<PAGE>   1
                                                                     EXHIBIT 4.3

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE (COLLECTIVELY, THE "ACTS"). NEITHER
THIS WARRANT NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
WITH RESPECT HERETO UNDER ALL OF THE APPLICABLE ACTS, OR AN OPINION OF COUNSEL
SATISFACTORY TO KCS ENERGY, INC. TO THE EFFECT THAT SUCH REGISTRATIONS ARE NOT
REQUIRED.

                                     WARRANT

                           to Purchase Common Stock of

                                KCS ENERGY, INC.

                          Expiring on February 19, 2006


         THIS IS TO CERTIFY THAT, for value received, SANDERS MORRIS HARRIS
INC., a Texas corporation, or permitted assigns, is entitled to purchase from
KCS ENERGY, INC., a Delaware corporation (the "Company"), at the place where the
Warrant Office designated pursuant to Section 2.1 is located, at a purchase
price per share of $4.00 (as adjusted pursuant to the terms of this Warrant, the
"Exercise Price"), 400,000 shares of duly authorized, validly issued, fully paid
and nonassessable shares of Common Stock, $.0l par value, of the Company (the
"Common Stock"), and is entitled also to exercise the other appurtenant rights,
powers and privileges hereinafter set forth. The number of shares of the Common
Stock purchasable hereunder and the Exercise Price are subject to adjustment in
accordance with Article III hereof. This Warrant shall expire at 5:00 p.m.,
C.S.T., on February 19, 2006.

         Certain Terms used in this Warrant are defined in Article IV.

                                   ARTICLE I.

                               Exercise of Warrant

         1.1. Method of Exercise. This Warrant may be exercised as a whole or in
part from time to time until February 19, 2006, at which time this Warrant shall
expire and be of no further force or effect; provided, however, that the minimum
number of Warrant Shares that may be purchased on a single exercise shall be
50,000. To exercise this Warrant, the holder hereof or permitted assignees of
all rights of the registered owner hereof shall deliver to the Company, at the
Warrant Office designated in Section 2.1, (a) a written notice in the form of
the Subscription Notice attached as an exhibit hereto, stating therein the
election of such holder or such permitted assignees of the holder to exercise
this Warrant in the manner provided in the Subscription Notice, (b) payment in
full of the Exercise Price (in the manner described below) for all Warrant
Shares purchased


<PAGE>   2

hereunder, and (c) this Warrant. Subject to compliance with Section 3.1(a)(vi),
this Warrant shall be deemed to be exercised on the date of receipt by the
Company of the Subscription Notice, accompanied by payment for the Warrant
Shares to be purchased and surrender of this Warrant, as aforesaid, and such
date is referred to herein as the "Exercise Date." Upon such exercise (subject
as aforesaid), the Company shall issue and deliver to such holder a certificate
for the full number of the Warrant Shares purchasable by such holder hereunder,
against the receipt by the Company of the total Exercise Price payable hereunder
for all such Warrant Shares, (a) in cash or by certified or cashier's check or
(b) if the Common Stock is registered under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), by surrendering Warrant Shares having a Current
Market Price equal to the Exercise Price for all the Warrant Shares so
purchased. The Person in whose name the certificate(s) for Common Stock is to be
issued shall be deemed to have become a holder of record of such Common Stock on
the Exercise Date.

         1.2. Net Exercise. Notwithstanding any provisions herein to the
contrary, if the Common Stock is registered under the Exchange Act, and the
Current Market Price of one share of Common Stock is greater than the Exercise
Price (at the date of calculation as set forth below), in lieu of exercising
this Warrant by payment of cash, the holder may elect to receive Warrant Shares
equal to the value (as determined below) of this Warrant (or the portion thereof
being canceled) by surrender of this Warrant at the Warrant Office together with
the properly endorsed Subscription Notice in which event the Company shall issue
the holder a number of shares of Common Stock computed as follows:

                                   X = Y(A-B)
                                       A

Where:        X = the number of shares of Common Stock to be issued to the
                  holder.

              Y = the number of shares of Common Stock purchasable under the
                  Warrant or, if only a portion of the Warrant is being
                  exercised, the portion of the Warrant being canceled (at the
                  date of such calculation)

              A = the Current Market Price of one share of Common Stock (at
                  the date of such calculation)

              B = Exercise Price (as adjusted to the date of such calculation)

         1.3. Fractional Shares. In lieu of any fractional shares of Common
Stock which would otherwise be issuable upon exercise of this Warrant, the
Company shall issue a certificate for the next lower number of whole shares of
Common Stock for any fraction of a share which is one-half or greater. No shares
will be issued for less than one-half a share.

                                  ARTICLE II.

                            Warrant Office; Transfer

         2.1. Warrant Office. The Company shall maintain an office for certain
purposes specified herein (the "Warrant Office"), which office shall initially
be the


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<PAGE>   3


Company's office at 5555 San Felipe, Suite 1200, Houston, Texas 77056, and may
subsequently be such other office of the Company or of any transfer agent of the
Common Stock in the continental United States of which written notice has
previously been given to the holder of this Warrant. The Company shall maintain,
at the Warrant Office, a register for the Warrant in which the Company shall
record the name and address of the person in whose name this Warrant has been
issued, as well as the name and address of each permitted assignee of the rights
of the registered owner hereof.

         2.2. Ownership of Warrant. The Company may deem and treat the person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of transfer
as provided in this Article II.

         2.3. Transfer of Warrants. The Company agrees to maintain at the
Warrant Office books for the registration and transfer of this Warrant. This
Warrant may be transferred in whole or in part only in compliance with the
applicable law and only to shareholders, officers, and employees of Sanders
Morris Harris Inc. or to any person who succeeds to all of the assets of Sanders
Morris Harris Inc. The Company, from time to time, shall register the transfer
of this Warrant in such books upon surrender of this Warrant at the Warrant
Office, properly endorsed or accompanied by appropriate instruments of transfer
and written instructions for transfer satisfactory to the Company. Upon any such
transfer, a new Warrant shall be issued to the transferee, and the surrendered
Warrant shall be canceled by the Company. The registered holder of this Warrant
shall pay all taxes and all other expenses and charges payable in connection
with the transfer of Warrants pursuant to this Section 2.3.

         2.4. Registration Rights. The Company agrees to include the Warrant
Shares on any registration statement filed by the Company with respect to shares
of Common Stock of the Company issuable upon conversion of the Company's Series
A Convertible Preferred Stock.

         2.5. Acknowledgment of Rights. The Company will, at the time of the
exercise of this Warrant in accordance with the terms hereof, upon the request
of the registered holder hereof, acknowledge in writing its continuing
obligation to afford to such holder any rights (including without limitation,
any right to registration of the Warrant Shares) to which such holder shall
continue to be entitled after such exercise in accordance with the provisions of
this Warrant, provided that if the holder of this Warrant shall fail to make any
such request, such failure shall not affect the continuing obligation of the
Company to afford to such holder any such rights.

         2.6. Expenses of Delivery of Warrants. Except as provided in Section
2.3 above, the Company shall pay all reasonable expenses, taxes (other than
transfer taxes) and other charges payable in connection with the preparation,
issuance and delivery of Warrants and related Warrant Shares hereunder.


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<PAGE>   4


         2.7. Compliance with Securities Laws. The holder hereof understands and
agrees that the following restrictions and limitations shall be applicable to
all Warrant Shares and resales or other transfers thereof pursuant to the
Securities Act:

         (a) The holder hereof agrees that the Warrant Shares shall not be sold
or otherwise transferred unless the Warrant Shares are registered under the
Securities Act and state securities laws or are exempt therefrom.

         (b) A legend in substantially the following form has been or will be
placed on the certificate(s) evidencing the Warrant Shares:

                  "The shares represented by this certificate have not been
         registered under the Securities Act of 1933, as amended, or the
         securities laws of any state (collectively, the "Acts"). Neither the
         shares nor any interest therein may be offered, sold, transferred,
         pledged, or otherwise disposed of in the absence of an effective
         registration statement with respect to the shares under all of the
         applicable Acts, or an opinion of counsel satisfactory to KCS Energy,
         Inc. to the effect that such registrations are not required."

         (c) Stop transfer instructions have been or will be imposed with
respect to the Warrant Shares so as to restrict resale or other transfer
thereof, subject to this Section 2.7.

                                  ARTICLE III.

                            Anti-Dilution Provisions

         3.1. Adjustment of Exercise Price and Number of Warrant Shares. The
Exercise Price shall be subject to adjustment from time to time as hereinafter
provided in this Article III. Upon each adjustment of the Exercise Price, except
pursuant to Sections 3.1(a)(iii), (iv), and (v), the registered holder of the
Warrant shall thereafter be entitled to purchase, at the Exercise Price
resulting from such adjustment, the number of shares of the Common Stock
(calculated to the nearest whole share pursuant to Section 1.2) obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of shares of the Common Stock purchasable pursuant hereto immediately
prior to such adjustment and dividing the product thereof by the Exercise Price
resulting from such adjustment.

         (a) Exercise Price Adjustments. The Exercise Price shall be subject to
adjustment from time to time as follows:

                  (i) Adjustment for Stock Splits and Combinations. If the
         Company shall at any time or from time to time after the date hereof
         (the "Original Issue Date") effect a subdivision of the outstanding
         Common Stock, the Exercise Price in effect immediately before such
         subdivision shall be proportionately decreased. Conversely, if the
         Company shall at any time or from time to time after the Original Issue
         Date combine the outstanding shares of Common Stock into a smaller
         number of shares, the Exercise Price in effect immediately before such
         combination shall be proportionately increased. Any adjustment under
         this


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<PAGE>   5

         Section 3.1(a)(i) shall become effective at the close of business on
         the date the subdivision or combination becomes effective.

                  (ii) Adjustment for Common Stock Dividends and Distributions.
         If the Company at any time or from time to time after the Original
         Issue Date makes, or fixes a record date for the determination of
         holders of Common Stock entitled to receive, a dividend or other
         distribution payable in additional shares of Common Stock, in each such
         event the Exercise Price that is then in effect shall be decreased as
         of the time of such issuance or, in the event such record date is
         fixed, as of the close of business on such record date, by multiplying
         the Exercise Price then in effect by a fraction (i) the numerator of
         which is the total number of shares of Common Stock issued and
         outstanding immediately prior to the time of such issuance or the close
         of business on such record date, and (ii) the denominator of which is
         the total number of shares of Common Stock issued and outstanding
         immediately prior to the time of such issuance or the close of business
         on such record date plus the number of shares of Common Stock issuable
         in payment of such dividend or distribution; provided, however, that if
         such record date is fixed and such dividend is not fully paid or if
         such distribution is not fully made on the date fixed therefor, the
         Exercise Price shall be recomputed accordingly as of the close of
         business on such record date, and thereafter the Exercise Price shall
         be adjusted pursuant to this Section 3.1(a)(ii) to reflect the actual
         payment of such dividend or distribution.

                  (iii) Adjustment for Reclassification, Exchange and
         Substitution. If at any time or from time to time after the Original
         Issue Date, the Common Stock is changed into the same or a different
         number of shares of any class or classes of stock, whether by
         recapitalization, reclassification or otherwise (other than an
         Acquisition, Asset Transfer, subdivision or combination of shares,
         stock dividend, reorganization, merger, consolidation, or sale of
         assets provided for elsewhere in this Section 3.1(a)), in any such
         event the holder hereof shall have the right thereafter to convert such
         stock into the kind and amount of stock and other securities and
         property receivable upon such recapitalization, reclassification or
         other change by holders of the maximum number of shares of Common Stock
         into which such shares of Common Stock could have been converted
         immediately prior to such recapitalization, reclassification or change,
         all subject to further adjustment as provided herein or with respect to
         such other securities or property by the terms thereof.

                  (iv) Reorganizations, Mergers, Consolidations or Sales of
         Assets. If at any time or from time to time after the Original Issue
         Date, there is a capital reorganization of the Common Stock (other than
         an Acquisition, Asset Transfer, recapitalization, or subdivision,
         combination, reclassification, exchange, or substitution of shares
         provided for elsewhere in this Section 3.1(a)), as a part of such
         capital reorganization, provision shall be made so that the holder of
         this Warrant shall thereafter be entitled to receive upon exercise
         hereof the number of shares of stock or other securities or property of
         the Company to which a holder of the number of shares of Common Stock
         deliverable upon exercise immediately


                                       5
<PAGE>   6


         prior to such event would have been entitled as a result of such
         capital reorganization, subject to adjustment in respect of such stock
         or securities by the terms thereof. In any such case, appropriate
         adjustment shall be made in the application of the provisions of this
         Section 3.1(a) with respect to the rights of the holder hereof after
         the capital reorganization to the end that the provisions of this
         Section 3.1(a) (including adjustment of the Exercise Price then in
         effect and the number of shares issuable upon exercise) shall be
         applicable after that event and be as nearly equivalent as practicable.

                  (v) Rounding of Calculations; Minimum Adjustment. All
         calculations under this Section 3.1(a) and under Section 3.1(b) shall
         be made to the nearest cent or to the nearest whole share (as provided
         in Section 1.2), as the case may be. Any provision of this Section 3.1
         to the contrary notwithstanding, no adjustment in the Exercise Price
         shall be made if the amount of such adjustment would be less than one
         percent, but any such amount shall be carried forward and an adjustment
         with respect thereto shall be made at the time of and together with any
         subsequent adjustment which, together with such amount and any other
         amount or amounts so carried forward, shall aggregate one percent or
         more.

                  (vi) Timing of Issuance of Additional Common Stock Upon
         Certain Adjustments. In any case in which the provisions of this
         Section 3.1(a) shall require that an adjustment shall become effective
         immediately after a record date for an event, the Company may defer
         until the occurrence of such event issuing to the holder of this
         Warrant after such record date and before the occurrence of such event
         the additional shares of Common Stock or other property issuable or
         deliverable upon exercise by reason of the adjustment required by such
         event over and above the shares of Common Stock or other property
         issuable or deliverable upon such exercise before giving effect to such
         adjustment; provided, however, that the Company upon request shall
         deliver to such holder a due bill or other appropriate instrument
         evidencing such holder's right to receive such additional shares or
         other property, and such cash, upon the occurrence of the event
         requiring such adjustment.

         (b) Current Market Price. The "Current Market Price" shall mean, as of
any date, 5% of the sum of the average, for each of the 20 consecutive Trading
Days immediately prior to such date, of either: (i) the high and low sales
prices of the Common Stock on such Trading Day as reported on the composite tape
for the principal national securities exchange on which the Common Stock may
then be listed, or (ii) if the Common Stock shall not be so listed on any such
Trading Day, the high and low sales prices of Common Stock in the
over-the-counter market as reported by the Nasdaq Stock Market for National
Market Securities, or (iii) if the Common Shares shall not be included in the
Nasdaq Stock Market as a National Market Security on any such Trading Day, the
representative bid and asked prices at the end of such Trading Day in such
market as reported by the Nasdaq Stock Market or (iv) if there be no such
representative prices reported by the Nasdaq Stock Market, the lowest bid and
highest asked prices at the end of such Trading Day in the over-the-counter
market as reported by the OTC Electronic Bulletin Board or National Quotation
Bureau, Inc., or any successor


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<PAGE>   7


organization. For purposes of determining Current Market Price, the term
"Trading Day" shall mean a day on which an amount greater than zero can be
calculated with respect to the Common Stock under any one or more of the
foregoing categories (i), (ii), (iii) and (iv), and the "end" thereof, for the
purposes of categories (iii) and (iv), shall mean the exact time at which
trading shall end on the New York Stock Exchange. If the Current Market Price
cannot be determined under any of the foregoing methods, Current Market Price
shall mean the fair value per share of Common Stock on such date as determined
by the Board of Directors in good faith, irrespective of any accounting
treatment.

         (c) Statement Regarding Adjustments. Whenever the Exercise Price shall
be adjusted as provided in Section 3.1(a), and upon each change in the number of
shares of the Common Stock issuable upon exercise of this Warrant, the Company
shall forthwith file, at the office of any transfer agent for this Warrant and
at the principal office of the Company, a statement showing in detail the facts
requiring such adjustment and the Exercise Price and new number of shares
issuable that shall be in effect after such adjustment, and the Company shall
also cause a copy of such statement to be given to the holder of this Warrant.
Each such statement shall be signed by the Company's chief financial or
accounting officer. Where appropriate, such copy may be given in advance and may
be included as part of a notice required to be mailed under the provisions of
Section 3.1(d).

         (d) Notice to Holders. In the event the Company shall propose to take
any action of the type described in clause (iii) or (iv) of Section 3.1(a), the
Company shall give notice to the holder of this Warrant, in the manner set forth
in Section 6.6, which notice shall specify the record date, if any, with respect
to any such action and the approximate date on which such action is to take
place. Such notice shall also set forth such facts with respect thereto as shall
be reasonably necessary to indicate the effect of such action (to the extent
such effect may be known at the date of such notice) on the Exercise Price and
the number, kind or class of shares or other securities or property which shall
be deliverable upon exercise of this Warrant. In the case of any action which
would require the fixing of a record date, such notice shall be given at least
10 days prior to the date so fixed, and in case of all other action, such notice
shall be given at least 15 days prior to the taking of such proposed action.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of any such action.

         (e) Treasury Stock. For the purposes of this Section 3.1, the sale or
other disposition of any Common Stock of the Company theretofore held in its
treasury shall be deemed to be an issuance thereof.

         3.2. Costs. The registered holder of this Warrant shall pay all
documentary, stamp, transfer or other transactional taxes attributable to the
issuance or delivery of shares of Common Stock of the Company upon exercise of
this Warrant. Additionally, the Company shall not be required to pay any taxes
which may be payable in respect of any transfer involved in the issuance or
delivery of any certificate for such shares. The holder of this Warrant shall
reimburse the Company for any such taxes assessed against the Company.


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<PAGE>   8


         3.3. Reservations of Shares. The Company shall reserve at all times so
long as this Warrant remains outstanding, free from preemptive rights, out of
its treasury Common Stock or its authorized but unissued shares of Common Stock,
or both, solely for the purpose of effecting the exercise of this Warrant,
sufficient shares of Common Stock to provide for the exercise hereof.

         3.4. Valid Issuance. All shares of Common Stock which may be issued
upon exercise of this Warrant will upon issuance by the Company be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issuance thereof attributable to any act or omission
by the Company, and the Company shall take no action which will cause a contrary
result (including without limitation, any action which would cause the Exercise
Price to be less than the par value, if any, of the Common Stock).

                                  ARTICLE IV.

                                 Terms Defined

         As used in this Warrant, unless the context otherwise requires, the
following terms have the respective meanings set forth below or in the Section
indicated:

         Acquisition -- any consolidation or merger of the Company with or into
any other corporation or other entity or Person, or any other corporate
reorganization, in which the stockholders of the Company immediately prior to
such consolidation, merger or reorganization, own less than 50% of the Company's
voting power immediately after such consolidation, merger or reorganization, or
any transaction or series of related transactions to which the Company is a
party in which in excess of fifty percent (50%) of the Company's voting power is
transferred.

         Asset Transfer -- a sale, lease or other disposition of all or
substantially all of the assets of the Company.

         Board of Directors -- the Board of Directors of the Company.

         Common Stock -- the Company's authorized Common Stock, $0.01 par value
per share.

         Company -- KCS Energy, Inc., a Delaware corporation, and any other
corporation assuming or required to assume the obligations undertaken in
connection with this Warrant.

         Current Market Price -- See Section 3.1(b).

         Outstanding -- when used with reference to Common Stock at any date,
all issued shares of Common Stock (including, but without duplication, shares
deemed issued pursuant to Article III) at such date, except shares then held in
the treasury of the Company.


                                       8
<PAGE>   9


         Person -- any individual, corporation, partnership, trust,
organization, association or other entity.

         Securities Act -- the Securities Act of 1933 and the rules and
regulations promulgated thereunder, all as the same shall be in effect at the
time.

         Trading Day -- See Section 3.1(b).

         Warrant -- this Warrant and any successor or replacement Warrant
delivered in accordance with Section 2.3 or 6.8.

         Warrant Office -- See Section 2.1.

         Warrant Shares -- shall mean the shares of Common Stock purchased or
purchasable by the registered holder of this Warrant or the permitted assignees
of such holder upon exercise of this Warrant pursuant to Article I hereof.

                                   ARTICLE V.

                             Covenant of the Company

         The Company covenants and agrees that this Warrant shall be binding
upon any corporation succeeding to the Company by merger, consolidation, or
acquisition of all or substantially all of the Company's assets.

                                  ARTICLE VI.

                                 Miscellaneous

         6.1. Entire Agreement. This Warrant contains the entire agreement
between the holder hereof and the Company with respect to the Warrant Shares
that it can purchase upon exercise hereof and the related transactions and
supersedes all prior arrangements or understanding with respect thereto.

         6.2. Governing Law. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of Texas, without regard to its
conflict of law provisions.

         6.3. Waiver and Amendment. Any term or provision of this Warrant may be
waived at any time by the party which is entitled to the benefits thereof, and
any term or provision of this Warrant may be amended or supplemented at any time
by agreement of the holder hereof and the Company, except that any waiver of any
term or condition, or any amendment or supplementation, of this Warrant must be
in writing. A waiver of any breach or failure to enforce any of the terms or
conditions of this Warrant shall not in any way affect, limit or waive a party's
rights hereunder at any time to enforce strict compliance thereafter with every
term or condition of this Warrant.


                                       9
<PAGE>   10


         6.4. Illegality. In the event that any one or more of the provisions
contained in this Warrant shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in any other respect and the remaining
provisions of this Warrant shall not, at the election of the party for whom the
benefit of the provision exists, be in any way impaired.

         6.5. Copy of Warrant. A copy of this Warrant shall be filed among the
records of the Company.

         6.6. Notice. Any notice or other document required or permitted to be
given or delivered to the holder hereof shall be delivered at, or sent by
certified or registered mail to such holder at, the last address shown on the
books of the Company maintained at the Warrant Office for the registration of
this Warrant or at any more recent address of which the holder hereof shall have
notified the Company in writing. Any notice or other document required or
permitted to be given or delivered to the Company, other than such notice or
documents required to be delivered to the Warrant Office, shall be delivered at,
or sent by certified or registered mail to, the office of the Company at 5555
San Felipe, Suite 1200, Houston, Texas 77056 or any other address within the
continental United States of America as shall have been furnished by the Company
to the holder of this Warrant.

         6.7. Limitation of Liability; Not Stockholders. No provision of this
Warrant shall be construed as conferring upon the holder hereof the right to
vote, consent, receive dividends or receive notices other than as herein
expressly provided in respect of meetings of stockholders for the election of
directors of the Company or any other matter whatsoever as a stockholder of the
Company. No provision hereof, in the absence of affirmative action by the holder
hereof to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof, shall give rise to any liability of
such holder for the purchase price of any shares of Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.

         6.8. Exchange, Loss, Destruction, etc. of Warrant. Upon receipt of
evidence satisfactory to the Company of the loss, theft, mutilation or
destruction of this Warrant, and in the case of any such loss, theft or
destruction upon delivery of a bond of indemnity in such form and amount as
shall be reasonably satisfactory to the Company, or in the event of such
mutilation upon surrender and cancellation of this Warrant, the Company will
make and deliver a new Warrant of like tenor, in lieu of such lost, stolen,
destroyed or mutilated Warrant; provided, however, that the original recipient
of this Warrant shall not be required to provide any such bond of indemnity and
may in lieu thereof provide his agreement of indemnity. Any Warrant issued under
the provisions of this Section 6.8 in lieu of any Warrant alleged to be lost,
destroyed or stolen, or in lieu of any mutilated Warrant, shall constitute an
original contractual obligation on the part of the Company. This Warrant shall
be promptly canceled by the Company upon the surrender hereof in connection with
any exchange or replacement. The registered holder of this Warrant shall pay all
taxes (including securities transfer taxes) and all other expenses and charges


                                       10
<PAGE>   11


payable in connection with the preparation, execution and delivery of Warrants
pursuant to this Section 6.8.

         6.9 Headings. The Article and Section and other headings herein are for
convenience only and are not a part of this Warrant and shall not affect the
interpretation thereof.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name.

         Dated: February 20, 2001

                                       KCS ENERGY, INC.


                                       By:     /s/ James W. Christmas
                                               ---------------------------------
                                       Name:   James W. Christmas
                                               ---------------------------------
                                       Title:  President/Chief Executive Officer
                                               ---------------------------------


                                       11
<PAGE>   12


                               SUBSCRIPTION NOTICE

         The undersigned, the holder of the foregoing Warrant, hereby elects to
exercise purchase rights represented by said Warrant for, and to purchase
thereunder _________ shares of the Common Stock covered by said Warrant and
herewith makes payment in full therefor pursuant to Section 1.1 of such Warrant,
and requests (a) that certificates for such shares (and any securities or other
property issuable upon such exercise) be issued in the name of, and delivered
to, __________________, _________________ and (b) if such shares shall not
include all of the shares issuable as provided in said Warrant, that a new
Warrant of like tenor and date for the balance of the shares issuable thereunder
be delivered to the undersigned.

         The undersigned represents that (1) the aforesaid shares of Common
Stock are being acquired for the account of the undersigned for investment not
with view to, or for resale in connection with, the distribution thereof and
that the undersigned has no present intention of distributing or reselling such
shares; (2) the undersigned is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision regarding its investment in the
Company; (3) the undersigned is experienced in making investments of this type
and has such knowledge and background in financial and business matters that the
undersigned is capable of evaluating the merits and risks of this investment and
protecting the undersigned's own interests; (4) the undersigned understands that
the shares of Common Stock issuable upon exercise of this Warrant have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
by reason of a specific exemption from the registration provisions of the
Securities Act, which exemption depends upon, among other things, the bona fide
nature of the investment intent as expressed herein, and, because such
securities have not been registered under the Securities Act, they must be held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available; (5) the undersigned is aware that
the aforesaid shares of Common Stock may not be sold pursuant to Rule 144
adopted under the Securities Act unless certain conditions are met and until the
undersigned has held the shares for the number of years prescribed by Rule 144,
that among the conditions for use of the Rule is the availability of current
information to the public about the Company, and the Company has not made such
information available and has no present plans to do so; and (6) the undersigned
agrees not to make any disposition of all or any part of the aforesaid shares of
Common Stock unless and until there is then in effect a registration statement
under the Securities Act covering such proposed disposition and such disposition
is made in accordance with said registration statement, or the undersigned has
provided the Company with an opinion of counsel satisfactory to the Company,
stating that such registration is not required.


                                               ---------------------------------


Dated:                ,
      ----------------  --------


                                       12
<PAGE>   13

                                   ASSIGNMENT

For value received, ________________________________, hereby sells, assigns and
transfers unto _______________________________ the within Warrant, together with
all right, title and interest therein and does hereby irrevocably constitute and
appoint attorney, to transfer said Warrant on the books of the Company, with
full power of substitution.


                                               ---------------------------------


Dated:                 , 20
       ---------------     --




                                       13