<PAGE>   1
                                                                   EXHIBIT 10.21



                                January 15, 1998



HarCor Energy, Inc.
Attention:  Mr. Mark Harrington, CEO
5 Post Oak Park Blvd., Suite 2220
Houston, Texas 77027

Dear Mr. Harrington:

This Agreement dated effective January 8, 1998, is between HarCor Energy, Inc.
("Seller") and Penroc Oil Corporation ("Buyer") and evidences the agreement of
the parties with respect to various issues which were not fully resolved in
that certain Purchase and Sale Agreement dated December 3, 1997, but effective
as of January 1, 1998, at 7:00 A.M., local time (the "Purchase and Sale
Agreement").  All defined terms in the Purchase and Sale Agreement shall have
the same meaning herein.

For valuable consideration received, Seller and Buyer agree as follows:

1.       Subsequent to the execution of the Purchase and Sale Agreement, Buyer
         learned that an unforeseen downhole mechanical failure occurred in the
         Beaurline No. 9 well, Beaurline/McAllen Ranch Area, South Texas, which
         failure, if not fully corrected, would significantly and materially
         reduce the value of the property.  Seller and Buyer agree as follows
         with respect to Seller's interest in the Beaurline #9 well and its
         pooled or allocated producing unit (the "Well"):  (a) The Purchase
         Price shall be reduced by an amount equal to the PV10 value given to
         this Well by the Ryder Scott Reserve Report previously furnished to
         Buyer by Seller, being an amount equal to $714,911.00, and the Well
         shall be excluded from the Property to be conveyed by Buyer at
         Closing.  (b) Seller will participate in necessary remedial operations
         proposed by the Operator in an attempt to restore the Well to its
         previous producing condition or in the drilling of a replacement well
         to the financial extent as may be determined in Seller's sole
         discretion.  Seller will advise Buyer of all proposals and remedial
         operations to restore the Well.  (c) If the Well is restored by
         sidetrack or redrill or associated operations, Seller will obtain at
         its cost a new evaluation of the Well from Ryder Scott (the "New
         Reserve Evaluation"), and Seller will promptly provide same to Buyer.
         (d) Buyer will purchase the Well pursuant to the same terms and
         provisions as the Purchase and Sale Agreement for a price qual to the
         PV10 value given to the Well in the New Reserve Evaluation.  Unless
         otherwise agreed between Seller and Buyer, the Closing for Buyer's
         purchase of the Well will take place at 10:00 A.M., local time, in
         Seller's offices on the tenth (10th) business day after Buyer's
         receipt of the new Reserve Evaluation, at which time Seller will
         deliver to Buyer an executed assignment of the Well, in the same form
         as the Assignment and Bill of Sale attached to the Purchase and Sale
         Agreement, and Buyer will concurrently deliver the purchase price to
         Seller in immediately available funds.
<PAGE>   2
2.       Seller agrees to assist Buyer in obtaining any necessary consents for
         Buyer to use any and all seismic data in Seller's possession or to
         which Seller has access, including but not limited to all such three
         dimensional and two dimensional seismic data covering any portion of
         the Property, including, but not limited to, the Hostetter Area in
         McMullen, Duval and Live Oak Counties, Texas, and the Lapeyrouse
         (Starboard) Area in Terrebonne Parish, Louisiana, in the event Buyer
         acquires the corresponding Property pursuant to the Purchase and Sale
         Agreement, subject to the provisions of Section 1.1.7 of the Purchase
         and Sale Agreement.

3.       Seller and Buyer agree that Seller's rights in the 2D/3D Geophysical
         computer workstation, associated peripheral devices and furniture,
         including without limitation, plotter, digitizer and all related
         software and software licenses shall constitute a part of the
         Property, and Buyer agrees to pay $10,000.00 for such equipment, in
         addition to the Purchase Price, without warranty and subject to the
         disclaimers and other restrictions on transfer in the Purchase and
         Sale Agreement.

4.       Seller hereby authorizes Buyer to plug and abandon, on behalf of
         Seller, the May B #1, the *WEI 32 #1, and the WEI 32 #3 located on
         expired leases not a part of the Property in the Eumont Prospect, Lea
         County, New Mexico.  Buyer will bill Seller for such services and
         Seller agrees to pay Buyer the billed costs within ten (10) business
         days after receipt of Buyer's invoice.

5.       The Warranted Property described in Exhibit "B" to the Purchase and
         Sale Agreement, Schedule 1, Item 16.  "California-Chowchilla" may be
         transferred and assigned by Seller to the Non-Operator owning a fifty
         percent (50%) interest therein prior to the Closing between Seller and
         Buyer, and in such case shall be excluded from the Property, or if the
         Non-Operator does not agree to accept the above interests prior to the
         Closing, the Warranted Property described above will remain a part of
         the Property and shall be transferred to Buyer at Closing, and Seller
         will maintain its operator's bond concerning such property for a
         period of ninety (90) days following Closing.

The authorized representatives of Seller and Buyer sign below indicating their
agreement to the terms of the Agreement on the date first above written.

Seller:                                       Buyer:

HarCor Energy, Inc.                           Penroc Oil Corporation

By:  /s/ MARK HARRINGTON                      By: /s/ M.Y. MERCHANT
     ------------------------------               -----------------------------
         Mark Harrington                              M. Y. Merchant
         Chief Executive Officer                      President
         Chairman of the Board



* Also included in the plugging and abandonment are the Freedman State wells #1
and 2.


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<PAGE>   3
                               CLOSING STATEMENT


         This Closing Statement (the"Statement"), dated February 6, 1998, but
effective as of   January 1,1998, at 7:00 a.m., local time, is between HarCor
Energy, Inc., a Delaware corporation ("Seller"), and Penroc Oil Corporation, a
Texas corporation ("Buyer"), in conjunction with that certain Purchase and Sale
Agreement (the "Agreement"), dated December 3, 1997, by and between Seller  and
Buyer, and sets forth the subsequent understanding and agreement of Seller and
Buyer with respect to the subject matter of the Agreement.  Capitalized terms
used herein without definition are used herein as defined in the Agreement.

         Accordingly, in consideration of the mutual promises contained in this
Statement, Buyer and Seller agree as follows:

1.       Attached hereto as Exhibit I and made a part hereof  is a true and
         correct copy of that certain Letter Agreement dated effective  January
         15, 1998, by and between HarCor Energy, Inc., and Penroc Oil
         Corporation with respect various issues that were not fully resolved
         in the Agreement, which terms and provisions thereof are incorporated
         herein by reference thereto.

2.       Pursuant to Section 7.3.3.3 of the Agreement Seller delivered to Buyer
         a Certificate of the Chief Financial Officer of Seller setting forth
         in reasonable detail the calculation of the estimate of the amount of
         the Purchase Price adjustment; a true and correct copy of the
         Certificate, as amended and corrected, is attached hereto as Exhibit
         II and incorporated herein by reference.

3.       In conjunction with the Certificate of the Chief Financial Officer,
         the estimate of the adjusted purchase price and Section 7.3 of the
         Agreement regarding Closing obligations, a Closing Settlement
         Statement, including a recapitulation of the calculation of the
         initially  adjusted  Purchase Price, is attached hereto as Exhibit III
         and incorporated herein by reference.

4.       By facsimile letter dated February 4, 1998, Seller notified Buyer of
         the bank wiring instructions for the payment of the Purchase Price, as
         initially adjusted, by Buyer as set forth in Section 7.3.2 of the
         Agreement.  A true and correct copy of  which letter is attached
         hereto as Exhibit IV and incorporated herein by reference.  The
         initial adjusted Purchase Price was calculated on the basis that
         Closing would occur on February 6, 1998, but since Closing is
         occurring February 12,1998, additional interest has accrued on the
         Earnest Deposit held in escrow  that would change the wiring
         instructions, and in the interest of simplicity, the parties have
         agreed not to change the wiring instructions, and that the difference
         in accrued interest would be paid at Closing by Seller to Buyer.  At
         Closing Seller shall deliver its check in the amount of $404.44 to
         Buyer, being the amount of the accrued interest since February 6,
         1998.

5.       By facsimile letter dated February 12,1998, received February 12, 1998
         by Buyer, Seller notified Buyer that under Section 7.1 of  the
         Agreement that Seller postponed the Closing and that the Closing will
         occur on February 12, 1998, at 11:30 a.m.  A true and correct copy of
         which letter is attached hereto as Exhibit V and incorporated herein
         by reference.





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6.       Seller and Buyer acknowledge that the Agreement was executed and
         accepted by both parties by facsimile signature pages, that the
         parties agree to execute original signature pages simultaneous with
         the execution of this Statement, and that such original signature
         pages shall be attached to the Agreement and with the same validity as
         if same had been originally  executed as of the time of execution of
         the Agreement.  A true and correct copy of the facsimile signature of
         the Agreement is attached hereto as Exhibit VI and incorporated herein
         by reference.

7.       Seller and Buyer hereby acknowledge the Agreement, as executed, did
         not include all Exhibits referenced throughout the terms and
         provisions thereof, and certain of the Exhibits, as originally
         attached, contained scrivener's errors or were incomplete with respect
         to the descriptions, or certain of the Property was eliminated from
         this transaction between Seller and Buyer due to the exercise of
         preferential rights of purchase under certain Related Contracts.  The
         following described Exhibits, in the form attached hereto as
         designated below, shall be the Exhibits to the Agreement as if such
         Exhibits had originally been attached to the Agreement:

         a.      Exhibit A, Leases and Certain Related Contracts, including
                 Schedule I. Leases, Schedule II. Contracts, Schedule III.
                 Preferential Rights, and Schedule IV. Consents, all of which
                 is attached hereto as Exhibit VII and incorporated herein and
                 in the Agreement by reference.

         b.      Exhibit B, Warranted Property, including Schedule I. Inventory
                 of Wells and Schedule II. Value Allocation, all of which is
                 attached hereto as Exhibit VIII and incorporated herein and in
                 the Agreement by reference.

         c.      Exhibit C, Non Foreign Affidavit, styled "Non Foreign
                 Certificate", is attached hereto as Exhibit IX and
                 incorporated herein and in the Agreement by reference.

         d.      Exhibit D, Assignment and Bill of Sale, is attached hereto as
                 Exhibit X and incorporated herein and in the Agreement by
                 reference.

         e.      Exhibit E, Release Liens, is attached hereto as Exhibit XI and
                 incorporated herein and in the Agreement by reference.

         f.      Exhibit F, Certain Consents and Preferential Purchase Rights,
                 is attached hereto as Exhibit XII and incorporated herein and
                 in the Agreement by reference.

         g.      Exhibit G, Disclosure, is attached hereto as Exhibit XIII and
                 incorporated by reference.

8.       Seller and Buyer acknowledge that Section 12.1 of the Agreement
         provides that Seller transfers all production imbalances as of the
         Effective Date to Buyer, that production imbalances, whether
         underproduced or overproduced, are to be valued on the basis of
         assuming permanent cessation of production as of the Effective Date,
         that as of the Closing



                                     -2-

<PAGE>   5
         Date final gas balancing volume statements through December 31,1997,
         have not been provided to Seller by all of the respective operators,
         and that the applicable gas balancing agreements provide for a cash
         balancing based on the actual price received for the gas in the
         specific months in which the out of balance conditions occurred.
         Seller and Buyer agree that settling the volumes, pricing and cash
         balancing at the time of Closing is in the best interest of the
         parties.  Therefore Seller and Buyer agree that the provisions of
         Section 12.1 of the Agreement are satisfied and that all imbalances
         have been transferred at Closing based on the estimates of 50,564
         MMBtu of  underproduced gas at an average price of $1.68 for a total
         cash value of $84,799.00, which cash value has been incorporated in
         the initially adjusted Purchase Price as set forth in the Closing
         Settlement Statement attached hereto as Exhibit III and as reflected
         in the Certificate of the Chief Financial Officer of Seller attached
         hereto as Exhibit II.

9.       Section 7.3.1(v) of the Agreement provides that Seller shall deliver
         to Buyer letters to third party pipeline operators notifying such
         operators that Buyer shall operate all pipeline meters included in the
         Property which are currently being operated by Seller. Seller has
         delivered no such letters and represents to Buyer that Seller does not
         operate any such pipeline meters  as would require delivery of such
         letters.

10.      Seller and Buyer entered into that certain Escrow Agreement dated
         December 31, 1997, by and between Penroc Oil Corporation, and HarCor
         Energy, Inc., collectively as the "Other Parties", and Texas Commerce
         Bank National Association, the "Bank", as Escrow Agent for the deposit
         of the Earnest Money Deposit.  The parties hereto acknowledge that no
         additional amounts are required to be paid to the Escrow Agent in
         accordance with the provisions of  Sections 5.3.2 and 6.2.3 of the
         Agreement.  Seller and Buyer have executed the written instructions
         dated February 6, 1998 directing the Escrow Agent to disburse the
         Earnest Money Deposit and accrued interest to Seller.  A true and
         correct copy of which written instructions are attached hereto as
         Exhibit XIV and incorporated by reference.

11.      Should either Seller or Buyer desire to make a public announcement
         regarding the conclusion of this transaction, such party shall comply
         with Section 12.2 of the Agreement, and a true and correct copy of
         such announcement will be attached to this Statement as Exhibit XV and
         be incorporated herein.

12.      Buyer acknowledges that Buyer has had an opportunity to inspect the
         Property as provided  in the Agreement, and Buyer makes no claim of
         Adverse Environmental Conditions pursuant to Section 5.3 of the
         Agreement, otherwise than agreed to by Seller and Buyer herein below.

         a.      Seller grants to Buyer written authorization to plug and
                 abandon the Freedman #1 and #2 Wells located on expired leases
                 not a part of the Property in the Eumont Prospect in Lea
                 County, New Mexico, including without limitation surface
                 restoration,  in accordance with the rules and regulations of
                 the governmental authority having jurisdiction and related
                 agreements , and Seller agrees to be liable for all expenses
                 and liabilities incurred in connection therewith.  Buyer shall
                 invoice Seller for such costs and expenses incurred in
                 relation thereto, and Seller agrees to



                                     -3-

<PAGE>   6
                 pay the amount of the invoice to Buyer within ten(10) business
                 days after receipt of the Buyer's invoice.

         b.      Seller confirms Buyer's notification to Seller in November
                 1997 regarding the Federal D #3 Well located in the Eumont
                 Prospect.  Seller authorizes Buyer to apply  for the proper
                 state permits and commence the operations to conform the well
                 to be  in compliance with the state regulations at Buyer's
                 sole cost and expense.  Buyer and Seller agree that the costs
                 of such operations shall be $20,000.00.  The Purchase Price
                 has been reduced by $20,000.00 as Seller's full payment to
                 Buyer, and Buyer releases Seller from any further cost by
                 reason of such matter.

         c.      Seller authorizes Buyer to complete the operations for the
                 environmental remediation of the surface conditions relating
                 to the tank battery sites on the Harris well, the State AD
                 well and the New Mexico 'E' State well, which operations have
                 not been completed due to adverse weather conditions and the
                 delays incident thereto.  Seller and Buyer agree that the
                 remaining operations will cost $12,000.00, which cost and
                 expense will be borne by Seller and Buyer on an equal basis
                 according to a preexisting agreement.  The Purchase Price has
                 been reduced by $6,000.00 as Seller's full payment and
                 satisfaction under this and the preexisting agreement to Buyer
                 to conduct such operations, and Buyer releases Seller from any
                 further cost by reason of such matter.

13.      Seller hereby transfers and assigns to Buyer as of the Effective Date
         all claims, causes of action, rights under contracts or applicable
         law, and other rights that Seller may have against Cabot Oil & Gas
         Corporation, its agents, representatives, successors and assigns,
         relating to the fields in South Texas that are a part of the Property
         relating to or arising out of the ownership or operation of the Leases
         and other property described in Section 1.1 of the Agreement, and
         Buyer shall indemnify, defend and hold Seller harmless from and
         against any and all Claims caused by, resulting from or incidental to
         the prosecution or otherwise of the rights assigned to Buyer in this
         paragraph. Seller does not hereby transfer and assign to Buyer any
         other claims, causes of action, rights under contracts or applicable
         law, and other rights, excluded from the Property and reserved by
         Seller pursuant to Section 1.2.2 of the Agreement (the "Excluded
         Claims").  Notwithstanding anything in the Agreement to the contrary,
         Seller shall indemnify, defend and hold Buyer harmless from and
         against any and all Claims affecting the Property, or Buyer's
         ownership or operations of the Property, after the Effective Date, and
         resulting from or incidental to the Excluded Claims or Seller's
         prosecution or assertion of the Excluded Claims.

14.      Buyer has  notified Seller in the attached list marked as Exhibit XVI
         hereto of several Consents (to the assignment to Buyer of  Leases)that
         have not been obtained as of the date hereof. The most material of
         these Consents are required from The Louisiana Land & Exploration
         Company in the Lapeyrouse Area, Terrebonne Parish, Louisiana.  Buyer
         reserves all of its rights under Section 6.1.3 of the Agreement to
         seek an adjustment of the Purchase Price at the time of the
         post-Closing adjustment provided for in Section 7.3.3.4 of the
         Agreement for the denial of such Consents, and if the Consents are
         denied, the Purchase Price will be reduced by $20,000 at the time of
         the post-Closing adjustment.



                                     -4-

<PAGE>   7
15.      Section 8.1 of the Agreement provides that Buyer shall assume
         responsibility for all liabilities of Seller for net proceeds from
         production attributable to the Property as currently held in suspense
         to the extent such net proceeds are transferred to and delivered to
         Buyer at the Closing.  Seller acknowledges and agrees with Buyer that
         Seller retains all liability of Seller  under Section 8.1 of the
         Agreement as no such net proceeds from production held in suspense
         were transferred and delivered to Buyer.

16.      Seller agrees to pay Invoice #8140-01 from Penwell Energy, Inc., dated
         January 8, 1998 for costs related to the TXL "1" #1 well in the ERG
         Prospect, Reeves County, Texas, in the amount of $56,340.00 pursuant
         to Section 8.1 of the Agreement as a cost incurred in connection with
         the operation of the Property before the Effective Date.  Seller
         represents to Buyer that the amounts of the invoice are not included
         in the adjustments of the Purchase Price as reflected in the
         Certificate of the Chief Financial Officer attached hereto as Exhibit
         II.

17.      In confirmation of Seller's representations in Section 3.1.1
         (Corporate Authority) of the Agreement Seller has submitted to Buyer
         the Certificate of Secretary of HarCor Energy, Inc., dated January 28,
         1998.  A true and correct copy of such Certificate is attached hereto
         as Exhibit XVII and incorporated herein by reference.

18.      In confirmation of Buyer's representations in Section 3.1.1(Corporate
         Authority) of the Agreement Buyer has submitted to Seller the
         Unanimous Consent of Board of Directors of Penroc Oil Corporation
         dated February 3, 1998.  A true and correct copy of such Consent is
         attached hereto as Exhibit XVIII and incorporated herein by reference.

19.      Section 10.2 of the Agreement provides that Seller will pay all
         Property Taxes assessed for all tax periods through the Effective
         Date, and such Property Taxes remain the obligation of Seller.
         Attached hereto as Exhibit XIX and incorporated herein by reference is
         the Certificate dated February 5, 1998, of the Chief Financial Officer
         that there are outstanding unpaid Property Taxes in the amount of
         $0.00.  Seller shall furnish Buyer with evidence that all Property
         Taxes for periods before the Effective Date have been paid at the time
         of the post-Closing adjustment provided in Section 7.3.3.4 of the
         Agreement.

20.      Section 7.4 of the Agreement provides that within five (5) days after
         Closing, Seller shall deliver to Buyer the originals of the Property
         Records (as defined in Section 5.1) at a location designated by Buyer.
         Buyer hereby designates Ted Rhodes as its representative to direct
         preparation and delivery of the Property Records, the location of such
         delivery, and to accept  custody of the Property Records on behalf of
         Buyer.  The Property Records will be delivered at a time mutually
         agreeable to the parties within five (5) days of Closing.  Included
         within the definition of Property Records is information contained in
         the bound volumes containing the documents regarding the financing
         agreements relating to the Release Liens.  Buyer is willing to accept
         a duplicated copy of such volumes and agrees to allow Seller to retain
         the original for its records, and Seller agrees to deliver such
         duplicated copy within five (5) days of Closing.


                                     -5-


<PAGE>   8
21.      The parties  agree to resolution of the title issue set forth in
         Paragraph No. 2 of the Statement of Title Defects letter dated
         February 3, 1998, as set forth herein. Seller will deliver to Buyer a
         fully executed, recordable instrument in which Saba Energy of Texas
         Incorporated quitclaims all of its rights, titles and interests to
         Buyer in and to that portion of the Property identified as Jennings
         Lake Field, Matagorda County, Texas, and White Kitchen Field, LaSalle
         County, Texas, in the Agreement, insofar and only insofar as the 6%
         interest more fully described in Statement of Title Defects, effective
         as of January 1, 1995, on or before  the date of the post-Closing
         adjustment, or the Allocated Value thereof, being 6% of $350,000.00 or
         $21,000.00, shall be deducted from the Purchase Price and will be
         accounted for in the final Purchase Price adjustment provided for in
         Section 7.3.3.4 of the Agreement.

22.      All alleged Title Defects and objections to the condition of the
         Property given to Seller by Buyer in  previous notices have been
         satisfied or waived by Buyer, except as set out in this Closing
         Statement.

         The authorized representatives of Seller and Buyer sign below
indicating their agreement to the terms of this Statement on the date first
above written.

         Seller:                            Buyer:

         HarCor Energy, Inc.                Penroc Oil Corporation


         By:                                By:
              ------------------------          -------------------------------
         Name:  Mark G. Harrington          Name:  M. Y. Merchant
                ----------------------            -----------------------------
         Title:  Chairman and CEO           Title: President
                 ---------------------             ----------------------------




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