PROMISSORY NOTE
                               (Limited Recourse)

$600,000                                                       February 15, 2001


         FOR VALUE RECEIVED, the undersigned,  FORELAND CORPORATION ("Maker"), a
Nevada  corporation,  hereby  promises  to pay  to the  order  of  PETRO  SOURCE
CORPORATION,  ("Payee")  a Utah  corporation,  whose  mailing  address  is  9801
Westheimer,  Suite 900,  Houston TX 77042,  the  aggregate  principal sum of six
hundred thousand dollars and no cents ($600,000),  in lawful money of the United
States of America  for  payment  of public  and  private  debts,  together  with
interest  (calculated  on the basis of the  actual  number of days  elapsed  but
computed as if each year consisted of 360 days) on the unpaid principal  balance
from time to time outstanding at a rate that is two percentage  points above the
reference  rate  for  corporate  loans  published  from  time to time by Bank of
America, NT & SA.

         1.  Release  and  Settlement  Agreement.  This  Note  is  executed  and
delivered in connection  with that certain  Release and Settlement  Agreement of
even date herewith and is subject to all the terms and conditions therein.

         2.  Payments.  The entire  unpaid  principal and all accrued and unpaid
interest shall be due and payable on September 1, 2001.

         3. Time and Place of Payment. Each payment or prepayment hereon must be
paid at such  address  as the  Payee or  assignee  hereof  may from time to time
designate in writing, in lawful money of the United States in funds which are or
will be  available  for  immediate  use by Payee at such  office  by 2:00  p.m.,
Payee's local time, on the day payment is due.

         4. Prepayment. Maker reserves the right and privilege of prepaying this
Note in whole or in part,  at any  time or from  time to time,  without  notice,
premium, charge, or penalty.

         5.  Security.  This Note is secured  by  collateral  described  in that
certain  Stock Pledge  Agreement of even date  herewith by and between Maker and
Payee and by that  certain  Deed of Trust and  Security  Agreement  of even date
herewith by and between Maker and Payee.

         6. Default.  The  occurrence  of one or more of the following  shall be
deemed an Event of Default ("Events of Default"):

                  (a) The failure or refusal of Maker to pay  principal  of this
         Note and accrued  interest when the same becomes due in accordance with
         the terms  hereof and such  failure or refusal is not cured  within ten
         calendar days after Maker has notice thereof.

                  (b) Maker  shall (i)  become  insolvent,  (ii) fail to pay its
         debts generally as they become due, (iii) voluntarily seek, consent to,
         or  acquiesce  in the  benefit or  benefits  of any  Debtor  Relief Law
         (defined  hereinafter),  or  (iv)  become  a party  to (or be made  the
         subject of) any proceeding provided for by any Debtor Relief Law, other
         than as a  creditor  or  claimant,  that  could  suspend  or  otherwise
         adversely  affect the Rights  (defined  hereinafter)  of Payee  granted
         herein  (unless,  in the event  such  proceeding  is  involuntary,  the
         petition  instituting same is dismissed within 60 days of the filing of
         same).  "Debtor  Relief  Law" means the  Bankruptcy  Code of the United
         States   of   America   and   all   other    applicable    liquidation,
         conservatorship,  bankruptcy, moratorium, rearrangement,  receivership,
         insolvency,  reorganization,  suspension  of payments,  or similar Laws

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         from  time  to  time  in  effect  affecting  the  Rights  of  creditors
         generally.  "Rights" means rights,  remedies,  powers,  and privileges.
         "Laws" means all applicable statutes,  laws,  ordinances,  regulations,
         orders,  writs,  injunctions,  or decrees  of any state,  commonwealth,
         nation,  territory,   possession,   county,  parish,  municipality,  or
         Tribunal.  "Tribunal"  means  any  court  or  governmental  department,
         commission,  board,  bureau,  agency, or  instrumentality of the United
         States or of any state,  commonwealth,  nation, territory,  possession,
         county,  parish, or municipality,  whether now or hereafter constituted
         and/or existing.

If any one or more of the Events of Default specified above shall have happened,
the  rights  of the  holder of this  Note  shall be  limited  to  executing  and
foreclosing  on the collateral  described in the Stock Pledge  Agreement and the
Deed of Trust and Security  Agreement by and between the Maker and Payee, and in
the event that any sale of the collateral  shall be  insufficient to satisfy the
obligation  evidenced  by this  Note,  the  holder of this Note shall not seek a
deficiency or personal judgment against Maker.

         7. Cumulative  Rights.  No delay on the part of the holder of this Note
in the  exercise  of any power or right or single  partial  exercise of any such
power or right under this Note, or under any other instrument  executed pursuant
hereto, shall operate as a waiver thereof.

         8. Waiver. Maker and each surety, endorser,  guarantor, and other party
liable  for the  payment  of any  sums of money  payable  on this  Note,  waives
presentment  and  demand  for  payment,  protest,  and  notice  of  protest  and
nonpayment, or other notice of default except as specified herein and agree that
its  liability on this Note shall not be affected by any renewal or extension in
the time of payment hereof,  or in any  indulgences,  or by any partial payment,
any release or change in any  security  for the payment of this Note,  before or
after  maturity,  regardless  of  the  number  of  such  renewals,   extensions,
indulgences, releases, or changes.

         9. Notices.  All notices,  demands,  requests,  or other communications
required  or  authorized  hereunder  shall be deemed  given  sufficiently  if in
writing  and  if  personally  delivered;  if  sent  by  facsimile  transmission,
confirmed  with a written copy  thereof  sent by second day express  delivery or
registered  mail,  return  receipt  requested  and postage  prepaid;  if sent by
registered mail or certified mail, return receipt requested and postage prepaid;
or if sent by second day express delivery to the address or facsimile number set
forth in the  Release  and  Settlement  Agreement  or other such  addresses  and
facsimile  numbers as shall be  furnished  by any party in the manner for giving
notices hereunder,  and any such notice, demand, request, or other communication
shall be  deemed  to have  been  given as of the  date so  delivered  or sent by
facsimile  transmission,  three days after the date so mailed, or two days after
the date so sent by second day delivery.

         10.  Successor  and  Assigns.  All  of  the  covenants,   stipulations,
promises,  and  agreements in this Note contained by or on behalf of Maker shall
bind its successors and assigns, whether so expressed or not; provided, however,
that Maker may not,  without  the prior  written  consent  of Payee,  assign any
rights, powers, duties, or obligations under this Note.

         11. Headings.  The headings of the paragraphs of this Note are inserted
for convenience only and shall not be deemed to constitute a part hereof.

         12.  Applicable  Law. This Note is being executed in the state of Utah,
and the substantive laws of such state shall govern the validity,  construction,
enforcement,  and  interpretation  of this Note except  insofar as federal  laws
shall have  application.  Any action or proceeding  brought to enforce this Note
shall be instituted in Salt Lake County, Utah, if brought in a Utah state court,
or in the District of Utah, Central Division, if brought in a federal court.

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         13. Nonnegotiable. This Note is nonnegotiable.

         DATED as of the day first above written.

                                                   FORELAND CORPORATION


                                                   By  /s/ Bruce C. Decker
                                                      --------------------------
                                                      Bruce D. Decker, President

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