<PAGE>




                                   CREDIT AGREEMENT





                                    by and between




                           FRONTIER NATURAL GAS CORPORATION


                                         and


                         DUKE ENERGY FINANCIAL SERVICES, INC.









                            Dated as of February 23, 1998

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                                  TABLE OF CONTENTS
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<S>                                                                           <C>
ARTICLE 1 - DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . . . . 2

    1.1     DEFINED TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
    1.2     ACCOUNTING TERMS . . . . . . . . . . . . . . . . . . . . . . . . . .15
    1.3     NUMBER AND GENDER OF WORDS . . . . . . . . . . . . . . . . . . . . .16

ARTICLE 2 - TERMS OF FACILITY. . . . . . . . . . . . . . . . . . . . . . . . . .16

    2.1     ADVANCING COMMITMENT . . . . . . . . . . . . . . . . . . . . . . . .16
    2.2     ADVANCES AND PAYMENTS UNDER THE NOTE . . . . . . . . . . . . . . . .18
    2.3     REPAYMENT PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . .18
    2.4     INTEREST RATES . . . . . . . . . . . . . . . . . . . . . . . . . . .19
    2.5     PHANTOM OVERRIDES. . . . . . . . . . . . . . . . . . . . . . . . . .20
    2.6     GENERAL PROVISIONS RELATING TO INTEREST. . . . . . . . . . . . . . .21
    2.7     LOANS TO SATISFY OBLIGATIONS . . . . . . . . . . . . . . . . . . . .22
    2.8     VOLUNTARY PREPAYMENT . . . . . . . . . . . . . . . . . . . . . . . .23

ARTICLE 3 - CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . .23

    3.1     CONDITIONS OF LENDER . . . . . . . . . . . . . . . . . . . . . . . .23
    3.2     FURTHER CONDITIONS TO EACH ADVANCE PURSUANT TO SUBSECTION 2.1(b) . .27
    3.3     FURTHER CONDITIONS TO EACH ADVANCE PURSUANT TO SUBSECTION 2.1(c) . .28
    3.4     FURTHER CONDITIONS TO EACH ADVANCE PURSUANT TO SUBSECTION 2.1(d) . .29

ARTICLE 4 - REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . .30

    4.1     EXISTENCE AND GOOD STANDING. . . . . . . . . . . . . . . . . . . . .30
    4.2     DUE AUTHORIZATION. . . . . . . . . . . . . . . . . . . . . . . . . .30
    4.3     VALID AND BINDING OBLIGATIONS. . . . . . . . . . . . . . . . . . . .30
    4.4     SCOPE AND ACCURACY OF FINANCIAL STATEMENTS . . . . . . . . . . . . .30
    4.5     LIABILITIES AND LITIGATION . . . . . . . . . . . . . . . . . . . . .31
    4.6     TITLE TO ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . .31
    4.7     AUTHORIZATIONS AND CONSENTS. . . . . . . . . . . . . . . . . . . . .31
    4.8     COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . . . . .31

<PAGE>

    4.9     PROPER FILING OF TAX RETURNS AND PAYMENT OF TAXES DUE. . . . . . . .32
    4.10    ERISA COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . .32
    4.11    INVESTMENT COMPANY ACT COMPLIANCE. . . . . . . . . . . . . . . . . .32
    4.12    PUBLIC UTILITY HOLDING COMPANY ACT COMPLIANCE. . . . . . . . . . . .32
    4.13    LIEN PRIORITY. . . . . . . . . . . . . . . . . . . . . . . . . . . .32
    4.14    USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . .33
    4.15    FULL DISCLOSURE. . . . . . . . . . . . . . . . . . . . . . . . . . .33
    4.16    PLACES OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . .33
    4.17    SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . .33

ARTICLE 5 - AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . .33

    5.1     MAINTENANCE AND ACCESS TO RECORDS. . . . . . . . . . . . . . . . . .33
    5.2     QUARTERLY FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . .33
    5.3     ANNUAL FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . .34
    5.4     COMPLIANCE CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . .34
    5.5     RESERVE REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . .34
    5.6     PROSPECT REPORT. . . . . . . . . . . . . . . . . . . . . . . . . . .35
    5.7     QUARTERLY MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . .35
    5.8     PROSPECT INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .35
    5.9     SALES AND PRODUCTION REPORTS . . . . . . . . . . . . . . . . . . . .36
    5.10    PAYMENT STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . .36
    5.11    ADDITIONAL LIENS . . . . . . . . . . . . . . . . . . . . . . . . . .36
    5.12    STATEMENT OF MATERIAL ADVERSE EFFECT . . . . . . . . . . . . . . . .36
    5.13    TITLE DEFECTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .36
    5.14    ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . .36
    5.15    COMPLIANCE WITH LAWS AND PAYMENT OF TAXES. . . . . . . . . . . . . .36
    5.16    MAINTENANCE OF EXISTENCE AND GOOD STANDING . . . . . . . . . . . . .37
    5.17    FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . . . .37
    5.18    INITIAL EXPENSES OF THE LENDER . . . . . . . . . . . . . . . . . . .37
    5.19    SUBSEQUENT EXPENSES OF THE LENDER. . . . . . . . . . . . . . . . . .37
    5.20    MAINTENANCE OF TANGIBLE PROPERTY . . . . . . . . . . . . . . . . . .38
    5.21    MAINTENANCE OF INSURANCE . . . . . . . . . . . . . . . . . . . . . .38
    5.22    RIGHT OF INSPECTION. . . . . . . . . . . . . . . . . . . . . . . . .38
    5.23    COMPLIANCE WITH ERISA. . . . . . . . . . . . . . . . . . . . . . . .38
    5.24    NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
    5.25    HAZARDOUS SUBSTANCES INDEMNIFICATION . . . . . . . . . . . . . . . .39

ARTICLE 6 - NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . .40

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    6.1     OTHER DEBT OF BORROWER . . . . . . . . . . . . . . . . . . . . . . .40
    6.2     GUARANTY OF PAYMENT OR PERFORMANCE . . . . . . . . . . . . . . . . .40
    6.3     LOANS, ADVANCES OR INVESTMENTS . . . . . . . . . . . . . . . . . . .40
    6.4     MORTGAGES OR PLEDGES OF ASSETS . . . . . . . . . . . . . . . . . . .40
    6.5     CANCELLATION OF INSURANCE. . . . . . . . . . . . . . . . . . . . . .40
    6.6     SALES OF PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . .41
    6.7     SALE AND LEASEBACK . . . . . . . . . . . . . . . . . . . . . . . . .41
    6.8     DIVIDENDS AND DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . .41
    6.9     CHANGES IN CORPORATE STRUCTURE . . . . . . . . . . . . . . . . . . .41
    6.10    PAYMENT OF ACCOUNTS PAYABLE. . . . . . . . . . . . . . . . . . . . .41
    6.11    TRANSACTIONS WITH AFFILIATES . . . . . . . . . . . . . . . . . . . .41
    6.12    LIMITATION ON NEGATIVE PLEDGE CLAUSES. . . . . . . . . . . . . . . .42
    6.13    NATURE OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . .42
    6.14    NO SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . . . . . . . .42

ARTICLE 7 - EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . .42

    7.1     EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . .42
    7.2     RIGHTS UPON OCCURRENCE OF UNMATURED EVENT OF DEFAULT . . . . . . . .44
    7.3     RIGHTS UPON OCCURRENCE OF AN EVENT OF DEFAULT. . . . . . . . . . . .45

ARTICLE 8 - MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . .45

    8.1     NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
    8.2     AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . .46
    8.3     INVALIDITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
    8.4     SURVIVAL OF AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . .46
    8.5     SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . .46
    8.6     RENEWAL, EXTENSION OR REARRANGEMENT. . . . . . . . . . . . . . . . .47
    8.7     WAIVERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
    8.8     CUMULATIVE RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . .47
    8.9     TAXES, ETC . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
    8.10    EXHIBITS; CONFLICTS. . . . . . . . . . . . . . . . . . . . . . . . .47
    8.11    TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS . . . . . . . . . . . .47
    8.12    JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
    8.13    JURY TRIAL WAIVED. . . . . . . . . . . . . . . . . . . . . . . . . .48
    8.14    COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
    8.15    EFFECTIVENESS. . . . . . . . . . . . . . . . . . . . . . . . . . . .48
    8.16    DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
    8.17    RIGHTS OF THIRD PERSON . . . . . . . . . . . . . . . . . . . . . . .48

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    8.18    ANNOUNCEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .49
    8.19    CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . . . . . .49
    8.20    SURVIVAL OF CERTAIN COVENANTS. . . . . . . . . . . . . . . . . . . .50
    8.21    GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . .50
</TABLE>

<PAGE>

                                   CREDIT AGREEMENT


          This CREDIT AGREEMENT, dated as of February 23, 1998, is by and
between FRONTIER NATURAL GAS CORPORATION, an Oklahoma corporation (the
"BORROWER"), and DUKE ENERGY FINANCIAL SERVICES, INC., a Delaware corporation
(the "LENDER").

                            W I T N E S S E T H  T H A T:

          The Borrower, Aspect Resources LLC, a Colorado limited liability
company ("ASPECT"), and Esenjay Petroleum Corporation, a Texas corporation
("ESENJAY"), have entered into that certain Acquisition Agreement and Plan of
Exchange Regarding the Acquisition of Certain Assets of Esenjay Petroleum
Corporation and Aspect Resources LLC by Frontier Natural Gas Corporation dated
January 19, 1998 (the "EXCHANGE AGREEMENT") whereby Aspect and Esenjay intend to
exchange certain oil and gas prospects in various stages of development for and
in consideration of common stock of the Borrower.  The closing of such
transaction is subject to approval by the Securities and Exchange Commission of
the form of proxy statement to be presented to the existing shareholders of
common stock of the Borrower and then approval of such transaction by such
shareholders.  Upon obtaining such approvals, such transaction shall close and
become effective and thereafter the Borrower desires to raise additional capital
by selling additional shares of its common stock to the public.

          Prior to such transactions closing and becoming effective and the
raising of such additional capital, the Borrower projects it will incur
obligations in connection with certain oil and gas prospects presently owned by
the Borrower and Esenjay will incur obligations in connection with certain oil
and gas prospects presently owned by Esenjay and intended to be contributed to
the Borrower pursuant to the terms of the Exchange Agreement.

          In order to facilitate the transactions contemplated by the Exchange
Agreement, the Borrower has requested the Lender to extend credit to the
Borrower in order to enable it to borrow from time to time on or before July 30,
1998 sums not to exceed, either singularly or cumulatively, $7,800,000.00 to be
used for the repayment of certain indebtedness the Borrower owes Aspect, for the
payment of development costs of certain oil and gas prospects, by the Borrower
as loans to Esenjay for Esenjay to develop certain oil and gas prospects and to
repay holders of all of the Borrower's existing preferred stock. The Lender
agrees to extend such credit to the Borrower upon the terms and subject to the
conditions hereinafter set forth.

<PAGE>

          NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and of the loans and commitment hereinafter referred
to, the Borrower and the Lender agree as follows:

                                      ARTICLE 1
                           DEFINITIONS AND ACCOUNTING TERMS

     1.1  DEFINED TERMS.  As used in this Agreement, the following terms have
the following meanings:

          "ADVANCE" means a direct advance of immediately available funds
     by the Lender to the Borrower or funds advanced to another Person for
     and on behalf of and at the direction of the Borrower pursuant to
     Section 2.1 of this Agreement.

          "AFFILIATE" means any Person controlling, controlled by, or under
     common control with, any other Person.  For purposes of this
     definition, "control" (including "controlled by" and "under common
     control with") means the possession, directly or indirectly, of the
     power to direct or cause the direction of the management and policies
     of such Person, whether through the ownership of voting securities or
     otherwise.

          "AGREEMENT" means this Credit Agreement and all exhibits and
     schedules hereto, as the same may be amended from time to time
     according to the terms hereof.

          "ASPECT" has the meaning indicated in the recitals hereof.

          "ASPECT DEBT" means the Debt of the Borrower owed Aspect, being
     $500,000.00 of outstanding principal and evidenced by that certain
     Promissory Note dated January 12, 1998 executed by the Borrower to the
     order of Aspect in the principal face amount of $1,800,000.00.

          "ASPECT PROSPECTS" means (a) those certain undivided interests of
     Aspect in certain oil and gas prospects intended to be conveyed to the
     Borrower pursuant to the Exchange Agreement and which undivided
     interests in such prospects are more particularly described on Exhibit
     III attached hereto and a similar undivided interest in any other Oil
     and Gas Property or associated Right which Aspect may acquire in any
     of the areas outlined on the plats attached hereto behind each
     respective Aspect Prospect and (b) any other undivided interest of
     Aspect in any other oil and gas prospects which from 


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<PAGE>

     time to time Aspect proposes and the Borrower and the Lender agree in 
     writing become Aspect Prospects.

          "ASPECT SUBORDINATION AGREEMENT" means that certain Subordination
     by and among Aspect, the Lender and the Borrower relating to the
     subordination by Aspect of the repayment of Debt owed Aspect by the
     Borrower to the repayment of the Obligations.

          "BANK OF AMERICA DEBT" means the Debt of the Borrower owed Bank
     of America Illinois, an Illinois banking corporation, which is
     governed by that certain Credit Agreement dated as of January 3, 1996
     between the Borrower and Bank of America Illinois.

          "BORROWER" has the meaning indicated in the opening paragraph
     hereof.

          "BORROWER PROSPECTS" means (a) all of the undivided interest of
     the Borrower in the oil and gas prospects described on Exhibit IV
     attached hereto and any other interest in any Oil and Gas Property or
     associated Right which the Borrower may acquire in any of the areas
     outlined on the plats attached hereto behind each respective Borrower
     Prospect and (b) any other undivided interest of the Borrower in any
     other oil and gas prospects which from time to time the Borrower
     proposes and the Lender agrees in writing become Borrower Prospects.

          "BORROWING REQUEST" means a written application by the Borrower
     for an Advance.  Each such Borrowing Request shall specify the
     requested amount of such Advance, the requested date of such Advance
     and the purposes for which proceeds for such Advance will be used.

          "BUSINESS DAY" means a day other than a Saturday, Sunday or legal
     holiday for commercial banks in the State of Colorado.

          "CLOSING DATE" means the date when all the conditions precedent
     set forth in Section 3.1 of this Agreement have been fulfilled.

          "COLLATERAL" means the Property now or at any time hereafter
     securing the Obligations.

          "COMMITMENT" means the obligation of the Lender as set forth
     herein (a) contemporaneously with the execution and delivery of this
     Agreement to extend credit by means of an Advance to the Borrower to
     repay the Aspect 


                                       3
<PAGE>

     Debt in full, (b) through the earlier of the date the Exchange Transactions
     close and become effective or May 15, 1998, to extend credit to the 
     Borrower by means of Advances for the purposes set forth in 
     Subsection 2.1(b), with the sum of all such Advances made pursuant to 
     Subsections 2.1(a) and (b) from the date hereof through such earlier 
     date not to exceed either singularly or cumulatively, (i) $1,200,000.00
     prior to the execution and delivery of the 420 Energy Investments Consent
     or (ii) $1,800,000.00 after the execution and delivery of the 420 Energy 
     Investments Consent, (c) through the earlier of the date the Exchange 
     Transactions close and become effective or May 15, 1998, to extend credit
     to the Borrower by means of Advances for the purposes set forth in 
     Subsection 2.1(c), with the sum of all such Advances made pursuant to 
     Subsection 2.1(c) from the date hereof through such earlier date not to 
     exceed either singularly or cumulatively, $3,000,000.00, and (d) if the 
     Exchange Transactions close and are effective by May 15, 1998, to extend 
     credit to the Borrower by means of Advances for the purposes set forth in 
     Subsection 2.1(d), with the sum of all Advances made from the date hereof 
     through June 30, 1998 not to exceed, singularly or cumulatively, (i)
     $7,200,000.00 prior to the execution and delivery of the 420 Energy
     Investments Consent or (ii) $7,800,000.00 after the execution and
     delivery of the 420 Energy Investments Consent.

          "COMPLIANCE CERTIFICATES" means the certificates of the president
     or executive vice president of the Borrower submitted to the Lender
     from time to time pursuant to this Agreement, which certificates shall
     be substantially in the form attached hereto as Exhibit II.

          "CONTESTED IN GOOD FAITH" means contested in good faith by
     appropriate and lawful proceedings diligently conducted, reasonably
     satisfactory to the Lender, (a) in which foreclosure, distraint, sale,
     forfeiture, levy, execution or other similar proceedings have not been
     initiated or have been stayed and continue to be stayed, (b) in which
     a good faith contest will not materially detract from the value of the
     Collateral, jeopardize the Rights of the Lender with respect to the
     Collateral, interfere in any material respect with the operation by
     the Borrower of its business, or otherwise have a Material Adverse
     Effect, and (c) for which matter a reserve or other appropriate
     provision has been established in accordance with the requirements of
     GAAP.

          "DEBT" of any Person means, to the extent of such Person's
     liability, (a) all items of indebtedness for borrowed money,
     obligations, and liabilities (whether matured or unmatured, liquidated
     or unliquidated, direct or indirect, 


                                       4
<PAGE>

     joint or several, contingent or otherwise), which in accordance with GAAP
     should be classified upon such Person's balance sheet as liabilities, but 
     in any event including liabilities secured by any Lien existing on 
     Property of such Person or a Subsidiary of such Person, (b) the deferred 
     purchase price of Property or services and direct and contingent 
     obligations incurred in connection with letters of credit and similar 
     agreements and obligations as a lessee under leases which have been, or 
     which in accordance with GAAP should be, capitalized for financial 
     reporting purposes, (c) all guaranties, endorsements (other than for 
     collection or deposit in the ordinary course of business), and other 
     contingent obligations of such Person with respect to obligations of other
     Persons of the types described in clauses (a) and/or (b) preceding,
     (d) liabilities of unfunded vested benefits under any Plan, (e) Swaps
     of such Person and (f) all obligations to supply funds to, invest in
     or maintain working capital or equity capital of any other Person, or
     otherwise to maintain the net worth or solvency or any balance sheet
     condition of any other Person.

          "DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United
     States of America, as amended from time to time, and all other
     applicable liquidation, conservatorship, bankruptcy, moratorium,
     rearrangement, receivership, insolvency, reorganization, or similar
     debtor relief Laws or general equitable principles from time to time
     in effect affecting the Rights of creditors generally.

          "DEFAULT RATE" means a per annum rate of interest equal to the
     Prime Rate plus eight percent (8%), but in no event to exceed the
     Highest Lawful Rate.

          "ERISA" means the Employee Retirement Income Security Act of
     1974, as amended.

          "ERISA AFFILIATE" means any trade or business (whether or not
     incorporated) which together with the Borrower would be treated as a
     single employer under Section 4001 of ERISA.

          "ESENJAY" has the meaning indicated in the recitals hereof.

          "ESENJAY CREDIT AGREEMENT" means that certain Credit Agreement
     dated of even date herewith by and between the Borrower, as lender,
     and Esenjay, as borrower.


                                       5

<PAGE>

          "ESENJAY PROSPECTS" means (a) those certain undivided interests
     of Esenjay in certain oil and gas prospects intended to be conveyed to
     the Borrower pursuant to the Exchange Agreement and which undivided
     interests in such prospects are more particularly set forth on Exhibit
     V attached hereto and any other interest in any Oil and Gas Property
     or associated Right which Esenjay may acquire in any of the areas
     outlined on the plats attached hereto as behind each respective
     Esenjay Prospect and (b) any other undivided interest of Esenjay in
     any other oil and gas prospects which from time to time Esenjay
     proposes and the Borrower and the Lender agree in writing become
     Esenjay Prospects.

          "ESENJAY SUBORDINATION AGREEMENT" means that certain
     Subordination by and among Esenjay, the Lender and the Borrower
     relating to the subordination by Esenjay of the repayment of Debt owed
     Esenjay by the Borrower to the repayment of the Obligations.

          "EVENT OF DEFAULT" means any of the events specified in Section
     7.1, provided that the requirements, if any, for the giving of notice,
     the lapse of time, or both, or any other condition specified in
     Section 7.1 have been satisfied.

          "EXCHANGE AGREEMENT" has the meaning indicated in the recitals
     hereof.

          "EXCHANGE TRANSACTIONS" means the exchange of the Esenjay
     Prospects by Esenjay and the Aspect Prospects by Aspect for common
     stock of the Borrower as set forth in the Exchange Agreement.

          "FACILITY RATE" means a varying rate of interest per annum equal
     to the Prime Rate, from time to time in effect, plus four percent
     (4%).

          "FINANCIAL STATEMENTS" means statements of financial condition,
     as at the point in time and for the period indicated, and consisting
     of at least a balance sheet and related statements of operations,
     stockholders' equity and cash flows and, when audited, accompanied by
     the certification of independent certified public accountants, and
     footnotes to any of the foregoing.

          "420 ENERGY INVESTMENTS DEBT" means the Debt of the Borrower owed
     420 Energy Investments, Inc., a Delaware corporation, which is
     governed by that certain Loan Agreement dated as of March 1, 1996 as
     amended by that certain First Amendment to Loan Agreement dated
     effective September 1, 1996 between the Borrower and 420 Energy
     Investments, Inc.

                                       6
<PAGE>

          "420 ENERGY INVESTMENTS CONSENT" means the written consent, in
     form and substance acceptable to the Lender at its sole discretion, of
     420 Energy Investments, Inc. to the execution, delivery and
     recordation of Security Documents encumbering the same Oil and Gas
     Properties of the Borrower which are encumbered to secure the 420
     Energy Investments Debt.  Without limiting the Lender's discretion to
     approve the form and substance of such consent, such consent shall not
     require the Lender to subordinate the Debt governed by this Agreement
     to the 420 Energy Investments Debt or require the Lender to limit,
     forego or postpone any of its Rights under the Loan Documents.

          "GAAP" means, generally accepted accounting principles
     established by the Financial Accounting Standards Board and in effect
     in the United States from time to time during the term of this
     Agreement and applied on a basis consistent with that adopted in the
     Financial Statements of the Borrower to be delivered to the Lender.

          "GAINES BERLAND" means Gaines Berland Energy Fund, L.P., a
     Delaware limited partnership.

          "GUARANTIES" means those certain Limited Obligation Guaranty
     Agreements dated of even date herewith of each of the Guarantors in
     favor of the Lender pursuant to which the Guarantors each
     unconditionally guarantees the payment and performance of up to a
     certain amount of all of the Obligations, as such Limited Obligation
     Guaranty Agreements may be amended from time to time.

          "GUARANTORS" means each of Aspect, Esenjay and Gaines Berland.

          "HAZARDOUS SUBSTANCES" means any flammables, explosives,
     radioactive materials, hazardous wastes, asbestos or any material
     containing asbestos, polychlorinated biphenyls (PCB's), toxic
     substances or related materials, petroleum and petroleum products and
     associated oil or natural gas exploration, production and development
     wastes or any substances defined as "hazardous substances," "hazardous
     materials," "hazardous wastes" or "toxic substance" under the
     Comprehensive Environmental Response, Compensation and Liability Act,
     as amended; the Superfund Amendments and Reauthorization Act, as
     amended; the Hazardous Materials Transportation Act, as amended; the
     Resource Conservation and Recovery Act, as amended; the Toxic
     Substances Control Act, as amended; or any other law, statute,

                                       7
<PAGE>

     ordinance, rule, regulation or order now or hereafter enacted or
     promulgated by any governmental authority with jurisdiction and
     relating to the protection of the environment.

          "HIGHEST LAWFUL RATE" means the maximum rate (or, if the context
     so permits or requires, an amount calculated at such rate) of interest
     (if any) that, at the time in question, would not cause the interest
     charged on the Obligations owed to the Lender to exceed the maximum
     amount that the Lender would be allowed to contract for, charge, take,
     reserve or receive under applicable Law after taking into account, to
     the extent required by applicable Law, all relevant payments and
     charges under the Loan Documents.

          "INVESTMENT" in any Person means any stock, bond, note or other
     evidence of Debt or any other security (other than current trade and
     customer accounts) of, investment or partnership interest in or loan
     to, such Person.

          "LAWS" means all applicable statutes, laws, ordinances, rules,
     rulings, interpretations, regulations, judgments, requirements,
     governmental authorizations (including licenses, permits, franchises
     and other governmental consents necessary for the ownership or
     operation of Property), orders, writs, injunctions or decrees (or
     interpretations of any of the foregoing) of any political subdivision,
     state, commonwealth, nation, country, territory, possession, county,
     parish, municipality or Tribunal.

          "LENDER" has the meaning indicated in the opening paragraph
     hereof.

          "LIEN" means any lien, charge, claim, restriction, mortgage,
     mechanic's lien, materialmen's lien, pledge, hypothecation, inchoate
     lien, assignment, deposit arrangement, conditional sale or other title
     retention agreement, financing lease, security interest, security
     agreement or other encumbrance, whether arising by contract or under
     Law, and includes reservations, exceptions, encroachments, easements,
     rights-of-way, covenants, conditions, leases and other title
     exceptions and the filing of any financing statement under the Uniform
     Commercial Code of the State of Texas or comparable Law of any
     jurisdiction.

          "LIMITATION PERIOD" means any period during which the calculation
     of interest as provided in any of the Loan Documents would result in
     interest exceeding the Highest Lawful Rate.

                                       8
<PAGE>

          "LIQUID INVESTMENTS" means Investments in (a) United States
     government issued securities, obligations of the United States
     government or any agency thereof and any obligations guaranteed by the
     United States government with maturities of no more than one year, (b)
     certificates of deposit or repurchase agreements issued by the Lender,
     (c) certificates of deposit, in an aggregate amount not to exceed
     $100,000.00 at any one time as to any one issuer, issued by other
     banks or financial institutions organized under the Laws of the United
     States or any state thereof, having capital surplus and undivided
     profits aggregating at least $100,000,000.00 and with deposits insured
     by the Federal Deposit Insurance Corporation, and (d) commercial paper
     with a rating by Moody's Investor Service, Inc. of no less than A and
     with maturities of no more than nine months from the date of
     acquisition thereof.

          "LITIGATION" means any proceeding, claim, lawsuit, and/or
     investigation conducted, or threatened and known to the Person in
     question, by or before any Tribunal.

          "LOAN DOCUMENTS" means this Agreement, the Note, the Guaranties,
     the Security Documents and all other notes, deeds of trust,
     restatements, ratifications and amendments of deeds of trust,
     financing statements, guaranties, security agreements, pledge
     agreements, documents, instruments and other agreements now or
     hereafter delivered pursuant to the terms of, or in connection with,
     this Agreement, the Obligations and/or the Collateral, and all
     renewals, extensions and restatements of, and amendments and
     supplements to any or all of the foregoing.

          "LOANS" means the loans and extensions of credit by the Lender to
     or for the account of the Borrower pursuant to this Agreement.

          "MATERIAL ADVERSE EFFECT" means any material and adverse effect
     on (a) the assets, liabilities, financial condition, business or
     operations of the Borrower that are material to the business or
     financial condition of the Borrower, or (b) the ability of any of the
     Borrower to meet its Obligations under any of the Loan Documents on a
     timely basis as provided herein or therein.

          "MORTGAGED PROPERTIES" shall mean Oil and Gas Properties of the
     Borrower subject to the Liens of the Security Documents from time to
     time to secure the Debt evidenced by the Note.

                                       9
<PAGE>

          "MULTI-EMPLOYER PLAN" means a Plan described in Section
     4001(9)(3) of ERISA which covers employees of the Borrower or any
     ERISA Affiliate.

          "NET REVENUE INTEREST" means that proportionate portion of
     production attributable to the owner of an undivided interest in and
     to any Oil and Gas Property after deduction for royalty burdens,
     overriding royalty burdens or other burdens on production, if any,
     except severance, production, windfall profits and other similar
     taxes.

          "NOTE" means that certain promissory note in the face amount of
     $7,800,000.00 dated of even date herewith made by the Borrower to the
     order of the Lender, in the form attached hereto as Exhibit I,
     together with all deferrals, renewals or extensions thereof, which
     promissory note shall evidence the Advances made to the Borrower by
     the Lender pursuant to Section 2.1 and funds advanced and applied
     pursuant to Section 2.7.

          "OBLIGATIONS" means all present and future loans, advances,
     indebtedness, obligations, covenants, duties and liabilities, and all
     renewals for any period, increases and extensions thereof, or any part
     thereof, now or hereafter owing to the Lender by the Borrower or the
     Guarantors arising from or pursuant to any of the Loan Documents,
     together with all interest accruing thereon, and costs, expenses, and
     attorneys' fees incurred in the enforcement or collection thereof,
     whether such indebtedness, obligations, and liabilities are direct,
     indirect, fixed, contingent, liquidated, unliquidated, joint, several,
     or joint and several, and all other indebtedness or obligations of any
     type whatsoever now or hereafter owing to the Lender by the Borrower,
     whether or not in connection with any of the Loan Documents.

          "OIL AND GAS PROPERTIES" means fee, leasehold or other interests
     in or under mineral estates or oil, gas and other liquid or gaseous
     hydrocarbon leases with respect to properties situated in the United
     States, including, without limitation, overriding royalty and royalty
     interests, leasehold estate interests, net profits interests,
     production payment interests and mineral fee interests, together with
     contracts executed in connection therewith and all tenements,
     hereditaments, appurtenances and properties, real or personal,
     appertaining, belonging, affixed or incidental thereto.

          "OVERRIDE PERCENTAGE" means a percentage equal to the product of
     (a) six-tenths of one percent (0.6%) times (b) the result of the
     number of days (not to exceed one hundred eighty (180)) from the date
     of this Agreement to the 

                                      10
<PAGE>

     date the Debt evidenced by the Note is repaid in full divided by one 
     hundred eighty (180) days.

          "OVERRIDE WELL" means the Well Area established for any oil and
     gas well drilled on a Prospect, spudded after the date of this
     Agreement and prior to December 31, 2000, and completed as an oil and
     gas well capable of producing in paying quantities; provided, however,
     it shall not include any oil and gas wells drilled on an Aspect
     Prospect if the Exchange Transactions do not close and become
     effective.

          "PAYMENT STATEMENT" means each statement prepared by or under the
     supervision of the chief financial officer of the Borrower and
     submitted to the Lender pursuant to Section 5.10, and setting forth in
     such detail and with such supporting documentation as may reasonably
     be required by the Lender, a statement of the calculation by the
     Borrower of the amount of any charge due the Lender pursuant to
     Section 2.5 on such date, including, without limitation, when such
     Payment Statement is prepared in connection with a charge due the
     Lender pursuant to Subsection 2.5(b), a statement of the gross volume
     of sales and actual production during such month from all of the
     Override Wells and prices received for such production, all of which
     shall be certified by the chief financial officer of the Borrower as
     having been prepared in good faith and on the basis of the best
     information available to Borrower as of the time of preparation
     thereof.

          "PBGC" means the Pension Benefit Guaranty Corporation, or any
     successor thereof, established pursuant to Subtitle A of Title IV of
     ERISA.

          "PERMITTED LIENS" means: (a) Liens for Taxes, not yet due or
     which are being Contested in Good Faith; (b) Liens in connection with
     workers' compensation, unemployment insurance or other social security
     (other than Liens created by Section 4068 of ERISA), old age pension
     or public liability obligations which are not yet due or which are
     being Contested in Good Faith; (c) vendors', carriers',
     warehousemen's, repairmen's, mechanics', workmen's, materialmen's,
     construction or other similar Liens arising by operation of Law in the
     ordinary course of business or incident to the construction or
     improvement of any Property in respect of obligations which are not
     yet due or which are being Contested in Good Faith; (d) Liens to
     operators and non-operators under joint operating agreements arising
     in the ordinary course of business to secure amounts owing, which
     amounts are not yet due or are being Contested in Good Faith; (e)
     Liens under production sales agreements, division orders, operating
     agreements and other agreements customary in the oil and gas business
     for processing, producing and selling hydrocarbons; (f) Liens 

                                      11
<PAGE>

     created in favor of the Lender securing Obligations hereunder and other 
     Liens expressly permitted under the Security Documents; (g) easements,
     rights-of-way, restrictions and other similar encumbrances, and minor
     defects in the chain of title which are customarily accepted in the
     oil and gas financing industry, none of which interfere with the
     ordinary conduct of the business of the owner of the Property or
     materially detract from the value or use of the Property to which they
     apply; (h) Liens of record under terms and provisions of the leases,
     unit agreements, assignments and other transfer of title documents in
     the chain of title under which the owner of the relevant Property
     acquired such Property; (i) Liens securing the purchase price or
     existing under conditional sale of title retention contracts for
     equipment purchased in the normal course of business of the Borrower,
     provided that such Lien shall not extend to or cover any other
     Property of the Borrower; (j) Liens securing the Bank of America Debt
     provided that such Liens shall not extend to or cover any other
     Property of the Borrower except as set forth on Exhibit VI attached
     hereto; and (k) Liens securing the 420 Energy Investments Debt
     provided that such Liens shall not extend to or cover any other
     Property of the Borrower except as set forth on Exhibit VII attached
     hereto.

          "PERSON" means any individual, sole proprietorship, firm,
     corporation, trust, association, institution, partnership, joint
     venture, Tribunal or other entity.

          "PHANTOM OVERRIDE" means an overriding royalty interest
     calculated for each Override Well equal to (a) the Override Percentage
     times (b) (i) the Net Revenue Interest that the Borrower owns in an
     Override Well on the date such Override Well was spudded and (ii) the
     Net Revenue Interest which Esenjay and/or Aspect owns in an Override
     Well on the date such Override Well was spudded and which was intended
     to be conveyed to the Borrower pursuant to the Exchange Agreement.

          "PHANTOM OVERRIDE FUTURE REVENUES" means the projections of
     future net income to be derived from reserves of hydrocarbons
     classified as "proved producing", "proved shut-in" or "proved behind
     pipe", and based on projections of (a) future production from the
     indicated Oil and Gas Properties and (b) a pricing assumption (i) for
     oil of the 12 Months Futures Strip Price for light sweet crude oil
     adjusted for location and grade and (ii) for gas of the 12 Months
     Futures Strip Price for natural gas adjusted for location and grade.

                                      12
<PAGE>

          "PLAN" means any pension plan that is covered by Title IV of
     ERISA and maintained by the Borrower or any such plan to which the
     Borrower is required to contribute.

          "PREFERRED SHARES" means 85,961 shares of the Borrower's issued
     and outstanding preferred stock, $.01 par value per share, being all
     of the outstanding preferred stock of the Borrower as of the date of
     this Agreement.

          "PRIME RATE" means at any time the "prime rate" then most
     recently published in the "Money Rates" or equivalent section of the
     WALL STREET JOURNAL, provided that if a "prime rate" range is
     published by the WALL STREET JOURNAL, then the middle of that range
     will be the "Prime Rate".

          "PROPERTY" means any interest in any kind of property or asset,
     whether real, personal or mixed, tangible or intangible.

          "PROSPECTS" means the Aspect Prospects, the Borrower Prospects
     and the Esenjay Prospects.

          "PROSPECT DEVELOPMENT COSTS" means amounts owed to other Persons
     incurred by (a) the Borrower with respect to any of the Borrower
     Prospects prior to the date the Exchange Transactions close and become
     effective, (b) Esenjay with respect to any of the Esenjay Prospects
     prior to the date the Exchange Transactions close and become effective
     or (c) the Borrower with respect to any of the Prospects on or after
     the date the Exchange Transactions close and become effective for
     seismic options, seismic permits, options to acquire Oil and Gas
     Properties, Oil and Gas Properties, recording fees, title examination,
     lease broker fees and expenses, all other amounts owed other Persons
     to obtain or maintain Rights in the Prospects necessary or advisable
     for exploration and development of hydrocarbons on such Prospects,
     seismic data, interpretation of seismic data, all other geologic and
     geophysical costs related to the exploration and development of
     hydrocarbons on such Prospects, and the drilling, testing, logging,
     completing, equipping for production or plugging and abandoning any
     oil and gas well located on such Prospects.

          "RESERVOIR" means a separate, identifiable underground
     accumulation of oil, gas and/or associated hydrocarbons segregated
     from other such accumulations and characterized by a single pressure
     system.

          "REPORTABLE EVENT" and "PROHIBITED TRANSACTION" have the meanings
     given to those terms under ERISA.

                                      13
<PAGE>

          "RIGHTS" means rights, remedies, powers and privileges.

          "SECTION" or "SUBSECTION" means a section or subsection in this
     Agreement unless specified otherwise.

          "SECURITY DOCUMENTS" means the documents described in Subsection
     3.1(a)(7) of this Agreement and all other documents now or hereafter
     existing which provide the Lender with Collateral, as the same may be
     amended or restated from time to time.

          "SUBSIDIARY" of any Person means any corporation of which an
     aggregate of fifty percent (50%) or more of the stock of any class or
     classes is owned of record or beneficially, directly or indirectly, by
     such Person, if the holders of the stock of such class or classes are
     ordinarily entitled to vote for the election of a majority of the
     directors (or individuals performing similar functions) of such
     corporation (irrespective of whether, at the time in question, stock
     of any other class or classes of such corporation shall have or might
     have voting power by reason of the happening of any contingency).

          "SWAPS" means, with respect to any Person, foreign exchange
     transactions and commodity, currency and interest rate swaps, floors,
     caps, collars, forward sales, options, other similar transactions and
     combinations of the foregoing.

          "TAXES" means all taxes, assessments, filing or other fees,
     levies, imposts, duties, deductions, withholdings, stamp taxes,
     interest equalization taxes, capital transaction taxes, foreign
     exchange taxes or charges, or other charges of any nature whatsoever
     from time to time or at any time imposed by any Law or Tribunal.

          "TRIBUNAL" means any court, governmental department or authority,
     commission, board, bureau, agency, arbitrator or instrumentality of
     any state, political subdivision, commonwealth, nation, territory,
     county, parish or municipality, whether now or hereafter existing,
     having jurisdiction over the Lender, the Borrower or any of their
     respective Property.

          "12 MONTHS FUTURES STRIP PRICE" means for light sweet crude oil
     or natural gas, as the case may be, (a) in the case of the additional
     charge paid pursuant to Subsection 2.5(c), the average of the high and
     low prices on the New York Mercantile Exchange for each month from and
     including February 2001 through and including January 2002 as reported
     in the "Futures Prices" 


                                      14

<PAGE>

     section of the WALL STREET JOURNAL published on January 2, 2001 or the 
     first day thereafter the WALL STREET JOURNAL is published and (b) in the 
     case of an additional charge paid pursuant to Subsection 2.5(d), the 
     average of the high and low prices on the New York Mercantile Exchange for
     each of the immediately succeeding twelve (12) months following the 
     effective date of the relevant sale as reported in the "Futures Prices" 
     section of the WALL STREET JOURNAL published on the effective date of such 
     relevant sale or the first day thereafter the WALL STREET JOURNAL is 
     published.

          "UNMATURED EVENT OF DEFAULT" means any event or occurrence which
     solely with the lapse of time or the giving of notice or both will
     ripen into an Event of Default.

          "WELL AREA" means, with respect to any oil and gas well, the area
     within a particular Reservoir that can, as determined by statute
     and/or the appropriate governmental authority having jurisdiction, be
     efficiently and economically drained by such well.  For purposes of
     the foregoing: (a) as to any particular well located in the States of
     Texas, the Well Area for such well shall be (i) the proration unit, if
     any, from time to time allocated by the governmental authority having
     jurisdiction to such well for the Reservoir to which such well is
     completed, or (ii) in the absence of such a proration unit, the
     spacing unit from time to time established for the Reservoir to which
     such well is completed by statute or by rule, regulation or order
     issued by the governmental authority having jurisdiction, and (b) as
     to any particular well located in a State other than Texas, the Well
     Area for such well shall be the drilling unit, spacing unit or
     proration unit, as the case may be, from time to time established for
     the Reservoir to which such well is completed by statute or by rule,
     regulation or order issued by the governmental authority having
     jurisdiction.  In the absence of an applicable statute or an
     applicable rule or special order issued by a governmental authority
     having jurisdiction establishing the area within a particular
     Reservoir that can be efficiently and economically drained by a
     particular well, the Well Area within such Reservoir for such well
     shall be (a) 160 acres, in the event such oil and gas well is drilled
     and completed as a gas well in such Reservoir, and (b) 40 acres, in
     the event such oil and gas well is drilled and completed as an oil
     well in such Reservoir.

     1.2  ACCOUNTING TERMS.  All accounting and financial terms used in any 
of the Loan Documents and the compliance with each covenant contained in the 
Loan Documents that relates to financial matters shall be determined in 
accordance with GAAP, except to the extent that a deviation therefrom is 
expressly stated in such Loan Documents.

                                      15
<PAGE>

     1.3  NUMBER AND GENDER OF WORDS.  Whenever the singular number is used 
in any Loan Document, the same shall include the plural where appropriate, 
and VICE VERSA; words of any gender in any Loan Document shall include each 
other gender where appropriate; and the words "herein," "hereof," "hereunder" 
and other words of similar import refer to the relevant Loan Document as a 
whole and not to any particular part, section or subdivision thereof.

                                  ARTICLE 2
                              TERMS OF FACILITY

     2.1  ADVANCING COMMITMENT.  (a) Contemporaneously with the execution and 
delivery of this Agreement, but subject to the terms and conditions 
(including, without limitation, the rights of the Lender to terminate the 
Commitment hereunder upon an Event of Default or Unmatured Event of Default) 
and relying on the representations and warranties contained in this Agreement 
and the other Loan Documents, the Lender agrees to make an Advance to the 
Borrower in the amount of $500,000.00 which will be used by the Borrower to 
repay the Aspect Debt in full.

          (b)  Subject to the terms and conditions (including, without 
limitation the right of the Lender to terminate the Commitment hereunder upon 
an Event of Default or Unmatured Event of Default) and relying on the 
representations and warranties contained in this Agreement and the other Loan 
Documents, from time to time until the earlier of the date the Exchange 
Transactions have closed and become effective or May 15, 1998, the Lender 
agrees to make Advances to the Borrower following receipt by the Lender of a 
Borrowing Request on or before 10:00 a.m. Mountain Standard or Daylight 
Savings Time, as the case may be, five (5) Business Days prior to the date of 
the requested Advance, in such amounts as the Borrower may request, provided, 
however, that each Advance shall be in an amount not less than $100,000.00, 
be an integral multiple of $10,000.00, no Advance shall be made which will 
cause the sum of all Advances made pursuant to Subsections 2.1(a) and (b) to 
exceed, either singularly or cumulatively, (i) $1,200,000.00 prior to the 
execution and delivery of the 420 Energy Investments Consent or (ii) 
$1,800,000.00 after the execution and delivery of the 420 Energy Investments 
Consent, and the proceeds of any such Advance shall be used only to pay 
Prospect Development Costs relating to the Borrower Prospects and/or only up 
to $250,000.00 per calendar month of general and administrative expense of 
the Borrower.  The Borrower may transmit Borrowing Requests to the Lender by 
mail, personal delivery, telefacsimile, telex or other method; but the Lender 
shall not be obligated to make Advances on the requested date unless the 
Lender has received, on or before 10:00 a.m. Mountain Standard or Daylight 
Savings Time, as the case may be, the relevant Borrowing Request five (5) 
Business Days prior to such requested date.

          (c)  Subject to the terms and conditions (including, without 
limitation the right of the Lender to terminate the Commitment hereunder upon 
an Event of Default or 

                                      16
<PAGE>

Unmatured Event of Default) and relying on the representations and warranties 
contained in this Agreement and the other Loan Documents, from time to time 
until the earlier of the date the Exchange Transactions have closed and 
become effective or May 15, 1998, the Lender agrees to make Advances to the 
Borrower following receipt by the Lender of a Borrowing Request on or before 
10:00 a.m. Mountain Standard or Daylight Savings Time, as the case may be, 
five (5) Business Days prior to the date of the requested Advance, in such 
amounts as the Borrower may request, provided, however, that each Advance 
shall be in an amount not less than $100,000.00, be an integral multiple of 
$10,000.00, no Advance shall be made which will cause the sum of all Advances 
made pursuant to this Subsection 2.1(c) to exceed, either singularly or 
cumulatively, $3,000,000.00, and the proceeds of any such Advance shall be 
loaned by the Borrower to Esenjay pursuant to and governed by the Esenjay 
Credit Agreement.  The Borrower may transmit Borrowing Requests to the Lender 
by mail, personal delivery, telefacsimile, telex or other method; but the 
Lender shall not be obligated to make Advances on the requested date unless 
the Lender has received, on or before 10:00 a.m. Mountain Standard or 
Daylight Savings Time, as the case may be, the relevant Borrowing Request 
five (5) Business Days prior to such requested date.

          (d)  Subject to the terms and conditions (including, without 
limitation the right of the Lender to terminate the Commitment hereunder upon 
an Event of Default or Unmatured Event of Default) and relying on the 
representations and warranties contained in this Agreement and the other Loan 
Documents, from time to time from the date the Exchange Transactions have 
closed and become effective until July 30, 1998, the Lender agrees to make 
Advances to the Borrower following receipt by the Lender of a Borrowing 
Request on or before 10:00 a.m. Mountain Standard or Daylight Savings Time, 
as the case may be, five (5) Business Days prior to the date of the requested 
Advance, in such amounts as the Borrower may request, provided, however, that 
each Advance shall be in an amount not less than $100,000.00, be an integral 
multiple of $10,000.00, no Advance shall be made which will cause the sum of 
all Advances made pursuant to this Section 2.1 to exceed, either singularly 
or cumulatively, (i) $7,200,000.00 prior to the execution and delivery of the 
420 Energy Investments Consent or (ii) $7,800,000.00 after the execution and 
delivery of the 420 Energy Investments Consent, and the proceeds of all such 
Advances shall be used by the Borrower to pay Prospect Development Costs 
relating to the Prospects, repay the holders of the Preferred Shares in full 
and/or only up to $250,000.00 per calendar month of general and 
administrative expense of the Borrower.  The Borrower may transmit Borrowing 
Requests to the Lender by mail, personal delivery, telefacsimile, telex or 
other method; but the Lender shall not be obligated to make Advances on the 
requested date unless the Lender has received, on or before 10:00 a.m. 
Mountain Standard or Daylight Savings Time, as the case may be, the relevant 
Borrowing Request five (5) Business Days prior to such requested date.

                                      17
<PAGE>

          The Advances made by the Lender to the Borrower pursuant to the 
Commitment shall be made at the office of the Lender at 370 Seventeenth 
Street, Suite 900, Denver, Colorado, 80202 and shall be evidenced by the Note.

     2.2  ADVANCES AND PAYMENTS UNDER THE NOTE.  The Lender is authorized by 
the Borrower to attach to and to make a part of the Note a ledger (and 
continuations thereto, if necessary) reflecting the amount of all Advances 
made by the Lender and each payment made by the Borrower.  Each time such an 
Advance is made against or payment (including a prepayment) is made on the 
Note, the Lender is authorized but not required to make a notation on the 
ledger forming a part thereof reflecting the amount advanced or paid and the 
date thereof; provided, however, that the failure of the Lender to do so 
shall not relieve the Borrower of its liability hereunder or under the Note.

          The aggregate unpaid amount of such Advances reflected by the 
notations by the Lender on its records or the ledger sheets affixed to the 
Note shall be deemed rebuttably presumptive evidence of the principal amounts 
owing on the Note.  The liability for payment of principal and interest 
evidenced by the Note shall be limited to principal amounts actually advanced 
and outstanding pursuant to this Agreement and the other Loan Documents and 
interest accrued on such amounts calculated in accordance with this Agreement.

     2.3  REPAYMENT PROVISIONS.  All outstanding principal Debt for all 
Advances evidenced by the Note shall be repayable:

          (a)  in eleven (11) monthly installments each equal to one
     thirtieth (1/30th) of the outstanding principal Debt evidenced by the
     Note on July 31, 1998, the first of such installments commencing
     August 31, 1998 and continuing thereafter on the last day of each
     succeeding calendar month through and including June 30, 1999; and

          (b)  in an installment equal to all of the principal outstanding
     Debt evidenced by the Note on July 31, 1999.

          Interest as it accrues on principal amounts evidenced by the Note 
and calculated as provided herein and in the Note shall be due and payable 
monthly commencing on the last day of March, 1998, and continuing thereafter 
on the last day of each succeeding calendar month while any amount remains 
owing on the Note, the interest payment in each instance to be that which has 
been earned and remains unpaid.

          Notwithstanding anything to the contrary herein, immediately upon 
receipt by the Borrower of any monies for the sale or transfer of any of its 
Property after July 1, 1998, the Borrower shall repay the Debt evidenced by 
the Note in an installment equal to the lesser 

                                      18
<PAGE>

of (a) all Debt evidenced by the Note or (b) all such monies received by the 
Borrower in connection with such sale or transfer, with such amount being 
applied first to accrued and unpaid interest, the remainder to principal.

          Notwithstanding anything to the contrary herein, within three (3) 
Business Days of receipt by the Borrower of any monies raised in connection 
with an underwritten public offering of any of its stock, the Borrower shall 
repay the Debt evidenced by the Note in an installment equal to the lesser of 
(a) all Debt evidenced by the Note or (b) all such monies received by the 
Borrower on that day, with such amount being applied first to accrued and 
unpaid interest, the remainder to principal.

          All payments required pursuant to this Agreement or the Note shall 
be made in immediately available funds; shall be deemed received by the 
Lender on the next Business Day following receipt if such receipt is after 
2:00 p.m. on any Business Day; and shall be made at the offices of the Lender 
at 370 Seventeenth Street, Suite 900, Denver, Colorado 80202, provided, 
however, the Lender may, upon notice to the Borrower, designate a different 
place of payment. With each payment of principal, interest or other amount 
made to the Lender, the Borrower will on the same day notify the Lender Attn: 
Jeffrey B. Goodman by facsimile (713) 627-6271 of the details of such payment.

          Certain of the Security Documents contain an assignment unto and in 
favor of the Lender of all oil, gas and other minerals produced and to be 
produced from or attributable to the Mortgaged Properties together with all 
of the revenues and proceeds attributable to such production, and such 
Security Documents further provide that all such revenues and proceeds which 
may be so collected by the Lender pursuant to such assignment shall be 
applied to the payment of the Note and the satisfaction of all other Debt to 
be secured by such Security Documents.  The Lender and the Borrower expressly 
acknowledge and agree that so long as no Event of Default shall have occurred 
and be continuing, the Lender shall be entitled only to payment on the Note 
as set forth above, and the Borrower, to the extent of its rights apart from 
this Agreement, shall be entitled to receive all proceeds of production 
directly from the relevant purchasers or parties accounting for proceeds from 
the sale of production.  In connection with the rights of the Lender to all 
proceeds or production upon the occurrence and continuation of an Event of 
Default, the Borrower hereby grants the Lender a power of attorney, which 
power is coupled with an interest and is irrevocable, to complete in all 
respects and deliver to the addressee the letter transfer orders executed in 
connection with the Security Instruments upon the occurrence and continuance 
of an Event of Default.

     2.4  INTEREST RATES.  Principal amounts outstanding under the Note shall 
bear interest at the Facility Rate (but in no event greater than the Highest 
Lawful Rate) per annum, calculated on the basis of a year consisting of a 
three hundred sixty day (360) year and 

                                      19
<PAGE>

twelve (12) 30-day months as provided by Article 5069-1H.003 Vernon's TEXAS 
CIVIL STATUTES, as amended.  Should default occur in the payment of the Note 
and collection proceedings be instituted, all past due interest and principal 
under the Note shall bear interest at the lesser of the Highest Lawful Rate 
or the Default Rate per annum, calculated on the basis of a year consisting 
of a three hundred sixty day (360) year and twelve (12) 30-day months as 
provided by Article 5069-1H.003 Vernon's TEXAS CIVIL STATUTES, as amended and 
if no Highest Lawful Rate exists, all past due interest and principal under 
the Note shall bear interest at the Default Rate, calculated on the basis of 
a year consisting of a three hundred sixty day (360) year and twelve (12) 
30-day months as provided by Article 5069-1H.003 Vernon's TEXAS CIVIL 
STATUTES, as amended.

     2.5  PHANTOM OVERRIDES.  (a) As consideration for the Commitment by the 
Lender and in addition to interest accruing on principal evidenced by the 
Note, the Borrower agrees to the following additional charges set forth in 
this Section 2.5 and payable out of revenues of the Borrower.

          (b)  As such an additional charge, the Borrower will make a monthly 
payment to the Lender equal to an amount of money that the Lender would have 
received during the preceding calendar month if (i) the Lender owned a 
Phantom Override in every Override Well, (ii) hydrocarbons attributable to 
each such Phantom Override were sold at the same time, for the same price and 
to the same purchaser of production that the hydrocarbons attributable to the 
working interest which each such Phantom Override burdens were sold and (iii) 
proceeds from the sale of hydrocarbons attributable to each such Phantom or 
Override were received by the Lender from the respective purchasers of 
production at the same time that the proceeds from the sale of hydrocarbons 
attributable to the working interest which each such Phantom Override burdens 
were received by the owner thereof (provided, however, the first payment 
shall be equal to an amount of money the Lender would have received if 
proceeds from the sale of production attributable to each such Phantom 
Override from the date of first production for each Override Well were 
received by the Lender during the preceding calendar month).  Such monthly 
payment shall commence the earlier of August 31, 1998 or the last day of the 
first succeeding month after the Debt evidenced by the Note is repaid in full 
and continue on the last day of such succeeding calendar month until the 
Lender has been paid for all hydrocarbons produced through December 31, 2000 
and attributable to the Phantom Override in each of the Override Wells.

          (c)  As such an additional charge, the Borrower will make a payment 
to the Lender on April 1, 2001 in an amount equal to the present worth, 
discounted at a rate of ten percent (10%) per annum, of Phantom Override 
Future Revenues attributable to the Phantom Override in all of the Override 
Wells as of January 1, 2001.  The basis for such determination shall be the 
reserve report dated effective January 1, 2001 submitted to the Lender by the 
Borrower pursuant to Section 5.5.

                                      20
<PAGE>

          (d)  Notwithstanding anything to the contrary in Subsections 2.5(b) 
or (c), if the Borrower and/or Esenjay sells its interests in an Override 
Well prior to January 1, 2001, as such an additional charge, the Borrower 
will make a payment to the Lender within five (5) Business Days of the date 
of any sale by the Borrower and/or Esenjay of its interests in such Override 
Well in an amount equal to the present worth, discounted at a rate of ten 
percent (10%) per annum, of Phantom Override Future Revenues attributable to 
the Phantom Override in such Override Well as of the effective date of such 
sale by the Borrower and/or Esenjay.  The basis for such determination shall 
be the most recent reserve report submitted to the Lender by the Borrower 
pursuant to Section 5.5, adjusted for cumulative production since the 
effective date of such reserve report.  If either the Borrower or the Lender 
in good faith determines that the most recent reserve report does not 
accurately reflect the value of the Override Well sold, then the Borrower 
shall obtain from the independent firm of petroleum engineers who prepared 
the Borrower's most recent reserve report or another firm of independent 
petroleum engineers acceptable to the Lender, an updated reserve report 
effective through the effective date of such sale as to such Override Well.  
When the Borrower pays the charge due the Lender pursuant to this Subsection 
2.5(d) for an Override Well sold, the Borrower will no longer pay the charges 
to the Lender due pursuant to Subsections 2.5(b) and (c) as they relate to 
the Override Well sold.

     2.6  GENERAL PROVISIONS RELATING TO INTEREST.  It is the intention of 
the parties hereto to comply strictly with the applicable usury Laws as in 
effect from time to time; and in this connection, there shall never be taken, 
reserved, contracted for, collected, charged or received on any Loan or any 
other Obligation interest in excess of that which would accrue at the Highest 
Lawful Rate.  For purposes of Articles 5069-1D and 5069-1H, Vernon's TEXAS 
CIVIL STATUTES, as amended, the Borrower agrees that the Highest Lawful Rate 
shall be the "weekly rate ceiling" as defined in such article, provided that 
the Lender may also rely, to the extent permitted by applicable Laws, on 
alternative maximum rates of interest under such other applicable Laws, if 
greater.

          Notwithstanding anything herein or in the Note or the other Loan 
Documents to the contrary, if during any Limitation Period the calculation of 
interest at the rate otherwise due to the Lender would result in interest in 
excess of that which would accrue at the Highest Lawful Rate, then during 
such Limitation Period, the interest rate to be charged on the Obligations 
shall be the Highest Lawful Rate, and the requirement of the Borrower for the 
payment of other amounts, if any, constituting interest, shall be suspended 
only to the extent that such fees are, when added to interest accruing on the 
Note and other Obligations, if any, in excess of the Highest Lawful Rate.  
During any period of time following a Limitation Period, to the extent 
permitted by Laws applicable to the Lender, the interest rate to be charged 
on the Obligations shall remain at the Highest Lawful Rate until such time as 
there has been paid to the Lender: (a) the amount of interest in excess of 
the amount 

                                      21
<PAGE>

accruing at the Highest Lawful Rate that the Lender would have received 
during the Limitation Period if the otherwise applicable rate had been in 
effect at all times and (b) all interest and fees otherwise payable to the 
Lender hereunder as if the otherwise applicable rate had been in effect at 
all times during such Limitation Period.

          If under any circumstances the aggregate amount paid on the 
Obligations includes amounts that are by Law deemed to be interest which 
exceed the Highest Lawful Rate (the "EXCESS INTEREST"), the Borrower 
stipulates that such payment and collection will have been and will be deemed 
to have been, to the fullest extent permitted by applicable Laws, the result 
of mathematical error on the part of the Borrower and the Lender, and the 
Lender shall promptly credit the amount of such excess interest on the 
principal amount of the outstanding Obligations, or if the principal amount 
of the Obligations shall have been paid in full, refund the excess interest 
to the Borrower.  In the event that the maturity of the Note is accelerated 
by reason of an election of the Lender resulting from any Event of Default or 
by reason of operation of Subsection 7.3(a), or in the event of any 
prepayment, then such consideration that constitutes interest under Laws 
applicable to the Lender may never exceed the Highest Lawful Rate, and excess 
interest, if any, provided for in the Note, this Agreement or otherwise shall 
be cancelled automatically by the Lender as of the date of such acceleration 
or prepayment and, if theretofore paid, shall be credited by the Lender on 
the principal amount of the Obligations, or if the principal amount of the 
Obligations shall have been paid in full, refunded by the Lender to the 
Borrower.

          All sums paid, or agreed to be paid, to the Lender for the use, 
forbearance, and detention of the proceeds of the Loans shall, to the extent 
permitted by applicable Law, be amortized, prorated, allocated, and spread 
throughout the full term of the Obligations until paid in full so that the 
actual rate of interest is uniform, but does not exceed the Highest Lawful 
Rate, throughout the full term hereof.

     2.7  LOANS TO SATISFY OBLIGATIONS.  The Lender may, but shall not be 
obligated to, make Loans and apply proceeds thereof to the satisfaction of 
any warranty, representation, covenant or other Obligation of the Borrower 
contained in this Agreement or the other Loan Documents and which are 
necessary, in the good faith opinion of the Lender, to enforce its Rights, 
protect or preserve the Collateral or the Liens thereon in favor of the 
Lender and the priorities thereof, or avoid a Material Adverse Effect, and 
contemporaneously with so doing, the Lender shall furnish the Borrower 
written notice as to the amount and date of any such Loan. The Lender shall 
not advance funds pursuant to this Section without notifying the Borrower of 
the warranty, representation, covenant or other Obligation to be satisfied by 
such proposed advance of funds and shall give the Borrower five (5) Business 
Days from the date of such notice to satisfy such warranty, representation, 
covenant or other Obligation.  Any funds so advanced and applied shall be 
evidenced by the Note, shall be payable on 

                                      22
<PAGE>

demand and shall bear interest at the Default Rate from the time of the 
making of such Loan until the time of repayment.

     2.8  VOLUNTARY PREPAYMENT.  The Borrower shall have the right and option 
to prepay, at any time without premium or penalty, all or any part of the 
balance outstanding on the Note.  Any such prepayments of Debt evidenced by 
the Note shall be applied first to the payment of accrued and unpaid interest 
thereon and then to the reduction of principal.

                                   ARTICLE 3
                              CONDITIONS PRECEDENT

     3.1  CONDITIONS OF LENDER.  The execution and delivery of this Agreement 
by the Lender and the making of the Advance to or for the benefit of the 
Borrower as set forth in Subsection 2.1(a) is subject to the fulfillment of 
the following conditions precedent, with all documents to be delivered to the 
Lender to be in form and substance satisfactory to the Lender:

          (a)  The Lender shall have received the following documents,
     appropriately executed and acknowledged and in multiple counterparts
     as requested by the Lender:

          (1)  This Agreement and the Note executed by the Borrower;

          (2)  Certificates of the appropriate Tribunals of the State
          of Oklahoma, dated reasonably near the Closing Date, to the
          effect that attached thereto are the articles of
          incorporation of the Borrower and all amendments thereto,
          and that it is duly incorporated and in good standing with
          respect to the payment of all franchise or similar Taxes;

          (3)  A copy of the bylaws of the Borrower and all amendments
          thereto, accompanied by a certificate issued by its
          secretary or assistant secretary that such copies are
          correct and complete;

          (4)  Certificates of the appropriate Tribunals of the States
          where the Prospects are located, dated reasonably near the
          Closing Date, to the effect that it is duly qualified to
          transact business in such jurisdictions and is in good
          standing with respect to the payment of franchise and
          similar Taxes;

                                      23
<PAGE>

          (5)  Certificate of incumbency and signatures of all
          officers of the Borrower who will be authorized to execute
          the Loan Documents on its behalf, executed by the president
          or vice president and the secretary or an assistant
          secretary;

          (6)  A copy of the corporate resolutions of the Borrower
          approving the Loan Documents and authorizing the
          transactions contemplated therein, duly adopted by its board
          of directors and accompanied by a certificate of the
          secretary or an assistant secretary that such copy is a true
          and correct copy of resolutions duly adopted by written
          consent or at a meeting of the board of directors, that such
          resolutions constitute all the resolutions adopted with
          respect to such transactions, and that such resolutions have
          not been amended, modified or revoked in any respect, and
          are in full force and effect as of the Closing Date;

          (7)  The following documents creating, evidencing and
          perfecting Liens in favor of the Lender to secure the
          Obligations:

                    (i)   A Mortgage, Collateral Assignment, 
               Security Agreement and Financing Statement from
               the Borrower in favor of the Lender covering the
               Oil and Gas Properties described on Exhibit VIII
               attached hereto;

                    (ii)  A Financing Statement from the Borrower
               covering accounts from the sale of oil and gas
               produced from such Oil and Gas Properties
               described on Exhibit VIII attached hereto and
               equipment and other personal property associated
               therewith;

                    (iii) undated letter transfer orders
               directed to the party remitting to the Borrower
               proceeds from the sale of production from such Oil
               and Gas Properties described on Exhibit VIII
               attached hereto and instructing that such proceeds
               be remitted to the Lender for the account of the
               Borrower;

                                      24
<PAGE>

                    (iv)  a Security Agreement and Collateral
               Assignment of Note and Liens from the Borrower in
               favor of the Lender covering the Debt of Esenjay
               owed the Borrower governed by the Esenjay Credit
               Agreement and collateral for such Debt;

                    (v)   the promissory note evidencing the Debt
               of Esenjay owed the Borrower and governed by the
               Esenjay Credit Agreement properly endorsed to the
               Lender; and

                    (vi)  a financing statement from the Borrower
               associated with (iv) above;

          (8)  Certificate of incumbency and signatures of all
          officers of Esenjay who will be authorized to execute its
          Guaranty and the Esenjay Subordination Agreement on its
          behalf, executed by the president or vice president and the
          secretary or an assistant secretary;

          (9)  A copy of the corporate resolutions of Esenjay
          approving its Guaranty and the Esenjay Subordination
          Agreement and authorizing the transactions contemplated
          therein, duly adopted by its board of directors and
          accompanied by a certificate of the secretary or an
          assistant secretary that such copy is a true and correct
          copy of resolutions duly adopted by written consent or at a
          meeting of the board of directors, that such resolutions
          constitute all the resolutions adopted with respect to such
          transactions, and that such resolutions have not been
          amended, modified or revoked in any respect, and are in full
          force and effect as of the Closing Date;

          (10) Certificate of incumbency and signatures of all
          managers of Aspect who will be authorized to execute its
          Guaranty and the Aspect Subordination Agreement on its
          behalf, executed by a member of Aspect;

          (11) A copy of the company resolutions of Aspect approving
          its Guaranty and the Aspect Subordination Agreement and
          authorizing the transactions contemplated therein, duly
          adopted 

                                      25
<PAGE>

          by its members and accompanied by a certificate of a member of 
          Aspect that such copy is a true and correct copy of resolutions 
          duly adopted by written consent or at a meeting of the members, that 
          such resolutions constitute all the resolutions adopted with respect 
          to such transactions, and that such resolutions have not been 
          amended, modified or revoked in any respect, and are in full force 
          and effect as of the Closing Date;

          (12) Certificate of incumbency and signatures of all
          managers of Gaines Berland Management Company LLC, the
          general partner of Gaines Berland, who will be authorized to
          execute the Guaranty of Gaines Berland on behalf of Gaines
          Berland Management Company as general partner of Gaines
          Berland, executed by a manager of Gaines Berland Management
          Company LLC;

          (13) A copy of the resolutions of Gaines Berland Management
          Company LLC, the general partner of Gaines Berland approving
          the Guaranty of Gaines Berland and authorizing the
          transactions contemplated therein, duly adopted by the
          managers of Gaines Berland Management Company LLC and
          accompanied by a certificate of a manager that such copy is
          a true and correct copy of resolutions duly adopted by the
          managers, that such resolutions constitute all the
          resolutions adopted with respect to such transactions, and
          that such resolutions have not been amended, modified or
          revoked in any respect, and are in full force and effect as
          of the Closing Date;

          (14) The Guaranties executed by the respective Guarantors;

          (15) The Aspect Subordination Agreement executed by Aspect
          and the Borrower;

          (16) The Esenjay Subordination Agreement executed by Esenjay
          and the Borrower;

          (17) The Exchange Agreement shall not have been amended or
          modified;

                                      26
<PAGE>

          (18) The opinion of legal counsel to the Borrower, which
          opinion shall be accompanied by such supporting
          documentation as the Lender or its legal counsel may
          reasonably require; and

          (19) Such other agreements, documents, instruments,
          opinions, certificates, waivers, consents, and evidence as
          the Lender may reasonably request in compliance with or to
          accomplish the terms and provisions of any of the Loan
          Documents;

          (b)  The representations and warranties contained in Article 4
     shall be true and correct in all material respects on the date of
     execution of this Agreement;

          (c)  No Event of Default or Unmatured Event of Default shall have
     occurred and be continuing;

          (d)  The Lender shall have approved in all respects, at its
     discretion, the Mortgaged Properties existing as of the date of this
     Agreement, including, without limitation, title to and the
     environmental status of such Mortgaged Properties;

          (e)  All of the conditions set forth in Section 3.1 of the
     Esenjay Credit Agreement shall have occurred to the satisfaction of
     the Lender, at its discretion;

          (f)  Each of the Borrower, Esenjay and Aspect shall have executed
     and delivered the letter agreement with Duke Energy Field Services,
     Inc. relating to the gathering, processing, marketing and transporting
     of hydrocarbons for certain of the Prospects, a copy of which is
     attached hereto as Exhibit IX;

          (g)  The Aspect Prospects and the Esenjay Prospects are free and
     clear of all sales contracts, preferential purchase rights, rights of
     first refusal, rights to match or any other restrictions upon any
     Right of Aspect or Esenjay, as the case may be, to gather, process,
     market and transport hydrocarbons produced therefrom, except as set
     forth on Exhibit X attached hereto; and

          (h)  All legal matters incident to the execution of this
     Agreement shall be satisfactory to the firm of Henderson & Hammon,
     L.L.P., special counsel for the Lender.

                                      27
<PAGE>

     3.2  FURTHER CONDITIONS TO EACH ADVANCE PURSUANT TO SUBSECTION 2.1(b).  
The obligation of the Lender to make any Advance pursuant to Subsection 
2.1(b) is subject to the fulfillment of the following further conditions 
precedent:

          (a)  The representations and warranties contained in Article 4
     shall be true and correct in all material respects as of the date of
     Advance;

          (b)  No Event of Default or Unmatured Event of Default shall have
     occurred and be continuing or will have occurred at the completion of
     making the Advance;

          (c)  No Material Adverse Effect shall have occurred since the
     Closing Date;

          (d)  The Lender shall have received a Borrowing Request;

          (e)  The Lender shall have received with the Borrowing Request a
     list in reasonable detail of the Prospect Development Costs to be paid
     with the proceeds of such Advance and be accompanied by evidence of
     such Prospect Development Costs, as is requested by the Lender; and

          (f)  All legal matters incident to the consummation of such Loan
     shall be satisfactory to the then special counsel for the Lender.

     3.3  FURTHER CONDITIONS TO EACH ADVANCE PURSUANT TO SUBSECTION 2.1(c).
The obligation of the Lender to make any Advance pursuant to Subsection 
2.1(c) is subject to the fulfillment of the following further conditions 
precedent:

          (a)  The representations and warranties contained in Article 4
     shall be true and correct in all material respects as of the date of
     Advance;

          (b)  No Event of Default or Unmatured Event of Default shall have
     occurred and be continuing or will have occurred at the completion of
     making the Advance;

          (c)  No Material Adverse Effect shall have occurred since the
     Closing Date;

          (d)  The Lender shall have received a Borrowing Request;

                                      28
<PAGE>

          (e)  All of the conditions set forth in Section 3.2 of the
     Esenjay Credit Agreement shall have occurred to the satisfaction of
     the Lender, at its discretion;

          (f)  The Lender shall have received with the Borrowing Request
     copies of all documentation delivered to the Borrower by Esenjay
     pursuant to Section 3.2 of the Esenjay Credit Agreement; and

          (g)  All legal matters incident to the consummation of such Loan
     shall be satisfactory to the then special counsel for the Lender.

     3.4  FURTHER CONDITIONS TO EACH ADVANCE PURSUANT TO SUBSECTION 2.1(d).  
The obligation of the Lender to make any Advance pursuant to Subsection 
2.1(d) is subject to the fulfillment of the following further conditions 
precedent:

          (a)  The Exchange Transactions shall have closed and become
     effective by May 15, 1998;

          (b)  The Aspect Prospects and the Esenjay Prospects shall have
     been conveyed to the Borrower free and clear of all Liens, except
     Permitted Liens, and free and clear of all sales contracts,
     preferential purchase rights, rights of first refusal, rights to match
     or any other restrictions upon any Right of the Borrower to gather,
     process, market and transport hydrocarbons produced therefrom, except
     as set forth on Exhibit X attached hereto;

          (c)  Aspect shall execute and deliver to the Lender an amendment
     in form and substance satisfactory to the Lender increasing the
     limitation of its Guaranty to $2,175,000.00 and Esenjay shall execute
     and deliver to the Lender an amendment in form and substance
     satisfactory to the Lender increasing the limitation of its Guaranty
     to $1,950,000.00;

          (d)  The representations and warranties contained in Article 4
     shall be true and correct in all material respects as of the date of
     Advance;

          (e)  No Event of Default or Unmatured Event of Default shall have
     occurred and be continuing or will have occurred at the completion of
     making the Advance;

          (f)  No Material Adverse Effect shall have occurred since the
     Closing Date;

                                      29
<PAGE>

          (g)  The Lender shall have received a Borrowing Request;



























                                      30
<PAGE>

          (h)  The Lender shall have received with the Borrowing Request a
     list in reasonable detail of the Prospect Development Costs to be paid
     with the proceeds of such Advance and be accompanied by evidence of
     such Prospect Development Costs, as is requested by the Lender; and

          (i)  All legal matters incident to the consummation of such Loan
     shall be satisfactory to the then special counsel for the Lender.

                                  ARTICLE 4
                        REPRESENTATIONS AND WARRANTIES

          To induce the Lender to enter into this Agreement and to make the 
Loans hereunder, the Borrower represents and warrants to the Lender (which 
representations and warranties shall survive the delivery of the Note and the 
making of the Loans) that:

     4.1  EXISTENCE AND GOOD STANDING.  The Borrower is a corporation, duly 
organized, legally existing and in good standing under the Laws of the State 
of Oklahoma and is duly qualified and in good standing as a foreign 
corporation in all jurisdictions where any Prospect is located.

     4.2  DUE AUTHORIZATION.  The execution and delivery by the Borrower of 
this Agreement and the borrowings hereunder, the execution and delivery by 
the Borrower of the Note and the other Loan Documents, the repayment of the 
Loans and interest and fees provided in the Note and this Agreement and the 
performance of all Obligations of the Borrower under this Agreement and the 
other Loan Documents, are within the corporate power of the Borrower, have 
been duly authorized by all necessary corporate action on behalf of the 
Borrower and do not (a) require the consent of any Tribunal or other Person 
which has not been obtained, (b) contravene or conflict with any provision of 
applicable Law or the charter or bylaws of the Borrower, (c) contravene, 
conflict with or result in a default under any indenture, instrument, 
contract or other agreement to which the Borrower is a party or by which its 
Properties may be presently bound or encumbered, or (d) result in or require 
the creation or imposition of any Lien upon any of the Property of the 
Borrower, other than Permitted Liens.

     4.3  VALID AND BINDING OBLIGATIONS.  This Agreement and the other Loan 
Documents constitute valid and binding obligations of the Borrower, 
enforceable in accordance with their respective terms, except as limited by 
Debtor Relief Laws.

     4.4  SCOPE AND ACCURACY OF FINANCIAL STATEMENTS.  The Financial 
Statements of the Borrower as of October 31, 1997, including any schedules 
and notes pertaining thereto, which have been delivered to the Lender have 
been prepared in accordance with GAAP and 

                                      31
<PAGE>

fairly and accurately present the financial condition and the results of the 
operations thereof in all material respects, as of the dates and for the 
periods stated therein.

     4.5  LIABILITIES AND LITIGATION.  Except for (a) liabilities shown in 
the Financial Statements of the Borrower as of October 31, 1997 and furnished 
to the Lenders, (b) the Aspect Debt (which shall be repaid in full 
contemporaneously with the execution and delivery of this Agreement) and (c) 
liabilities incurred in the ordinary course of business since the date of 
such Financial Statements, the Borrower does not have any material 
liabilities of any nature, direct or contingent; and the Borrower is not in 
default with respect to any such material liabilities or any material 
agreements by which it is bound.

          There is no judgment against the Borrower, nor, except as set forth 
on Exhibit XI attached hereto, is there any Litigation or other action of any 
nature pending before any Tribunal or, to the knowledge of the Borrower, 
threatened against or affecting the Borrower or its Property.

     4.6  TITLE TO ASSETS.  The Borrower has indefeasible title to all of its 
Property, free and clear of all Liens, except for Permitted Liens.  All of 
the Borrower Prospects are free and clear of all sales contracts, 
preferential purchase rights, rights of first refusal, rights to market or 
any other restrictions upon any Right of Borrower to gather, process, market 
or transport hydrocarbons produced therefrom, except as set forth on Exhibit 
X attached hereto.

     4.7  AUTHORIZATIONS AND CONSENTS.  Except for that obtained from Bank of 
America Illinois and except for the consent of 420 Energy Investments, Inc. 
which has not been obtained, no authorization, consent, approval, exemption, 
franchise, permit or license of, or filing (except for filings required to 
perfect and maintain perfection of the Liens created by the Security 
Documents) with, any Tribunal or any third Person is required to authorize, 
or is otherwise required in connection with, the valid execution, delivery 
and performance by the Borrower of this Agreement, the other Loan Documents 
or any other agreement contemplated hereby or the repayment by the Borrower 
of the Obligations.

     4.8  COMPLIANCE WITH LAWS.  Neither the business nor any of the 
activities of the Borrower as presently conducted violates any applicable 
Law, the result of which violation would have a Material Adverse Effect.  The 
Borrower possesses all licenses, approvals, registrations, permits and other 
authorizations necessary to enable it to carry on its businesses in all 
material respects as now conducted.  All such licenses, approvals, 
registrations, permits and other authorizations are in full force and effect. 
Furthermore, the Borrower does not have any reason to believe that it will 
be unable to obtain the renewal of any such licenses, approvals, 
registrations, permits and other authorizations in due course. 

                                      32
<PAGE>

     4.9  PROPER FILING OF TAX RETURNS AND PAYMENT OF TAXES DUE.  The 
Borrower has duly and properly filed all Tax returns which are required to be 
filed and has paid all Taxes due pursuant to such returns or pursuant to any 
assessment received, except such Taxes, if any, as are being Contested in 
Good Faith.  The charges and reserves on the Borrower's books with respect to 
any Taxes are adequate, and the Borrower does not owe any deficiency or 
additional assessment in a material amount in connection with Taxes.

     4.10 ERISA COMPLIANCE.  The Borrower does not currently contribute to, 
or has any obligation to contribute to, and has not at any time contributed 
to, or had an obligation to contribute to, any Multi-employer Plan.  The 
Borrower will not, during the term of this Agreement, assume an obligation, 
or acquire any entity or the assets of any entity which has at any time had 
an obligation, to contribute to any Multi-employer Plan.  Since the effective 
date of ERISA, no Reportable Event or Prohibited Transaction has occurred 
with respect to any Plan of the Borrower.  Each Plan established or 
maintained by the Borrower meets the minimum funding standards of Section 302 
of ERISA and otherwise is in compliance with all applicable provisions of 
ERISA.  The Borrower has filed all reports required by ERISA and required to 
be filed with respect to each Plan.  The Borrower does not have any knowledge 
of any event that could result in any material liability of the Borrower to 
the PBGC. The Borrower has met all requirements with respect to funding the 
Plans imposed by ERISA or the PBGC. Since the effective date of Title IV of 
ERISA, there have not been any nor are there now existing any events or 
conditions that would permit any Plan to be terminated under circumstances 
that would cause the lien provided under Section 4068 of ERISA to attach to 
the assets of the Borrower. The value of the Plans' benefits guaranteed under 
Title IV of ERISA on the date hereof does not exceed the value of such Plans' 
assets allocable to such benefits as of the date of this Agreement and shall 
not be permitted to do so hereafter.

     4.11 INVESTMENT COMPANY ACT COMPLIANCE.  The Borrower is not an 
"investment company" or directly or indirectly controlled by or acting on 
behalf of any Person which is an "investment company" within the meaning of 
the Investment Company Act of 1940, as amended.

     4.12 PUBLIC UTILITY HOLDING COMPANY ACT COMPLIANCE.  The Borrower is not 
subject to the provisions of the Public Utility Holding Company Act of 1935, 
as amended.

     4.13 LIEN PRIORITY.  The Liens created in favor of the Lender under the 
Security Documents constitute and shall remain first priority Liens to secure 
the Obligations, subject only to Permitted Liens.

                                      33
<PAGE>

     4.14 USE OF PROCEEDS.  All proceeds of Advances made pursuant to this 
Agreement shall be used generally as set forth in Section 2.1 of this 
Agreement and specifically as represented by the Borrower in each Borrowing 
Request.

     4.15 FULL DISCLOSURE.  All of the Loan Documents and all written 
statements furnished by the Borrower, Esenjay and/or Aspect in connection 
with the consummation of the transactions contemplated by this Agreement, 
when taken together, do not contain any untrue statement of a material fact 
or omit to state a material fact necessary to make the statements contained 
herein or therein not misleading as of the date made or deemed made.

     4.16 PLACES OF BUSINESS.  The chief executive office and principal place 
of business of the Borrower is 500 Dallas, Suite 2920, Houston, Texas 77002.  
All records of the Borrower are maintained at such offices.  After the 
Exchange Transactions close and become effective the Borrower intends to move 
its chief executive office and principal place of business to 500 N. Water 
Street, Suite 1100, Corpus Christi, Texas 78471.

     4.17 SUBSIDIARIES.  The Borrower owns all of the issued and outstanding 
capital stock of Frontier Acquisition Corporation, an Oklahoma corporation, 
Frontier, Inc., an Oklahoma corporation, and Frontier Exploration & 
Production Corporation, an Oklahoma corporation.  Frontier Acquisition 
Corporation owns all of the issued and outstanding capital stock of Petroleum 
Acquisition Corporation, a Delaware corporation.  The Borrower has no other 
Subsidiaries.

                                  ARTICLE 5
                            AFFIRMATIVE COVENANTS

          So long as any Debt evidenced by the Note remains unpaid or the 
Lender remains obligated to make Advances, and in absence of written consent 
of the Lender to the contrary:

     5.1  MAINTENANCE AND ACCESS TO RECORDS.  The Borrower will keep adequate 
records, in accordance with GAAP or other established industry practices, of 
all of its transactions so that at any time, and from time to time, its true 
and complete financial condition may be readily determined and, at the 
Lender's reasonable request, make all such records available for the Lender's 
inspection and permit the Lender to make and take away copies thereof.

     5.2  QUARTERLY FINANCIAL STATEMENTS.  The Borrower will deliver to the 
Lender, as soon as available but in no event later than sixty (60) days after 
the end of each of the first three fiscal quarters of the Borrower, the 
unaudited Financial Statements of the Borrower and all of its Subsidiaries 
reflecting the financial condition and results of operations of the 

                                      34
<PAGE>

Borrower and all of its Subsidiaries on a consolidated and consolidating 
basis as at the end of such period and from the beginning of such fiscal year 
to the end of such period, as applicable.  Such Financial Statements shall be 
certified by the chief financial officer of the Borrower as having been 
prepared in accordance with GAAP and presenting the financial condition and 
the results of the operations of the Borrower and all of its Subsidiaries on 
a consolidated and consolidating basis subject to changes resulting from 
year-end audit adjustments.

     5.3  ANNUAL FINANCIAL STATEMENTS.  The Borrower will deliver to the 
Lender, as soon as available but in no event later than ninety (90) days 
after the close of each fiscal year of the Borrower, annual audited Financial 
Statements of the Borrower and all of its Subsidiaries reflecting the 
financial condition of the Borrower and all of its Subsidiaries on a 
consolidated and consolidating basis, together with a report and opinion on 
such Financial Statements issued by a nationally recognized firm of 
independent certified public accountants or another firm of independent 
certified public accountants satisfactory to the Lender.

     5.4  COMPLIANCE CERTIFICATES.  The Borrower will deliver to the Lender 
with each Financial Statement delivered pursuant to Sections 5.2 or 5.3 a 
duly executed Compliance Certificate.

     5.5  RESERVE REPORT.  The Borrower will deliver to the Lender promptly 
after March 1, 1998, and in any event prior to April 1, 1998, two reports, in 
form and substance satisfactory to the Lender, one prepared by Hofmann 
Engineering Co. and the other prepared by Netherland, Sewell & Associates, 
Inc., which reports shall set forth as of January 1, 1998, projections of 
future net income from hydrocarbons classified as "proved producing", "proved 
shut-in", "proved behind pipe" and "proved undeveloped" attributable to all of 
the Oil and Gas Properties of the Borrower as of January 1, 1998 and (b) such 
other information concerning such Oil and Gas Properties of the Borrower as 
the Lender may reasonably request, including, without limitation, 
engineering, geological and performance data.

          The Borrower will deliver to the Lender promptly after March 1 of 
each year, commencing March 1, 1999, and in any event prior to April 1, 1998 
of each such year, (a) a report, in form and substance satisfactory to the 
Lender, prepared by a nationally recognized firm of independent petroleum 
engineers, which report shall set forth, as of January 1 of the appropriate 
year, projections of future net income from hydrocarbons classified as 
"proved producing", "proved shut-in", "proved behind pipe" and "proved 
undeveloped" attributable to all of the Oil and Gas Properties of the 
Borrower and (b) such other information concerning the Oil and Gas Properties 
of the Borrower as the Lender may reasonably request, including, without 
limitation, engineering, geological and performance data.

                                      35
<PAGE>

          The Borrower will deliver to the Lender promptly after receipt 
thereof, any other reserve report prepared for or on behalf of the Borrower 
by an independent firm of independent petroleum engineers, setting forth 
projections of future net income from hydrocarbons classified as "proved 
producing", "proved shut-in", "proved behind pipe" and "proved undeveloped" 
attributable to any of the Oil and Gas Properties of the Borrower.

     5.6  PROSPECT REPORT.  Commencing March 1, 1998, the Borrower will 
deliver to the Lender promptly and in any event within ten (10) days after 
the end of each calendar month, with respect to each of the Borrower 
Prospects and, if the Exchange Transactions close and become effective, with 
respect to each of the Prospects a report, in form and substance satisfactory 
to the Lender, prepared by the Borrower and setting forth the activities of 
the Borrower with respect to the seismic programs, seismic interpretation, 
land acquisition and exploration and development for each of such Prospects 
during the previous month.  Such report shall be certified by the president 
of the Borrower as being true and correct in all material respects.

     5.7  QUARTERLY MEETINGS.  Commencing April 14, 1998, the Borrower will 
meet with the Lender on the second Tuesday of each calendar quarter (or such 
other date as is mutually agreeable) at a time and place mutually agreeable 
to review with respect to each of the Borrower Prospects and, if the Exchange 
Transactions close and become effective, with respect to each of the 
Prospects (a) the activities of the Borrower, costs and timing of seismic 
programs, seismic interpretation, land acquisition and exploration and 
development which has occurred since the last meeting, (b) the plans of the 
Borrower, including, without limitation, a projected budget, for the next 
fiscal quarter for seismic programs, seismic interpretation, land acquisition 
and exploration and development and (c) such other matters at the Lenders 
request.

     5.8  PROSPECT INFORMATION.  The Borrower will provide access to the 
Lender, promptly upon the Lender's written request from time to time to such 
information relating to any of the Borrower Prospects and, if the Exchange 
Transactions close and become effective, any of the Prospects, including, 
without limitation, (a) all seismic options, seismic permits, options to 
acquire Oil and Gas Properties, Oil and Gas Properties and all other 
contracts relating to such Prospects, (b) detailed maps of such Prospects, 
(c) title materials relating to such Prospects, (d) seismic data and 
interpretations relating to such Prospects and (e) AFEs, drilling reports, 
logs, side wall cores, well tests, formation tests or completion reports 
relating to any oil and gas wells located on such Prospects.  Promptly upon 
the Lender's written request, the Borrower will furnish copies of any such 
information to the extent that it is reasonable do so.

                                      36
<PAGE>

     5.9  SALES AND PRODUCTION REPORTS.  The Borrower will deliver to the 
Lender, as soon as available and in any event within sixty (60) days after 
the end of each calendar month, a report summarizing, as requested by the 
Lender, (a) the gross volume of sales and actual production during such month 
from all of the Oil and Gas Properties of the Borrower and current prices 
being received for such production, (b) the related severance, gross 
production, occupation, excise, sales, recording, ad valorem, gathering and 
other similar taxes, if any, deducted from gross proceeds during such month 
and (c) leasehold operating expenses and drilling expenditures attributable 
thereto and incurred during such month.

     5.10 PAYMENT STATEMENTS.  The Borrower will deliver to the Lender with 
the payment of each charge set forth in Section 2.5 a Payment Statement.

     5.11 ADDITIONAL LIENS.  Within five (5) Business Days of the written 
request of the Lender, the Borrower will execute and deliver documentation, 
in form and substance acceptable to the Lender at its reasonable discretion, 
granting a Lien in favor of the Lender against any Oil and Gas Interests, 
other Property or Rights owned by the Borrower in or relating to any Prospect 
to secure repayment of the Debt evidenced by the Note.

     5.12 STATEMENT OF MATERIAL ADVERSE EFFECT.  The Borrower will deliver to 
the Lender, promptly upon any officer of the Borrower having knowledge of any 
Event of Default or event or condition (except for events or conditions as to 
the economy of the United States as a whole or the oil and gas industry as a 
whole) causing or likely to cause a Material Adverse Effect, a statement of 
the president of the Borrower, setting forth the Event of Default or event or 
condition causing or likely to cause a Material Adverse Effect and the steps 
being taken with respect thereto.

     5.13 TITLE DEFECTS.  Other than Permitted Liens, the Borrower will clear 
any title defects to the Oil and Gas Properties of the Borrower material in 
value, in the sole reasonable opinion of the Lender, and, in the event any 
such title defects are not cured in a timely manner, pay all related costs 
and fees incurred by the Lender to do so.

     5.14 ADDITIONAL INFORMATION.  The Borrower will furnish to the Lender, 
promptly upon the Lender's request from time to time, such additional 
financial or other information concerning the assets, liabilities, operations 
and transactions of the Borrower, as the Lender may reasonably request.

     5.15 COMPLIANCE WITH LAWS AND PAYMENT OF TAXES.  The Borrower will 
comply in all material respects with all Laws and pay all Taxes, claims for 
labor, supplies, rent and other obligations which, if unpaid, might become a 
Lien against any of the its Oil and Gas Properties, except any of the 
foregoing being Contested in Good Faith.

                                      37
<PAGE>

     5.16 MAINTENANCE OF EXISTENCE AND GOOD STANDING.  The Borrower will 
maintain its corporate existence or qualification and good standing in its 
jurisdiction of incorporation and in all jurisdictions where a Prospect is 
located.

     5.17 FURTHER ASSURANCES.  The Borrower will promptly cure any defects, 
errors or omissions in the execution and delivery of the Loan Documents and, 
upon notice, take such other action and immediately execute and deliver to 
the Lender all such other and further instruments as may be reasonably 
required or desired by the Lender from time to time in compliance with the 
covenants and agreements made in this Agreement and the other Loan Documents, 
including, without limitation, taking such action as may be required to cure 
or correct any defects in title to any Oil and Gas Property (other than such 
defects in title which are Permitted Liens) and to create, perfect and 
maintain Liens on the Collateral and all other Property intended as security 
for the Obligations.

     5.18 INITIAL EXPENSES OF THE LENDER.  The Borrower will pay (a) all 
third party fees and expenses of the Lender up to $30,000.00 and (b) one-half 
of all third party fees and expenses of the Lender in excess of $30,000.00 
and up to $50,000.00 incurred in connection with the preparation and 
negotiation of the Loan Documents, the satisfaction of the conditions 
precedent set forth in Article 3 and the consummation for the transactions 
contemplated herein, including attorneys' fees.

     5.19 SUBSEQUENT EXPENSES OF THE LENDER.  Upon request, the Borrower will 
promptly reimburse the Lender for all amounts reasonably expended, advanced 
or incurred by the Lender in connection with the preparation of any 
assignments of, renewals of and amendments to any of the Loan Documents.  
Upon request, the Borrower will promptly reimburse the Lender for all amounts 
reasonably expended, advanced or incurred by the Lender to collect the Note 
or to enforce the Rights of the Lender under this Agreement or any of the 
other Loan Documents, all of which amounts shall be deemed compensatory in 
nature and liquidated as to amount upon notice to the Borrower by the Lender 
and which amounts will include, but not be limited to, (i) all court costs, 
(ii) attorneys' fees, (iii) fees of auditors and accountants, (iv) 
investigation expenses, (v) fees and expenses incurred in connection with the 
Lender's participation as a member of the creditors' committee in a case 
commenced under any Debtor Relief Laws, (vi) fees and expenses incurred in 
connection with lifting the automatic stay prescribed in 11 U.S.C. Section 
362, and (vii) fees and expenses incurred in connection with any action 
pursuant to 11 U.S.C. Section 1129 incurred by the Lender in connection with 
the collection of any sums due under this Agreement or the other Loan 
Documents, together with interest at the Default Rate, calculated on a per 
diem basis of a year of 365 days, on each such amount from the date of 
notification to the Borrower that the same was expended, advanced or incurred 
by the Lender until the date it is repaid to the Lender, with the Obligations 
under this Section surviving the non-assumption of this Agreement in a case 
commenced under any Debtor Relief Laws and being binding upon the 

                                      38
<PAGE>

Borrower, any guarantor or a trustee, receiver or liquidator of any such 
party appointed in any such case.

     5.20 MAINTENANCE OF TANGIBLE PROPERTY.  The Borrower will maintain, or 
to the extent that the right of operating is vested in others, will exercise 
its best efforts to require the operator to maintain, all of the its 
producing Oil and Gas Properties in good repair and working order and make 
all necessary replacements thereof and operate such Property in a good and 
workmanlike manner, unless the failure to do so would not have a Material 
Adverse Effect.

     5.21 MAINTENANCE OF INSURANCE.  The Borrower will maintain insurance 
with respect to its Oil and Gas Properties and business against such 
liabilities, casualties, risks and contingencies and in such amounts as are 
customarily maintained in the industry, and furnish to the Lender, on the 
Closing Date and annually thereafter, certificates evidencing such insurance.

     5.22 RIGHT OF INSPECTION.  The Borrower will permit any authorized 
representative of the Lender at its sole risk and expense to visit and 
inspect any Collateral and any other Property of the Borrower at such 
reasonable times and as often as the Lender may request.

     5.23 COMPLIANCE WITH ERISA.  The Borrower will furnish to the Lender (a) 
promptly after the filing thereof with the United States Secretary of Labor 
or the PBGC, copies of each annual and other report with respect to each Plan 
or any trust created thereunder and (b) immediately upon becoming aware of 
the occurrence of any Reportable Event or Prohibited Transaction in 
connection with any Plan or any trust created thereunder, a written notice 
specifying the nature thereof, what action is being taken or proposed to be 
taken with respect thereto, and, when known, any action taken by the Internal 
Revenue Service or any other Tribunal with respect thereto.  The Borrower 
will fund all current service pension liabilities as they are incurred under 
the provisions of all Plans from time to time in effect and timely file all 
reports required by ERISA and required to be filed with respect to each Plan.

     5.24 NOTICE.  The Borrower will immediately notify the Lender of (a) the 
receipt of any notice from, or the taking of any action by, the holder of any 
promissory note or other evidence of Debt of the Borrower with respect to a 
claimed default, together with a statement specifying the notice given or 
other action taken by such holder and what action the Borrower is taking or 
proposes to take with respect thereto; (b) any legal, judicial or regulatory 
proceedings affecting the Borrower in which the amount involved is material 
and is not covered by insurance or that would, if adversely determined, have 
a Material Adverse Effect; (c) any dispute between the Borrower and any 
Tribunal or any Person that would, if adversely determined, have a Material 
Adverse Effect; (d) information that in any way relates 

                                      39
<PAGE>

to or affects the filing of any financing statement or other security 
instrument for the purpose of perfecting or continuing a Lien on the 
Collateral; (e) any event that materially and adversely affects the 
Collateral or the Rights of the Lender with respect to such Collateral; (f) 
the occurrence of any Event of Default; and (g) any event or condition 
(except for events or conditions to the economy of the United States as a 
whole or the oil and gas industry as a whole) which could reasonably be 
expected to cause a Material Adverse Effect.

     5.25 HAZARDOUS SUBSTANCES INDEMNIFICATION.  The Borrower indemnifies and 
holds the Lender, its officers, employees, agents, shareholders and 
Affiliates (each an "INDEMNIFIED PERSON") harmless from and against any and 
all claims, losses, damages, liabilities, fines, penalties, charges, 
administrative and judicial proceedings and orders, judgments, remedial 
actions, requirements and enforcement actions of any kind, and all costs and 
expenses incurred in connection therewith (including, without limitation, 
attorneys' fees and expenses), arising directly or indirectly, in whole or in 
part, from (a) the presence of any Hazardous Substances on, under or from its 
Oil and Gas Properties, whether prior to or during the term hereof, (b) any 
activity carried on or undertaken on or off its Oil and Gas Properties, 
whether prior to or during the term hereof, and whether by the Borrower or 
any predecessor in title or any employees, agents, contractors or 
subcontractors of the Borrower or any predecessor in title, or any third 
persons at any time occupying or present on its Oil and Gas Properties in 
connection with the handling, treatment, removal, storage, decontamination, 
cleanup, transport or disposal of any Hazardous Substances at any time 
located or present on or under its Oil and Gas Properties, or (c) any 
residual contamination on or under its Oil and Gas Properties or affecting 
any natural resources in, on or under its Oil and Gas Properties, or any 
contamination of any of the property or natural resources arising in 
connection with the generation, use, handling, storage, transport or disposal 
of any Hazardous Substance by the Borrower or any employee, agent, contractor 
or subcontractor of the Borrower irrespective of whether any of such 
activities were or will be undertaken in accordance with applicable laws, 
regulations, codes and ordinances.  WITHOUT LIMITING ANY PROVISION OF THIS 
AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS, IT IS THE EXPRESS 
INTENTION OF THE PARTIES THAT EACH INDEMNIFIED PERSON SHALL BE INDEMNIFIED 
AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, 
DEFICIENCIES, JUDGMENTS AND REASONABLE EXPENSES ARISING OUT OF OR RESULTING 
FROM THE ORDINARY NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OR STRICT 
LIABILITY OF SUCH INDEMNIFIED PERSON.  Notwithstanding anything to the 
contrary in this Agreement, such indemnity shall survive repayment of the 
Debt evidenced by the Note.

                                      40
<PAGE>

                                   ARTICLE 6
                              NEGATIVE COVENANTS

          So long as any Debt evidenced by the Note remains unpaid or the 
Lender remains obligated to make Advances, and in the absence of written 
consent of the Lender to the contrary:

     6.1  OTHER DEBT OF BORROWER.  The Borrower will not incur, create, 
assume or suffer to exist any Debt aggregating in excess of $50,000.00 
except: (a) Loans hereunder, (b) unsecured current accounts payable incurred 
in the ordinary course of business, provided such accounts are paid within 
sixty (60) days of the invoice date or are being Contested in Good Faith, or 
paid pursuant to other terms agreed to between the Borrower and the account 
creditor, (c) the Bank of America Debt (provided, however, the principal 
amount of the Bank of America Debt shall not increase above the principal 
amount outstanding as of the date of this Agreement) and (d) the 420 Energy 
Investments Debt (provided, however, the principal amount of the 420 Energy 
Investments Debt shall not increase above the principal amount outstanding as 
of the date of this Agreement).

     6.2  GUARANTY OF PAYMENT OR PERFORMANCE.  The Borrower will not 
guarantee any contract or otherwise be or become liable in connection with 
any obligation of any Person, except that the foregoing restriction shall not 
apply to endorsements of instruments for collection in the ordinary course of 
business.

     6.3  LOANS, ADVANCES OR INVESTMENTS.  The Borrower will not make or 
agree to make or allow to remain outstanding any Investment, including, 
without limitation, any loans or advances or the purchase (for cash or 
securities) of all or a substantial part of the Property or capital stock of 
any Person, except (a) advances or extensions of credit in the form of 
accounts receivable incurred in the ordinary course of business and upon 
terms common in the industry for such accounts receivable, (b) Liquid 
Investments, or (c) the Exchange Transactions.

     6.4  MORTGAGES OR PLEDGES OF ASSETS.  The Borrower will not create, 
incur, assume or permit to exist any Lien on any of its Property (now owned 
or hereafter acquired), except Permitted Liens.

     6.5  CANCELLATION OF INSURANCE.  The Borrower will not allow any 
insurance policy required to be carried hereunder to be terminated or lapse 
or expire without provision for adequate renewal or replacement thereof.

                                      41
<PAGE>

     6.6  SALES OF PROPERTY.  The Borrower will not sell, transfer or 
otherwise dispose of, in one or any series of transactions, any of its 
Property if such sale, transfer or disposition (a) transfers or disposes of 
greater than an undivided ten percent (10%) of the undivided interest of the 
Borrower in the Property, the undivided interest of Aspect in the Aspect 
Prospects or the undivided interest of Esenjay in the Esenjay Prospects as of 
the date of this Agreement, (b) exceeds $250,000.00 per transaction or (c) 
exceeds $1,000,000.00 in the aggregate for any twelve month period.  Nothing 
in this Section shall be construed that the Lender is obligated to release 
its Liens on any of Property sold.

     6.7  SALE AND LEASEBACK.  The Borrower will not enter into any 
arrangement with any Person providing for the leasing by the Borrower of 
Property which has been or is to be sold or transferred by the Borrower to 
such Person or to any other Person to whom funds have been or are to be 
advanced by such Person on the security of such Property or rental 
obligations of the Borrower.

     6.8  DIVIDENDS AND DISTRIBUTIONS.  Other than the redemption of the 
Preferred Shares in full contemporaneously with the closing of the Exchange 
Transactions, the Borrower will not declare, pay or make, whether in cash or 
other Property, any dividend or distribution on, or purchase, redeem or 
otherwise acquire for value, any share of any class of its capital stock.

     6.9  CHANGES IN CORPORATE STRUCTURE.  Other than pursuant to the 
consummation of the transactions contemplated by the Exchange Agreement or 
pursuant to an underwritten public offering, the Borrower will not issue or 
agree to issue additional shares of capital stock; enter into any transaction 
of consolidation, merger or amalgamation; liquidate, wind up or dissolve (or 
suffer any liquidation or dissolution); or convey, sell, lease, assign, 
transfer or otherwise dispose of all or substantially all of its Property or 
business.

     6.10 PAYMENT OF ACCOUNTS PAYABLE.  The Borrower will not allow any 
account payable to be in excess of sixty (60) days past due, except such as 
are being Contested in Good Faith.

     6.11 TRANSACTIONS WITH AFFILIATES.  The Borrower will not directly or 
indirectly, enter into any transaction (including the sale, lease or exchange 
of Property or the rendering of service) with any of its Affiliates, Esenjay, 
any of Esenjay's Affiliates, Aspect, or any of Aspect's Affiliates, other 
than as set forth in the Exchange Agreement or upon fair and reasonable terms 
no less favorable than could be obtained in an arm's length transaction with 
a Person which was not an Affiliate.

                                      42
<PAGE>

     6.12 LIMITATION ON NEGATIVE PLEDGE CLAUSES.  The Borrower will not enter 
into any agreement with any Person other than the Lender which prohibits or 
limits the ability of the Borrower create, incur, assume or suffer to exist 
any Lien upon any of its Property, whether now owned or hereafter acquired.

     6.13 NATURE OF BUSINESS.  The Borrower will not make any material change 
in the character of its business as carried on at the date hereof.

     6.14 NO SUBSIDIARIES.  The Borrower will not own any Subsidiaries other 
than those set forth in Section 4.17.

                                  ARTICLE 7
                              EVENTS OF DEFAULT

     7.1  EVENTS OF DEFAULT.  The occurrence of any of the following events 
shall constitute an Event of Default:

          (a)  The Borrower shall fail to pay when due any installment of
     principal or interest on the Note or any charge payable under this
     Agreement;

          (b)  Default shall occur in the due observance or performance of
     any affirmative covenant required in this Agreement, the Note, the
     Guaranties, any of the Security Documents or any of the other Loan
     Documents, and such default shall remain unremedied for in excess of
     twenty (20) days after the earlier of (i) notice given by the Lender,
     or (ii) actual knowledge thereof by the Borrower;

          (c)  Default shall occur in the due observance or performance of
     any negative covenant required in this Agreement, the Note, the
     Guaranties, any of the Security Documents or any of the other Loan
     Documents;

          (d)  The occurrence of an Event of Default as defined in the
     Esenjay Credit Agreement;

          (e)  Any Financial Statement, representation, warranty or
     certificate made or furnished by or on behalf of the Borrower or any
     of the Guarantors to the Lender in connection with this Agreement or
     other Loan Document, or as an inducement to the Lender to enter into
     this Agreement, or in any instrument furnished in compliance with or
     in reference to this Agreement or any other Loan Document, shall be
     materially false, incorrect, or incomplete at or as of the time made;

                                      43
<PAGE>

          (f)  Default shall be made by the Borrower (as principal or
     guarantor or other surety) in payment or performance of any bond,
     debenture, note or other evidence of Debt for borrowed money having an
     outstanding principal amount in excess of $50,000.00, or under any
     credit agreement, loan agreement, indenture, promissory note or
     similar agreement or instrument executed in connection with any of the
     foregoing, and such default shall remain unremedied for in excess of
     the period of grace, if any, with respect thereto, with the effect of
     accelerating the maturity of any such Debt or establishing a right to
     accelerate the maturity of such Debt;

          (g)  The Borrower shall file a petition seeking relief for itself
     under Debtor Relief Laws, or file an answer consenting to, admitting
     the material allegations of or otherwise not controverting, or fail
     timely to controvert a petition filed against it seeking relief under
     Debtor Relief Laws;

          (h)  An order for relief shall be entered against the Borrower
     under any Debtor Relief Laws, which order is not stayed, or upon the
     entry of an order, judgment or decree by operation of Law or by a
     court of competent jurisdiction which is not stayed, ordering relief
     against the Borrower under, or approving as properly filed, a petition
     seeking relief against any such Person under the provisions of any
     Debtor Relief Laws, or appointing a receiver, liquidator, assignee,
     sequestrator, trustee or custodian of the Borrower or of any
     substantial part of its Property, or ordering the reorganization,
     winding up or liquidation of any the Borrower's affairs, or upon the
     expiration of sixty (60) days after the filing of any involuntary
     petition against the Borrower seeking any of the relief specified in
     the preceding Subsection or this Subsection without the petition being
     dismissed prior to that time;

          (i)  The Borrower shall (i) make a general assignment for the
     benefit of its creditors, (ii) consent to the appointment of or taking
     possession by a receiver, liquidator, assignee, sequestrator, trustee
     or custodian of the Borrower or any substantial part of its Property,
     (iii) admit insolvency or inability to pay its debts generally as such
     debts become due, (iv) fail generally to pay its debts as such debts
     become due, or (v) take any action (or an action shall be taken by its
     directors or majority stockholders) looking to the dissolution or
     liquidation of the Borrower;

          (j)  Final judgment for the payment of money in excess of
     $50,000.00 shall be rendered against the Borrower and such judgment
     shall 

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<PAGE>

     remain undischarged for a period of thirty (30) days during which execution
     shall not be effectively stayed;

          (k)  The Security Documents shall for any reason, except to the
     extent permitted by the terms thereof, cease to be in full force and
     effect and valid, binding and enforceable in accordance with their
     terms, cease to create a valid Lien of the priority required thereby
     on any of the Collateral purported to be covered thereby, or, upon
     perfection, cease to be a perfected Lien on any of the Collateral
     purported to be covered thereby, or the Borrower or any other Person
     who may have granted or purported to grant such Lien shall so state in
     writing;

          (l)  A judgment creditor of any Person who is the owner of any of
     the Collateral shall obtain possession of any of the Collateral by any
     means, including, without limitation, levy, attachment or self help;   

          (m)  The validity or enforceability of any of the Loan Documents
     shall be contested by the Borrower, any of the Guarantors or any of
     such Persons shall deny that it has any or further liability or
     Obligation under any of the Loan Documents or allege that any of the
     Loan Documents shall be construed or enforced other than in accordance
     with their terms;

          (n)  The Borrower shall have concealed, removed, or permitted to
     be concealed or removed, any part of its Property with the intent to
     hinder, delay or defraud its creditors or any of them, or made or
     suffered a transfer of any of its Property which is fraudulent under
     any Debtor Relief Laws (except for such transfers in favor of the
     Lender); or shall have made any transfer (other than in the ordinary
     course of business) of its Property to or for the benefit of a
     creditor at a time when other creditors similarly situated have not
     been paid; or

          (o)  The Exchange Agreement shall be amended or modified.

     7.2  RIGHTS UPON OCCURRENCE OF UNMATURED EVENT OF DEFAULT. At any time that
there exists an Unmatured Event of Default, any obligation of the Lender
hereunder to make Advances to or for the benefit of the Borrower shall be
suspended unless and until the Lender shall reinstate the same in writing, the
Unmatured Event of Default shall have been waived by the Lender or the relevant
Unmatured Event of Default shall have been remedied prior to the ripening into
an Event of Default.

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<PAGE>

     7.3  RIGHTS UPON OCCURRENCE OF AN EVENT OF DEFAULT.

          (a)  Upon the occurrence of any Event of Default specified in
     Subsections (g), (h), (i) or (n) of Section 7.1, immediately and
     without notice, (i) all Obligations evidenced by the Note shall
     immediately become due and payable without presentment, demand,
     protest, notice of protest or dishonor, notice of intent to
     accelerate, notice of acceleration or other notice of any kind, all of
     which are expressly waived by the Borrower and (ii) all obligations of
     the Lender, if any, under this Agreement shall immediately and
     automatically cease and terminate unless and until the Lender shall
     reinstate any such obligation in writing.

          (b)  Upon the occurrence and at any time during the continuance
     of any other Event of Default, (i) all obligations of the Lender, if
     any, under this Agreement shall immediately and automatically cease
     and terminate unless and until the Lender shall reinstate any such
     obligation in writing and (ii) the Lender may by written notice to the
     Borrower declare all Obligations evidenced by the Note to be
     immediately due and payable without presentment, demand, protest,
     notice of protest or dishonor, notice of intention to accelerate,
     notice of acceleration or other notice of any kind, all of which are
     expressly waived by the Borrower.

          (c)  The Borrower acknowledges and understands that under the
     Laws of the State of Texas, unless waived, the Borrower has the right
     to notice of the Lender's intent to accelerate the Obligations
     evidenced by the Note, the right to notice of the actual acceleration
     of the Obligations evidenced by the Note, and the right to presentment
     of the Note by the Lender's demand for payment.  The Borrower
     acknowledges that it understands that it can waive these rights and by
     the Borrower's execution of this Agreement it agrees to waive its
     right to notice of intent to accelerate, its right to notice of
     acceleration, and its right to presentment or other demand for
     payment.

          (d)  In addition to the foregoing, upon the occurrence of any
     Event of Default, the Lender may exercise any or all of the Rights
     provided in any or all of the Loan Documents.

                                  ARTICLE 8
                                MISCELLANEOUS

     8.1  NOTICES.  Any notice required or permitted to be given under or in 
connection with this Agreement or any of the other Loan Documents (except as 
may otherwise be expressly required therein) shall be in writing and shall be 
mailed by certified mail, return 

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<PAGE>

receipt requested, postage prepaid, or sent by telex, telegram, telecopy or 
other similar form of rapid transmission confirmed by mailing (by certified 
mail, return receipt requested, postage prepaid) written confirmation at 
substantially the same time as such rapid transmission, or personally 
delivered to an officer of the receiving party.  All such communications 
shall be mailed, sent or delivered,

          (a)  if to the Borrower, to Frontier Natural Gas Corporation, 500
     Dallas, Suite 2920, Houston, Texas 77002, Attn: David B.
     Christofferson, or to such other address or to such individual's or
     department's attention as the Borrower may have furnished the Lender
     in writing; or

          (b)  if to the Lender, to Duke Energy Financial Services, Inc.,
     5718 Westheimer, Suite 2000, Houston, Texas 77057, Attn: Jeffrey B.
     Goodman, or to such other address or to such individual's or
     department's attention as the Lender may have furnished the Borrower
     in writing.

Any communication so addressed and mailed shall be deemed to be given when so 
mailed, and any notice so sent by rapid transmission is acknowledged, and any 
communication so delivered in person shall be deemed to be given when 
receipted for or actually received by an authorized officer of the Borrower 
or the Lender, as the case may be.

     8.2  AMENDMENTS AND WAIVERS.  Any provision of this Agreement or any of 
the other Loan Documents may be amended or waived if, but only if, such 
amendment or waiver is in writing and is signed by the Borrower and the 
Lender (and/or any other Person which is a party to any Loan Document being 
amended or with respect to which a waiver is being obtained).

     8.3  INVALIDITY.  In the event that any one or more of the provisions 
contained in this Agreement or any of the other Loan Documents shall for any 
reason be held invalid, illegal or unenforceable in any respect, such 
invalidity, illegality or unenforceability shall not affect any other 
provision of this Agreement or any other Loan Document.

     8.4  SURVIVAL OF AGREEMENTS.  All representations and warranties of the 
Borrower herein or in the other Loan Documents and all covenants and 
agreements not fully performed before the effective date or dates of this 
Agreement or the other Loan Documents shall survive such date or dates.

     8.5  SUCCESSORS AND ASSIGNS.  All covenants and agreements by or on 
behalf of the Borrower in this Agreement and all of the other Loan Documents 
shall bind its legal representatives, successors and assigns and shall inure 
to the benefit of the Lender and its legal representatives, successors and 
assigns.

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<PAGE>

          The Borrower may not assign its respective Rights or Obligations 
hereunder or under the Note without the prior consent of the Lender.

          Prior to any acceleration of the Debt evidenced by the Note or all 
of such Debt otherwise being due and payable, the Lender, without the consent 
of the Borrower, may not assign any portion of the Loans, the Note or the 
Commitment.

          After any acceleration of the Debt evidenced by the Note or all of 
such Debt otherwise being due and payable, the Lender, without the consent of 
the Borrower, may assign all or any portion of the Loans, the Note, or the 
Commitment.

          Notwithstanding anything to the contrary above, the Lender, without 
the consent of the Borrower, may at any time assign all or any portion of the 
Loans, the Note or the Commitment to or at the direction of a governmental 
authority or agency.

     8.6  RENEWAL, EXTENSION OR REARRANGEMENT.  All provisions of this 
Agreement and of any other Loan Documents, as presently existing or as they 
may hereafter be amended, relating to the Note or other Obligations shall 
apply with equal force and effect to each and all promissory notes 
hereinafter executed which in whole or in part represent a renewal, extension 
for any period, increase or rearrangement of any part of the Obligations 
originally evidenced by the Note or of any part of such other Obligations.

     8.7  WAIVERS.  No waiver by the Lender of any of its Rights under this 
Agreement, the other Loan Documents or otherwise shall be considered a waiver 
of any other or subsequent Right.  No course of dealing on the part of the 
Lender, its officers, employees, consultants or agents, nor any failure or 
delay by the Lender with respect to exercising any Right under any of the 
Loan Documents shall operate as a waiver thereof.

     8.8  CUMULATIVE RIGHTS.  The Rights of the Lender under the Note, this 
Agreement and each other Loan Document shall be cumulative, and the exercise 
or enforcement of any such Right shall not preclude the exercise or 
enforcement of any other Right.

     8.9  TAXES, ETC.  Any Taxes (excluding income taxes), together with 
interest and penalties, if any, payable or ruled payable by federal or state 
authority in respect of the Note, this Agreement or the other Loan Documents 
shall be paid by the Borrower.

     8.10 EXHIBITS; CONFLICTS.  The exhibits attached to this Agreement are 
incorporated herein and shall be considered a part of this Agreement for the 
purposes stated herein.  In the event of any direct conflict between any of 
the provisions of such exhibits or any of the other Loan Documents and the 
provisions of this Agreement, the provisions of this Agreement shall prevail.

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<PAGE>

     8.11 TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS.  All titles or 
heading to articles, Sections, Subsections or other divisions of this 
Agreement or the exhibits hereto are only for the convenience of the parties 
and shall not be construed to have any effect or meaning with respect to the 
other content of such articles, Sections, Subsections or other divisions, 
such other content being controlling as to the agreement between the parties 
hereto.

     8.12 JURISDICTION.  All actions or proceedings with respect to the Note, 
this Agreement or any of the other Loan Documents may be instituted in the 
courts of the State of Texas, the United States District Court for the 
Southern District of Texas, or elsewhere to the extent that jurisdiction 
shall exist apart from the provisions of this Section, as the Lender may 
elect.  By execution and delivery of this Agreement, the Borrower irrevocably 
and unconditionally submits to the jurisdiction (both subject matter and 
personal) of each such court, and irrevocably and unconditionally waives (a) 
any objection it may now or hereafter have to the laying of venue in any of 
such courts and (b) any claim that any action or proceeding brought in any of 
such courts has been brought in an inconvenient forum.  The choice of forum 
and laying of venue as set forth in this Section 8.12 was negotiated in good 
faith by the Borrower and the Lender and is a significant term of the bargain 
between the Borrower and the Lender governed by this Agreement.  The Borrower 
and the Lender further agree that service of process, summons, notice of 
document by U.S. registered mail to the address of each set forth above shall 
be effective service of process for any action, suit or proceeding brought 
against the other in any such court.

     8.13 JURY TRIAL WAIVED.  THE BORROWER AND THE LENDER HEREBY AGREE THAT 
THEY SHALL AND HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR 
COUNTERCLAIM, WHETHER AT LAW OR IN EQUITY, BROUGHT BY EITHER OF THEM, OR IN 
ANY MATTER WHATSOEVER WHICH ARISES OUT OF OR IS CONNECTION IN ANY WAY WITH 
THIS AGREEMENT.

     8.14 COUNTERPARTS.  This Agreement may be executed in two or more 
counterparts and multiple originals of such counterparts, and it shall not be 
necessary that the signatures of all parties hereto be contained on any one 
counterpart hereof.  Any executed Agreement or any counterpart thereof shall 
be deemed an original, but all of which together shall constitute one and the 
same instrument.

     8.15 EFFECTIVENESS.  This Agreement shall not be effective until 
delivered to, accepted and executed by the Lender and the Borrower.

     8.16 DOCUMENTS.  All Loan Documents and any other certificate, agreement 
or other document provided or to be provided under the terms hereof shall be 
in form and substance satisfactory to the Lender.

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<PAGE>

     8.17 RIGHTS OF THIRD PERSON.  All provisions of this Agreement are 
imposed solely and exclusively for the benefit of the Lender and the 
Borrower.  No other Person shall have standing to require satisfaction for 
such provisions in accordance with their terms or be entitled to assume that 
the Lender will refuse to perform its obligations hereunder in the absence of 
strict compliance with any or all thereof, and any or all of such provisions 
may be freely waived in whole or in part by the Lender at any time if in its 
sole discretion it deems it advisable to do so.

     8.18 ANNOUNCEMENTS.  Each party covenants and agrees with the other 
that, subject to applicable law, each party shall promptly advise and consult 
with the other and obtain the other's written consent before issuing any 
press release with respect to this Agreement or the transactions described 
herein. Notwithstanding the above, the Borrower may issue a press release 
with respect to this Agreement or the transactions described herein if the 
Lender is not identified by its name, any Affiliate of the Lender is not 
identified by its name or the Lender or any Affiliate of the Lender is 
otherwise not identified and a Law requires the Borrower to issue such press 
release.

     8.19 CONFIDENTIALITY.  In connection with the negotiation and 
administration of this Agreement and the other Loan Documents, the Borrower 
has furnished and from time to time will furnish the Lender written 
information or the Lender has provided and from time to time will provide 
access to information which is identified to the Lender in writing as 
confidential (such information, other than any such information which (i) was 
publicly available, or otherwise known to the Lender, at the time of 
disclosure, (ii) subsequently becomes publicly available other than through 
any act or omission by the Lender or (iii) otherwise subsequently becomes 
known to the Lender, being hereinafter referred to as "CONFIDENTIAL 
INFORMATION").  The Lender will use reasonable efforts to maintain the 
confidentiality of any Confidential Information.  The Lender will not use any 
of the Confidential Information to compete with the Borrower in the 
exploration and production business.  It is understood, however, that the 
foregoing will not restrict the Lender's ability to freely exchange such 
Confidential Information with current or prospective investors, assignees and 
advisors who obligate themselves to the terms of this Section 8.19 and who 
further agree not to use any of the Confidential Information to compete with 
the Borrower in the exploration and production business.  It is further 
understood that the foregoing will not prohibit the disclosure of any or all 
Confidential Information if and to the extent that such disclosure may be 
required or requested (w) by a Governmental Authority, (x) pursuant to court 
order, subpoena or other legal process in connection with any pending or 
threatened litigation hereunder, (y) otherwise as required by law, or (z) in 
order to protect their interests or their rights or remedies hereunder or 
under the other Loan Documents; in the event of any required disclosure under 
clause (w), (x), or (y) above, the Lender agrees to use reasonable efforts to 
inform the Borrower as promptly as practicable.

                                      50
<PAGE>

     8.20 SURVIVAL OF CERTAIN COVENANTS.  The covenants of the Borrower set 
forth in Sections 5.5 and 5.10 shall survive repayment of the Debt evidenced 
by the Note and shall continue until all of the additional charges payable by 
the Borrower to the Lender pursuant to Section 2.5 have been satisfied.

     8.21 GOVERNING LAW.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL 
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE UNITED STATES 
OF AMERICA AND THE STATE OF TEXAS (EXCEPT TO THE EXTENT THE LOCATION OR 
NATURE OF THE COLLATERAL REQUIRES THE APPLICATION OF THE LAWS OF OTHER 
JURISDICTIONS TO BE APPLIED AS TO MATTERS OF CREATION, PERFECTION AND 
PRIORITY OF LIENS AND THE RIGHTS OF THE LENDER UPON DEFAULT).

          IN WITNESS WHEREOF, the parties hereto have caused this instrument 
to be duly executed effective as of the date first above written.

                              FRONTIER NATURAL GAS
                                CORPORATION


                              By:
                                  ------------------------------------------
                                   David W. Berry
                                   President
                              
                              

                              DUKE ENERGY FINANCIAL
                                 SERVICES, INC.


                              By:
                                  ------------------------------------------
                                   Jeffrey B. Goodman
                                   Vice President






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