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                          FRONTIER NATURAL GAS CORPORATION
                                          
                            EMPLOYEE OPTION PLAN - 1997

     1.   PURPOSE.  The purpose of this Employee Option Plan - 1997 ("the Plan")
is to further the interest of Frontier Natural Gas Corporation (hereinafter
called "the Company") by providing incentives for officers, managers, department
heads, corporate counsel, directors and employees of the Company who may be
designated for participation in the Plan and to provide additional means of
attracting and retaining competent personnel.

     2.   ADMINISTRATION.  The Plan shall be administered by the Board of
Directors of the Company (hereinafter referred to as the "Board").  Subject to
the provisions of the Plan and applicable law, the Board is authorized to
interpret the Plan and to prescribe, amend and rescind rules and regulations
regulating the Plan and to make all other determinations necessary or advisable
for the administration of the Plan.  In the event the Board forms an Executive
Compensation Committee, said Committee shall assume all of the responsibility
for the administration of the Plan.

     3.   PARTICIPANTS AND ALLOTMENTS.  The Board shall determine and designate
from time to time those employees of the Company to whom options to purchase
shares of common stock of the Company pursuant to the Plan are to be granted and
who thereby become participants in the Plan.  The Board shall allot to such
participants (the "Option Holders") in such amount as the Board shall from time
to time determine.  No member of the Board shall have any right to vote or
decide upon any matter relating solely to himself or a member of his immediate
family or solely to any of his rights or benefits (or rights or benefits of a
member of his immediate family) under the Plan, provided, however that, the
Board of Directors may provide for the automatic annual grant of a 
pre-determined number of stock options to each member of the Board of 
Directors who is not an employee of the Company.  Participation in the Plan 
shall not confer any right of continuation of service as an employee of the 
Company.

     4.   SHARES OF COMMON STOCK SUBJECT TO PLAN.  Under this Plan, the Board
may from time to time grant options to purchase shares of common stock to
employees of the Company up to an aggregate of 695,350 shares.  If any options
granted under the Plan shall terminate or expire, in whole or in part, the
shares so released from the options may be made the subject of additional
options granted under the Plan.  The Company shall reserve and keep available
such number of shares of stock as will satisfy the requirements of all
outstanding options granted under the Plan.  If there is any change in the
Company's shares of Common Stock, as by stock splits, reverse stock splits,
stock dividends or re-capitalization, the number of options outstanding and the
shares subject to options shall be appropriately adjusted by the Board.

     5.   OPTION PRICE.  The Option price or prices shall be greater than or
equal to the fair market value of issued and outstanding shares of stock of the
Company at the date the Option is granted.  For the purposes hereof, fair market
value shall be determined by the Board after due investigation and inquiry.

     6.   OTHER PROVISIONS.  Each Option shall be subject to all provisions of
this Plan, including, but not limited to, the following terms and conditions:

     (a)  Options granted under the Plan shall be exercisable for a period of
          ten years from the date of the grant.

     (b)  The Board shall grant Options to officers and other employees and
          shall provide for the automatic receipt of options by directors who
          are not full time employees.  Each option shall consist of an option
          ("Option") to purchase one share of common stock at the exercise price
          (as defined below).  The Exercise Price shall be at least the fair
          market value of the Common Stock on the date of the grant of the
          Option.


EMPLOYMENT OPTION PLAN - 1997
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     (c)  The Board may in its discretion establish a schedule setting forth a
          time period during which options may be exercised.  Absent such a
          schedule, the options shall be exercisable 33 1/3% on January 1 the
          year following the effective date of the grant thereof, an additional
          33 1/3% on January 1 of the second year following the grant thereof,
          and the final 33 1/3% on January 1 of the third year following the
          grant thereof.  The Option Holder's right to exercise the options
          shall, however, be cumulative.

     (d)  If the employment of the Option Holder by the Company is terminated
          for any reason other than (i) his death, (ii) his discharge for
          dishonesty or commission of a crime, or (iii) his employment with a
          competitor of the Company without the Company's consent, the Option
          Holder may, within three months thereafter, subject to provisions of
          subsections 6(a) and (b) above, exercise the option to the extent that
          the option was exercisable as of the date of termination of his
          employment.  All unexercised Options shall terminate, be forfeited and
          shall lapse upon the expiration of said three-month period, or
          immediately if the employment of the Option Holder is terminated by
          the Company for any of the reasons set forth in (ii) or (iii) above.

     (e)  If the Option Holder dies (i) while employed by the Company or (ii)
          within three months after termination of his employment for any reason
          other than as set forth in subsections 6(c)(ii) or (iii) above, then
          within six months after the date of Option Holder's death, subject to
          the provisions of subsections 6(a) and (b) above, the Option may be
          exercised by his estate or by any person who has acquired the Option
          Holder's right to exercise the Option by bequest or inheritance to the
          extent the Option was exercisable as of the date of his death.  Upon
          the expiration of such six-month period, all unexercised options shall
          terminate, be forfeited and shall lapse.

     (f)  Except as otherwise provided in subsection 6(d) above, the Option and
          all rights granted hereunder shall not be transferred by the Option
          Holder, and may not be assigned, pledged or hypothecated in any way
          and shall not be subject to execution, attachment or similar process. 
          Upon any attempt by the Option Holder to transfer the option, or to
          assign, pledge, hypothecate or otherwise dispose of such Option or of
          any rights granted hereunder, contrary to the provisions hereof, or
          upon the levy of any attachment or similar process upon such Option or
          such rights, such Option and such rights shall immediately become null
          and void.  The option shall be exercisable, during the lifetime of the
          Option Holder, only by the Option Holder.

     7.   EXERCISE OF OPTIONS.

     (a)  To exercise the Option, the Option Holder or his successor shall give
          written notice to the Company's President at the Company's principal
          office.  Within ten days of the receipt by the Company of such written
          notice, the Company shall tender the Common Stock due pursuant to the
          exercise of the Option.  The Option Holder shall, concurrent with
          acceptance of the tendered Common Stock, remit full payment for the
          Common Stock being purchased pursuant to the Option to the Company. 
          The Option Holder shall also provide to the Company a written
          statement that the shares are purchased for investment and not with a
          view to distribution.  However, this statement shall not be required
          if the shares subject to the option are registered with the Securities
          and Exchange Commission.  If the option is exercised by the successor
          of the Option Holder, following his death, proof shall be submitted,
          satisfactory to the Board, of the right of the successor to exercise
          the option.

     (b)  Shares of stock issued pursuant to this Plan which have not been
          registered with the Securities and Exchange Commission shall bear the
          following legend:

          THE SECURITIES REPRESENTED BY THIS STOCK CERTIFICATE HAVE NOT BEEN
          REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE
          STATE SECURITIES LAW (THE "STATE ACTS"), AND SHALL NOT BE SOLD,
          PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED (WHETHER OR
          NOT FOR CONSIDERATION) BY THE HOLDER EXCEPT UPON THE ISSUANCE TO THE
          CORPORATION OF A FAVORABLE OPINION OF ITS COUNSEL AND/OR THE


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          SUBMISSION TO THE CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE
          SATISFACTORY TO COUNSEL FOR THE CORPORATION, TO THE EFFECT THAT ANY
          SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THE STATE ACTS.
     
     (c)  The Company shall not be required to transfer or deliver any
          certificate or certificates for shares purchased upon any exercise of
          such option:  (i) until after compliance with all then applicable
          requirements of law; and (ii) prior to admission of such shares to
          listing on any stock exchange on which the stock may then be listed. 
          In no event shall the Company be required to issue fractional shares
          to the Optionee.

     8.   REGISTRATION.  If the Company shall be advised by its counsel that
shares of stock deliverable upon any exercise of an option are required to be
registered under the Securities Act of 1933, or that the consent of any other
authority is required for the issuance of same, the Company may effect
registration or obtain consent, and delivery of shares by the Company may be
deferred until registration is affected or consent obtained.

     9.   ISSUANCE OF STOCK.  No stock shall be issued until full payment for
such stock has been made.  The Option Holder shall have no rights as a
shareholder with respect to optioned shares until the date of the issuance of a
stock certificate to him for such shares.  No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is prior to
the date such certificate is issued, except as provided in Sections 4 and 10
hereof.

     10.  CORPORATE REORGANIZATION.  If there shall be any capital
reorganization or consolidation or merger of the Company with another
corporation or corporations, or any sale of all or substantially all of the
Company's properties and assets to any other corporation or corporations, then
all Options outstanding shall be exercisable for a thirty day period prior to
the effective date thereof.  Options not so exercised shall expire upon the
effectiveness of such a transaction.  This provision does not however, apply to
mergers where the Company is the survivor.

     11.  AMENDMENTS AND TERMINATION.  The Board of Directors or the Committee
may terminate the Plan in whole or in part, may suspend the Plan in whole or in
part from time to time, and may amend the Plan from time to time, including the
adoption of amendments deemed necessary or desirable to qualify the Options
under the laws of various states (including tax laws) and under rules and
regulations promulgated by the Securities and Exchange Commission with respect
to the persons who are subject to the provisions of Section 16 of the Securities
Exchange Act of 1934, or to correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any Option granted thereunder,
without the approval of the share owners of the Company.

          However, no action shall be taken without the approval of the share
owners of the Company if the Committee determines that the approval of share
owners would be necessary to retain the benefits of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, or Section 162(m) of the Internal
Revenue Code of 1986, as amended.

     12.  OPTION AGREEMENT.  The granting of an option shall take place only
when a written option agreement in the form of an Employee Option Plan 1997
Agreement is executed by or on behalf of the Company and the employee to whom
the Option is granted and such executed agreement is delivered to the Company.

     13.  PERIOD OF PLAN.  No Option shall be granted on or after the tenth
anniversary of the date of adoption of the Plan by the Board of Directors of the
Company.  The Plan shall expire on the later of such tenth anniversary date or
the date on which all Options granted under the Plan have expired or been
exercised in full.


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