FORELAND                                         2561 South 1560 West, Suite 200
CORPORATION                                      Woods Cross, Utah  84087
                                                 (801) 298-9866
                                                 Fax: (801) 298-9889



                                Letter Agreement

May 1, 2000



         This  letter is  intended  to  memorialize  the  terms of an  agreement
between Foreland  Corporation,  a Nevada Corporation  ("Foreland") and Deerfield
Production  Corporation,  a  Delaware  Corporation  ("Deerfield")  concerning  a
farmout of the "Hay Ranch" prospect in Eureka County,  Nevada. It is anticipated
that a complete farmout  agreement and operating  agreement will be prepared for
execution forthwith.

1. On or before July 31, 2000 the Marshall Group  ("Marshall")  will at its sole
cost and  expense,  commence or cause to be commenced a test well in Section 16,
T29N-R52E, Eureka Co. Nevada, and drill and complete or plus and abandon a 6000'
Newark Canyon/Chainman test well. Foreland will be operator of the well.

2. By drilling  and  completing  or plugging and  abandoning  the test well (the
"test well"), Marshall would earn an assignment of a 75% working interest in the
well and the eight  surrounding 160 acre wellsites (1280) acres to a depth equal
to the total  depth of the test well  within the 5345.96  acres  comprising  the
approved but not as yet  authorized  Federal Unit,  (the "Unit"),  (see attached
Unit map and Table).  The Test Well will also earn a 50% interest in the balance
of the Unit acreage to TD. Deerfield will deliver to Marshall an 80% net revenue
interest  ("NRI"),   proportionately  reduced  to  Deerfield's  interest  (where
possible) in Said Leases.  The NRI delivered  pursuant to this  Agreement may be
less than 80%, proportionately reduced, when acquired by Deerfield.

3. Foreland and Deerfield will share the promoted 25% carried  interest on a 1/3
Foreland 2/3 Deerfield basis, respectively.

4. An acreage fee of $10 per acre on the 5345.96  acres  within the Unit will be
paid by  Marshall  with  such fee to be split  between  Foreland  and  Deerfield
proportionately on the same basis as in item three.

                                                                          /s/RSJ
                                                                           /s/BD

                       Oil and Gas Exploration Development
<PAGE>

Page 2

5. within thirty (30) days of reaching total depth on the initial well, Marshall
shall elect to:

         (1) drill within 60 days of its election at its sole cost and expense a
second test well in the same Federal Unit to test the  Devonian  anticipated  at
8000',  to earn the same  interests as  previously  stated below TD of the first
Test Well, with no additional acreage fee due, or

         (2) drill on below the  Newark  Canyon  formation  at its sole cost and
expense to test the Devonian  anticipated at 8000' to earn the same interests as
previously stated below the Newark Canyon formation,  with no additional acreage
fee due, or

         (3)  reserve for a period of nine  months a right to  participate  on a
"most favored nations" basis 50% of the working interest if the Devonian test is
sold to a third party, including any acreage fee charged to that third party.

6. The Test Well and any subsequent wells drilled under the terms of this letter
agreement  will be operated in accordance  with a mutually  agreeable  1989 AAPL
Operating  Agreement  and Area of  Mutual  Interest  Agreement.  Said  Operating
Agreement  will provide for drilling and producing well rates of $6,500 and $650
respectively.  The  operating  agreement  will  have a  nonconsent  penalty  for
subsequent operations of 300%.

7. It is  acknowledged  that Foreland may  participate in drilling as part o the
"Marshall Group" subject to the success of Foreland's fundraising efforts.

8.  Notwithstanding  anything  to the  contrary in this  Letter  Agreement,  the
parties  acknowledge  and  agree  that  Deerfield's  obligations  hereunder  are
conditioned  upon the  execution  of a written  agreement  between  Foreland and
Marshall  on the terms  and  conditions  set out in this  Letter  Agreement.  If
Foreland  and  Marshall  fail to reach  such  agreement  by June 1,  2000,  then
Deerfield  shall have no  obligation to either  Foreland or Marshall  under this
Letter Agreement.

                                                                          /s/RSJ
                                                                           /s/BD
<PAGE>

Page 3

(Foreland/Deerfield letter agreement)




Agreed this 1st day of May, 2000.

Deerfield Production                                   Foreland Corporation

/s/Robert Imel                                         /s/ Bruce C. Decker
---------------------------                            ------------------------
President                                              Vice-President
Title                                                  Title

<PAGE>

                        Deerfield Production Corporation



                                  June 23, 2000

Bruce C. Decker
Foreland Corporation
2561 South 1560 West, Suite 200
Woods Cross, UT  84087


     Re:  Proposed  Amendment  to Letter  Agreement  dated  May 1, 2000  between
          Foreland and Deerfield (the "Hay Ranch Agreement"):


Dear Bruce:

                  With respect to the captioned Hay Ranch Agreement,

         1.       The date in the  first  sentence  of  Paragraph  1,  "July 31,
2000," shall be deleted and replaced by "September 1, 2000."

         2.       Paragraph 4 shall be deleted and  replaced in its  entirety by
the following:

                  "An acreage fee of $10 per acre on the  5,345.96  acres within
                  the Unit  will be paid by  Foreland  with such fee to be split
                  between  Foreland and  Deerfield  proportionately  on the same
                  basis as in item 3."

                  Please  acknowledge  these  changes by signing and returning a
copy of this letter to me.

                                           Sincerely,



                                           Steven P. McDonald
                                           Vice President
<PAGE>

(page 2 of Amendment to Letter Agreement dated May 1, 2000)

Agreed to this 23rd day of June, 2000.

FORELAND CORPORATION

By: /s/ Bruce C. Decker
    ------------------------
    Bruce C. Decker
    Vice-President