AMENDMENT NO. 1 TO CREDIT AGREEMENT


     THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT (this "Amendment No. 1"), dated as
of November 1, 1996,  between  FRONTIER  NATURAL  GAS  CORPORATION,  an Oklahoma
corporation (the "Borrower"),  and BANK OF AMERICA ILLINOIS, an Illinois banking
corporation (the "Lender").

                              W I T N E S S E T H:

     WHEREAS,  the Borrower  and the Lender are parties to that  certain  Credit
Agreement, dated as of January 3, 1996 (hereinafter referred to as the "Existing
Credit Agreement"); and

     WHEREAS,  the Borrower has requested that certain amendments be made to the
Existing Credit Agreement; and

     WHEREAS,  the Lender is willing to make certain  amendments to the Existing
Credit Agreement on the terms and conditions hereinafter provided;

     NOW,  THEREFORE,  in consideration of the agreements herein contained,  the
parties hereto hereby agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS

     SECTION  1.1  Certain  Definitions.  The  following  terms  (whether or not
underscored)  when  used in  this  Amendment  No.  1 shall  have  the  following
meanings:

     "Amended Credit  Agreement"  means the Existing Credit Agreement as amended
by this Amendment No. 1.

     "Amendment No. 1 Effective Date" has the meaning provided in Section 4.1.

     SECTION  1.2 Other  Definitions.  Unless  otherwise  defined or the context
otherwise  requires,  terms used herein  (including in the preamble and recitals
hereto) have the meanings provided for in the Existing Credit Agreement.


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                                   ARTICLE II.

                                  AMENDMENTS TO
                            EXISTING CREDIT AGREEMENT

     Effective  on the  Amendment  No. 1 Effective  Date,  the  Existing  Credit
Agreement is amended in accordance  with the terms of this Article II; except as
so  amended,  the  Existing  Credit  Agreement  shall  continue to remain in all
respects in full force and effect.

     SECTION 2.1 Amendments to Section 1.1.

     (a) The  definition  of "Tranche B  Availability  Termination  Date" in the
Existing Credit Agreement is deleted and the following definition is inserted in
its place:

               "Tranche B Availability Termination Date" means June 30, 1997."

     SECTION 2.2 Amendments to Borrower's  Address.  The address of the Borrower
set forth on the signature page of the Existing  Credit  Agreement is amended by
deleting  the existing  address and  inserting  in its place the  following  new
address:

               Frontier Natural Gas Corporation
               One Allen Center
               500 Dallas Street
               Suite 2920
               Houston, TX  77002

               713-739-7100
               713-739-7124 (fax)

     SECTION 2.3 Amendments to Certain Exhibits and Schedules.

     (a)  Schedule  II to the  Existing  Credit  Agreement  is deleted and a new
Schedule  II in the  form of the  Minimum  Monthly  Payments  schedule  shown in
Schedule II hereto is inserted in its place.

     (b) Section  2.10 of the form of Mortgage and of each  Mortgage  previously
executed and  delivered in favor of the Lender is deleted and a new Section 2.10
in the form shown in Exhibit A hereto is inserted in its place.


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                                  ARTICLE III.

                         REPRESENTATIONS AND WARRANTIES

     In order to  induce  the  Lender  to make the  amendments  provided  for in
Article II, the Borrower hereby

     (a) acknowledges and agrees that,  immediately  prior to the Amendment No.1
Effective  Date,  the aggregate  outstanding  principal  amount of all Tranche A
Loans is $523,888 and the aggregate  outstanding principal amount of all Tranche
B Loans is $0.00;

     (b)  represents and warrants that the Borrower has full power and authority
to execute,  deliver and perform its obligations  under this Amendment No. 1 and
all other Loan Documents  delivered to Lender in connection  herewith,  and this
Amendment  No. 1 and all such Loan  Documents  are the legally valid and binding
obligations of Borrower,  enforceable  against Borrower in accordance with their
respective terms;

     (c)  represents  and  warrants,   that  each  of  the  representations  and
warranties  contained in the  Existing  Credit  Agreement  and in the other Loan
Documents  is true  and  correct  as of the date  hereof  as if made on the date
hereof (except,  if any such  representation  and warranty relates to an earlier
date, such representation and warranty shall be true and correct in all material
respects  as of such  earlier  date)  and  Borrower  has  performed  each of the
covenants  and  agreements in the Existing  Credit  Agreement and the other Loan
Documents required to be performed by Borrower as of the date hereof; and

     (d)  There is no  Default  or Event of  Default  by  Borrower  or any other
Obligor  under the Existing  Credit  Agreement or any other Loan Document and no
event  exists  which,  with the giving of notice or the passage of time or both,
would  give rise to a  Default  or Event of  Default  by  Borrower  or any other
Obligor under the Existing Credit Agreement or any Loan Document.

                                   ARTICLE IV.

                           CONDITIONS TO EFFECTIVENESS

     SECTION 4.1 Effective Date. This Amendment No. 1 shall become  effective on
November 1, 1996,  or, if later,  the date (herein  called the  "Amendment No. 1
Effective  Date") when the  conditions  set forth in this  Section 4.1 have been
satisfied.

     (a) Execution of Counterparts.  The Lender shall have received counterparts
of this  Amendment  No. 1 duly  executed and delivered on behalf of the Borrower
and the Lender.


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<PAGE>
     (b)  Closing  Fees,  Expenses,  etc.  The Lender  shall have  received  all
reasonable  costs and expenses due and payable  pursuant to Sections 3.3 and 9.3
of the Existing Credit Agreement, if then invoiced.

     (c) Legal  Details,  etc.  All  documents  executed or  submitted  pursuant
hereto,  and all legal matters incident  thereto,  shall be satisfactory in form
and substance to the Lender and its counsel.

     SECTION 4.2  Expiration.  If all of the conditions set forth in Section 4.1
hereof  shall not have been  satisfied  on or prior to  February  7,  1997,  the
agreements  of the  parties  contained  in this  Amendment  No. 1 shall,  unless
otherwise agreed by the Lender, terminate effective immediately on such date and
without further action.

                                   ARTICLE V.

                                  MISCELLANEOUS

     SECTION  5.1 Loan  Document  Pursuant to Existing  Credit  Agreement.  This
Amendment  No. 1 is a Loan  Document  executed  pursuant to the Existing  Credit
Agreement.   Except  as  expressly   amended  or  waived  hereby,   all  of  the
representations,  warranties,  terms,  covenants and conditions contained in the
Existing  Credit  Agreement and each other Loan Document shall remain  unamended
and in full force and effect.  The  amendments set forth herein shall be limited
precisely  as  provided  for  herein  and shall not be deemed to be a waiver of,
amendment of, consent to or  modification  of any other term or provision of the
Existing Credit Agreement or of any term or provision of any other Loan Document
or of any transaction or further or future action on the part of the Borrower or
which  would  require  the  consent  of the  Lender  under the  Existing  Credit
Agreement or any other Loan Document.

     SECTION 5.2 Counterparts,  etc. This Amendment No. 1 may be executed by the
parties hereto in several  counterparts,  each of which shall be deemed to be an
original  and all of  which  shall  constitute  together  but  one and the  same
agreement  with the same  effect as if all  parties  hereto  had signed the same
signature  page. Any signature page of this Amendment No. 1 may be detached from
any identical  counterpart of this Amendment No. 1 having  attached to it one or
more additional signature pages.

     SECTION 5.3 GOVERNING LAW; ENTIRE AGREEMENT.  THIS AMENDMENT NO. 1 SHALL BE
DEEMED TO BE A CONTRACT  MADE UNDER AND  GOVERNED  BY THE  INTERNAL  LAWS OF THE
STATE OF ILLINOIS.

     SECTION 5.4 Titles and Headings. The titles and headings of the Sections of
this Amendment No. 1 are intended for convenience  only and shall not in any way
affect the meaning or construction of any provision of this Amendment No. 1.


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<PAGE>
     SECTION 5.5 Changes and  Modifications  in Writing.  No  provision  of this
Amendment  No. 1 may be changed or modified  except by an  instrument in writing
signed by the party against whom  enforcement of the change or  modification  is
sought.


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<PAGE>
     IN WITNESS WHEREOF,  the parties hereto have caused this Amendment No. 1 to
be executed by their respective  officers hereunto duly authorized as of the day
and year first above written.


                                  BORROWER

                                  FRONTIER NATURAL GAS CORPORATION, an
                                  Oklahoma corporation


                                  By: /s/ illegible
                                     -------------------------------------------
                                      /s/ illegible
                                  Title:  Executive Vice President



                                  LENDER

                                  BANK OF AMERICA ILLINOIS


                                  By:  /s/ John H. Homer
                                     -------------------------------------------
                                       John H. Homer
                                  Title:  John H. Homer


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<PAGE>
                                                                       Exhibit A

                          NEW SECTION 2.10 OF MORTGAGE


2.10  Right of Entry.

     (a) The  Mortgagor  will permit the Trustees or the Bank,  or the agents of
either of them,  at the cost and  expense  of the  Mortgagor,  to enter upon the
Mortgaged  Property and all parts thereof,  for the purpose of investigating and
inspecting  the  condition and operation  thereof,  and shall permit  reasonable
access to the field offices and other offices,  including the principal place of
business,  of the Mortgagor to inspect and examine the Mortgaged Property and to
inspect,  review  and  reproduce  as  necessary  any books,  records,  accounts,
contracts or other documents of the Mortgagor.

     (b) Without  limiting the generality of the foregoing,  the Bank shall have
the right,  on twenty-four  (24) hours prior notice to the  Mortgagor,  to cause
such  persons and  entities  as the Bank may  designate  to enter the  Mortgaged
Property to conduct (at the cost and expense of the Mortgagor),  or to cause the
Mortgagor to conduct (at the cost and expense of the Mortgagor),  such tests and
investigations  as the Bank deems  necessary to determine  whether any hazardous
substance or solid waste is being generated, transported, stored, or disposed of
in accordance with applicable  Environmental Laws. Such tests and investigations
may include, without limitation,  underground borings, ground water analyses and
borings from the floors,  ceilings and walls of any improvements  located on the
Mortgaged Property.  This Section 2.10 shall not be construed to affect or limit
the obligations of the Mortgagor pursuant to Section 2.5 hereof.

     (c) The Bank shall have no duty to visit or observe the Mortgaged  Property
or to conduct tests, and no site visit, observation or testing by the Bank shall
impose any  liability on the Bank,  nor shall the Mortgagor or any other Obligor
be  entitled  to rely on any  visit,  observation  or testing by the Bank in any
respect. The Bank may, in its discretion, disclose to the Mortgagor or any other
Person,  including  any  governmental  agency,  any report or finding  made as a
result of, or in connection with, any site visit,  observation or testing by the
Bank. The Mortgagor agrees that the Bank makes no warranty or  representation to
the Mortgagor or any other Obligor regarding the truth, accuracy or completeness
of any such report or findings  that may be so  disclosed.  The  Mortgagor  also
acknowledges that, depending upon the results of any site visit,  observation or
testing by the Bank and  disclosed to the  Mortgagor,  the  Mortgagor may have a
legal  obligation to notify one or more  governmental  agencies of such results,
that such reporting  requirements are site-specific,  and are to be evaluated by
the Mortgagor without advice or assistance from the Bank.
<PAGE>
                                                                     Schedule II


                            Minimum Monthly Payments