ADVISORY AGREEMENT

THIS ADVISORY  AGREEMENT  (the  "Agreement')  is made this 21st day of September
2000, by and between  Howard A. Pence, a Texas  resident  ("Advisor")  and Power
Exploration,  Inc., a Nevada Corporation with its offices located in Fort Worth,
Texas (the "Company").

     WHEREAS, Advisor and Advisor's Personnel (as defined below) have experience
in evaluating and effecting acquisitions of oil and gas properties, acquisitions
of oil and gas drilling  prospects,  and in  performing  general  administrative
duties for oil and gas companies; and

     WHEREAS,  the  Company  desires to retain  Advisor to advise and assist the
Company in its development on the terms and conditions set forth below.

     NOW  THEREFORE,  in  consideration  of the mutual  promises,  covenants and
agreements contained herein, and for other good and valuable consideration,  the
receipt and sufficiency of which is hereby acknowledged, the Company and Advisor
agree as follows:

     1.   Engagement

          The Company  hereby retains  Advisor,  effective as of the date hereof
          (the "Effective date") and continuing until  termination,  as provided
          herein,  to assist  the  Company in it's  effecting  the  purchase  of
          businesses  and assets  relative to its business and growth  strategy,
          the  introduction  of others  that may assist the Company in its plans
          and  future  and to  assist  in the  acquisition  of wells  and  other
          producing properties (the "Servicee).  The Services are to be provided
          on a 'liest efforts" basis directly and through Advisor's  officers or
          others  employed  or  retained  and under  the  direction  of  Advisor
          ("Advisor's  Personnel");  provided  however.  that the Services shall
          expressly  exclude  all legal  advice,  accounting  services  or other
          services which require licenses or certification which Advisor may not
          have.

     2.   Term

          This  Agreement  shall have an initial term of twelve (12) months (the
          "Primary Tenn"), commencing with the Effective Date. At the conclusion
          of the Primary Term this Agreement will  automatically  be extended on
          for the same term  (the  "Extension  Period")  unless  Advisor  or the
          Company shall serve written notice on the other party  terminating the
          Agreement. Any notice to terminate given hereunder shall be in writing
          and shall be delivered at least  thirty  (30)days  prior to the end of
          the Primary Term or an subsequent Extension Period.

     3.Time and Effort of Advisor

          Advisor  shall  allocate  time  and  Advisors  Personnel  as it  deems
          necessary to provide the Services.  The particular  amount of time may
          vary  from day to day or week to week.  Except  as  otherwise  agreed,
          Advisor's monthly statement  identifying,  in general, tasks performed
          for the Company  shall be  conclusive  evidence that the Services have
          been performed.  Additionally,  in the absence of willful misfeasance,
          bad faith,  negligence or reckless  disregard for the  obligations  or
          duties hereunder by Advisor,  neither Advisor nor Advisor's  Personnel
          shall be liable to the Company or any of its  shareholders for any act
          or omission in the course of or connected with rendering the Services,
          including  but not  limited  to losses  that may be  sustained  in any
          corporate  act in any  subsequent  Business  Opportunity  (as  defined
          herein)  undertaken  by the Company as a result of advice  provided by
          Advisor or Advisor's Personnel.

     4.Compensation


          The  Company  agrees to pay Advisor a fee for the  Services  CAdvisory
          Fee') by way of the  issuance by the  company of Two Hundred  Thousand
          (200,000) shares of the Company's common stock as an initial fee: plus
          all bonuses agreed upon throughout the duration of this agreement.

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     5.Other Services

          If the Company enters into a merger or exchanges  securities  with, or
          purchases  the assets or enters into a joint venture with, or makes an
          investment   in  a  company   introduced   by  Advisor  (a   "Business
          Opportunity"),  the  Company  agrees to pay Advisor a fee equal to ten
          percent (100/o) of the value of each Business  Opportunity  introduced
          by Advisor and  acquired or otherwise  participated  in by the Company
          (collectively   referred  to  herein,   in  each   instance,   as  the
          "Transaction Fee'), which shall be payable  immediately  following the
          closing of each such  transaction,  in shares of the Company's  common
          stock or in kind if an acquisition is made at the Company's option, if
          paid in cash the  Transaction  Fee shall be  reduced  to five  percent
          (5%).

     6.Registration of Shares

          The  Company  will  issue  shares  for  the  above  Initial  Fee,  all
          subsequent   Bonuses  and  all  Transaction  Fees  as  authorized  and
          registered under the Company's Form S-8  Registration  Statement filed
          December  13,  1999 (1999  Stock  Benefit  Plan of Power  Exploration,
          Inc.).

     7.Costs and Expenses

          All third party and out-of-pocket  expenses incurred by Advisor in the
          performance  of the Services or for the  settlement  of debts shall be
          paid by the Company, or Advisor shall be reimbursed if paid by Advisor
          on behalf of the  Company,  within ten (10) days of receipt of written
          notice by  Consultant,  provided  that the  Company  must  approve  in
          advance all such expenses in excess of $500.00 per month.

     8.   Place of Services

          The Services provided by Advisor or Advisor's Personnel hereunder will
          be performed at Advisor's offices except as otherwise  mutually agreed
          by Advisor and the Company.

     9.Independent Contractor

          Advisor and Advisor's Personnel will act as an independent  contractor
          in the  performance of its duties under this  Agreement.  Accordingly,
          Advisor  will be  responsible  fbr payment of all  federal,  state and
          local  taxes on  compensation  paid  under this  Agreement,  including
          income and social  security  taxes,  unemployment  insurance,  and any
          other  taxes due  relative  to  Advisor's  Personnel,  and any and all
          business  license  fees as may be  required.  This  Agreement  neither
          expressly nor impliedly creates a relationship of principal and agent,
          or employee and employer, between Advisor's Personnel and the Company.
          Neither  Advisor nor Advisor's  Personnel are authorized to enter into
          any agreements on behalf of the Company. The Company expressly retains
          the right to approve,  in its sole discretion,  each Asset Opportunity
          or Business  Opportunity  introduced by Advisor, and to make all final
          decisions  with  respect to  effecting a  transaction  on any Business
          Opportunity.

     10.  Rejected Asset Opportunity or Business Opportunity

          If, during the Primary Term of this Agreement or any Extension Period,
          the Company elects not to proceed to acquire, participate or invest in
          any  Business  Opportunity  identified  and/or  selected  by  Advisor,
          notwithstanding  the time and expense  the  Company may have  incurred
          reviewing such  transaction,  such Business  Opporttmity  shall revert
          back to and  become  proprietary  to  Advisor,  and  Advisor  shall be
          entitled to acquire or broker the sale or  investment in such rejected
          Business  Opportunity  for its own  account,  or submit such assets or
          Business  Opportunity  elsewhere.  In such  event,  Advisor  shall  be
          entitled  to any and all  profits  or fees  resulting  from  Advisor's
          purchase, referral or placement of any such rejected

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          Business   Opportunity,   or  the  Company's  subsequent  purchase  or
          financing with such Business Opportunity in circumvention of Advisor.

     11.  No Agency Express or Implied

          This Agreement neither expressly nor iinpliedly creates a relationship
          of principal  and agent  between the Company and Advisor,  or employee
          and employer as between Advisor's Personnel and the Company.

     12.  Termination

          The  Company and Advisor may  terminate  this  Agreement  prior to the
          expiration  of the Primary Term upon thirty (30) days  written  notice
          with mutual written consent.  Failing to have mutual consent,  without
          prejudice  to any other remedy to which the  terminating  party may be
          entitled,  if any,  either party may  terminate  this  Agreement  with
          thirty (30) days written notice under the following conditions:

          (A)  By the Company


               (i)  If  during  the  Primary  Term  of  this  Agreement  or  any
                    Extension Period,  Advisor is unable to provide the Services
                    as set forth  herein for thirty  (30)  consecutive  business
                    days because of illness,  accident,  or other  incapacity of
                    Advisor's Personnel; or,

               (ii) If  Advisor  willfully   breaches  or  neglects  the  duties
                    required to be performed hereunder; or,

               (iii)At  Company's  option  without  cause  upon 30 days  written
                    notice to Advisor; or

          (B)  By Advisor

               (i)  If the Company breaches this Agreement or filils to make any
                    payments or provide information required hereunder; or,

               (ii) If the Company ceases  business or, other than in an Initial
                    Merger,  sells a controlling  interest to a third party,  or
                    agrees to a  consolidation  or merger of itself with or into
                    another  corporation,  or  enters  into  such a  transaction
                    outside   of  the   scope  of  this   Agreernen@   or  sells
                    substantially  all of its  assets  to  another  corporation,
                    entity or  individual  outside the scope of this  agreement;
                    or,

               (iii)If the  Company  subsequent  to the  execution  hereof has a
                    receiver  appointed for its business or assets, or otherwise
                    becomes   insolvent   or  unable  to  timely   satisfy   its
                    obligations  in the ordinary  course of,  including  but not
                    limited  to the  obligation  to pay  the  Initial  Fee,  the
                    Transaction Fee, or the Advisory Fee; or,

               (iv) If  the  Company   subsequent   to  the   execution   hereof
                    institutes,  makes a general  assignment  for the benefit of
                    creditors,   has   instituted   against  it  any  bankruptcy
                    proceeding  for  reorganization  for  rearrangement  of  its
                    financial   affairs,   files  a  petition   in  a  court  of
                    bankruptcy, or is adjudicated a bankrupt; or,

               (v)  If any of the disclosures  made herein or subsequent  hereto
                    by the Company to Consultant are determined to be materially
                    false or misleading.

In the event  Advisor  elects to terminate  without  cause or this  Agreement is
terminated  prior to the expiration of the Primary Term or any Extension  Period
by mutual  written  agreement,  or by the Company for the reasons set forth in A
(i) and (ii) above,  the Company  shall only be  responsible  to pay Advisor for
unreimbursed  expenses,  Advisory  Fee and  Transaction  Fee  accrued  up to and
including the effective date of termination.  If this Agreement is terminated by
the Company for any other  reason,  or by Advisor for reasons set forth in B (i)
thru (v) above, Advisor shall be entitled to any outstanding


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unpaid portion of reimbursable  expenses,  Transaction Fee,, if any, and for the
remainder of the  unexpired  portion of the  applicable  term  (Primary  Term or
Extension Period) of the Agreement.

     13.  Indemnification

          Subject to the  provisions  herein,  the Company and Advisor  agree to
          indemnify,  defend and hold each other  harmless  from and against all
          demands,  claims,  actions,  losses, damages,  liabilities,  costs and
          expenses,  including  without  limitation,   interest,  penalties  and
          attorneys' fees and expenses  asserted  against or imposed or incurred
          by either party by reason of or resulting  from any action or a breach
          of any representation,  warranty, covenant, condition, or agreement of
          the other party to this Agreement.

     14.  Remedies

          Advisor and the Company  acknowledge  that in the event of a breach of
          this Agreement by either party,  money damages would be inadequate and
          the  non-breaching  party  would  have  no  adequate  retnedy  at law.
          Accordingly,  in the event of any controversy concerning the rights or
          obligations under this Agreement,  such rights or obligations shall be
          enforceable in a court of equity by a decree of specific  performance.
          Such remedy,  however,  shall be cumulative and nonexclusive and shall
          be in  addition  to any  other  remedy  to which  the  parties  may be
          entitled.

     15.  Miscellaneous

          (A)  Subseciuent,Events.  Advisor and the Company each agree to notify
               the other  party if,  subsequent  to the date of this  Agreement,
               either  party  incurs  obligations  which  could  compromise  its
               efforts and obligations under this Agreement.

          (B)  Amendment.  This Agreement may be amended or modified at any time
               and in any manner only by an  instrument  in writing  executed by
               the parties hereto.

          (C)  Further Actions and Assurances. At any time an from time to time,
               each party agrees,  at its or their expense,  to take actions and
               to execute and deliver  documents as may be reasonably  necessary
               to effectuate the purposes of this Agreement.

          (D)  Waiver. Any failure of any party to this Agreement to comply with
               any of its Obligations,  agreements,  or conditions hereunder may
               be waived in  writing  by the  party to whmn such  compliance  is
               owed.  The failure of any party to this  Agreement  to enforce at
               any time any of the provisions of this Agreement  shall in no way
               be construed to be a waiver of any such  provision or a waiver of
               the right of such party thereafter to enforce each and every such
               provision.  No waiver of any breach of or noncompliance with this
               Agreement shall be held to be a waiver of any other or subsequent
               breach or noncompliance.

          (E)  Assignment.  Neither this  Agreement  nor any right created by it
               shall be  assignable  by either party  without the prior  written
               consent of the other or as stated herein.

          (F)  Notices. Any notice or other communication  required or permitted
               by this  agreement  must be in writing  and shall be deemed to be
               properly  given  when  delivered  in person to an  officer of the
               other  party,  when  deposited  in the  United  States  mafls for
               transmittal by certified or registered mail, postage prepaid,  or
               when deposited with a public  telegraph  company for transmittal,
               or when sent by facsimile transmission charges prepared, provided
               that the communication is addressed:

        In the case of the Company: Power Exploration, Inc.
                                    5416 Birchman Avenue
                                    Fort Worth, Texas 76107-5111


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                                    Telephone: (817) 377-44
                                    Telefax: (817) 377-46
                                    Attn: Joe Bennett

        In the case of Advisor:     Howard A. Pence
                                    4216 Rockland Dr.
                                    Arlington, Texas 76016


          Or to such  other  person or  address  designated  in  writing  by the
          Company or Advisor to receive notice.

          (G)  Headings.  The section and subsection  headings in this Agreement
               are inserted for convenience only and shall not affect in any way
               the meaning or interpretation of this Agreement.

          (H)  Governing  Law.  This  Agreement  was  negotiated  and  is  being
               contracted for in Texas, and shall be governed by the laws of the
               State of Texas, and the United States of America, notwithstanding
               any conflict-of-law provision to the contrary.

          (I)  Binding Effect. This Agreement shall be binding up on the parties
               here to and inure to the benefit of the parties, their respective
               heirs, administrators, executors, successors, and assigns.

          (J)  Entire  Agreement.  This Agreement  contains the entire agreement
               between  the  parties  hereto  and  supersedes  any and all prior
               agreements,  arrangements,  or understandings between the parties
               relating  to the  subject  matter  of  this  Agreement.  No  oral
               understandings,  statements, promises, or inducements contrary to
               the  terms  of  this   Agreement   exist.   No   representations,
               warranties,  covenants, or conditions,  express or implied, other
               than as set forth herein, have been made by any party.

          (K)  Severability.  If any  part of this  Agreement  is  deemed  to be
               unenforceable  the balance of the Agreement  shall remain in full
               force and effect.

          (L)  Countparts. A facsimile,  telecopy, or other reproduction of this
               Agreement  may  be  executed   simultaneously   in  two  or  more
               counterparts,  each of which shall be deemed an original, but all
               of which together shall  constitute one and the same  instrument,
               by one or more  parties  hereto  and  such  executed  copy may be
               delivered  by  facsimile  or  similar  instantaneous   electronic
               transmission  device  pursuant  to which the  signature  of or on
               behalf of such party can be seen. In this event,  such  execution
               and delivery shall be considered valid, binding and effective for
               all  purposes.  At the request of any party  hereto,  all parties
               agree to execute an  original  of this  Agreement  as well as any
               facsimile, telecopy or other reproduction hereof.

          (M)  Time is of the Essence.  Time is of the essence of this Agreement
               and of each and every provision hereof.

IN WITNESS  WHEREOF,  the parties have executed this Agreement on the date above
written.

The "Company"                                  "Advisor"
Power Exploration, Inc.                        Howard A. Pence
A Nevada Corporation                           A Texas Resident


By:  /s/ Joe Bill Bennett                      By:  /s/ Howard A. Pence
---------------------------                    -----------------------
Name: Joe Bill Bennett                         Name:  Howard A. Pence
Title: President, CEO

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