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                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT


         This agreement is made and entered into as of the 5th day of March,
2001, by and between TRANSTEXAS GAS CORPORATION hereinafter called "COMPANY" and
ARNOLD BRACKENRIDGE, hereinafter called "EMPLOYEE".

     1.  The term of this agreement is for twelve (12) months, commencing on
         March 5, 2001, and ending on March 4, 2002. Thereafter this contract
         shall be subject to renegotiations and renewal. This agreement may be
         terminated prior to the end of the term pursuant to paragraph 6, 7 or 8
         hereof.

     2.  The COMPANY agrees to employ EMPLOYEE for the term of this Agreement,
         and EMPLOYEE shall have and fulfill such duties, responsibilities and
         obligations as are usual and customary for the President and Chief
         Operating Officer, subject to the direction and control of the Board of
         Directors and the Chief Executive Officer.

     3.  EMPLOYEE agrees EMPLOYEE will faithfully and diligently serve the
         COMPANY to the best of his ability.

     4.  During his service hereunder, EMPLOYEE'S salary shall be $350,000 per
         year payable in installments in accordance with the COMPANY'S regular
         payroll practices and any bonus or other consideration as approved by
         the Board of Directors.

     5.  At such costs and eligibility restrictions applicable to all employees,
         EMPLOYEE shall participate in all plans and benefits generally
         applicable or available to employees of the COMPANY, including but not
         limited to health, hospital and surgical benefits, disability, life
         insurance plans, and accidental death and dismemberment insurance.

                  a.       During his service hereunder, EMPLOYEE shall receive
                           four (4) weeks of vacation.

     6.  This Agreement shall be terminable by the COMPANY for "cause" without
         advance notice. In the event of such termination properly for cause,
         the salary set forth above shall cease on the effective date of
         termination; however, benefits earned to date shall be paid in full.
         "Cause" shall mean:

                  a.       Neglect or mismanagement by EMPLOYEE of his duties,
                           responsibilities and obligations which either
                           significantly damages or could have significantly
                           damaged the property or interest of the COMPANY; or

                  b.       Material breach of this Agreement by EMPLOYEE; or

                  c.       Inability of EMPLOYEE to perform his duties,
                           responsibilities and obligations by reason of
                           illness, accident or other incapacity for a
                           continuous period of six (6) months.


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     7.  This Agreement shall be terminable by EMPLOYEE for cause. In the event
         that EMPLOYEE terminates this Agreement properly for cause within
         thirty (30) days after he knows of the existence of such cause, the
         COMPANY shall be obligated to pay EMPLOYEE his salary through the
         effective date of the contract period. "Cause" shall mean:

                  a.       Wrongful behavior or willful neglect by the COMPANY
                           not caused by EMPLOYEE; or

                  b.       Material breach of its obligations under this
                           Agreement by the COMPANY; or

                  c.       Sale, reorganization (other than the reorganization
                           of the COMPANY pursuant to the Plan of Reorganization
                           of the COMPANY in Case No. 99-21550-C in the United
                           States Bankruptcy Court, Southern District of Texas,
                           Corpus Christi Division) or merger of the COMPANY
                           resulting in a change in the actual control of the
                           COMPANY.

     8.  The COMPANY shall have the right to terminate this Agreement without
         cause by giving EMPLOYEE written notice of such termination.

     9.  In the event that the COMPANY terminates EMPLOYEE other than for cause
         before the end of the term of this Agreement or EMPLOYEE terminates
         this Agreement for cause before the end of the term of this Agreement,
         the COMPANY shall pay to EMPLOYEE his salary for the remaining term of
         this Agreement.

     10. The entire understanding and agreement between the parties has been
         incorporated into this Agreement. This Agreement shall inure to the
         benefit of, and shall be binding upon the COMPANY, its successors and
         assigns and upon EMPLOYEE and his heirs, successors and assigns. This
         Agreement may not otherwise be assigned without the prior written
         approval of the other party.

     11. Any disputes concerning or arising out of interpretation or application
         of this Agreement shall be determined by final and binding arbitration
         under and in accordance with the rules and procedures of the American
         Arbitration's Association provided that the dispute is submitted to
         arbitration by written demand therefor delivered to and received by the
         other party within sixty (60) days after occurrence of the event giving
         rise to the dispute.

     12. If there is a conflict between the COMPANY personnel policies and this
         Agreement, this Agreement shall prevail.


         TRANSTEXAS GAS CORPORATION          ARNOLD BRACKENRIDGE

         By: /s/ GERALD BARKLEY              By: /s/ ARNOLD BRACKENRIDGE
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         Date: March 5, 2001                 Date: March 5, 2001
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