that Gas will be  delivered  as nearly as
practicable at a relatively constant daily rate over the Month.

     11.2  Cooperation of Parties.  The parties  recognize  that  imbalances may
occur on  Transporters.  Accordingly,  Buyer  and  Seller  agree  to make  every
reasonable effort to promptly  eliminate or minimize such imbalances.  The Buyer
shall have the primary  responsibility for eliminating or minimizing  imbalances
downstream of the Delivery Point(s),  it being understood,  however, that Seller
shall cooperate with Buyer's efforts in all reasonable respects.

     11.3  Liability  for Imbalance  Charges.  If any of the  Transporter(s)  of
Committed Gas sold and purchased  hereunder  elects to enforce the general terms
and conditions of its then applicable  Tariff which allow the  Transporter(s) to
impose  Imbalance  Charges,  Buyer and Seller  shall be  obligated  to take such
commercially  reasonable action as may be necessary in order to avoid imposition
of such  Imbalance  Charges.  If, during any Month,  Seller or Buyer receives an
invoice from a Transporter which includes an Imbalance  Charge,  the validity as
well as the  cause  of such  Imbalance  Charge  shall  be  determined.  If it is
determined  that  the  Imbalance  Charge  was  imposed  as a  result  of acts or
omissions  of Buyer or  Buyer's  resale  customer,  then  Buyer  shall  pay such
Imbalance  Charge and/or shall indemnify Seller for any such Imbalance Charge as
may be incurred by Seller.  If it is determined  that the  Imbalance  Charge was
imposed  as a  result  of  acts  or  omissions  of  Seller  (including,  without
limitation,  errors made in Seller's Estimate which are not corrected in time to
reasonably permit Buyer to adjust nominations within any deadline established by
the Tariff of a Transporter), then Seller shall pay such Imbalance Charge and/or
shall indemnify Buyer for any such Imbalance Charge as may be incurred by Buyer.
With  respect  to  the  indemnification   against  Imbalance  Charges  that  are
cash-outs,  the  responsible  party will bear only the  portion of such  Charges
constituting a loss to the other party.

     11.4  Operational  Flow Orders.  Should either party receive an operational
flow order or other order or notice from a  Transporter  requiring  action to be
taken in connection  with this Agreement or Gas flowing under this Agreement (an
"Operational  Flow Order" or "OFO"),  such party shall notify the other party of
the OFO as soon as practicable and simultaneously provide the other party a copy
of such OFO by facsimile or other  commercially  reasonable  means.  The parties
shall take all  actions  required  by the OFO within  the  period(s)  prescribed
therein.

                                   ARTICLE XII

                      CERTAIN EVENTS AFFECTING PERFORMANCE
                      ------------------------------------

     12.1 Buyer and Seller Events.

          (a)  Buyer  Event  Defined.  Each of the  following  shall be deemed a
"Buyer  Event":  (i) Buyer's  failure to pay or cause to be paid any  undisputed
amount owing under this Agreement when due (including, without limitation, Buyer
Payment in accordance  with Section  4.2(b) and interest  accrued on any amounts
payable  hereunder in accordance  with Section 8.5) by the Final Business Day of
the Month following the Month in which  Committed Gas was delivered,  subject in
all  respects to Buyer's  rights under  Sections  8.2 and 8.3 (a "Buyer  Payment
Event"); (ii) the occurrence of one or more of the following events with respect
to  Buyer:  (A) the entry of a decree or order for  relief  against  any  entity
controlling  Buyer by a court of competent  jurisdiction in any involuntary case
brought against any such entity under any bankruptcy insolvency or other similar
law  (collectively,  "Debtor  Relief  Laws")  generally  affecting the rights of
creditors and relief of debtors now or hereafter in effect,  (B) the appointment
of a receiver,  liquidator,  assignee, custodian, trustee, sequestrator or other
similar agent under applicable Debtor Relief Laws for any such entity or for any
substantial  part of its assets or property,  (C) the ordering of the winding up
or  liquidation  of any such  entity's  affairs,  (D) the  filing of a  petition
against any such entity in any such involuntary  bankruptcy case, which petition
remains  undismissed  for a period  of 180 Days or  which  is not  dismissed  or
suspended  pursuant  to  Section  305 of the  Federal  Bankruptcy  Code  (or any
corresponding  provision of any future United States  bankruptcy  law),  (E) the
commencement by any such entity of a voluntary case under any applicable  Debtor
Relief Law now or hereafter in effect, (F) the consent by any such entity to the
entry of an order for relief in an involuntary case under any such law or to the
appointment of or the taking of possession by a receiver, liquidator,  assignee,
trustee,  custodian;  sequestrator  or other similar agent under any  applicable
Debtor Relief Laws for any such entity or for any substantial part of its assets
or property,  or (G) the making by any such entity of any general assignment for
the benefit of its creditors (the events  referred to in clauses (A) through (G)
being  collectively  referred  to as a  "Buyer  Bankruptcy  Event");  (iii)  the
inaccuracy,  in any material respect,  of any representation or warranty made by
Buyer in Section 14.15 (a "Buyer Representation Event"); or (iv) Buyer's failure
to perform any covenant or other  obligation in this Agreement (other than those
specified  in clauses (i) through  (iii) of this Section  12.1(a)),  and if such
failure is  susceptible  of cure before Seller  suffers any costs or losses as a
result thereof,  such failure is not remedied within thirty (30) Days of Buyer's
receipt  of a written  notice  describing  the  particulars  of such  failure in
reasonable detail (such failure being herein called "Buyer Covenant Event").

          (b) Seller  Event  Defined.  Each of the  following  shall be deemed a
"Seller  Event":  (i) the  failure  of any Seller to pay or cause to be paid any
undisputed  amount  owing  under this  Agreement  when due  (including,  without
limitation,  interest  accrued  thereon in  accordance  with  Section 8.5) for a
period of fifteen  (15) Days  after the due date,  subject  in all  respects  to
Seller's  rights under  Section 8.3 (a "Seller  Payment  Event");  (ii) a Seller
Delivery  Event,  as defined in Section  4.2(a);  (iii) the occurrence of one or
more of the following  events with respect to Seller:  (A) the entry of a decree
or  order  for  relief  against  any  entity  controlling  Seller  by a court of
competent  jurisdiction in any involuntary  case brought against any such entity
under any  bankruptcy,  insolvency or other similar law  (collectively,  "Debtor
Relief Laws") generally  affecting the rights of creditors and relief of debtors
now or  hereafter  in effect,  (B) the  appointment  of a receiver,  liquidator,
assignee,   custodian,  trustee,  sequestrator  or  other  similar  agent  under
applicable Debtor Relief Laws for any such entity or for any substantial part of
its assets or property, (C) the ordering of the winding up or liquidation of any
such entity's  affairs,  (D) the filing of a petition against any such entity in
any such involuntary  bankruptcy case, which petition remains  undismissed for a
period of 180 Days or which is not  dismissed or  suspended  pursuant to Section
305 of the Federal Bankruptcy Code (or any corresponding provision of any future
United States  bankruptcy  law),  (E) the  commencement  by any such entity of a
voluntary  case  under any  applicable  Debtor  Relief Law now or  hereafter  in
effect,  (F) the  consent by any such entity to the entry of an order for relief
in an involuntary case under any such law or to the appointment of or the taking
of  possession  by  a  receiver,   liquidator,   assignee,  trustee,  custodian,
sequestrator or other similar agent under any applicable  Debtor Relief Laws for
any such entity or for any  substantial  part of its assets or property,  or (G)
the making by any such entity of any general  assignment  for the benefit of its
creditors (the events referred to in clauses (A) through (G) being  collectively
referred  to as a  "Seller  Bankruptcy  Event");  (iv)  the  inaccuracy,  in any
material  respect,  of any  representation or warranty made by Seller in Section
14.14 (a "Seller Representation  Event"); or (v) Seller's failure to perform any
covenant or other  obligation in this Agreement  (other than those  specified in
clauses  (i)  through  (iv) of this  Section  12.1(b)),  and if such  failure is
susceptible  of cure  before  Buyer  suffers  any  costs or  losses  as a result
thereof,  such  failure is not  remedied  within  thirty  (30) Days of  Seller's
receipt  of a written  notice  describing  the  particulars  of such  failure in
reasonable detail (such failure being herein called a "Seller Covenant Event").

          (c) Consequences of Events.

               (i) Except as explicitly provided in this Agreement,  and subject
               in  all  respects  to  the  other  terms  and  conditions  hereof
               (including,  without limitation,  Sections 4.2, 4.3 and 14.4), an
               Unaffected  Party may take such actions as it may be permitted to
               take under applicable law in consequence of an Event,  including,
               without  limitation,  the exercise of offset rights under Section
               12.2,  the  right  to  suspend  further  performance  under  this
               Agreement and the right to terminate  this  Agreement;  provided,
               however, that the right to terminate shall only be applicable (A)
               upon  occurrence  of  a  Buyer   Bankruptcy  Event  or  a  Seller
               Bankruptcy   Event  (whereupon  this  Agreement  shall  terminate
               automatically and  immediately),  (B) upon occurrence of at least
               three (3) Buyer Payment  Events  within any 12 Month  period,  or
               five (5) Buyer Payment  Events during the term of this  Agreement
               (whereupon this Agreement shall terminate,  at Seller's  election
               if Seller  had  previously  given at least ten (10)  Days'  prior
               written  notice to Buyer of  Seller's  intent to  terminate  this
               Agreement),  (C) upon  occurrence  of at least three (3) Seller's
               Payment  Events  within  any  12  Month  period  (whereupon  this
               Agreement  shall  terminate,  at  Buyer's  election  if Buyer had
               previously  given at least ten (10) Days prior written  notice to
               Seller of Buyer's  intent to terminate  this  Agreement),  or (D)
               upon,  occurrence of a Material Buyer Take Event,  as provided in
               Section 4.2(c).

               (ii)  An  Unaffected  Party  shall  use  commercially  reasonable
               efforts  to  mitigate  costs or  losses  as a result of an Event,
               including, without limitation, exercising commercially reasonable
               efforts  to  find  alternative   markets  for  Committed  Gas  or
               alternative supplies of Gas, as applicable.

               (iii)  Unless  explicitly  indicated  to  the  contrary  in  this
               Agreement,  the  remedies  provided  for  in  this  Section  12.1
               (including,  without  limitation,  termination of this Agreement)
               are cumulative of, and may be exercised without prejudice to, any
               other  remedies,  whether  at  law  or  in  equity  to  which  an
               Unaffected  Party.  maybe  entitled  under this Agreement for any
               Event.

     12.2 Offset Rights. No party hereto shall have the right to offset, against
any amounts  owed to any other party  pursuant to this  Agreement,  any payments
owed to or claims made by such paying party;  provided,  however, that Buyer may
offset,  against  payments made to Seller  pursuant to Article VIII hereof,  any
Costs of Delivery that are  deductible  from payments made to Seller  hereunder,
and any  amounts  owing by Seller to Buyer  pursuant  to any  Administrator  Gas
Supply  Agreement or Service  Agreement  entered into between  Seller and Buyer.
Nothing in this Section  12.2 shall be  construed  as limited or  modifying  the
rights of either party under Section 8.3.

                                  ARTICLE XIII.

                               CERTAIN DEFINITIONS
                               -------------------

     13.1 Other Definitions.  The phrases "Gas production owned or controlled by
Seller" and "Gas production  acquired or obtained by Seller," or similar phrases
as used in this Agreement  (including,  but not limited to, Section 3.1 hereof),
shall mean produced or producible Gas that is either: (a) owned by Seller as and
when it is produced at the wellhead (including,  without limitation, residue Gas
subject  to Section  3.6(c)),  (b)  purchased  by Seller and resold by Seller to
Buyer (such Gas being called  "Third-Party  Gas"),  but only if such Third-Party
Gas is (i) being gathered and commingled  with Gas owned or controlled by Seller
(within the meaning of clauses (a) or (c) of this Section 13.1) and all such Gas
is subsequently gathered,  processed or otherwise treated in connection with the
marketing of such Gas, or (ii) residue Gas subject to Section 3.6(c),  which has
been  commingled  with and  processed  together  with Gas owned or controlled by
Seller (within the meaning of clauses (a) or (c) of this Section  13.1),  or (c)
Gas for which  Seller has the  written  authority  of the third  party  owner(s)
thereof to act as such owner(s)'  representative,  agent, or attorney-in-fact in
marketing  such Gas  (including,  without  limitation,  under a joint  operating
agreement  pursuant to which Seller is the operator),  but only for the duration
of such authorization.

                                  ARTICLE XIV.

                                  MISCELLANEOUS
                                  -------------

     14.1 Seller's  Title  Warranty.  Seller  warrants title to, or the right to
sell, all Gas delivered to Buyer under this Agreement. Seller also warrants that
all such Gas shall be free from all  liens,  encumbrances  and  adverse  claims,
other than (a) Liens as permitted  under Section 3.7, and (b) liens  mandated by
Section 9-319 of the Texas Business and Commerce Code and the statutes,  if any,
in other  jurisdictions  with like lien  provisions  of  mandatory  application.
Seller  agrees that Section 8.7 of this  Agreement is  applicable  to any claims
regarding title to the Gas delivered hereunder.

     14.2 No Continuing  Waiver. The waiver by either party of any breach of any
of the provisions of this Agreement shall not constitute a continuing  waiver of
other breaches of the same or other provisions of this Agreement.

     14.3  Government  Regulation.  This Agreement is subject to all present and
future valid laws,  orders,  rules and regulations of any regulatory body of the
federal  government  or any  state,  county or local  governmental  body  having
jurisdiction.

     14.4 Exclusion of Consequential  Damages. IN NO EVENT SHALL EITHER PARTY BE
LIABLE  TO THE OTHER  FOR ANY  PUNITIVE,  SPECIAL,  CONSEQUENTIAL,  OR  INDIRECT
DAMAGES, INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOST PROFITS.

     14.5 Notices.  Unless otherwise  explicitly  provided  herein,  all notices
provided for in this Agreement shall be in writing and shall be (a) delivered in
person or by messenger, (b) mailed by Federal Express or similar private courier
service,  (c) sent by United States  certified mail (return receipt  requested),
postage  prepaid,  (d) by facsimile,  telex or  telecopier,  or (e) by any other
commercially  reasonable  means, to the addresses of the parties set forth below
or to such other addresses as either party may designate in writing to the other
party.  All notices  given  hereunder  shall be  effective on the date of actual
receipt at the appropriate address. Notice given pursuant to clause (d) shall be
effective (i) upon actual receipt if received during recipient's normal business
hours,  or (ii) at the  beginning  of the next  Business  Day after  receipt  if
received after the recipient's normal business hours.

               Wire Transfer Payments:
               -----------------------
SELLER
------
               ORYX GAS MARKETING LIMITED PARTNERSHIP NationsBank-Dallas
               ABA #111000012
               FC: Oryx Gas Marketing Limited Partnership
               Account No. 129-0144733

               SUN OPERATING LIMITED PARTNERSHIP c/o ORYX Energy Company
               NationsBank-Dallas
               ABA #111000012
               Account No. 018-0175588

               Notices. Statements and Correspondence:
               ---------------------------------------

               Oryx Gas Marketing Limited Partnership
               P.O. Box 2880
               Dallas, Texas 75221-2880
               Attn: Gas Marketing
               Telephone: (972) 715-4000
               Facsimile: (972) 715-3184

BUYER          Wire Transfer Payments:
-----          -----------------------

               Producers Energy Marketing, LLC
               First National Bank of Chicago
               ABA No.: 071000013
               Account No.: 55-59340

               Invoices:
               ---------

               Producers Energy Marketing, LLC
               616 F.M. 1960 West, Suite 800
               Houston, Texas 77090
               Attn: Manager Gas Accounting
               Telephone: (713) 582-6477
               Facsimile: (713) 583-5272

Notices and Correspondence:
---------------------------

               Producers Energy Marketing, LLC
               616 F.M. 1960 West, Suite 800.
               Houston, Texas 77090
               Attn: Manager Producer Services
               Telephone: (713) 583-6252
               Facsimile: (713) 583-5252

and to:
-------
                  Cinergy Capital & Trading Inc.
                  221 East Fourth Street
                  Cincinnati, Ohio 45201
                  Attn: President
                  Telephone: (513) 287-2382
                  Facsimile: (513) 287-3046

     14.6  Assignability.  This Agreement  shall not be assigned by either party
without the prior written consent of the other party;  provided,  however,  that
either  party may assign this  Agreement  to a company that is an Affiliate or a
successor to its business without the consent of the other party, so long as the
assigning party remains liable hereunder.

     14.7 Choice of Law.  THIS  AGREEMENT  SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO ITS PRINCIPLES
OF CONFLICTS OF LAWS. Any dispute concerning the rights and obligations of Buyer
and Seller hereunder,  or the interpretation of any provision of this Agreement,
shall be resolved in accordance with Section 14.10.

     14.8 Integrates.  This Agreement sets forth all understandings of Buyer and
Seller  with  respect  to the  purchase  and sale of  Committed  Gas.  All other
agreements,  oral or written,  concerning such purchase and sale are merged into
and superseded by this Agreement.  No modification or amendment  hereof shall be
effective unless in writing and signed by both parties.

     14.9 Confidentiality.

          (a) Parties' Obligations. The terms of this Agreement,  including, but
not limited to, the Contract  Price and all other  information  exchanged by the
parties  hereunder,  will be kept  confidential  by the parties  unless (i) such
information  becomes  known  to the  public  at  large  without  breach  of this
Agreement,  (ii)  a  party  is  obligated  to  disclose  such  information  to a
Transporter  or other third party for the purpose of  effectuating  the sale and
transportation  of the Gas pursuant to this Agreement,  (iii) to meet applicable
securities or commodity  exchange  requirements,  (iv) to meet regulatory filing
requirements,  (v) to comply with  mandatory  document  production  requirements
under  federal or state Rules of Civil  Procedure,  a subpoena or other order of
judicial  or   administrative   tribunal,   (vi)  to  comply  with   contractual
requirements  with  third  parties,  (vii) to comply  with a  request  made by a
Lender, or (viii) to disclose such information to advisors,  potential investors
and  financial   institutions   retained  by  such  party  for  the  purpose  of
effectuating a transaction,  but only if (x) the recipients of such  information
agree in writing (A) to maintain such information in confidence, subject only to
the  exceptions  set forth in this Section 14.9 and (B) to use such  information
for the sole purpose of (1) advising such party in connection  with the relevant
transaction  or (2)  evaluating  the  relevant  transaction  and (y)  after  the
consummation or abandonment of the relevant  transaction,  the party  disclosing
information  notifies the other party of the identity of the person to whom such
information was disclosed.

          (b) Handling of Request for Disclosure.  If either party believes that
it may be required to disclose information  concerning this Agreement that is to
be kept confidential  pursuant to Section 14.9(a)(v),  the disclosing party will
notify  the  other  party  in  writing  as soon as  practicable  in  advance  of
disclosure,  specifying  the nature of the  request  and the  information  to be
disclosed.  To the  extent  permitted  under  statutes,  rules,  regulations  or
contractual  provisions applicable to the disclosure request, the party required
to make disclosure will assert any available privilege permitting non-disclosure
of the  information  that  is to be  kept  confidential  hereunder,  or  request
confidential  treatment of the disclosed  information,  including exemption from
public  disclosure  under applicable "open records" and "freedom of information"
statutes.  The party  disclosing  information  required to be kept  confidential
under Section 14.9 shall use commercially  reasonable efforts to obtain from the
person to whom disclosure of such information is made an agreement, to be signed
by such  person  and any  employee,  agent,  officer,  director  or  independent
contractor of such person to whom  disclosure  shall be made,  such agreement to
have  terms  and  conditions  substantially  the same as those set forth in this
Section 14.9.

          (c)  Responsibility  for  Confidentiality.  Each  party will be deemed
solely  responsible  and liable for the  actions of its  employees,  independent
contractors,   officers,   and  agents  for  maintaining   the   confidentiality
commitments  of this  Article,  but  will be  required  in that  regard  only to
exercise such care in maintaining  the  confidentiality  of this Agreement as it
normally  exercises in preserving the  confidentiality of its other commercially
sensitive documents.


     14.10 Arbitration.

          (a) Generally.  Subject to the  provisions of this Section 14.10,  all
claims, controversies, disputes and other matters in question arising out of, or
relating to, this Agreement or the breach hereof shall be decided by arbitration
proceedings  before  one  (1)  arbitrator  in  accordance  with  the  Commercial
Arbitration Rules of the American Arbitration Association,  then existing unless
the parties  mutually  agree  otherwise.  This  agreement to arbitrate  shall be
specifically  enforceable  under the prevailing  arbitration law. The demand for
arbitration  shall be made within a reasonable time after the claim,  dispute or
other matter in question  has arisen,  and in no event shall it be made when the
institution of a legal or equitable proceeding based upon such claim, dispute or
other  matter  in  question  would  be  barred  by  the  applicable  statute  of
limitations.  The parties shall continue performing their obligations under this
Agreement while any arbitration  proceeding hereunder is pending. The proceeding
shall be held in Houston,  Texas or another location mutually agreeable to Buyer
and  Seller.  Within  30  Days  of the  delivery  of a  demand  for  arbitration
hereunder, the Parties shall designate one arbitrator. If the Parties shall have
failed for any reason to have agreed upon the  arbitrator  within 45 Days of the
delivery of a demand for  arbitration  hereunder,  either  Party may request the
Texas Chapter of the American Arbitration  Association to select the arbitrator.
The arbitrator appointed hereunder shall be qualified by education, training and
actual work experience as an expert on the disputed issue, and shall have had at
least  five  years'  experience  in  the  natural  gas  marketing  industry.  No
arbitrator so selected shall be, nor shall ever have been, an officer, director,
employee or consultant of either party or any Affiliate of either party.  Within
30 Days after an arbitrator has been appointed in accordance with the provisions
of this Section 14.10(a), the arbitrator shall meet with the parties in Houston,
Texas to hear and  determine  the  questions  in  dispute.  Each party  shall be
required to make full  disclosure  of all  relevant  material  factual and legal
issues to the arbitrator, to the extent each party has knowledge of such issues.
The  arbitrator's  decision  shall be  rendered  in writing 15 Days after  their
initial meeting with the parties.. The award rendered by the arbitrator shall be
final and non-appealable, and judgment may be entered upon it in accordance with
applicable  law in any court having  jurisdiction  thereof,  the parties  hereto
consenting  to the  jurisdiction  of such  courts  for such  purpose.  The party
prevailing in the  arbitration  shall also be awarded all reasonable  attorneys'
fees,  costs and expenses of arbitration,  including,  without  limitation,  all
arbitrator's fees, costs and expenses.


          (b) Special Provisions Applicable to Price Disputes. The provisions of
this Section 14.10(b) shall apply to disputes  relating to the  determination of
the Contract Price, including, without limitation, issues relating to the choice
of an  applicable  Index,  Index  Price  or the  determination  of  Index  Price
Adjustments  or Costs of Delivery (all such disputes  being  hereinafter  called
"Price  Disputes").  Each  party  shall  deliver  to the other  party and to the
arbitrator,  within ten (10) Business Days of the appointment of the arbitrator,
a  written  proposal  stating  such  party's  proposed  outcome,  together  with
supporting materials and documentation.  Each party shall submit its response to
the other party's  proposal within ten (10) Business Days after the arbitrator's
and other party's receipt of such proposal.  The arbitrator,  in his discretion,
may request the submission of additional information,  and may conduct a hearing
on the subject  matter of the  dispute.  Within  forty-five  (45) Days after the
selection and  appointment of the  arbitrator,  the arbitrator  shall select and
adopt either  Seller's  proposal or Buyer's  proposal,  without  modification or
compromise.  The arbitrator shall make his decision as follows: (i) in any Price
Dispute over an Index, the arbitrator shall decide which of the proposed Indexes
presented to the  arbitrator,  after Index Price  Adjustments and deductions for
Costs of Delivery,  best  represents the market price for Gas of like quantities
and quality at the applicable Delivery Point(s),  (ii) in any Price Dispute over
Index Price Adjustments,  the arbitrator shall decide which proposed Index Price
Adjustment  presented  to  the  arbitrator  best  represents  the  differentials
reasonably necessary to adjust the Index Price for Gas to accurately reflect the
market price for Gas of like quantities and quality at the Delivery  Point(s) in
question, and (iii) in all other Price Disputes (including,  but not limited to,
Price Disputes  regarding Costs of Delivery),  the arbitrator shall consider the
terms and conditions of this Agreement and the  requirements of applicable Texas
law, including,  without limitation, the Texas version of the Uniform Commercial
Code in effect at the period relevant to the Price Dispute under  consideration.
The applicable Contract Price during the arbitration shall be the Contract Price
being paid on the day before the Price  Effective  Date.  Upon the conclusion of
the  arbitration,  such  Contract  Price,  if it has  changed as a result of the
arbitrator's  decision,  shall be adjusted  retroactive  to the Price  Effective
Date.  Unless  explicitly  provided  otherwise  in this  Section  14.10(b),  the
provisions  of Section  14.10(a)  shall be applicable  to all  arbitration  with
respect to Price Disputes.

     14.11 Taxes. The Contract Price to be paid by Buyer to Seller for Committed
Gas  purchased  and sold  hereunder  is inclusive  of the  reimbursement  of one
hundred  percent (100%) of all state  severance tax  reimbursement.  Production,
severance,  ad valorem,  and/or  similar taxes levied on the Committed Gas at or
prior to the Delivery  Point(s),  and all such taxes,  if due,  shall be paid by
Seller, provided, however, that where Buyer is required by law to be responsible
for the payment of production, severance or similar taxes, Buyer shall make such
payment  and the  Contract  Price  payable  to Seller  shall be  correspondingly
decreased by a like amount.  If state law requires  Buyer to remit such taxes to
the collecting authority, then Buyer shall do so and deduct the taxes so paid on
Seller's behalf from payments otherwise due to Seller hereunder.

     14.12 Construction of Agreement.

          (a) General  Principles.  In construing this Agreement,  the following
principles shall be followed:

               (i) no  consideration  shall be given to the fact or  presumption
               that one party had a greater  or  lesser  hand in  drafting  this
               Agreement;

               (ii)  examples  shall not be construed to limit,  expressly or by
               implication, the matter they illustrate;

               (iii)  the word  "includes"  and its  syntactical  variants  mean
               "includes,  but is not limited to" and corresponding  syntactical
               variant expressions;

               (iv) the plural  shall be deemed to include the singular and vice
               versa, as applicable;

               (v) the term "party" shall refer to all  Affiliates of such party
               unless the context specifically indicates to the contrary; and

               (vi) each exhibit,  attachment, and schedule to this Agreement is
               a part  of  this  Agreement,  but if  there  is any  conflict  or
               inconsistency  between  the main body of this  Agreement  and any
               exhibit, attachment, or schedule, the provisions of the main body
               of this Agreement shall prevail.

          (b)  Severability.  If any  provision of this  Agreement is held to be
illegal,  invalid,  or unenforceable  under the present or future laws effective
during the term of this Agreement,  (i) such provision will be fully  severable,
(ii) this Agreement will be construed and enforced as if such illegal,  invalid,
or  unenforceable  provision had never comprised a part of this  Agreement,  and
(iii) the remaining  provisions of this  Agreement will remain in full force and
effect  and will not be  affected  by the  illegal,  invalid,  or  unenforceable
provision or by its severance from this Agreement.  Furthermore, in lieu of such
illegal, invalid, or unenforceable provision,  there will be added automatically
as a part of this  Agreement  a provision  as similar in terms to such  illegal,
invalid,  or unenforceable  provision as may be possible to reflect the parties'
original intentions and may be legal, valid and enforceable.


     14.13   Relationship   of  Parties.   This  Agreement  does  not  create  a
partnership,  joint  venture,  or  relationship  of trust or agency  between the
parties.

     14.14  Representations  and Warranties of the Seller.  Each party executing
this  Agreement as a Seller hereby  represents  and warrants to Buyer that as to
such Seller on and as of the date hereof (and no party  executing this Agreement
as a Seller  shall be  liable  to Buyer or  another  for any  inaccuracy  of any
representation  or warranty  made  hereunder  by another  party  executing  this
Agreement as a Seller):

          (a) It is duly formed and validly  existing and, to the extent it is a
corporation,  in good standing  under the laws of the state or  jurisdiction  of
formation,  with all  requisite  corporate,  partnership  or  limited  liability
company,  as the case may be,  power and  authority  to carry on the business in
which it is  engaged  and to  perform  its  respective  obligations  under  this
Agreement;


          (b) The  execution  and  delivery  of this  Agreement  have  been duly
authorized  and  approved  by  all  requisite  corporate,  partnership,  limited
liability company, or similar action;

          (c) It has all the requisite  corporate,  limited  liability  company,
partnership  or similar  power and  authority to enter into this  Agreement  and
perform its obligations hereunder,

          (d)  The  execution  and  delivery  of  this  Agreement  do  not,  and
consummation of the  transactions  contemplated  herein will not, violate any of
the material  provisions of  organizational  documents,  any material  agreement
pursuant to which such party or its  properties  are bound or, to its knowledge,
any material applicable laws; and

          (e) This Agreement is valid,  binding,  and enforceable  against it in
accordance  with its terms,  subject to bankruptcy,  moratorium,  insolvency and
other laws  generally  affecting  creditor's  rights and general  principles  of
equity (whether applied in a proceeding in a court of law or equity).


     14.15  Representations and Warranties of Buyer. Buyer hereby represents and
warrants to each party  executing  this  Agreement as a Seller that on and as of
the date hereof:

          (a) It is duly formed and validly  existing and in good standing under
the laws of the state or jurisdiction of formation, with all requisite corporate
power and  authority  to carry on the  business  in which it is  engaged  and to
perform its respective obligations under this Agreement;


          (b) The  execution  and  delivery  of this  Agreement  have  been duly
authorized and approved by all requisite corporate action;

          (c) It has all the  requisite  corporate  power and authority to enter
into this Agreement and perform its obligations hereunder,

          (d)  The  execution  and  delivery  of  this  Agreement  do  not,  and
consummation of the  transactions  contemplated  herein will not, violate any of
the material  provisions of  organizational  documents,  any material  agreement
pursuant to which such party or its  properties  are bound or, to its knowledge,
any material applicable laws; and

          (e) This Agreement is valid,  binding,  and enforceable  against it in
accordance  with its terms,  subject to bankruptcy,  moratorium,  insolvency and
other laws  generally  affecting  creditor's  rights and general  principles  of
equity (whether applied in a proceeding in a court of law or equity).


     14.16  Seller's  Agent.  Each party  executing  this  Agreement as a Seller
hereby   appoints  ORYX  GAS  MARKETING   LIMITED   PARTNERSHIP  as  its  agent,
attorney-in-fact  and  representative  ("Seller's Agent") for the purpose of (a)
providing or receiving any other notices  required or permitted  hereunder,  (b)
receiving  any amounts or payments due any such Seller  hereunder and (c) making
any elections or taking any actions  required or permitted  hereunder by Seller,
including,  without  limitation,  making any amendments to this Agreement or any
Exhibit  thereto.  Buyer is entitled to assume that Seller's Agent is authorized
to act on behalf of each Seller  hereunder to avoid liability should any dispute
as to the matters set forth in the preceding  sentence arise. It is specifically
understood  and  agreed,  however,  that (i)  Buyer  reserves  the right to deal
directly with any party upon Buyer's actual  awareness of any dispute  between a
party and its Sellers Agent and (ii) Buyer may interplead any amounts in dispute
between a party and its  Seller's  Agent in  accordance  with and subject to the
terms of Section 8.7 and Section 14.17.

     14.17  No  Third  Party  Beneficiaries.  Any  agreement  herein  contained,
expressed  or  implied,  shall be only for the  benefit of the parties and their
respective legal representatives,  successors,  and assigns, and such agreements
or assumptions shall not inure to the benefit of any other person whomsoever, it
being the  intention of the parties that no person shall be deemed a third party
beneficiary of this Agreement. It is specifically understood and agreed that, in
the  performance  of its duties  hereunder,  Buyer may  interplead  funds in its
possession  with respect to this  Agreement if there is a dispute  regarding the
disposition  of such funds between the Seller and a third  person,  or any party
and its  Seller's  Agent,  and  Buyer  shall be  indemnified  for all  Losses in
consequence of such interpleader in accordance with Section 8.7.

     14.18 Further Assurances:  Transition  Matters.  Each party shall take such
acts and execute and deliver  such  documents in form and  substance  reasonably
satisfactory  to 'each of them,  in order to  effectuate  the  purposes  of this
Agreement.

     14.19 Ancillary Agreements.  Simultaneously with the execution and delivery
of this  Agreement,  Buyer and  Seller  have also  executed  and  delivered  the
following   Agreements:   (i)  the   Service   Agreement;   (ii)  the   Contract
Administration Agreement; and (iii) the Administrator Gas Supply Agreement (such
Agreements being collectively called the "Ancillary  Agreements").  With respect
to such  Ancillary  Agreements,  (x) each party's  execution and delivery of the
Ancillary  Agreements  is a material  inducement to the other party in executing
and  delivering  this  Agreement  and  (y)  each  party's   performance  of  its
obligations  under  such  Ancillary  Agreements  is  an  integral  part  of  its
performance of its obligations hereunder.

<PAGE>



     IN WITNESS WHEREOF, this Agreement has been executed in duplicate originals
by the parties hereto but effective as of the Effective Date.

                                    COMPANY:

                                    ORYX GAS MARKETING LIMITED PARTNERSHIP

                                    By: Oryx Gas Marketing Company,
                                    Its Managing General Partner


                                    By:  /s/ Michael S. Burdett
                                         ----------------------
                                    Name: Michael S. Burdett
                                    Title:  Vice President




                                    SUN OPERATING LIMITED PARTNERSHIP

                                    By: Oryx Energy Company,
                                    Its Managing General Partner

                                    By:  /s/ Edward W. Moneypenny
                                         ------------------------
                                    Name:  Edward W. Moneypenny
                                    Executive Vice President, Finance and
                                    Chief Financial Officer




                                    PRODUCERS ENERGY MARKETING, LLC


                                    By:  /s/ R. Kent Samuel
                                         ------------------
                                    Name: R. Kent Samuel
                                    Title: Vice President and Chief Financial
                                       Officer



<PAGE>

                                   Exhibit A

Exhibit A changes on a monthly  basis and,  therefore,  is not  provided in this
filing.

<PAGE>


                                    Exhibit B
(to that certain Amended and Restated Gas Purchase  Agreement dated effective as
of July 1, 1998  among  Oryx Gas  Marketing  Limited  Partnership,  et al.,  and
Producers Energy Marketing, LLC)


                        RESTRICTED GAS PURCHASE AGREEMENT
--------------------------------------------------------------------------------
SELLER:                                  BUYER:

                                         Producers Energy Marketing, LLC,
                                            a Delaware limited liability company
                                         616 F.M. 1960 West, Suite 800
                                         Houston, Texas 77090
                                         Attn: Contract Administration (Notices)
                                         Attn: Gas Control (Nominations)
                                         Attn: Gas Accounting (Invoices)
                                         Phone: 281-583-2800
                                         Fax: 281-583-4353
Attn:  (Notices)
Attn:  (Nominations)
Phone:
Fax:
--------------------------------------------------------------------------------
Payment Instructions:                    Date of Contract:
ON ACCOUNT OF:

BANK:
ABA#:
ACCOUNT #:
--------------------------------------------------------------------------------
Seller's Contract #                      Buyer's Contract #
--------------------------------------------------------------------------------

This  Agreement is made by and between the parties hereto and  incorporates  the
General Terms and Conditions  attached hereto.  This Agreement is not binding on
Buyer until  approved and accepted by it at its offices in Houston,  Texas,  a &
will be indicated by. its signature hereto.

--------------------------------------------------------------------------------
BUYER             Producers Energy Marketing, LLC

                  SIGNATURE                                   Date
                  Title -
--------------------------------------------------------------------------------
SELLER
                  SIGNATURE                                   Date
                  Title -
--------------------------------------------------------------------------------
<PAGE>


                          GENERAL TERMS AND CONDITIONS


1.  TRANSACTION  AGREEMENTS:  If the  parties  desire to sell and  purchase  gas
hereunder,  they will execute one or more Transaction  Agreements in the form of
Exhibit "A," which shall specify the basic terms of such transaction such as the
price for the gas (the  "Price"),  the wells from which the gas dedicated to the
sale under the  transaction is produced (the "Dedicated  Wells"),  the period of
the sale in Days or Months (the "Purchase  Period"),  the location where the gas
will  be  delivered  from  Seller  to  Buyer  (the  "Delivery  Point'),  and any
provisions that apply to that transaction only (the "Special Provisions").  More
than one  Transaction  Agreement  may be in effect from time to time.  After the
parties  verbally  agree to the terms of a  transaction,  Buyer  will  forward a
completed  Transaction  Agreement  to Seller  (which may be by fax),  and Seller
shall  execute  same and return a copy  thereof to Buyer on or before the second
business day (any day except Saturday,  Sunday, or a Federal holiday)  following
the day on which it was received by Seller.  Seller's  failure to respond within
such time shall  conclusively  establish  Seller's  consent and agreement to the
terms specified in the Transaction Agreement,  but Seller must still execute the
Transaction Agreement and return it to Buyer.


2.  DEDICATION  AND QUANTITY:  Seller  dedicates to Buyer under the  transaction
covered  by  an  effective  Transaction  Agreement  all  of  Seller's  owned  or
controlled gas capable of being produced from the Dedicated Wells  identified on
the Transaction  Agreement during the Purchase Period,  which is either produced
by Seller, purchased by Seller from the producer thereof for resale, or marketed
by Seller on behalf of the owner  thereof,  up to a maximum  on any Day equal to
the Maximum Daily  Quantity,  if any,  specified in the  Transaction  Agreement.
Subject to the terms of this  Agreement and an executed  Transaction  Agreement,
Seller shall sell, deliver, and schedule for transportation (if applicable), and
Buyer shall purchase, receive, and schedule for transportation,  the quantity of
Seller's gas producible from the Dedicated Welts which Buyer desires to purchase
from time to time up to 100% of the gas owned or controlled  by Seller,  but not
to exceed the Maximum  Daily  Quantity on any Day of the Purchase  Period In the
event  that  Buyer  does not take and  purchase  at least  95% of  Seller's  gas
dedicated to the transaction  during any three  consecutive  Month period,  then
Seller,  as its sole remedy,  may terminate  this Agreement as to the applicable
Transaction  Agreement  only by  giving  Buyer at least 10 days'  prior  written
notice  which  must  be  given  to  Buyer  within  15 days  from  the end of the
applicable three Month period.  At least ten days prior to the first Day of each
Month,  Seller shall provide Buyer with Seller's good faith estimate  ("Seller's
Estimate") of the amount of gas which Seller  expects to have available for sale
and delivery during each Day of the Month under a Transaction Agreement.  If the
quantity of gas which Seller sets forth in Seller's  Estimate exceeds the actual
quantity of gas which Seller has  available and Buyer has committed the gas to a
resale market  requiring a firm sale obligation on behalf of Buyer,  then Seller
shall reimburse Buyer for any additional costs and losses,  including additional
transportation  costs, incurred by Buyer in securing replacement gas, if any, on
the open  market to  replace  the gas not  provided  by  Seller,  which  will be
deducted  from the amounts due Seller  hereunder  or  reimbursed  to Buyer.  The
parties  shall  make  nominations  and   confirmations  to  each  other  and  to
transporting  pipelines  in a timely  manner and give the other party  notice as
soon as possible of any increases or decreases in deliveries or receipts. To the
extent  practical,  deliveries  and receipts will be at uniform hourly and daily
rates of flow.


3. PRICE:  Buyer will pay Seller the Price per MMBtu of gas, on a dry basis, set
forth in the applicable Transaction Agreement for all gas purchased and received
pursuant  to the  Transaction  Agreement  If the  Price is based on a  published
price,  then it wilt be redetermined each month based on the published price for
the applicable  month unless the parties  specify to the contrary in the Special
Provisions section of the Transaction  Agreement Such Price will be inclusive of
all taxes, including, but not limited to, all production, severance, and similar
taxes,  assessed  on or in  connection  with the gas  upstream  of the  Delivery
Point(s) and all royalty,  working interest, and similar burdens, which shall be
paid by Seller.  Buyer shall pay all taxes  assessed on the gas at or downstream
of the Delivery Point(s) or on this transaction  including,  without limitation,
all sales, use, and similar taxes.

4. DELIVERY POINT(S), TITLE. AND POSSESSION:  The gas will be delivered to Buyer
at the Delivery Point(s) set out in a Transaction  Agreement(s).  Title and risk
of loss to all gas  purchased  hereunder  will  pass to Buyer at the  respective
Delivery  Point(s).  Seller  warrants  that, at the time. of delivery of all gas
hereunder  to Buyer,  Seller will have either  title to such gas or the right to
sell such gas, that such gas will be free and clear of all liens,  encumbrances,
or claims,  and that Buyer will  receive good title to all such gas. If Seller's
tide to the gas or its right to sell it becomes  questioned.  Buyer may  suspend
payments, without interest, until the issue is resolved or Seller posts adequate
security,  in a form and amount  satisfactory  to Buyer,  to protect  Buyer from
adverse claims.  Seller will be deemed to have possession of the gas upstream of
the Delivery  Point(s) and will be responsible for all necessary  transportation
of the gas from Seller's source(s) of such gas to the Delivery  Point(s).  Buyer
will be deemed to have possession of the gas downstream of the Delivery Point(s)
and will be  responsible  for all  transportation  of the gas from the  Delivery
Point(s).  As between the Parties  hereto,  Seller shall be responsible  for and
indemnify, defend, and hold Buyer harmless with respect to any losses, injuries,
claims,  liabilities,  or  damages  occurring  while  the  gas  is  in  Seller's
possession,  and Buyer shall be responsible for and indemnify,  defend, and hold
Seller harmless with respect to any losses, injuries,  claims.  liabilities,  or
damages occurring while the gas is in Buyer's possession,  which indemnity shall
include the  obligation to reimburse the  indemnified  party for its  attorneys'
fees and other costs and expenses.


5. TERM:  This  Agreement  shall become  effective on the date  appearing on the
cover  sheet  hereto and shall  continue in force and effect from Month to Month
unless and until  terminated  at the end of a Month by either  party upon giving
the  other  party 30 days'  prior  written  notice;  provided,  however,  if the
Purchase Period of an executed Transaction  Agreement extends beyond the date of
termination  specified in a notice from one of the parties, this Agreement shall
remain in full force and effect with respect to the transaction described in the
Transaction Agreement until the expiration of the Purchase Period.


6.  BILLING AND  PAYMENT:  On or before the 15th day of each month.  Seller will
render to Buyer a statement  showing the total quantities of gas delivered under
each Transaction  Agreement at the Delivery Point(s) during the preceding Month,
the Price(s) in effect for such gas, and the total  amount due  therefor.  Buyer
will pay to Seller  the  stated  total  amount on or before  the last day of the
month  following  the Month of  deliveries  by wire  transfer or, if  available,
automated  clearinghouse in accordance with the payment instructions provided by
Seller.  Past due  amounts  shall bear  interest  at the lesser of the prim rate
charged  from time to time by  Citibank,  N.A.,  N.Y.,  N.Y.  plus 2% per annum,
compounded  monthly,  or the maximum lawful rate of interest,  from the due date
until the date paid.  No  adjustment  to any  statement  or payment will be made
after the lapse of two years from the  rendition  thereof.  The  obligations  of
Buyer to make payment hereunder for gas that has been purchased and received and
the warranties and indemnification of both parties will survive the termination,
cancellation, or expiration of this Agreement


7.  MEASUREMENT:  Gas  delivered at the  Delivery  Point(s)  hereunder  shall be
measured by the  transporting  pipeline(s)  receiving the gas in accordance with
its tariff(s) or standard  practices and  procedures,  unless another  measuring
party is specified in the Transaction Agreement The unit of measurement shall be
one million  British  Thermal  Units  ("MMBtu").  One "British  Thermal Unit" is
defined as the amount of heat required to raise the  temperature of one pound of
water  from  59(degree)F  to  60(degree)F.  The  parties  agree to  accept  such
measuring party's measurements,  including adjustments thereto, for all purposes
hereunder, subject to the limitation on adjustments in Section 6.


8. QUALITY AND PRESSURE:  Gas tendered for sale hereunder shall meet the quality
and pressure  specifications  required by the transporting  pipelines) receiving
the gas at the Delivery Point(s).


9.  IMBALANCES  AND IMBALANCE PEI ES: Any imbalance  between the quantity of gas
scheduled  for  delivery  and the  quantity  actually  delivered at the Delivery
Point(s)  shall  be  minimized  and  corrected  in gas or cash or in such  other
mutually  agreeable manner as soon as possible.  As between the parties,  Seller
shall bear, pay, and be responsible for (or reimburse Buyer if Buyer has already
paid)  all  imbalance,  overrun,  scheduling,  cash-out  (but  only the  portion
constituting a loss to a party),  or other  penalties and charges  assessed by a
transporting  pipeline  ("Imbalance  Penalties") as a result of Seller's actions
including,  but not  limited  to,  Seller's  delivery  of more or less  than the
scheduled quantities at the Delivery Point(s), and Buyer shall bear, pay, and be
responsible  for (or  reimburse  Seller if  Seller  has  already  paid) all such
Imbalance  Penalties that are assessed as a result of Buyer's actions including,
but not limited to, Buyer's taking more or less than the scheduled quantities at
the Delivery  Point(s).  The parties  will  cooperate  and use their  reasonable
efforts  to  determine  the cause and  validity  of, and to  mitigate,  any such
Imbalance Penalties.

10. FORCE MAJEURE:  Non-performance of any obligation hereunder,  other than the
obligation to pay for gas taken and the  obligation to pay Imbalance  Penalties,
shall be excused if prevented, in whole or part, by an occurrence of an Event of
Force Majeure, but only for so long as performance is prevented by such Event of
Force Majeure.  The party claiming  excuse shall promptly advise the other party
of such Event of Force Majeure and shall seek to remedy the occurrence  with all
reasonable  dispatch.  The term "Event of Force Majeure" shall mean any event or
occurrence  involving  an act of God;  strikes,  lockouts,  or other  industrial
disturbances;   wars;   insurrections,   riots,  or  other  civil  disturbances;
landslides;  lightning;  earthquakes;  fires;  storms;  hurricanes or threats of
hurricanes;  floods;  governmental restraints or orders; failure or interruption
of  transportation;  breakdown  or damage to plants,  pipelines,  equipment,  or
machinery;  well  freeze-ups;  and any  other  event or  occurrence  beyond  the
reasonable  control of the party and not caused by the  negligence of the party.
The term Event of Force Majeure specifically  excludes the following occurrences
or events:  increases or decreases  in natural gas supply due to  allocation  or
reallocation  of production by well operators,  pipelines,  or other parties and
regulatory disallowance of the passthrough of the costs of the gas hereunder.


11. NOTICES: Notices, requests,  statements,  bills, and nominations shall be in
writing (which shall include  faxes) and sent to the parties at their  addresses
specified  on the cover  sheet  hereto or such other  addresses  as  directed in
writing  by a party and shall be  deemed  to have  been  given  upon the date of
actual receipt; provided, however, faxes received after 5:00 p.m. local time for
the  recipient's  address  location  shall be deemed  to have been  given on the
following  business day. The parties agree that  facsimile  copies and facsimile
signatures  will be  considered  to be  originals  for all  purposes  and may be
admitted  into  evidence as  original  documents  in the event of a  controversy
between the parties.


12. REMITTANCE OBLIGATIONS TO THIRD PARTIES AND PRODUCTION  PREFERENCES:  Seller
shall have the sole and primary obligation to pay all production, severance, and
similar  taxes on the gas and to pay all royalty,  working  interest,  and other
similar  burdens  due to third  parties  with  respect  to the gas.  If Buyer is
required to remit any such amounts to the  government or third  parties,  Seller
will provide Buyer with all payment  instructions,  Buyer will make the payments
to the  government  or the third  parties,  and Buyer shall deduct the amount of
such  payments from the sums  otherwise due Seller for gas delivered  hereunder.
Seller shall  indemnify and hold Buyer  harmless from and against all claims for
wrongful or late  payments,  including all fines and penalties and Buyer's costs
(including  attorneys fees) of defending against or settling same. If the gas is
a type that receives a preferential production right under applicable state law,
such preference  shall not interfere with Buyer's absolute right to interrupt or
curtail  its  'takes,  and  Seller  will be  solely  responsible  for  finding a
replacement purchaser for such gas.


13. ADDITIONAL  DEFINITIONS:  The term "Day," but only when  capitalized,  shall
mean a gas day as determined by the  measuring  entity  identified in Section 7.
The  term  "Month,"  but  only  when  capitalized,  shall  mean a gas  month  as
determined by the measuring entity identified in Section 7. The term "gas" shall
mean natural gas.


14. MISCELLANEOUS

a.   If  any  provision  hereof  is  determined  to  be  void,   invalid,  r  or
     unenforceable, the remaining provisions hereof. shall remain in effect:: No
     waiver of any breach of this Agreement  shall be held to be a waiver of any
     other or subsequent breach.

b.   This  Agreement  shall not be  assigned by either  party  without the prior
     written  consent of the other  party;  provided,  however,  that (i) either
     party may assign this  Agreement  to a company  that is an  affiliate  or a
     successor to its business  without the consent of the other party,  so long
     as the assigning party remains liable hereunder, and (ii) Seller may assign
     this  Agreement to a third party that is the purchaser of Settees  interest
     in the  Dedicated  Wells  without  the  consent  of  Buyer,  so long as the
     interest sold remains  subject to this Agreement or a replacement  contract
     in substantially the form hereof.

c.   THIS  AGREEMENT  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE
     LAWS OF THE STATE OF TEXAS.  This  Agreement  shall be  considered  for all
     purposes to have been  prepared  through  the joint  efforts of the parties
     hereto  and  shall  not be  construed  against  one party or the other as a
     result of the  preparation  or other  event of  negotiation,  drafting,  or
     execution hereof.

d.   Either party shall have the right to setoff any amounts due from or owed to
     it hereunder  against any amounts due from or owed to it hereunder or under
     other  contracts  between the parties and vice versa.  Each right of setoff
     may be exercised  without  demand on or prior notice to the other party and
     shall not be deemed to be waived by a party under any circumstances.

e.   In no event  shall  either  party be liable for any  punitive,  incidental,
     consequential, special, or indirect damages arising from its performance or
     failure to perform hereunder.

f.   This document, together with applicable Transaction Agreements, constitutes
     the entire agreement between the parties with respect to the subject matter
     hereof. No promises,  agreements,  or warranties not specifically set forth
     in  such  documents  will be  deemed  to be a part  hereof,  nor  will  any
     alteration, amendment, or modification hereof be effective unless confirmed
     in writing  except as provided  hereinabove  with respect to a  Transaction
     Agreement submitted by Buyer.

g.   The terms of this Agreement including,  without limitation,  the Price paid
     for the gas and  the  volumes  of gas  purchased  or  sold,  shall  be kept
     confidential  by  the  parties  hereto,  except  to  the  extent  that  any
     information  must  be  disclosed  to a  third  party  for  the  purpose  of
     effectuating  transportation of the gas, by law, or to regulatory  agencies
     or to the extent a party  desires to disclose such to the owners of a party
     or a potential purchaser of the Dedicated Wells.


     15.  REDETERMINATION  OF INDEX(ES).  If, during the term of this Agreement,
(a) a published  index used to determine the Price for any Delivery Point ceases
to be available, or (b) either party believes that another index more accurately
reflects  existing  market  conditions  than the index currently being used with
respect to such  Delivery  Point(s),  then either party may request the other to
reconsider the currently applicable index; provided,  however, that no change of
indexes shall be made for the first 60 Days of the  applicable  Purchase  Period
except for (i) the deletion of Delivery Points no longer needed for the delivery
of Gas,  (ii) the  addition  of indexes and  Delivery  Points for new sources of
supply  added during such period,  and (iii) the  replacement  of any index that
ceases to be available during such period.  Either party may propose a change in
indexes by giving the other party not less than 30 Days  written  notice  before
the first Day of the Month such change is proposed to be  effective  (the "Price
Effective  Date").  If the other party agrees in writing to the proposed change,
the change shall be effective on the Price  Effective  Date.  If the other party
does not agree in  writing to the  proposed  change by the I0"' Day prior to the
proposed Price  Effective Date, then the proposed change shall not be effective,
and either party may seek to arbitrate,  at any time, the parties'  disagreement
pursuant to Section  16, and the  decision of the  arbitrator  thereunder  shall
become effective retroactively on the Price Effective Date.


16. ARBITRATION.

a.   Generally,.  Subject  to  the  provisions  of  this  Section,  all  claims,
     controversies,  disputes,  and other matters in question arising out of, or
     relating  to,  this  Agreement  or the  breach  hereof  shall be decided by
     arbitration  proceedings  before one (1) arbitrator in accordance  with the
     Commercial  Arbitration Rules of the American Arbitration  Association then
     existing  unless the parties  mutually agree  otherwise.  This agreement to
     arbitrate   shall  be   specifically   enforceable   under  the  prevailing
     arbitration  law.  The  demand  for  arbitration  shall  be made  within  a
     reasonable time after the claim,  dispute,  or other matter in question has
     arisen, and in no event shall it be made when the institution of a legal or
     equitable  proceeding  based upon such claim,  dispute,  or other matter in
     question  would be barred by the  applicable  statute of  limitations.  The
     parties shall continue  performing their  obligations  under this Agreement
     while any arbitration proceeding hereunder is pending. The proceeding shall
     be held in Houston,  Texas, or another location mutually agreeable to Buyer
     and  Seller.  Within 30 Days of the  delivery  of a demand for  arbitration
     hereunder, the parties shall agree upon an arbitrator. If the parties shall
     have  failed for any reason to have agreed  upon the  arbitrator  within 45
     Days of the delivery of a demand for  arbitration  hereunder,  either party
     may request the Texas Chapter of the American  Arbitration  Association  to
     select  the  arbitrator.   The  arbitrator  appointed  hereunder  shall  be
     qualified by education, training and actual work experience as an expert on
     the disputed issue,  and shall have had at least five years'  experience in
     the natural gas marketing industry. No arbitrator so selected shall be, nor
     shall ever have been,  an  officer,  director,  employee or  consultant  of
     either  party or any  affiliate of either  party.  Within 30 Days after the
     arbitrator  has been  appointed in accordance  with the  provisions of this
     Section 16, the arbitrator shall meet with the parties in Houston, Texas to
     hear and determine  the questions in dispute.  Each party shall be required
     to make full disclosure of all relevant  material  factual and legal issues
     to the  arbitrator,  to the extent each party has knowledge of such issues.
     The arbitrator's  decision shall be rendered in writing 15 Days after their
     initial  meeting with the  parties.  The award  rendered by the  arbitrator
     shall be final and  non-appealable,  and judgment may be entered upon it in
     accordance  with applicable law in any court having  jurisdiction  thereof,
     the parties hereto  consenting to the  jurisdiction of such courts for such
     purpose.  The party prevailing in the arbitration shall also be awarded all
     reasonable attorneys' fees, costs, and expenses of arbitration,  including,
     without limitation, all arbitrator's fees, costs, and expenses.



b.   Special  Provisions  Applicable to Price  Disputes.  The provisions of this
     Section 16(b) shall apply to disputes  relating to the determination of the
     Price for gas under this Agreement,  including, without limitation,  issues
     relating to the choice of an applicable  index, the replacement of an index
     that ceases to be available or the  determination of index price adjustment
     or deductions  for costs of delivery (all such disputes  being  hereinafter
     called "Price  Disputes").  Each party shall deliver to the other party and
     to the arbitrator,  within ten (10) business Days of the appointment of the
     arbitrator,  a written  proposal  stating  such party's  proposed  outcome.
     together  with  supporting  materials and  documentation.  Each party shall
     submit its response to the other party's  proposal within ten (10) business
     Days after the arbitrator's and other party's receipt of such proposal. The
     arbitrator,  in his  discretion,  may request the  submission of additional
     information,  and may  conduct  a  hearing  on the  subject  matter  of the
     dispute. Within forty-five (45) Days after the selection and appointment of
     the  arbitrator,  the  arbitrator  shall select and adopt  either  Seller's
     proposal or Buyer's  proposal,  without  modification  or  compromise.  The
     arbitrator  shall make his  decision as follows:  (i) in any Price  Dispute
     over an index,  the arbitrator  shall decide which of the proposed  indexes
     presented to the arbitrator,  after index price  adjustments and deductions
     for costs of  delivery,  best  represents  the market price for gas of like
     quantities and quality at the  applicable  Delivery  Point(s),  (ii) in any
     Price Dispute over index price  adjustments,  the  arbitrator  shall decide
     which proposed  index price  adjustment  presented to the  arbitrator  best
     represents the differentials  reasonably  necessary to adjust the Price for
     gas to accurately  reflect the market price: for gas of like quantities and
     quality at the Delivery Point(s) in question,  and (iii) in all other Price
     Disputes (including,  but not limited to, Price Disputes regarding costs of
     delivery),  the arbitrator  shall consider the terms and conditions of this
     Agreement and the requirements of applicable Texas law, including,  without
     limitation,  the Texas version of the Uniform  Commercial Code in effect at
     the  period  relevant  to  the  Price  Dispute  under  consideration.   The
     applicable  Price during the  arbitration  shall be the Price being paid on
     the day before the demand for  arbitration was made. Upon the conclusion of
     the arbitration, such Price, it has changed as a result of the arbitrator's
     decision,  shall  be  adjusted  retroactive  to  the  date  of  demand  for
     arbitration. Unless explicitly provided otherwise in this Section 16(b) the
     provisions of Section 16(a) shall apply to all  arbitrations  in respect of
     Price Disputes.

<PAGE>
                                   EXHIBIT "A"
                              TRANSACTION AGREEMENT

                                     , 1998


                                               Transaction Agreement
                                               No._________to
                                               Restricted Gas Purchase Agreement
                                               dated_____________________,  1998


                                               Agreement No.________


-----------------------------
-----------------------------
-----------------------------


This Transaction  Agreement  constitutes an agreement by the parties to sell and
purchase gas in accordance with the terms of the above referenced Restricted Gas
Purchase Agreement and the: terms described below:

A. DEDICATED WELL(S),  DELIVERY POINT(S),  PRICING INDEXES (IF APPLICABLE),  AND
PURCHASE PERIOD:

--------------------------------------------------------------------------------
                      DELIVERY POINT(S)
                   -----------------------
DEDICATED WELL(S)  PIPELINE(S)    METER NO.     PRICING INDEX    PURCHASE PERIOD
-----------------  -----------    ---------     -------------    ---------------


--------------------------------------------------------------------------------
B. PRICE:
C. MAXIMUM DAILY QUANTITY:
D. SPECIAL PROVISIONS:

ACCEPTED. AND AGREED TO:                      ACCEPTED AND AGREED TO:
      "SELLER"                                        "BUYER"
                                              PRODUCERS ENERGY MARKETING, LLC




By:______________________________             By:_______________________________
Name:____________________________             Name:_____________________________
Its:_____________________________             Its:______________________________


<PAGE>

                                               Cinergy Marketing & Trading, LP
                                               1100 Louisiana Street, Suite 4900
                                               Houston, TX 77002 Tel
                                               713.393.6800 Fax 713.571.1741



                                  July 1, 2002


Oryx Gas Marketing Limited Partnership
16666 Northchase
Houston, Texas 77060

RE:  Modification of Purchase and Sale  Agreement,  dated June 18, 1998 for: (a)
     Article II, Deletion of Section 2.3,  Additional  Consideration (b) Article
     XV, Clarification to Section 15.12, Non-Competition

Gentlemen:

Reference is hereby made to that certain Purchase and Sale Agreement, dated June
18, 1998, among (Oryx Gas Marketing Limited Partnership  ("Kerr-McGee"),  Apache
Gathering Company, and Cinergy Corp.  ("Cinergy") (the "Agreement").  In Section
2.3  of  the  Agreement,  the  parties  provided  a  mechanism  whereby  certain
additional  payments  would be made to  Kerr-McGee  by  Cinergy or to Cinergy by
Kerr-McGee  depending on the levels of gas deliveries under that certain Amended
and Restated Gas Purchase  Agreement  dated  effective July 1, 1998 between Oryx
Gas Marketing Limited  Partnership,  et al, and Cinergy Marketing & Trading,  LP
(the "Kerr-McGee GPC").

Kerr-McGee  and  Cinergy do hereby  agree  that,  effective  July 1,  2002,  the
provisions of Section 2.3 of the Agreement  shall be deleted from the Agreement,
solely as between Kerr-McGee and Cinergy.  Such deletion shall have no effect on
the obligations of Kerr-McGee and Cinergy under such Section 2.3 with respect to
the period  prior to July 1, 2002.  The parties will  continue to calculate  the
amount due one party to the other for the twelve month period ending on June 30,
2002 and the  appropriate  payment will be made by the payor to the payee by the
due date specified in Section 2.3.

Notwithstanding   anything  in  the  Agreement  to  the  contrary,  the  parties
acknowledge and agree that the sale of  Kerr-McGee's,  or its  affiliates',  gas
produced  from the Rocky  Mountain  production  area in the states of  Colorado,
Utah, and Wyoming,  including but not limited to the wells behind the Wattenberg
Gas Plant located in Weld County,  Colorado,  by Kerr-McGee or its affiliates to
third  parties  shall  not  constitute  a  violation  of  Section  15.12  of the
Agreement.


<PAGE>
Modification of Purchase & Sale Agreement
July 1, 2002
Page 2




If the  foregoing is in accordance  with your  understanding  of our  agreement,
please  execute all copies of this letter  agreement in the space provided below
and return same to the undersigned.

                                                      Sincerely,

                                                      CINERGY CORP.

                                                      By:  /s/ Michael J. Cyrus
                                                           --------------------
                                                      Name:  Michael J. Cyrus
                                                      Its:  President, CM&T
                                                            CEO, Energy Merchant

Accepted and agreed to on this 9 day
of October, 2002.


ORYX GAS MARKETING LIMITED PARTNERSHIP
BY: KERR-MCGEE OIL & GAS ONSHORE LLC,
ITS MANAGING GENERAL PARTNER

By:  /s/ Kenneth W. Crouch
     ---------------------
Name:  Kenneth W. Crouch
Its:  Senior Vice President