<PAGE>
                                                                     EXHIBIT 2.3

     THE FOLLOWING DOCUMENT DOES NOT CONSTITUTE AN OFFER TO BUY, OR THE
SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES. THE SECURITIES TO BE OFFERED IN
CONNECTION WITH THE COMBINATION TRANSACTION WILL BE OFFERED ONLY PURSUANT TO A
PROSPECTUS/PROXY STATEMENT INCLUDED IN A REGISTRATION STATEMENT FILED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.

     ALL DORCHESTER HUGOTON UNITHOLDERS ARE ADVISED TO READ, WHEN AVAILABLE, THE
PROSPECTUS/PROXY STATEMENT TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AND THE RELATED SOLICITATION/RECOMMENDATIONS THAT WILL BE PROVIDED
TO EACH UNITHOLDER REQUESTING SUCH UNITHOLDER'S VOTE, BECAUSE THESE DOCUMENTS
WILL CONTAIN IMPORTANT INFORMATION. A COPY OF THE PROSPECTUS/PROXY STATEMENT AND
RELATED SOLICITATION/RECOMMENDATIONS, WHEN FINALIZED, WILL BE MAILED TO
DORCHESTER HUGOTON UNITHOLDERS AND WILL BE AVAILABLE FROM DORCHESTER HUGOTON ON
REQUEST. THE PROSPECTUS/PROXY STATEMENT AND RELATED SOLICITATION/RECOMMENDATIONS
WILL ALSO BE AVAILABLE ON THE INTERNET AT THE SECURITIES AND EXCHANGE
COMMISSION'S WORLD WIDE WEB SITE AT HTTP://WWW.SEC.GOV.

     Dorchester Hugoton and its General Partners, and their respective directors
and/or officers, as applicable, may be deemed under the Rules of the Securities
and Exchange Commission to be "participants in the solicitation" of proxies from
the security holders of Dorchester Hugoton in favor of the transaction. SECURITY
HOLDERS OF DORCHESTER HUGOTON MAY OBTAIN INFORMATION REGARDING THE INTERESTS OF
THE "PARTICIPANTS IN THE SOLICITATION" BY READING THE PROSPECTUS.
<PAGE>


                        BUSINESS OPPORTUNITIES AGREEMENT

         This BUSINESS OPPORTUNITIES AGREEMENT (this "Agreement"), dated as of
December 13, 2001, is entered into by Dorchester Minerals, L.P., a Delaware
limited partnership (the "Partnership"); Dorchester Minerals Management LP, a
Delaware limited partnership and the general partner of the Partnership (the
"General Partner"); Dorchester Minerals Management GP LLC, a Delaware limited
liability company and the general partner of the General Partner ("Management
GP"); SAM Partners, Ltd., a Texas limited partnership ("SAM"), Vaughn Petroleum,
Ltd., a Texas limited partnership ("Vaughn"), Smith Allen Oil & Gas, Inc., a
Texas corporation ("SAOG"), P.A. Peak, Inc., a Delaware corporation ("Peak"),
and James E. Raley, Inc., a Delaware corporation ("Raley") (as used herein, each
of SAM, Vaughn, SAOG, Peak and Raley are referred to as a "GP Party"), and each
individual that both is an executive officer of any Operating Company (defined
below) and has agreed in writing to be bound as an "Officer" under this
Agreement (each, an "Officer").

                                    RECITALS:

         This Agreement is being executed and delivered simultaneously with the
execution and delivery of the Combination Agreement dated December 13, 2001 (the
"Combination Agreement") among the Partnership, the General Partner, the
Management GP, Dorchester Minerals Operating LP, a Delaware limited partnership
and a subsidiary of the General Partner (the "Operating Subsidiary" and,
together with its general partner, Dorchester Minerals Operating GP LLC, the
"Operating Companies"), Dorchester Hugoton, Ltd., a Texas limited partnership
("DHL"), Republic Royalty Company, a Texas general partnership ("RRC"), and
Spinnaker Royalty Company, L.P., a Texas limited partnership ("SRC"). Pursuant
to the Combination Agreement, DHL, RRC and SRC will combine their businesses and
properties into the Partnership (the "Transaction"). All capitalized terms used
and not defined herein (as well as the term person) have the meanings
attributable to them in the Combination Agreement. As used herein, the term
"Affiliate" means, in addition to any "affiliate" as defined in the Combination
Agreement, any owner, director, manager, managing member, officer or employee of
any such affiliate; provided, however, that the Operating Companies shall not be
Affiliates of the General Partner for purposes of this Agreement, and neither
the Operating Companies nor the General Partner shall be Affiliates of any GP
Party for purposes of this Agreement.

         The GP Parties are currently all of the general partners of RRC, SRC
and DHL. Immediately following the Transaction, the GP Parties will (directly or
indirectly) own all of the equity of the General Partner and own units of
limited partnership interest in the Partnership.

         Each of the GP Parties believes that it and its respective partners in
RRC, SRC or DHL, as applicable, will benefit from the Transaction and that the
Transaction is in its best interest and in the best interest of its respective
partners. The GP Parties, however, are unwilling to permit the General Partner,
the Management GP and the Operating Subsidiary to enter into the Combination
Agreement and to agree in the Combination Agreement to enter into the Amended
and Restated Partnership Agreement of the Partnership (the "Partnership
Agreement") upon the



<PAGE>



closing of the Transaction unless the respective rights and responsibilities of
the GP Parties, the General Partner, the Management GP, the Operating Companies
and their Affiliates and the Partnership with respect to the matters addressed
in this Agreement are clearly delineated and agreed upon in advance for the
reasons referred to below.

         The GP Parties engage in the acquisition and ownership of oil and gas
properties, including but not limited to oil and gas net profits interests,
mineral interests and royalty interests in the United States. The businesses in
which the GP Parties engage are similar to those in which the Partnership will
engage following the Transaction.

         As the owners of the General Partner following the Transaction, the GP
Parties may owe certain duties to the Partnership. Pursuant to the Limited
Liability Company Agreement of Management GP, each GP Party will have the right
to designate a person (the "Designees") to serve on the committee of managers of
the Management GP following the Transaction. Certain of the Designees may be
directors, members, managers and/or officers of or employed by the General
Partner, an Operating Company, a GP Party, an entity which possesses management
authority over a GP Party, or a company in which the General Partner or a GP
Party has an interest. These Designees will have duties to the Partnership and
duties to the General Partner, an Operating Company, the GP Party or such other
companies (as applicable).

         The law relating to the duties that the GP Parties or their Designees
or Affiliates may owe to the Partnership is not clear. The application of such
law to particular circumstances is often difficult to predict, and if a court
were to hold that a GP Party or one of their Designees or Affiliates breached
any such duty, the GP Party or such Designee or Affiliate could be held liable
for damages in a legal action brought on behalf of the Partnership.

         In order to induce the GP Parties to permit the General Partner, the
Management GP and the Operating Subsidiary to enter into the Combination
Agreement and/or the Partnership Agreement, as applicable, the Partnership is
willing to enter into this Agreement in order (i) to renounce, effective upon
the consummation of the Transaction, any interest or expectancy it may have in
the classes or categories of business opportunities specified herein that are
presented to or identified by any Affiliate of the General Partner, a GP Party
or any Affiliate thereof, or any of the Designees, as more fully described
herein; (ii) to permit the GP Parties and their respective Affiliates to
continue to conduct their respective businesses and to pursue certain business
opportunities without an obligation, except as provided herein, to offer such
opportunities to the Partnership, and (iii) to permit any Designee to continue
to discharge his or her responsibilities as a director, member, manager, officer
or employee of the General Partner, an Operating Company, a GP Party or
Affiliate thereof or a company in which a GP Party has an interest.

         NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants, rights, and obligations set forth in this Agreement, and the benefits
to be derived herefrom, and other good and valuable consideration, the receipt
and the sufficiency of which each of the parties hereto acknowledges and
confesses, the parties hereto agree as follows:


                                        2

<PAGE>



         1. Scope of Business of the Partnership Following the Transaction. The
Partnership covenants and agrees that, following consummation of the
Transaction, except with the consent of General Partner (which it may withhold
in its sole discretion), the Partnership will not engage in any business not
allowed by the Partnership Agreement as in effect immediately following the
closing of the Transaction. The Partnership hereby renounces, effective upon
consummation of the Transaction, any interest or expectancy in any business
opportunity (each, together with those business opportunities so designated in
Section 3(d) hereof, a "Renounced Opportunity") that does not consist of the Oil
and Gas Business (as defined below) within the Designated Area (as defined
below). The "Oil and Gas Business" means the acquisition, management, ownership
or sale of oil and gas assets or properties, including but not limited to
mineral fee interests, net profits interests and royalty and overriding royalty
interests but specifically excluding working interests. "Designated Areas" means
the areas identified on Schedule A attached hereto.

         2. Business Opportunities. The Partnership recognizes that Affiliates
of the General Partner, the GP Parties and their Affiliates, and the Designees
(i) participate and will continue to participate in the Oil and Gas Business,
directly and through Affiliates, (ii) may have interests in, participate with,
and maintain seats on the boards of directors of or serve as officers, managers,
partners, members or employees of other companies engaged in the Oil and Gas
Business and (iii) may develop business opportunities for the GP Parties and
their Affiliates and such other companies. The Partnership recognizes that the
GP Parties and their Affiliates and the Designees may be engaged in the Oil and
Gas Business in competition with the Partnership. The Partnership:

         (a)      acknowledges and agrees that Affiliates of the General
                  Partner, the GP Parties and their Affiliates, the Designees,
                  and such other companies shall not be restricted or proscribed
                  by the relationship between the Partnership and General
                  Partner and/or the Operating Companies, or otherwise, from
                  engaging in the Oil and Gas Business or any other business,
                  regardless of whether such business activity is in direct or
                  indirect competition with the business or activities of the
                  Partnership, if such business activity either

                  (i)      is a Renounced Opportunity; or

                  (ii)     is engaged in on any basis that is consistent with
                           the standards set forth in Section 5 hereof;

         (b)      acknowledges and agrees that Affiliates of the General
                  Partner, the GP Parties and their Affiliates, the Designees,
                  and such other companies shall not have any obligation to
                  offer the Partnership any business opportunity if either

                  (i)      such business opportunity is a Renounced Opportunity;
                           or

                  (ii)     their activities are conducted in accordance with the
                           standards set forth in Section 5 hereof;


                                        3

<PAGE>



         (c)      renounces any interest or expectancy in any business
                  opportunity pursued by any Affiliate of the General Partner,
                  any GP Party or any Affiliate thereof, any Designee, or any
                  such other company if such business opportunity either

                  (i)      is a Renounced Opportunity; or

                  (ii)     is pursued in accordance with the standards set forth
                           in Section 5 hereof; and

         (d)      waives any claim that any business opportunity pursued by any
                  Affiliate of the General Partner, any GP Party or Affiliate
                  thereof, any Designee, or any such other company constitutes a
                  business opportunity of the Partnership that should have been
                  presented to the Partnership, unless such business opportunity
                  both

                  (i)      is not a Renounced Opportunity; and

                  (ii)     was pursued in violation of the standards set forth
                           in Section 5 hereof.

The parties agree (x) that, notwithstanding the foregoing, the renouncement and
other matters set forth above in this Section 2 shall not limit the contractual
obligations in Sections 3 and 4 of the persons specified in such Sections 3 and
4, and (y) the contractual obligations contained in Sections 3 and 4 shall not
be limited by virtue of the renouncement and other matters set forth above in
this Section 2.

         3. Notification of the Partnership Business Opportunities.

         (a) If (i) a GP Party or any Subsidiary thereof or any Officer or any
Subsidiary thereof has signed a binding agreement to purchase (a "Purchase
Agreement") oil and gas interests, including but not limited to, oil and gas net
profits interests, royalty interests and other mineral interests in the United
States but specifically excluding working interests (the "Oil and Gas
Interests") and (ii) the purchase price to be paid for such Oil and Gas
Interests is greater than ten percent (10%) of the Market Capitalization of the
Partnership (as defined herein) as determined on the date such Purchase
Agreement is fully executed (a transaction meeting the requirements of both (i)
and (ii) shall be referred to herein as a "Qualifying Acquisition Opportunity"),
then such party (the "Notifying Party") hereby agrees to provide, or to cause
its applicable Subsidiary to provide, written notice to the Partnership (the
"Partnership Notice") of the Qualifying Acquisition Opportunity at least 15 days
prior to the consummation the transactions contemplated by the Purchase
Agreement, so that the Partnership may determine whether to pursue the purchase
of the Oil and Gas Interests directly from the seller of the Oil and Gas
Interests (the "Seller"). As used herein, "Market Capitalization of the
Partnership" shall mean the total value of all outstanding units of limited
partnership interest in the Partnership as determined by the "Current Market
Price" (as defined in the Partnership Agreement). In the event that the purchase
price to be paid by the Notifying Party to the Seller pursuant to the Purchase
Agreement will be paid in consideration other than cash, the value of such


                                        4

<PAGE>



consideration shall be determined by the Advisory Committee (the "Advisory
Committee") of the Partnership (as defined in the Agreement of Limited
Partnership of the Partnership), upon request of the Notifying Party. At the
option of the Notifying Party, the Notifying Party may (but is not obligated to)
provide the Partnership Notice and the information described in subsection (b)
below with respect to a transaction which would otherwise qualify as a
Qualifying Acquisition Opportunity prior to signing a binding agreement with
respect to such transaction.

         (b) As general partner of the General Partner, Management GP shall, on
behalf of the Partnership, forward copies of such Partnership Notice and other
information to the persons serving on the Advisory Committee as promptly as
practicable upon the Partnership's receipt thereof. Within 5 days of receipt of
such notice, the Partnership shall notify the Notifying Party as to whether the
Partnership will exercise its right to pursue such opportunity (the "Partnership
Option"), unless such opportunity reasonably requires a shorter response time,
in which case Notifying Party shall describe the circumstances giving rise to
the need for a shorter response time in the Partnership Notice and the
Partnership shall be required to respond within such shorter time period.

         (c) If the Partnership timely notifies the Notifying Party of its
intent to exercise a Partnership Option pursuant to subsection (b) above and,
within 10 days after the Partnership's receipt of the Partnership Notice (or
such extended period as is agreed by the Partnership and the Seller and is
specified in a written notice of the Partnership and the Seller to the Notifying
Party), the Notifying Party receives written notice from the Partnership and the
Seller that the Seller desires to sell the oil and gas interests to the
Partnership instead of the Notifying Party, the Notifying Party hereby agrees to
take, or cause to be taken, any and all commercially reasonable action as is
necessary to effect the termination of the Purchase Agreement between the
Notifying Party and the Seller; provided Seller agrees such termination is to be
effective only upon the execution of a binding agreement between the Partnership
and the Seller. Upon exercise of the Partnership Option, the Partnership is not
required to pursue such Qualifying Acquisition Opportunity on terms identical to
those under which the Notifying Party intended to pursue such opportunity.

         (d) If the Partnership notifies the Notifying Party that it declines to
pursue such Qualifying Acquisition Opportunity, or fails to respond to a
Partnership Notice within the time period provided in Section 3(b) above, the
Notifying Party shall have no further obligation to the Partnership under this
Section 3 with respect to such Qualifying Acquisition Opportunity and, in
addition, such Qualifying Acquisition Opportunity shall be a "Renounced
Opportunity" for purposes of this Agreement even if would not fall within such
definition but for this sentence. If the binding agreement between the Seller
and the Partnership with respect to the Qualifying Acquisition Agreement is
terminated, then notwithstanding any other provision of this Section 3, the
Notifying Party may pursue the relevant Qualifying Acquisition Opportunity
without further obligation under this Section 3.

         (e) Determinations regarding whether the Partnership shall exercise the
Partnership Option shall be made by the Advisory Committee.


                                        5

<PAGE>



         4. Other Rights to Purchase by the Partnership.

         (a) In the event that any GP Party or a Subsidiary thereof or any
Officer or any Subsidiary thereof (each, an "Offeror") acquires any Oil and Gas
Interests or oil and gas working interests which are located in the Designated
Areas or which as a package include Oil and Gas Interests or oil and gas working
interests at least twenty percent (20%) of the net acreage of which is located
within the Designated Area (any such interests are referred to herein as the
"Restricted Assets"), then not later than one month after the consummation of
the acquisition by such Offeror of the Restricted Assets, such Offeror shall
notify the Partnership of such purchase and offer the Partnership the
opportunity to purchase such Restricted Assets. Such notice shall furnish to the
Partnership all information in Offeror's possession regarding such the
Restricted Assets that is material to the Partnership's decision regarding
whether or not to exercise the option set forth in this Section 4. Within twenty
(20) days of receipt of such notice and information (forty (40) days in the
event Offeror notifies the Partnership of more than one such opportunity during
the same time period), the Partnership shall notify the Offeror that either (i)
the General Partner has elected, with the approval of the Advisory Committee,
not to cause the Partnership to purchase such Restricted Assets, in which event
the Offeror shall be forever free to continue to own or operate such Restricted
Assets, or (ii) the General Partner has elected to cause the Partnership to
purchase such Restricted Assets, in which event the closing of such transaction
shall occur on a mutually agreeable date not more than twenty (20) business days
after the date of such notice of intent to exercise the option. The purchase
price, which shall be payable in immediately available funds, shall be equal to
the purchase price paid for the Restricted Assets. In the event that the
Restricted Assets were purchased by the Offeror other than for cash and the
Partnership and the Offeror are unable to agree on the value of such
consideration, the value of such consideration shall be determined (the
"Appraisal") by an appraiser appointed by mutual agreement of the Partnership
and the Offeror (the "Appraiser"). The fees and expenses of the Appraisal shall
be paid one-half by the Partnership and one-half by the Offeror. The Partnership
and the Offeror shall furnish such information to the Appraiser as shall be
needed to complete the appraisal. Such Appraisal shall be completed within
thirty (30) days after the appointment of Appraiser. The Partnership may revoke
its election to purchase the Restricted Assets within five (5) days of the
receipt of the Appraisal, provided that if the Partnership so elects to revoke,
it shall pay 100% of the fees and expenses of the Appraiser.

         (b) The General Partner and its Subsidiaries and the GP Parties and
their Subsidiaries shall have no obligation under this Section 4 with respect to
interests or properties which were part of a Qualifying Acquisition Opportunity
if such party has not violated the provisions of Section 3.

         5. Standards for Separate Conduct of Business. Any GP Party or any
Affiliate thereof, any Designee or any other company in which any Affiliate of
the General Partner, or any GP Party or any Affiliate thereof, has an interest
or of which a Designee is an owner, director, manager, partner, officer or
employee (except for the Management GP, the General Partner and their
Subsidiaries) ("Separate Parties") shall be deemed to meet the standards


                                        6

<PAGE>



referred to in Sections 2(a)(ii), 2(b)(ii), 2(c)(ii) and 2(d)(ii) if its
businesses are conducted entirely through the use of its own personnel and
assets and not with the use of any personnel or assets of the Partnership, the
General Partner or the Operating Subsidiary. Without limiting the foregoing,
such standards will be deemed met with respect to a business opportunity if (a)
it is identified by or presented to such Designee or personnel of such Separate
Party and developed and pursued solely through the use of their personnel and
assets (and not based on confidential information disclosed by or on behalf of
the Partnership, the Management GP, the General Partner or a Subsidiary of the
General Partner during the course of the relationship of such Designee or such
Separate Party's personnel with the Partnership, the Management GP, the General
Partner or a Subsidiary of the General Partner), and (b) it did not come to the
attention of such Designee or such Separate Party's personnel in, and as a
direct result of, his or her capacity as a manager of the Management GP or an
officer or employee of the General Partner, an Operating Company or a Subsidiary
of either; provided that (i) if such opportunity is separately identified by a
Designee or a Separate Party or its personnel or separately presented to a
Separate Party or its personnel by a person other than such Designee, the
Separate Party or such personnel, then the Designee, the Separate Party or its
personnel, as applicable, shall be free to pursue such opportunity even if it
also came to such person's attention as a result of and in his or her capacity
as an owner or manager of the Management GP or a director, manager, officer or
employee of the General Partner, an Operating Company or a Subsidiary of either
and (ii) if such opportunity is presented to or identified by a Designee, a
Separate Party or its personnel other than solely as a result of and in his or
her capacity as an owner or manager of the Management GP or an owner or employee
of the General Partner, an Operating Company or a Subsidiary thereof, such
person shall be free to pursue such opportunity even if it also came to such
person's attention as a result of and in his or her capacity as an owner or
manager of the Management GP or an owner or employee of the General Partner, an
Operating Company or a Subsidiary of either. Nothing in this Agreement will
allow a Designee or personnel of a Separate Party to usurp a corporate
opportunity solely for his or her personal benefit (as opposed to pursuing, for
the benefit of a Separate Party, an opportunity in accordance with the standards
set forth in this Section 5).

         6. Ownership of Securities. Notwithstanding the foregoing, neither
Section 3 nor Section 4 shall apply to the purchase or ownership of (i) limited
partnership interests in the Partnership or (ii) securities of any class
registered under Section 12 of the Securities Exchange Act of 1934 (regardless
of the types or locations of businesses in which the issuer thereof engages) if,
in the case of this clause (ii), following any such purchase the applicable
party owns, in the aggregate, less than 5% of such class.

         7. Termination of Restrictions.

         (a) All restrictions imposed by this Agreement on any person (other
than the Partnership) shall terminate at such time as the General Partner no
longer serves as a general partner of the Partnership, with respect to any
business opportunity or other matter that is first presented to or becomes known
to such person after such time as the General Partner no longer serves as a
general partner of the Partnership; and shall terminate as to all business
opportunities


                                        7

<PAGE>



and other matters six (6) months after such time as the General Partner no
longer serves as a general partner of the partnership, regardless of when such
business opportunity arose or was presented to or became known to such person.

         (b) Without limiting the generality of Section 7(a), all restrictions
imposed by this Agreement on any Officer shall terminate at such time as such
person no longer serves as an executive officer of any Operating Company, with
respect to any business opportunity or other matter that is first presented to
or becomes known to such person after such time as such person no longer serves
as an executive officer of any Operating Company; and shall terminate as to all
business opportunities and other matters six (6) months after such time as such
Officer no longer serves as an executive officer of any Operating Company,
regardless of when such business opportunity arose or was presented to or became
known to such person.

         8. Future Officers. Each GP Party agrees to use commercially reasonable
efforts to cause any person elected or appointed as an executive officer of any
Operating Company to agree to be bound as an "Officer" under this Agreement.

         9. Waiver of Rights; Amendment. Any rights of the Partnership under
this Agreement, including but not limited to rights to receive certain notices
pursuant to Section 3 and 4, may be waived on behalf of the Partnership by the
Advisory Committee. This Agreement may not be amended by or on behalf of the
Partnership without the approval of the Advisory Committee (as defined in the
Partnership Agreement) of the Partnership.

         10. Notices. All notices, requests, demands and other communications
required or permitted to be given or made hereunder by any party hereto shall be
in writing and shall be deemed to have been duly given or made if (i) delivered
personally, (ii) transmitted by first class registered or certified mail,
postage prepaid, return receipt requested, (iii) sent by prepaid overnight
courier service or (iv) sent by telecopy or facsimile transmission, answer back
requested, to the parties at the following addresses (or at such other addresses
as shall be specified by the parties by like notice):

             If to the Partnership, the General Partner or the Management GP:
                   c/o Dorchester Minerals Management GP LLC
                   3738 Oak Lawn Ave., Suite 300
                   Dallas, Texas  75219
                   Attention: Chief Executive Officer
                   Telecopy No.: 214-559-0301

             If to Vaughn:
                   c/o VPL(GP), LLC
                   3738 Oak Lawn Ave., Suite 101
                   Dallas, Texas  75219
                   Attention: Robert C. Vaughn
                   Telecopy No.: 214-522-7433


                                        8

<PAGE>



                           with a copy to:

                           c/o VPL(GP), LLC
                           3738 Oak Lawn Ave., Suite 101
                           Dallas, Texas  75219
                           Attention: Benny D. Duncan
                           Telecopy No.: 214-522-7433

             If to SAM:
                   c/o SAM Partners Management, Inc.
                   3738 Oak Lawn Ave., Suite 300
                   Dallas, Texas  75219
                   Attention: H. C. Allen, Jr.
                   Telecopy No.: 214-559-0301

             If to SAOG:
                   3738 Oak Lawn Ave., Suite 300
                   Dallas, Texas  75219
                   Attention: William Casey McManemin
                   Telecopy No.: 214-559-0301

             If to Peak:
                   1919 S. Shiloh Rd.
                   Suite 600 - LB48
                   Garland, Texas  75042
                   Attention: Preston A. Peak
                   Telecopy No.: 972-864-9095

             If to Raley :
                   1919 S. Shiloh Rd.
                   Suite 600 - LB48
                   Garland, Texas  75042
                   Attention: James E. Raley
                   Telecopy No.: 972-864-9095

Such notices, requests, demands and other communications shall be effective (i)
if delivered personally or sent by courier service, upon actual receipt by the
intended recipient, (ii) if mailed, upon the earlier of five days after deposit
in the mail or the date of delivery as shown by the return receipt therefor or
(iii) if sent by telecopy or facsimile transmission, when the answer back is
received.

         11. Binding Effect; Assignment; Third Party Benefit. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, however, that neither
this Agreement nor any of the rights,

                                        9

<PAGE>



interests or obligations hereunder shall be assigned by any of the parties
hereto (by operation of law or otherwise) without the prior written consent of
the other parties. This Agreement is intended to confer rights and benefits upon
the Designees, Affiliates of the GP Parties and the companies referred to in
Section 2. Except as provided in the preceding sentence, nothing in this
Agreement, express or implied, is intended to or shall confer upon any person
other than the parties hereto any rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement.

         12. Severability. If any provision of this Agreement is held to be
unenforceable, this Agreement shall be considered divisible and such provision
shall be deemed inoperative to the extent it is deemed unenforceable, and in all
other respects this Agreement shall remain in full force and effect; provided,
however, that if any such provision may be made enforceable by limitation
thereof, then such provision shall be deemed to be so limited and shall be
enforceable to the maximum extent permitted by Applicable Law.

         13. Injunctive Relief. The parties hereto acknowledge and agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Agreement, and shall be entitled to enforce specifically the provisions of this
Agreement, in any court of the United States or any state thereof having
jurisdiction, in addition to any other remedy to which the parties may be
entitled under this Agreement or at law or in equity.

         14. Miscellaneous. This Agreement may be signed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute one instrument. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, without regard to conflict of law principles.

                    [Remainder of page intentionally omitted]


                                       10

<PAGE>



         IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date set forth above.

                                DORCHESTER MINERALS, L.P.

                                By: Dorchester Minerals Management LP, General
                                    Partner

                                    By: Dorchester Minerals Management GP
                                        LLC, General Partner

                                        By: /s/ JAMES E. RALEY
                                           -----------------------------------
                                            James E. Raley, COO


                                DORCHESTER MINERALS MANAGEMENT LP

                                By: Dorchester Minerals Management GP LLC,
                                    General Partner

                                    By: /s/ JAMES E. RALEY
                                       ---------------------------------------
                                        James E. Raley, COO


                                DORCHESTER MINERALS MANAGEMENT GP
                                LLC


                                By: /s/ JAMES E. RALEY
                                   -------------------------------------------
                                    James E. Raley, COO


                                SAM PARTNERS, LTD.

                                By: SAM Partners Management, Inc., General
                                    Partner

                                    By: /s/ H.C. ALLEN,JR.
                                       ---------------------------------------
                                        H.C. Allen, Jr., Secretary

                                       11
<PAGE>



                                VAUGHN PETROLEUM, LTD.

                                By: VPL(GP), LLC, General Partner

                                    By: /s/ ROBERT C. VAUGHN
                                       --------------------------------------
                                       Robert C. Vaughn, CEO & MANAGER


                                SMITH ALLEN OIL & GAS, INC.

                                By: /s/ WILLIAM CASEY MCMANEMIN
                                   ------------------------------------------
                                   William Casey McManemin, Vice President


                                The following persons are executing this
                                Agreement as "Officers":



                                /s/ WILLIAM CASEY MCMANEMIN
                                ---------------------------------------------
                                William Casey McManemin


                                /s/ JAMES E. RALEY
                                ---------------------------------------------
                                James E. Raley


                                 /s/ H. C. ALLEN, JR.
                                ---------------------------------------------
                                H. C. Allen, Jr.

                                       12

<PAGE>


                                   Schedule A

                                 Designated Area


Texas County, Oklahoma:

         T 2N - 6N
         R 14 ECM - 19 ECM

Stevens County, Kansas:

         T 33S - 35S
         R 38W - 39W



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