OPERATING AGREEMENT

                            DATED    JUNE 5, 1990
                                 --------------------

                                 MAIN PASS BLOCK 299

                                LEASE NO. OCS-G 1316A



                                  TABLE OF CONTENTS

            ARTICLE                        PAGE
            -------                        ----

DEFINITIONS                                 I
INTERESTS OF PARTIES                        II
COSTS AND EXPENSES                          III
OPERATOR                                    IV
ACCOUNTING PROCEDURE                        V
MINIMUM ROYALTIES AND RENTALS               VI
EXPENDITURE LIMITATION                      VII
POLICY COMMITTEE AND WORK PLANS             VIII
    AND BUDGETS
SURRENDER OR ABANDONMENT                    IX
SUNDRY RIGHTS AND DUTIES OF OPERATOR        X
ACCESS AND RIGHTS OF NON-OPERATORS          XI
ASSIGNMENT OF INTEREST AND                  XII
    PREFERENTIAL RIGHT TO PURCHASE
RELATIONSHIP OF THE PARTIES AND TAX         XIII
    ELECTIONS
FORCE MAJEURE                               XIV
INSURANCE AND LIABILITY                     XV
CLAIMS AND LITIGATION                       XVI
DURATION                                    XVII
NOTICES                                     XVIII
TOPICAL HEADINGS                            XIX
SUCCESSORS AND ASSIGNS                      XX
LIENS                                       XXI
LAWS AND REGULATIONS                        XXII
DISPUTES                                    XXIII
NO PARTITION                                XXIV
WAIVER                                      XXV
SEVERABILITY                                XXVI
DECLARATION OF OPERATING AGREEMENT          XXVII






<PAGE>

                                 OPERATING AGREEMENT

    THIS OPERATING AGREEMENT is made and entered into as of the 5th day of
June, 1990, by and between Freeport-McMoRan Resource Partners, Limited
Partnership, hereinafter designated as "Operator" or "Freeport", IMC
Fertilizer, Inc. ("IMC") and Felmont Oil Corporation ("Felmont"), IMC and
Felmont hereinafter sometimes collectively referred to as "Non-operators" or
sometimes individually referred to as a "Non-operator".

                                       RECITALS

    WHEREAS, the Parties are the joint owners of the oil and gas lease
covering the Property; and

    WHEREAS, the Parties desire to enter into an Agreement pursuant to which
they will explore for, develop, and produce oil and gas from the Property.

    Now, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, the Parties agree as follows:

                                       I. DEFINITIONS

    "Affiliate" shall have the meaning set forth in Paragraph 12.1 hereof.

    "COLLATERAL" shall mean (i) all equipment, inventory, improvements,
fixtures, accessions, goods and other personal or movable property of
whatever nature now or hereafter located on or held for use in connection
with the Property (or in connection with the operation thereof or the
treating, handling, storing, transportation, processing or marketing of the
Hydrocarbons) and all renewals or replacements thereof or substitutions
therefor; (ii) all Hydrocarbons, now or hereafter produced from the Property;
and (iii) all accounts and general intangibles, now or hereafter arising from
the sale or other disposition of the Hydrocarbons now or hereafter produced
from the Property, or from any Hydrocarbon sales contracts, present or
future, relating to the Property.

    "DECLARATION" shall mean that Declaration of Operating Agreement dated of
even date herewith between the Parties, in the form of Exhibit "D" hereto.

    "EQUIPMENT" shall mean all surface or subsurface machinery, equipment,
fixtures, inventory, facilities, materials and other property of whatever
kind or nature now or hereafter located on the Lease which are useful for the
production, gathering, treatment, processing, storage, or transportation of
Hydrocarbons, including, but not by way of limitation, all oil wells, gas
wells, water wells, injection wells, casing, tubing, tubular goods, rods,
pumping units, engines, christmas trees, platforms, derricks, separators,
compressors, flowlines, tanks, gas systems (for gathering, treating and
compression), pipelines, chemicals, solutions, water systems, power plants,
lines, transformers, starters and controllers, tools, telegraph, telephone,
loading racks, loading docks and shipping facilities.

    "HYDROCARBONS" shall mean all oil, gas and other liquid or gaseous
hydrocarbons in, under or that may be produced from the Property, and all
products processed or obtained therefrom.

    "LEASE" means that certain Oil and Gas Lease granted by the United States
of America as Lessor to Freeport-McMoRan Resource Partners, Limited
Partnership, as Lessee, effective June 5, 1990, designated by Lease No. OCS-G
1316A, covering the therein described portion of Block 299, Main Pass Area,
South and East Addition, as shown on official leasing map LA No. 10A, Outer
Continental Shelf Leasing Map, Louisiana Offshore Operations.

    "LENDER" shall mean a lending institution, group of lending institutions,
or any other third party or parties who is the mortgagee, grantee,
beneficiary, or secured party under any Mortgage, and any successor or
assignee thereof, and any parent, subsidiary, or affiliate thereof.

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<PAGE>

    "MORTGAGE" shall mean a mortgage, pledge, lien, assignment, and/or other
encumbrance of, or security interest in, a Party's rights under this
Agreement and/or the Party's interest in the Property.

    "MORTGAGOR" shall mean the Party executing a Mortgage and its successors
and assigns.

    "PARTIES" shall mean Freeport, IMC and Felmont, and their respective
successors and assigns.

    "PROPERTY" shall mean and include, the Lease, the Equipment, the
Collateral, all Hydrocarbons in, under and upon the Lease, all easements,
mineral rights associated with or attributable to the Lease, and all
appurtenances and improvements to the Lease.

                              II.  INTERESTS OF PARTIES

    2.1  Except as otherwise provided in this Agreement, the Property shall
be owned as shown on Exhibit "A" attached hereto and made a part hereof for
all purposes.

    2.2  Subject to the rights of Chevron U.S.A. Inc. to purchase production
from the Lease and to the other provisions hereof, each Party shall own and
shall have the right to receive in kind and to separately dispose of its
proportionate share of the oil and gas production from the Lease which shall
be delivered to such Party, at its option, at the outlet of the production
facilities on the production facilities platform(s); or to its credit in the
pipeline to which the well or wells or production facilities platform(s) may
be connected. Any extra expenditure incurred in the receiving in kind or
separate disposition by any Party of its proportionate share of the
production shall be borne by such Party. Where a Party hereto elects to
receive in kind or separately dispose of its share of production, such Party
shall have the obligation to make payment of all royalties and other burdens
(including the Production Payment reserved or owned by Chevron U.S.A. Inc.)
attributable to the share of production taken or disposed of by such electing
Party and such Party shall furnish Operator with full information regarding
such royalty and other payments. In the event that a Party does not elect to
receive in kind or separately dispose of its share of production and such
share is sold by Operator pursuant to the provisions of Paragraph 2.3,
Operator shall make the royalty and other payments on production attributable
to such share, but shall not be liable to the party(s) that owns such share
for any good faith failure to make any such payment properly or punctually.

    2.3  In the event any Party shall fail to take in kind or separately
dispose of its proportionate share of production from the Lease, Operator
shall have the right, but not the obligation to purchase such production or
sell it to others for the time being, at the best price obtainable which
shall in no event be less than the price which Operator receives for its
portion of the production from the Lease.  Operator's authority to sell such
production shall be revocable at the will of the owner thereof, and the term
of any contract for the sale of such production shall be for no longer period
than is commensurate with the minimum needs of the industry under the
particular circumstances and in no event longer than one year. Any such
purchase or sale by Operator shall be subject always to the right of the
owner of the production to exercise at any time its right to take in kind, or
separately dispose of, its share of all production not previously delivered
to a purchaser. Notwithstanding the foregoing, the Parties agree to apply and
be bound by the terms and provisions of the Gas Balancing Agreement in the
form attached hereto as Exhibit "C" and made a part hereof for all purposes.

    2.4  Each Party shall execute all division orders and contracts of sale
relating to its interest in production from the Lease, or authorize execution
by Operator on its behalf; provided, however, no Party shall be forced to
share an available market with any other Party hereto.

                               III.  COSTS AND EXPENSES

    3.1  All costs, expenses and liabilities accruing or resulting from the
operation and/or ownership of the Property pursuant to this Agreement shall
be determined in accordance with the applicable provisions of this Agreement
and shall be shared and borne (except as hereinafter provided) by the Parties
hereto in the percentages stated in Exhibit "A" hereof (such percentages
referred to therein and herein as the "Participating Interests").

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<PAGE>

    3.2  Operator may, at any time, require each Non-operator to pay in
advance, its proportionate part of reasonable expenditures for the
development, operation, abandonment and reclamation of the Property for the
Joint Account (as that term is defined in Exhibit "B" hereto) for the
succeeding month's operation. Operator shall adjust each monthly billing to
reflect advances received from the Non-operators. Each Non-operator shall pay
its proportion of all bills within thirty (30) days after receipt or before
the first day of the month for which the advance payment is made, whichever
is later. If such payment is not so made when due, the amount thereof, or any
unpaid balance, shall bear interest at the rate as provided in Paragraph 3.3.
Adjustment between estimated expenditures for which advance payments are
made, and the actual expenditures, shall be made by Operator monthly.

    3.3  Unpaid sums, until paid, shall bear interest at the rate of two
percent (2%) over the prime rate of interest from time to time charged by
Manufacturers Hanover Trust Company, but in no event more than the maximum
rate permitted by applicable law; provided however, if Louisiana is the
applicable law then the interest rate shall be 2% over the prime rate of
interest from time to time charged by Manufacturers Hanover Trust Company.

                                    IV.  OPERATOR

    4.1  Freeport shall act as Operator of the Property and subject to the
terms, conditions, and provisions herein set forth, shall have complete
charge and control thereof and the management, operation, exploration and
development thereof for the Joint Account of the Parties hereto. Freeport,
IMC and Felmont are concurrently entering into a separate agreement effective
as of the date of this Agreement and entitled "Agreement Designating Acting
Operator" whereby Freeport-McMoRan Oil & Gas Company ("FMOG"), a Delaware
corporation and an affiliate of Freeport is designated as the "Acting
Operator" for the Property, pursuant to the terms and conditions of said
agreement. Such designation of FMOG as Acting Operator shall not constitute a
resignation or termination by Freeport of its duties as Operator hereunder.
The Parties hereto recognize and agree that, as a result of FMOG being
designated as Acting Operator pursuant to such separate agreement, costs and
expenses otherwise paid hereunder to Freeport as Operator shall be paid to
FMOG as Operator as long as FMOG is Acting Operator under such separate
agreement and that Freeport, as an owner of interest in this Agreement, shall
make payments to FMOG for its proportionate share of such costs and expenses,
including the overhead charges provided for in the Exhibit "B" attached
hereto and made a part hereof for all purposes. Should Operator or any
successor Operator hereunder (1) dissolve, liquidate or terminate its
corporate existence or partnership structure, (2) become insolvent, bankrupt,
or subject to receivership, (3) no longer own an interest in the Property or
(4) fail materially to perform its duties hereunder, it shall cease to be
Operator hereunder effective as of the date a new Operator is elected. Change
of the partnership name or structure of Operator or transfer of Operator's
interest to any subsidiary, parent, affiliate, successor corporation or
surviving corporation or partnership in consolidation or merger, shall not
automatically cause the removal of Operator.

    4.2  Operator or any successor Operator may resign its duties as Operator
hereunder; provided, however, that the Non-operators shall written notice of
such resignation at least sixty (60) days prior to the effective date of
resignation.

    4.3  In the event the total of the Participating Interests owned by
Operator and/or any Affiliate or Affiliates of Operator should at any time
fall below a percentage equal to 50%, less the lowest percentage
Participating Interest owned by a Non-operator at such time, the
Non-operators shall have the right to remove the Operator without cause upon
30 days written notice, provided such removal is by the unanimous agreement
of the Non-operators.

    4.4  Should any Operator or any successor Operator for any cause cease to
be Operator hereunder, a successor Operator shall be designated by the vote
of the Parties owning a majority in interest. If the removed Operator fails
to vote or votes only to succeed itself, the successor Operator shall be
selected by the affirmative vote of Non-operators having a majority of the
interest in the Property remaining after excluding the interest of the
removed Operator. Should Operator or any successor Operator hereunder cease
to be Operator for any cause, its rights, titles and interests in the
Property shall be unaffected by such cessation, but it shall thereupon become
one of the Non-operators hereunder and shall henceforth be bound by the terms
and provisions hereof, as a Non-operator.

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<PAGE>

    4.5  Any Party hereto designated as Operator to succeed the Operator
herein named or any successor Operator shall thereupon succeed to all the
duties, powers, obligations, rights and authority given to the Operator
herein named with respect to all operations of every kind thereafter
conducted on or in respect of the Property. All Equipment acquired for the
account of the Parties and devoted to operations hereunder shall be
surrendered promptly to any appointed successor Operator.

                               V.  ACCOUNTING PROCEDURE

    5.1  All costs incurred in the operations hereunder and all credits
received shall be charged or credited to the account of the Parties hereto in
accordance with the provisions of Exhibit "B" attached hereto and made a part
hereof; provided, however, that if any provision of said Exhibit "B"
conflicts with any provision of this Agreement, this Agreement shall control.

                          VI.  MINIMUM ROYALTIES AND RENTALS

    6.1  Operator shall pay and charge to the Joint Account the rental,
minimum royalty, and any similar payments provided for in the Lease.

                             VII.  EXPENDITURE LIMITATION

    7.1  No operation shall be conducted on or in respect of the Property
except as hereinafter provided for by this Agreement. No expenditure shall be
made by Operator for the Joint Account in developing and operating the
Property or for capital investment in excess of $100,000 unless made pursuant
to a Work Plan and Budget approved as provided in Paragraphs 8.5 or 8.6 below
or in connection with an operation or proposal approved pursuant to the
non-consent provisions of Article VIII hereof, except in the case of expenses
reasonably incurred in safeguarding life and property in case of a blowout,
explosion, fire, flood, storm, hurricane, catastrophe or other sudden
emergency.

    7.2  Upon written request, a copy of each of Operator's internal
Authorizations for Expenditure which covers a gross amount of TWENTY-FIVE
THOUSAND DOLLARS ($25,000.00) or more for the Joint Account shall be
furnished to Non-operators for information.

                  VIII.  POLICY COMMITTEE AND WORK PLANS AND BUDGETS

    8.1  The Parties establish a Policy Committee to be composed of one
representative designated by each Party.

         A representative designated pursuant to this Paragraph 8.1 shall
serve until replaced by the Party that designated such representative. Each
Party also may designate one or more alternates for any representative
designated by it. An alternate shall exercise voting rights only in the event
of a representative's absence. Each representative may bring to Policy
Committee meetings such advisors as the representative deems necessary or
desirable; however, such advisors shall have no right to vote on matters
before the Policy Committee.

         Each Party promptly shall advise the other Parties in writing as to
the names and addresses of its representative and alternate representative
who shall have the authority to represent and bind the advising Party with
respect to any matter to be acted upon by the Policy committee. A Party's
representative or alternate representative may be changed from time to time
upon written notice to the other Parties.

    8.2  The Operator will provide to the Non-operators and the members of
the Policy Committee a proposed Work Plan and Budget for the following
calendar year not later than September 15 of each year. As used herein the
term "Work Plan" means a detailed program for Joint Operations to be
conducted during a Budget Year, adopted pursuant to this Article VIII; the
term "Budget" means a detailed projection of costs and expenses required for
Joint Operations during a Budget Year; the term "Budget Year" means January 1
to December 31, or such period as is mutually agreed upon; and the term
"Joint Operations" shall have the meaning ascribed to such term in Exhibit
"B" hereof. The

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<PAGE>

designated representatives of Non-operators shall respond by October 15 of
each year with the regular meeting to be held between October 15 and November
1 of each year. Special meetings shall be called by the Operator as and when
the Operator should deem necessary. Any of the other Parties to this
Agreement shall have the right to call a special meeting provided that no
such special meeting shall be called sooner than three months after the last
such special meeting. During the fifth month of each Budget Year the Operator
shall call an advisory meeting for the sole purpose of informing the Policy
Committee of the progress of Joint Operations for the current Budget Year to
date. The Parties and Operator shall attend all regular, special and advisory
meetings of the Policy Committee. All meetings shall be held at Operator's
offices, unless all Parties agree to another location. Written notice of the
time and place of each regular, special and advisory meeting, shall be
submitted by the Operator to the Parties, not less than 15 days before any
such meeting, unless such requirement of notice is waived in writing by the
Parties. The holding of any advisory meeting may be waived provided all
Parties consent to such waiver.

         The designated representative, or alternate, of Operator shall act
as chairman at all Policy Committee meetings. Each Party shall bear its own
cost of attendance. If Operator deems it necessary for any personnel who are
assigned duties in connection with the conduct of Joint Operations to attend
any meeting, the additional cost incurred therefor shall be charged to the
Joint Account.

    8.3  The annual Work Plan shall describe in reasonable detail (i) the
maintenance, exploration, development and/or production, and abandonment and
reclamation objectives for the Budget Year covered thereby; (ii) the work to
be performed in attaining the objectives; (iii) the portion of the Lease on
which Joint Operations are to be performed; (iv) the technical basis for the
type of Joint Operation proposed; and (v) such other information as the
Operator may deem appropriate or as reasonably requested by one (1) or more
Non-operators. In addition to the foregoing:

         (a)  Work Plans involving development operations shall include: (i) any
         pertinent geological and engineering information; (ii) number, location
         and proposed depth of any wells proposed to be drilled; (iii) reworking
         operations on or abandonment of any well; and (iv) plans for the
         installation of necessary flowlines, facilities and/or platforms; and

         (b)  Work Plans involving production operations shall include: (i)
         expected production of oil and gas; and (ii) unit costs of such
         production.

         Each Budget shall describe in reasonable detail the anticipated
costs to be incurred under the applicable Work Plan and the date or dates
funds from the Parties are expected to be required.

    8.4  The Policy Committee shall approve all Work Plans and Budgets and
supplements thereto and revisions thereof, settlement of claims and suits in
accordance with the provisions of this Agreement, and shall have the right
and authority to wind up the activities of the Joint Operations following
termination of this Agreement.

    8.5  Only those Parties owning an interest in the Property of ten percent
(10%) or more may vote on matters before the Policy Committee. Policy
Committee approval of any matter requiring Policy Committee approval
hereunder, shall require the vote of Operator and the vote of at least one
other Party entitled to vote which is not an Affiliate of the Operator;
provided, however, that if only one Party other than Operator should be
entitled to vote then Policy Committee approval of any such matter shall
require only the vote of Operator.

         With respect to any matter submitted by Operator for Policy
Committee approval, should Operator be unable to obtain the vote of at least
one other Party entitled to vote which is not an Affiliate of the Operator,
then in such event all Parties entitled to vote shall continue good faith
negotiations to resolve outstanding differences. In the event the Policy
Committee is unable to secure approval of a proposed Work Plan and Budget
within 60 days, the Operator shall submit an alternate proposed Work Plan and
Budget. In any event, the Operator shall incur for the Joint Account such
expenditures as it reasonably determines to be necessary for the continued
maintenance of the Lease and shall be permitted to operate the Property at a
level and in a manner which preserves the value thereof, to the extent that

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<PAGE>

such expenditures and operations are not subject to the non-consent
provisions of this Article VIII. No formal Policy Committee approval shall be
necessary for such expenditures or for such operations.

         In lieu of deciding any matter at any meeting, the Policy Committee
may act (a) by instrument(s) in writing signed by the representative of each
interest owner, which instrument(s) (in one or more counterparts) shall be
conclusively deemed to be the act of the Policy Committee, or (b) by
telephone communication provided that such action is unanimous and is
confirmed in writing by each Party or each Party's representative.

    8.6  The Initial Work Plan and Budget for calendar years 1990 and 1991
has been submitted to the Non-operators prior to the execution of this
Agreement and is attached hereto as Exhibit "E". By their execution of this
Agreement, all Parties hereto hereby approve said initial Work Plan and
Budget and, accordingly, the Operator is authorized to make the expenditures
provided for therein. The Parties further recognize that certain of the
expenditures included in such initial Work Plan and Budget have already been
expended in anticipation of the execution of this Agreement and the approval
of such expenditures is hereby confirmed.

    8.7  Operator shall have the sole right to propose Work Plans and Budgets
and supplements and revisions thereto. Operator shall not be deemed to have
exceeded any approved Work Plan and Budget provided the total of actual costs
and expenses incurred by the implementation of such Work Plan and Budget does
not exceed by more than fifteen percent the total costs and expenses
authorized for such Work Plan and Budget; provided, however, if such actual
costs and expenses will exceed such percentage of authorized costs and
expenses, Operator shall be required to submit a revised Work Plan and Budget
in respect of such excess costs and expenses for Policy Committee approval.
Operator shall have discretion in deciding which costs and expenses shall or
shall not be incurred for purposes of keeping costs and expenses of an
approved Work Plan and Budget within the limits authorized therefor.  The
Policy Committee shall consider all Work Plans and Budgets submitted by
Operator pursuant to the provisions hereof and, except otherwise provided in
Paragraph 8.5 above, shall take action thereon in accordance with Paragraph
8.9 below. In the event that (1) the Operator has committed to the
construction of a platform or related facilities, the drilling of a well, or
any other operation, included in an approved Work Plan and Budget, (2) it
subsequently develops that the cost of such operation when added to costs
incurred pursuant to such approved Work Plan and Budget has exceeded ten
percent (10%) of the total estimated cost of the approved Work Plan and
Budget, (3) the Non-operators have declined to approve such excess
expenditures in a supplemental or revised Work Plan and Budget submitted
pursuant to Paragraph 8.8 below, and (4) the Operator under its commitment
diligently pursues such operation, then such excess costs so expended or to
be incurred by Operator shall be considered an approved budget expenditure in
the Work Plan and Budget adopted for the succeeding year and paid by the
Parties in the ordinary course of business as set out herein; provided,
however, at any time subsequent to the beginning of such succeeding year,
Operator may bill the Non-operators their unpaid respective shares of such
expenditures made by Operator in conducting such operation in the preceding
year, plus interest at the rate provided for in Paragraph 3.3 above on the
amount so billed; provided further, however, such excess costs expended or
incurred and paid by Operator pursuant to Item (4) of this sentence
considered approved in the succeeding year's Work Plan and Budget shall not
exceed fifteen percent (15%) of the total estimated cost of the said approved
Work Plan and Budget for the preceding year and further provided, any
supplemental or revised budget (or a portion thereof ) submitted pursuant to
Item 3 of this sentence shall not be subject to the non-consent provisions of
Article VIII.

    8.8  From time to time, Operator, pursuant to Paragraph 8.7 above, may
propose supplemental or revised Work Plans and Budgets to the Policy
Committee which shall consider and take action thereon in accordance with
Paragraph 8.9 below. Any such supplement or revision shall be prepared as
provided in Paragraph 8.3 above and shall be submitted to the Policy
Committee as far in advance of implementing the supplemental or revised Work
Plan and Budget as is reasonably practicable.

    8.9  The Policy Committee shall consult in a good faith effort either to
approve or adopt each proposed Work Plan and Budget (or revision thereof or
supplement thereto) as submitted, or to formulate an alternative Work Plan
and Budget acceptable to the Parties.  Actions on all Work Plans and Budgets
shall be taken as provided for in Paragraph 8.5 above. Once approved as
provided in Paragraph 8.5 above, the annual Work Plan and Budget, any
approved supplement thereto or any approved revision thereof, shall be
binding on the Parties and shall be carried out by Operator. Notwithstanding
the foregoing, in the event that the installation of a platform provided for
in the Initial Work Plan and

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Budget has not been commenced prior to the end of 1992, then in such event
such platform and any equipment related directly thereto as well as any wells
proposed to be drilled therefrom shall ipso facto be deleted from the Initial
Work Plan and Budget and the approval granted by Non-operators herein for
such platform, related equipment and wells shall accordingly terminate and be
of no further force and effect.

    8.10 The foregoing provisions of this Article VIII shall apply to
platforms, any wells drilled therefrom and any other operations that are
included in the Initial Work Plan and Budget for the calendar years 1990 and
1991 ("the Initial Work Plan and Budget"). For the purposes of this Article
VIII, an Extraordinary Operation is defined as (1) the setting of a platform
and related facilities that is not included in the said Initial Work Plan and
Budget, (2) the drilling of a well or wells (but not including salt water
disposal wells) on any part of the Lease that are not included in the Initial
Work Plan and Budget, (3) a proposal to conduct an enhanced oil recovery
operation on the Lease, or (4) a proposal to make a capital expenditure (not
including the cost of drilling a well) not included in the Initial Work Plan
and Budget in excess of $1,000,000. For the purposes of the immediately
preceding sentence, the phrase "not included in the Initial Work Plan and
Budget" shall be deemed to include any operations which were included in the
Initial Work Plan and Budget but are no longer included therein pursuant to
the operation of Paragraphs 8.7 and 8.9 hereof . The foregoing provisions of
Paragraphs 8.1 through 8.9 of this Article VIII shall also apply to
Extraordinary Operations that are approved by all Parties. The following
provisions of this Article VIII shall however apply to Extraordinary
Operations that are not approved by all Parties.

    8.11 Without the consent of all Parties in interest, no Extraordinary
Operation shall be conducted on the Property except as hereinafter provided
for by this Agreement and the following provisions of this Article VIII will
apply only to such Extraordinary Operations conducted on the Property. Once
an Extraordinary Operation has been considered by the Policy Committee and
has not received approval of all Parties, any Party, Operator or
Non-Operator, may at any time thereafter propose such an operation.

    8.12 Such proposal shall be made to all Parties and, in the case of a
well proposal, shall designate the surface and bottomhole location, the
proposed depth, the sands or horizons expected to be penetrated and tested,
the tentative programs for casing, surveying and testing the well, estimated
cost and the portion thereof to be borne by each Party entitled to
participate therein, and other relevant information and, in the case of a
platform, the proposal shall include the estimated cost of designing,
fabricating, transporting and installing such platform and any other
information that may be related thereto and, in the case of a proposal to
conduct an enhanced oil recovery operation, the proposal shall include
detailed information relating thereto.

    8.13 (a)  Within thirty (30) days (60 days in the case of a platform
proposal) after its receipt of such proposal and data to be used to make an
election, each Party to whom the proposal was made may elect to participate
in the proposed operation or operations to the extent of its interest as
stated in the proposal, by giving notice thereof to the Operator. Failure to
give timely notice of an election to participate shall constitute an election
not to participate in the proposed operation. Operator shall notify each
Party immediately of all of the elections which are made. Parties who elect
not to participate are hereinafter each referred to as a "Non-participant" or
collectively as "Non-participants".

    (b)  In the event fewer than all of the parties elect to participate,
Operator shall by telex or other written notice advise the Parties electing
to participate of the aggregate Participating Interests not participating and
of the pro rata increase in participation which is available to those Parties
which have elected to participate. Within 72 hours after receipt of such
notice from the Operator, each such notified Party shall notify the Operator
by telex or other written notice whether or not it will assume some or all of
the obligations which would have been assumed by the Non-participants had
they elected to participate. Failure to respond shall be deemed an election
not to increase participation. If the Participating Parties elect to assume
all of the obligations which would have been assumed by the Non-participants
had they elected to participate, the Operator shall proceed with such
operation for the account of and at the sole risk and expense and in the
agreed percentages of those Parties electing to participate. If one or more
of the Participating Parties do not agree to assume all of the obligations
which would have been assumed by the Non-participants, the Operator shall not
proceed with such operation and it will be considered as if no proposal had
been made.

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<PAGE>

    8.14 In the event that there are proposals made hereunder to drill more
than one well, the proposals shall take precedence in the order in which such
proposals are made. Although a Party may propose more than one well or
operation at the same time, the Parties receiving such proposal shall have
the right to consent or not to consent separately as to each individual well
or operation being proposed; provided however, that the response to all such
wells or operations shall be made within the time period specified in Section
8.13(a) hereof.

    8.15 If all Parties receiving the proposal elect to participate in such
operation, it shall be conducted at the cost and risk of such Parties. If
less than all such Parties elect to participate in such operation, the Party
who proposed such operation and any Parties who elected to participate
therein (herein called "Participating Parties" or "Participants" whether one
or more) shall cause such operation (hereinafter called "non-consent
operation") to be conducted by Operator at their cost and risk; provided,
however, that if such operation is not commenced within one hundred eighty
(180) days after the date of its proposal and thereafter continued with
reasonable diligence, it may not be conducted without again being proposed to
all Parties.

    8.16 All costs and risks of a non-consent operation will be borne and
shared by the Participating Parties proportionately to their interests stated
in Exhibit "A" hereof, or proportionately to their interests in the operation
which is to be conducted, if different from their interests stated in Exhibit
"A".

    8.17 Subject to the other provisions of this Agreement, including this
Article VIII, all material and equipment placed in or on a well by the
Participant(s), whether one or more, in a non-consent operation shall be
owned by them, and, if the non-consent operation results in production, the
Participant(s) therein shall own all operating rights therein and all
production thereby obtained until such time as they shall have received
currently an amount equal to 400% of the costs incurred by the Participating
Parties in such operation which would have been paid by the
Non-Participant(s) had it been a Participant out of (i) the proceeds of the
sale of the share of such production to which such Non-participant(s) would
have been entitled had it been a Participant, and (ii) 20% of the proceeds of
the sale of the share of production to which such Non-participant(s) is
entitled from production from other portions of the Lease, after deduction of
the portion of operating expenses, royalty, other payments under Article VI
hereof, and severance, production or other tax on such production which would
have been paid by such Non-participant(s) had it been a Participant(s)
("non-consent deductions"). Notwithstanding the foregoing, the Participants
shall not be entitled to the aforesaid 20% of proceeds of the sale of the
share of production on other portions of the Lease in the event that the well
which was the occasion of the non-consent is not completed as a producer of
oil or gas nor shall the Participants be entitled to the aforesaid 20% share
of production from other portions of the Lease from any period of time after
which production of oil and gas from the well which was the occasion of the
non-consent has ceased to produce. In the case of the installation of a
platform or equipment where all of the Parties do not participate therein,
such platform or equipment shall be owned by the Participants until such time
as Participants have received an amount equal to 400% of the cost incurred by
the Participant(s) in designing, fabricating, transporting and installing
such platform or equipment which would have been paid by the
Non-participant(s) had it been a Participant(s). In the case of the
installation of a non-consent platform, Non-participants shall have no
ownership in such platform and shall be deemed to non-consent any proposals
to drill a well from such platform until such time as Participants have
recouped (i) 400% of the aforesaid portion of the cost of such platform, and
(ii) 400% of the costs incurred by Participant(s) in drilling wells thereon
which would have been paid by the Non-participant(s) had it been a
Participant(s), out of the proceeds of the sale of the share of production
from all wells drilled on such platform to which such Non-participant(s)
would have been entitled had it been a Participant(s), less non-consent
deductions. Non-participant(s) shall have the right at any time to become an
owner of the platform or equipment by paying to Participant(s) in cash the
then unrecouped balance in the recoupment account. It is further provided
that the Participants shall not be entitled to the aforesaid 20% of proceeds
from other portions of the Lease in connection with such non-consent platform
and wells drilled thereon. In the case of the installation of equipment
pursuant to the non-consent provisions of this Article VIII, the
Participant(s) shall be entitled to recover 400% of the aforesaid cost of
such equipment out of 20% of the proceeds of the sale of the share of
production to which such Non-participant(s) is entitled from production from
all wells which benefited from or are serviced by such equipment, less
non-consent deductions.

         If a well is drilled hereunder as a non-consent operation, and such
well is drilled from a facility other than a permanent platform, such as from
a jackup rig or floating drilling vessel, and results in the discovery or
extension

                                  8
<PAGE>

of productive formations, 400% of the costs incurred by Participant(s) in the
drilling of such a well which would have been paid by the Non-participant(s)
had it been a Participant(s) shall be recouped out of the proceeds of the
sale of the share of the production to which such Non-participant(s) would
have been entitled had it been a Participant(s), less non-consent deductions,
from said well and from the production from all other wells which develop the
newly discovered or extended productive area completed from any platform
subsequently located on the Lease, provided such a platform is located within
three thousand feet (3,000') from the vertical projection of the bottomhole
location of such non-consent well.

         The above mentioned proceeds shall be received and shared by the
Participants in the proportions in which they participated in the non-consent
operation.

    8.18 After the recovery of a Non-participant's recoupment account by
Participants, such Non-participant shall own the interest in the well and all
material and equipment therein and all subsequent production therefrom which
it would have owned initially had it been a Participant. If the Participating
Parties are unable to recover a Non-participant's recoupment account they
shall continue to own the share of all material and equipment placed in or on
said well by them which would have been owned by such Non-participant had it
been a Participant and shall be entitled to the salvage value thereof,
provided, however, that if the net salvage value is in excess of the
unrecovered portion of such recoupment account the excess shall be credited
to such Non-participant.

    8.19 Any Party or Parties owning an interest in the platform may use it
free of charge for conducting drilling operations on the Property in
accordance with this Agreement, but shall indemnify the other Parties against
any loss, risk or expense resulting from such use.

    8.20 All operating, maintenance and repair expenses and liabilities
attributable solely to the platform, and not to the drilling or producing of,
or conducting of other operations in connection with, a particular well or
wells, and all cost, risk and expense of salvaging the platform, and the net
salvage thereof, will be shared on the basis of the then ownership of the
platform. All such expenses and liabilities attributable to or arising out of
the drilling or producing of, or the conducting of other operations in
connection with, a particular well or wells will be charged to and borne by
the then owners of such well or wells. The cost and expense of removing and
returning the drilling rig initially placed on the platform will be shared on
the basis of ownership of the platform at the time of its removal. The cost
and expense of again placing a drilling rig on the platform, and of its
removal, will be prorated on a well basis to the owners of wells on which it
is used.

    8.21 At the request of any Party owning an interest in a platform,
Operator shall furnish to the owners thereof the estimated net deficit or net
value resulting from the salvage and removal of the platform, and any
disagreement as to the amount of such deficit or value will be settled by a
majority in interest of such owners. Within thirty (30) days after the fixing
of such estimate, any Party owning an interest in a platform may propose to
the other owners thereof that it be salvaged and removed from the lease, at
the same time agreeing to convey its interest therein to any owner thereof
desiring to retain the platform and to pay to or accept from such other
owners such proposing Party's share of such estimated net deficit or net
value, as the case may be. Any such other owner may, within thirty (30) days
after receipt of such proposal, elect to retain the platform by giving notice
thereof to the other owners, at the same time agreeing to accept its pro rata
share of the interest of any Parties desiring salvage and removal and to make
or accept payment for the estimated net value or net deficit attributable to
such interest as hereinabove provided. The Parties will promptly thereafter
make such payments and execute a conveyance, effective as of the date of the
earliest notice given by a Party desiring to retain the platform, of the
interest of the Parties desiring to salvage and abandon to the Parties
desiring to retain such platform. From and after such effective date the
Parties so conveying their interest will have no further rights, obligations
or liabilities thereafter accruing with respect to such platform. If no Party
desires to retain the platform, Operator shall proceed promptly to have same
salvaged and removed at the cost of the owners thereof.

                            IX.  SURRENDER OR ABANDONMENT

                                  9
<PAGE>

    9.1  Unless otherwise provided for in this Agreement, the Parties shall
not surrender or abandon any of the Property unless all Parties consent to
the same in writing; provided, however, that such consent shall not
unreasonably be withheld.

                       X.  SUNDRY RIGHTS AND DUTIES OF OPERATOR

    10.1 Operator shall conduct its activities under this agreement as a
reasonable prudent operator, in a good and workmanlike manner, with due
diligence and dispatch, in accordance with good oilfield practice, and in
compliance with applicable law and regulation, but in no event shall it have
any liability as Operator to the other Parties for losses sustained or
liabilities incurred except such as may result from gross negligence or
willful misconduct. Operator shall have the rights and discharge the duties
set forth in this Article X, except as may be expressly provided otherwise
elsewhere in this Agreement.

    10.2 Operator shall have control and supervision of all operations
hereunder for the exploration and development for oil and gas production
from, and for the abandonment and reclamation of, the Property. The approval
of the drilling of any well hereunder shall include all necessary
expenditures incurred by Operator in connection with drilling the well,
including but not limited to testing and completing it for production.

    10.3 All wells drilled and all operations performed upon the Property by
outside contractors shall be drilled or performed by qualified, responsible,
independent contractors on a competitive contract basis to the extent
competitive bids are available, or, if the wells are drilled under multi-well
contracts, at the contract rates. Operator may, if approved by Non-operators,
employ any of its own drilling equipment, tools or machinery in performing
any operations under this Agreement, but such work shall be performed by
Operator acting as an independent contractor under a written contract
containing the same terms and conditions and at the same rate for using such
equipment, tools and machinery as is customary, usual and prevailing in
competitive contracts of independent contractors who are doing work of
similar nature in the vicinity of the Lease.

    10.4 Operator shall have the right (subject to the provisions of the
Accounting Procedure, Exhibit "B") to dispose of any salvaged material or
equipment resulting from operations hereunder. The accounts of the Parties
shall be credited with the proceeds thereof in proportion to their interest
therein.

    10.5 Operator shall use reasonable diligence to see to the performance of
all of the obligations of the Lease affecting the Property.  Operator shall
endeavor to comply with all laws, rules and regulations governing the
operations hereunder. Operations conducted hereunder shall be subject to
applicable Executive Orders and applicable provisions of the Code of Federal
Regulations. Operator shall endeavor to keep the Property free and clear of
all liens in favor of third Parties resulting from construction or operations
on or in respect of such Property. Operator shall undertake to see to the
payment, on or before the date when they become due and payable, of all taxes
assessed or levied against the Property, the respective interest of the
Parties herein, or the production therefrom, including ad valorem taxes,
production, severance and other taxes (other than income taxes) and
governmental charges, except to the extent that any such taxes or charges may
be paid or payable by the purchaser of any of the production.  Operator shall
be authorized to make payments to the Fisherman's Contingency Fund, to the
Offshore Oil Pollution Fund and to any other similar funds, and shall charge
Non-operators for their share of such payments.

    10.6 The number of employees, the selection of such employees, the hours
of labor and compensation for services to be paid any and all such employees
shall be determined by the Operator and, as among the Parties hereto, such
employees shall be the employees of Operator.

    10.7 Operator shall keep accurate books, accounts, and records of
operations, which shall be available at reasonable times to each Party or its
authorized representatives.

    10.8 Operator shall make all required reports to governmental authorities
that it has the duty to make as Operator. Operator shall give timely written
notice to the Parties of all litigation and hearings which affect the Lease
or operations hereunder.

                                  10
<PAGE>

    10.9 Upon written request, Operator shall, as soon as practicable,
furnish each Party the following information pertaining to each well being
drilled:

         a)   copy of application for permit to drill and all amendments
              thereto;

         b)   daily drilling report;

         c)   complete report of all core analyses;

         d)   copies of any logs and surveys made in the well as run and upon
              completion of the well a composite of all electrical type logs and
              mud logs (if any);

         e)   upon written request received by Operator prior to the
              commencement of drilling, samples of cuttings and cores marked as
              to depth to be packaged and shipped at the expense of the
              requesting Party;

         f)   copies of any well tests, bottomhole pressure surveys, gas and
              condensate analysis, or any other pertinent information;

         g)   copies of all routine reports to any governmental agency;

         h)   reports of production, crude oil runs and stocks;

         i)   reports on status of wells including wells not producing and not
              abandoned; and

         j)   reports of inventory and any other information pertaining to
              operations.

The cost of gathering and furnishing information not ordinarily furnished to all
Parties shall be charged to the Party(s) that requests such information.

                       XI.  ACCESS AND RIGHTS OF NON-OPERATORS

    11.1 Each of the Non-operators hereto, for so long as such Non-operator
has a Participating Interest, at its sole risk and expense shall have access
at all reasonable times to the Property, including access to the rig floor,
to inspect and observe any and all operations thereon. Each of the
Non-operators, for so long as such Non-operator has a Participating Interest
and upon reasonable notice, shall also have access at all reasonable times
during normal office hours to any and all information pertaining to the
operation, exploration, and development of the Property and the production
secured therefrom, including Operator's books, records and vouchers relating
thereto in the office in which such books, records and vouchers are kept.
Operator shall, upon request, furnish any Party entitled thereto with copies
of any and all drilling contracts, drilling reports, electric well survey
logs, well logs, test data, tank tables, daily gauge and run tickets, and
reports of production and stock on hand on the first day of each calendar
month.  Operator shall also, upon request, make available to any Party
entitled thereto samples of any and all cores, cuttings or fluids taken from
or encountered in any wells drilled on the Property.

           XII.  ASSIGNMENT OF INTEREST AND PREFERENTIAL RIGHT TO PURCHASE

    12.1 For the purposes of this Agreement "Affiliate" shall mean when used
in relation to the Parties hereto any corporation, partnership, joint venture
or other entity other than a Party hereto that shall be directly or
indirectly under the common control of, controlled by, or which controls,
that Party.

    12.2 Except as provided in Paragraphs 12.3 and 12.4 below and subject to
the provisions of Paragraph 12.5 below, no Party shall assign or transfer all
or any part of its interest in the Property or this Agreement, or any of its
rights and interests hereunder.

                                  11
<PAGE>

    12.3 Subject to the provisions of Paragraph 12.5 below, any Party may
convey, assign or transfer all or any part of its interest in this Agreement
and the Property to an Affiliate or to a successor by reason of merger,
consolidation or reorganization or sale of substantially all of such Party's
assets.

    12.4 If any Party receives from a person or entity, other than an
Affiliate or successor as provided for in Paragraph 12.3 above, a bona fide
offer to purchase or otherwise acquire all or any part of the offeree's
interest in the Property, which the offeree is willing to accept, the offeree
shall furnish in writing to the other Parties the complete terms of the
offer; provided, however, if any part of the consideration offered is other
than cash, in submitting such offer to the other Parties the offeree shall
place a reasonable cash value on such non-cash part of the consideration and
support such cash value with appropriate information and data upon which it
is based. Each other Party shall have the right (in the proportion that its
Participating Interest bears to the total Participating Interest of the
Parties hereto other than the Participating Interest of the offeree Party, or
in such other proportions as the Parties other than the offeree Party shall
agree) for a period of 30 days after receipt of the offer to elect in writing
to purchase or otherwise acquire the same interest upon the same terms and
conditions as the proposed offer, but with the right to pay the entire
consideration in cash; provided however, if a majority in interest of the
other Parties do not agree that cash value of the non-cash part of the offer
is reasonable, and the offeree and the other Parties are unable to agree
within ten (10) days after the latest date on which any of the other Parties
receive the offer (the "Receipt Date"), then both the offeree and the other
Parties shall select a resident partner of one of the so-called "Big Eight"
accounting firms (if such Parties are unable to agree on such a person within
thirteen (13) days after Receipt Date, each side shall immediately designate
such a partner and the two partners so designated shall within fifteen (15)
days from Receipt Date select such a partner who shall act solely as
hereinafter provided) furnish him with information, data and reasons
supporting their respective cash values, and such partner, on or before
twenty (20) days from Receipt Date, shall determine the reasonable cash value
of the non-cash part of the consideration, which determination shall be
final, unappealable, binding on all Parties and enforceable in a court of
law, and shall be used in establishing the price at which the offeree may
elect to reject the offer entirely and, if not, at which the other Parties
shall elect to acquire or not acquire the interest offered. If the offer is
not accepted by the other Parties, the offeree Party may sell or otherwise
dispose of the interest described in the offer at the price and upon the
terms and conditions of the proposed offer, provided (i) the provisions of
Paragraph 12.5 below are satisfied, and (ii) that the sale or other
disposition is effectuated within 120 days after the other Parties' right of
election has expired. After the 120 day period has expired, the provisions of
this Paragraph 12.4 shall again apply to the proposed offer for another 30
day period, if that offer is still effective. The failure of the other
Parties to exercise their rights to acquire an interest under this Paragraph
12.4 shall not be deemed to be a waiver of their rights under this Paragraph
12.4 with respect to subsequent offers.

         The preferential right to purchase and the procedures for
implementing it set forth in this Paragraph 12.4 shall apply to all sales or
other dispositions of all or any portion of a Party's interest in all or any
portion of the Property, regardless of whether other interests or assets of
the offeree Party also are included in such sale or other disposition. If the
offeree Party is disposing of all or any portion of its interest in all or
any portion of the Property together with other interests or assets held by
the offeree Party, in its notice of offer to the other Parties, the offeree
Party shall state the offered consideration for the interest in the Property,
as it is set forth in the offer, including offeree's determination of a
reasonable cash value for any non-cash part of the consideration, and if it
is not set forth in the offer separately from the consideration offered for
the other interests or assets of the offeree Party that are the subject of
the offer, the offer shall state the reasonable cash value of the offered
price or consideration relating to the interest in the Property. If the
offeree and the other Parties cannot agree as to the reasonable cash value of
the offered price or consideration relating to the interest in the Property,
such reasonable cash value and the rights of the Parties thereunder shall be
established as between the offeree and the other Parties following the same
procedures set out in this Paragraph 12.4 for a determination of the
reasonable cash value of the non-cash part of the consideration therein
involved, however, the price so stated for the interest in the Property shall
not exceed the fair market value of the same. The other Parties may elect, in
the manner provided above in this Paragraph 12.4, to accept the offer as to
only the interest in the Property but shall have no right as to the other
interests and assets described in the notice.

    12.5 Any transfer, sale, assignment or other disposition of all or any
part of the Property which is allowed under Paragraphs 12.3 or 12.4 hereof
shall be subject to the following additional conditions: (a) any sale,
transfer, assignment or other disposition shall be made only to a financially
responsible Party or Parties; (b) all outstanding

                                  12
<PAGE>

obligations and liabilities of the transferring Party under this Agreement
due and owing as of the date of said transfer must be paid; (c) the
transferee shall execute and deliver to the other Parties an agreement
whereby it assumes and agrees to keep, observe and perform all of the terms,
covenants and conditions of this Agreement and the Declaration to be kept,
observed and performed on the part of the transferor, including without
limitation a ratification and adoption by such transferee of the restrictions
upon transfer and encumbrance contained in Article 2 of the Declaration and
Article XII hereof and the lien and security interest granted under Section
2.5 of the Declaration and Paragraph 21.1 hereof, (d) any sale, transfer,
assignment or other disposition shall be subject to obtaining the approval of
all required governmental authorities, and (e) if the original interest of
any Party is at any time transferred to four (4) or more transferees,
Operator may, at its discretion, require such transferees to appoint a single
trustee with full authority to receive notices and payments, approve
expenditures, and pay the share of costs which are chargeable against such
transferees.

    12.6 No Party may execute a Mortgage affecting any part of its interest
under this Agreement or the Property (other than the lien and security
interest granted under Paragraph 21.1 hereof and Section 2.5 of the
Declaration) unless the following conditions are first satisfied:

    (a)  The Mortgage and the rights of the Lender thereunder shall be made
         expressly subject to this Agreement and the Declaration as amended by
         the Agreement to Coordinate Operating Agreements and the Agreement
         Designating Acting Operator, executed among the Parties in connection
         herewith, and as further amended from time to time, (as so amended, the
         "Documents") and the rights of the Parties hereunder and thereunder and
         the Mortgage shall contain a provision which binds the adjudicatee at a
         foreclosure sale arising out of the Mortgage or the transferee in a
         deed in lieu of such foreclosure to (i) assume and agree to keep,
         observe and perform all of the terms, covenants and conditions of the
         Documents to be kept, observed and performed on the part of the
         Mortgagor, including without limitation a ratification and adoption of
         the restrictions on transfer and encumbrance contained in Article 2 of
         the Declaration and Article XII hereof and the lien and security
         interest granted under Section 2.5 of the Declaration and Paragraph
         21.1 hereof, (ii) pay, within thirty (30) days of the date on which the
         said adjudicatee or transferee succeeds to any interest of the
         Mortgagor in this Agreement or the Property all amounts owed by the
         Mortgagor under this Agreement which remain unpaid as of the date that
         the said adjudicatee or transferee succeeds to any interest of the
         Mortgagor in this Agreement or the Property, (iii) execute an agreement
         whereby such adjudicatee or transferee evidences its assumption
         provided for under (i) above and agreement provided for under (iv)
         below, and (iv) include in any conveyance of any interest in this
         Agreement or the Property an agreement by the transferee thereto to
         assume and agree to keep, observe and perform all of the terms,
         covenants and conditions of the Documents to be kept, observed and
         performed on the part of the Mortgagor, including without limitation a
         ratification and adoption by such transferee of the restrictions on
         transfer and encumbrance contained in Article 2 of the Declaration and
         Article XII hereof and the lien and security interest granted under
         Section 2.5 of the Declaration and Paragraph 21.1 hereof.

    (b)  The Lender shall agree in writing at the time the Mortgage is granted
         that if the Lender is the adjudicatee at a foreclosure sale arising out
         of the Mortgage or the transferee in a deed in lieu of such
         foreclosure, such Lender shall: (i) assume and agree to keep, observe
         and perform all of the terms, covenants and conditions of the Documents
         to be kept, observed and performed on the part of the Mortgagor,
         including without limitation a ratification and adoption of the
         restrictions on transfer and encumbrance contained in Article 2 of the
         Declaration and Article XII hereof and the lien and security interest
         granted under Section 2.5 of the Declaration and Paragraph 21.1 hereof,
         (ii) pay, within thirty (30) days of the date on which the Lender
         succeeds to any interest of the Mortgagor in this Agreement or the
         Property, all amounts owed by the Mortgagor under this Agreement which
         remain unpaid as of the date that the Lender succeeds to any interest
         of the Mortgagor in this Agreement or the Property, (iii) execute an
         agreement whereby it evidences its assumption provided for under (i)
         above and agreement provided for under (iv) below, and (iv) include in
         any conveyance of any interest in this Agreement or the Property by the
         Lender an agreement by the transferee thereto to assume and

                                  13
<PAGE>

         agree to keep, observe and perform all of the terms, covenants and
         conditions of the Documents to be kept, observed and performed on the
         part of the Mortgagor, including without limitation a ratification and
         adoption by such transferee of the restrictions on transfer and
         encumbrance contained in Article 2 of the Declaration and Article XII
         hereof and the lien and security interest granted under Section 2.5 of
         the Declaration and Paragraph 21.1 hereof.

                 XIII.  RELATIONSHIP OF THE PARTIES AND TAX ELECTIONS

    13.1 This Agreement is not intended and shall not be construed to create
a partnership within the meaning of the federal common law nor under the
applicable laws of any state nor under the laws of any state in which any
Party hereto is incorporated, organized or conducting business. The Parties
expressly agree that no Party hereto shall be responsible for the obligations
of any other Party, each Party being severally responsible only for its
obligations arising hereunder and liable only for its allocated share of the
costs and expenses incurred hereunder. It is not the purpose or intention of
this Agreement to create, and this Agreement should never be construed as
creating, a relationship whereby any of the Parties shall be held liable for
acts, either of omission or commission, of any other Party hereto.

    13.2 The Parties agree to make an election under Internal Revenue Code
section 761(a) out of the provisions of subchapter K of the Internal Revenue
Code of 1986. Further, the Parties agree to take no action in contravention
of this election including but not limited to entering into any agreement,
contract, undertaking or any other act which would jeopardize the ability to
make such election. The Parties also agree that, to the extent permissible
under applicable law, their relationship shall be treated for state income
tax purposes in the same manner as it is for federal income tax purposes.

                                 XIV.  FORCE MAJEURE

    14.1 In the event of any Party hereto being rendered unable, wholly or in
part, by force majeure applying to its operations, to carry out its
obligations under this Agreement (other than to make payments of amounts due
hereunder), it is agreed that upon such Party's giving detailed written
notice within a reasonable time of such force majeure to all Parties in
interest, then the obligations of such Party so far as they are affected by
such force majeure shall be suspended during the continuance of any inability
so caused and such cause shall, so far as possible, be remedied with all
reasonable dispatch. The term "force majeure" as employed herein shall mean
acts of God, strikes, lockouts, or other industrial disturbances, acts of the
public enemy, wars, blockades, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fires, storms, floods, washouts, arrests, and
restraints of rulers and peoples, including unusual difficulty in obtaining
pipe or other material or other unusual difficulty in carrying out operations
hereunder because of government edict or regulations, civil disturbances,
explosions, breakage or accident to machinery or lines of pipe, and any other
cause whether of the kind herein enumerated or otherwise not within the
control of the Party claiming suspension, all of which by the exercise of due
diligence such Party is unable to foresee or overcome; however, the
settlement of strikes or lockouts shall be entirely within the discretion of
the Party having the difficulty, and the above requirement that any force
majeure shall be remedied with the exercise of due diligence shall not
require the settlement of strikes or lockouts by acceding to the demands of
the opposing party when such course is inadvisable in the discretion of the
Party having the difficulty.

                             XV.  INSURANCE AND LIABILITY

    15.1 Operator shall at all times while operations are conducted by it for
the Joint Account on the Property carry, pay for and charge to the Joint
Account such insurance in such amounts and covering such risks as Operator
deems appropriate, as follows:

    (a)  WORKER'S COMPENSATION:

         Such insurance shall be in full compliance with the law in the state
         where the work is to take place and shall contain a voluntary
         compensation endorsement and a waiver of subrogation as to
         Non-operators. Where applicable, coverage shall also be provided to
         comply with the:

                                  14
<PAGE>

         (i)   U. S. Longshoremen's and Harbor Worker's Compensation Act, and
               the

         (ii)  Outer Continental Shelf Lands Act.

    (b)  EMPLOYER'S LIABILITY:

         Such insurance shall have a limit of liability of $1,000,000 per
         accident and shall be endorsed, where applicable, to provide:

         (i)   Maritime (Amendment to Coverage B), to include transportation,
               wages, maintenance and cure.

         (ii)  A claim "in rem" will be treated as a claim "in personam".

         (iii) A waiver of subrogation as to Non-operators.

    It is agreed that the Operator, subject to the laws in the state or
    jurisdiction where the work is to take place, may elect to self-insure all
    or any portion of the Worker's Compensation and Employer's Liability
    exposures arising out of operations conducted hereunder, provided all
    Non-operators consent in writing to such election.

    (c)  All vessels owned or chartered by Operator shall be adequately covered
         by Hull and Protection and Indemnity Insurance.

    (d)  No insurance other than as specified above shall be provided by the
         Operator.

    (e)  The premiums for all insurance policies obtained under this article
         shall be charged to the Joint Account of the Parties hereto in
         accordance with Exhibit "B" and Operator, upon written request, shall
         furnish evidence certifying such insurance.

    (f)  The Operator shall require contractors and subcontractors performing
         work for the Joint Account to provide such insurance as deemed
         reasonable by the Operator in relation to the work to be performed by
         said contractors or subcontractors.

    (g)  Upon request, certificates of insurance evidencing the insurance
         obtained by Operator hereunder shall be furnished to each Non-operator
         and each Non-operator shall furnish to Operator certificates of
         insurance evidencing the insurance obtained by Non-operator in
         compliance with the provisions hereof.

    (h)  Unless otherwise agreed in writing, Operator and Non-operator shall
         separately carry their own policies of the following insurance:

         (i)   Control of Well Insurance in the minimum amount of $50,000,000
               for the total loss.

         (ii)  Where applicable, Blanket Charterers' Legal Liability and Cargo
               Legal Liability with a limit of liability of $500,000.

         (iii) Umbrella Liability Insurance in the amount of $25,000,000 excess
               of all primary limits.

         (iv)  Above insurance coverages, including but not limited to any and
               all deductibles, self-insured retentions or primary layers, shall
               contain waivers of subrogation as to the Parties hereto.

    15.2 Notwithstanding anything contained in this Agreement to the
contrary, each Party shall be responsible for all costs, liabilities, claims,
damages and liens for property or personal injury, as well as pollution cost
and damage,

                                  15
<PAGE>

arising out of any operation on the Property in proportion to its
Participating Interest, except as to such costs, liabilities, claims, damages
and liens caused by the gross negligence or willful misconduct of any Party
to this Agreement, in which case such Party shall be liable therefor.

    15.3 Operator shall at any time requested furnish any Non-operator with
full information concerning the kind, character and amounts of insurance
carried. Operator shall promptly notify Non-operators of any loss, damage or
claim not covered by insurance carried by the Operator for the benefit of the
Joint Account or individual Non-operators.

    15.4 Operator shall not be liable for loss, damage or destruction to any
property of Non-operators in connection with operations hereunder for the Joint
Account on or in respect of the Property, except those arising out of willful
misconduct or gross negligence of Operator.

    15.5 Each Party, in proportion to its Participating Interest shall be
liable for any losses and expenses that exceed the amount collectable under
the insurance carried by Operator for the Joint Account (as set forth in
Paragraph 15.1) on account of personal injury or death to any person in
connection with operations hereunder; provided however, all Parties shall
share in the loss to the extent of their interest unless such loss is caused
by the willful misconduct or gross negligence of one of the Parties hereto;
then in such event the loss shall be borne entirely by that Party.

    15.6 Subject to the other provisions of this Agreement, each Party, to
the extent of its Participating Interest, shall indemnify and save harmless
the other Parties hereto for claims and losses that exceed the amounts
collectible under the insurance carried by Operator for the Joint Account (as
set forth in Paragraph 15.1), regardless of the negligent acts or omissions
of Operator. Nothing contained in this Paragraph 15.6 shall be deemed to
release the Operator from its obligation under Article X hereof.

    15.7 Liability for (1) damages to property of "third persons" (as used in
this paragraph, the term "third persons" shall not include the employees,
agents or representatives of Operator or any Non-operator), (2) fines,
penalties, damages, losses, etc., arising out of claims, either civil or
criminal, public or private, relating to actual or alleged pollution of
water, air, or the environment, or (3) injury to or death of third persons
arising from operations on or in respect of the Property including the
expenses incurred in defending claims or actions asserting liabilities of
this character, shall be borne by the Parties in proportion to said Parties'
respective Participating Interests, except that when such damage is caused by
the gross negligence or willful misconduct of Operator, then Operator shall
be responsible for such liability. In the event such damage is caused by one
or more of the Non-operators, then in that event, the liability for such
damage shall be borne by the Non-operator or Non-operators responsible,
except when a Non-operator is expressly authorized to act for the Joint
Account, then any such damage except that caused by the gross negligence or
willful misconduct of such Non-operator shall be borne by the Parties in
proportion to their respective Participating Interests.

    15.8 In the event of a judgment against Operator as the result of a
personal injury, death and/or property loss or damage case arising out of
operations hereunder and brought by a party or parties other than a Party to
this Agreement, which judgment includes a finding of gross negligence on the
part of Operator, the Court's finding of gross negligence shall not be
binding for purposes of determining whether or not any Non-operator is
obligated hereunder to share the burdens of any such judgment unless the
gross negligence was found to be attributable to an act or omission of an
officer or director of Operator. In the event the gross negligence was found
to be attributable to an act or omission of an employee of Operator other
than an officer or director, the facts and circumstances giving rise to such
judgment shall be submitted to a board of arbitration, as hereinafter
provided, for an independent determination, in light of applicable law and
generally accepted standards in the offshore oil and gas producing industry,
of the degree of negligence exhibited by the Operator; provided, however,
that the previous finding of gross negligence on the part of Operator shall
not be admitted in evidence in such arbitration proceeding. For purposes of
this Paragraph 15.8, Operator shall, as soon as practicable following the
judgment containing the gross negligence finding, give notice of submission
to the Non-operators, which notice shall name one arbitrator. The
Non-operators shall, within thirty (30) days after the date such notice is
given, agree among themselves to the appointment of one arbitrator and give
notice of such appointment to the Operator, failing in which the arbitrator
shall be appointed by the then senior United States District

                                  16
<PAGE>

Judge for the Eastern District of Louisiana. The two arbitrators so selected
shall select a third arbitrator or umpire within twenty (20) days after the
giving of notice of the appointment of the second arbitrator. Should the two
arbitrators selected by Operator and the Non-operators fail so to agree upon
a third arbitrator or umpire, either Operator or the Non-operators may upon
ten (10) days' written notice to the other apply to the then senior United
States District Judge for the Eastern District of Louisiana for the
appointment of such third arbitrator or umpire. The arbitrators so appointed
shall promptly hear and determine (after due notice of hearing and giving the
Parties a reasonable opportunity to be heard) the negligence issue submitted,
and shall render their decision which shall be final and nonappealable and
absolutely binding and conclusive upon Operator and Non-operators. The
expenses of the arbitrator selected by Operator shall be paid by Operator and
the expenses of the arbitrator selected by the Non-operators shall be paid by
the Non-operators. The expenses of the third arbitrator shall be borne
one-half by Operator and one-half by the Non-operators. Operator's attorney
fees and expenses attributable to the arbitration shall be paid by Operator
and Non-operators' attorney fees and expenses attributable to the arbitration
shall be paid by the Non-operators.

    15.9  All references in this Article XV to the extent of or in proportion
to Participating Interest shall refer to those cases in which all Parties
participated in an operation, but in the case of an operation in which fewer
than all of the Parties participated, the reference shall be to the
Participating Parties and shall apply in proportion to such Parties'
interests in such operation.

    15.10 Notwithstanding anything contained in this Agreement to the
contrary, no Party, including the Operator, shall be responsible or liable
for any consequential loss or damage of the other Parties hereto, included
but not limited to, inability to produce oil or gas, loss of reserves, loss
of production or loss of profits.

                             XVI.  CLAIMS AND LITIGATION

    16.1  All investigation, litigation and settlements in connection with
the titles, claims and causes of action of every kind and joint rights and
interests hereunder shall be carried on, conducted and defended for and on
behalf of all Parties involved. Each Party shall notify the others of any
process served upon it in any suit or claims hereunder. The Policy Committee
shall decide whether the handling and defense of such suit or claim shall be
handled by the attorneys of all Parties or by joint counsel selected by a
majority in interest of the Parties. When such selection has not been made in
time to permit preparation, filing, appearance or other representation in
accordance with legal requirements, Operator is authorized to provide such
legal services as in its discretion are necessary to preserve the rights of
the Parties and shall charge the cost and expense of same to the Joint
Account. If less than all Parties participate through their attorneys in such
litigation, a reasonable charge for legal services provided by participating
counsel shall be made to the Joint Account. If the attorneys of all Parties
participate, no fee or expense for their services shall be charged to the
Joint Account. The fee and expense of any joint counsel selected by the
Policy Committee shall be charged to the Joint Account.

    16.2  All settlements of all claims and suits shall be subject to the
approval and agreement of the Policy Committee, except that Operator may
settle any claim under $100,000 without consulting Non-operators, provided
the payment is in complete settlement. Operator agrees to keep Non-operators
advised as to claims for which Non-operators may be partly responsible
hereunder. The amount of settlement shall be charged to the Joint Account.

    16.3  All references in this Article XVI to charges to the "Joint
Account" shall refer to those cases in which all Parties participated in an
operation, but in the case of an operation in which fewer than all of the
Parties participated, the reference shall be to the Participating Parties and
shall apply in proportion to such Parties' interests in such operation.

                                   XVII.  DURATION

    17.1  This Agreement shall continue in full force and effect for as long
as the Lease, or any extensions or renewals thereof, is continued in force as
to any part of the Property, whether by production or otherwise, and
thereafter until all Equipment has been salvaged and disposed of and final
settlement and accounting had between the Parties, unless otherwise mutually
agreed upon by all Parties hereto.

                                  17
<PAGE>

                                   XVIII.  NOTICES

    18.1  All notices, billings, or other communications between the Parties
required or authorized hereunder shall be given or sent by prepaid mail, a
prepaid telegram, TWX, telex or by telecopied letter addressed to the Party
to whom such notice is given or communication sent. The names of the Parties
to receive such notices are shown on Exhibit "A" hereof. A notice shall be
effective only when received by the Party to whom given and any response
thereto shall be effective only when received.

          Notices requiring a response within a twenty-four (24) hour period
and responses thereto may be made orally and shall be followed by written
confirmation as soon as is reasonably possible.

    18.2  Any Party may change its address specified above to another address by
notice of such change to each of the other Parties.

                                XIX.  TOPICAL HEADINGS

    19.1  The topical headings appearing at the top of each numbered
paragraph have been inserted for convenience only and are to be given no
force or effect whatever. The provisions of this Agreement shall control in
the event of any conflict or inconsistency with the provisions of any Exhibit
attached hereto.

                             XX.  SUCCESSORS AND ASSIGNS

    20.1  This Agreement shall be binding upon and inure to the benefit of
the Parties hereto, their successors and permitted assigns, and the terms,
conditions and provisions hereof shall constitute covenants running with the
lands and leasehold estates covered hereby.

                                     XXI.  LIENS

    21.1  Each other Party hereby mortgages, pledges and hypothecates to
Operator and the Acting Operator, and grants Operator and the Acting Operator
a security interest, and Operator hereby mortgages, pledges and hypothecates
to the other Parties and the Acting Operator and grants the other Parties and
the Acting Operator a security interest, in any interest each Party now owns
or may hereafter acquire in and to: (i) the Property, (ii) the Equipment,
(iii) the Collateral, and any (iv) Hydrocarbons, as security for the payment
and performance of all obligations, liabilities and indebtedness of each
Party under this Agreement or under the Agreement Designating Acting
Operator, now or hereafter arising, up to the Limit for each Party as
hereinafter set forth (as to each Party, the "Secured Obligations"). The lien
and security interest granted by each Party secures the Secured Obligations
of such Party and the lien and security granted by the Operator also secures
the obligations, liabilities and indebtedness of the Acting Operator up to
the limit for the Operator as hereinafter set forth. Any person acquiring an
interest in this Agreement and the Property, whether by assignment, merger,
mortgage, operation of law, or otherwise, shall be deemed to have taken such
interest subject to the liens and security interests granted by this
Paragraph 21.1 as to all Secured Obligations attributable to such interest
being acquired whether or not such Secured Obligations arose before or after
such interest is acquired. The secured Parties hereunder shall be entitled to
exercise the rights and remedies of a secured creditor under applicable
Louisiana law, including but not limited to Chapter 9 of the Louisiana
Commercial Laws, R.S. 10:9-101 ET SEQ. (the "Act"). The bringing of a suit
and obtaining of judgment by a Party for Secured Obligations shall not be
deemed an election of remedies or otherwise affect the lien rights or
security interests and security for the payment thereof. This Paragraph 21.1
shall constitute a security agreement under the Act. The lien and security
interest herein granted shall be superior to and have priority over any
Mortgage. The maximum amount of the Secured Obligations of each Party to be
secured hereunder (the "Limit") is fixed as $65,910,000, with reference to
Freeport, $28,250,000 with reference to IMC, and $18,840,000 with reference
to Felmont. To perfect the lien and security interest herein provided, each
Party hereto shall execute and acknowledge any financing statement or other
instrument prepared or submitted by any Party hereto in connection therewith
or at any time following execution thereof, and Operator and/or the Acting
Operator are authorized to file this Agreement as a lien and mortgage in
applicable real estate records and as a financing statement with the proper
office under the Act.

                                  18
<PAGE>
         Each Party represents and warrants to the other Parties hereto and
to the Acting Operator that the lien and security interest granted by such
Party to the other Parties and to the Acting Operator shall be a first and
prior lien and security interest, and each Party agrees to maintain the
priority of said lien and security interest against all persons acquiring an
interest in the Property by, through or under such Party.

         If any Party does not perform all of its Secured Obligations
hereunder, and the failure to perform will subject such Party to foreclosure
or execution proceedings, the defaulting Party waives any available right of
redemption from and after the date of judgment, any required valuation or
appraisement of the mortgaged or secured property prior to sale, any
available right to stay execution or to require a marshalling of assets and
any required bond in the event a receiver is appointed. In addition, to the
extent permitted by applicable law, each Party hereby grants to the other
Parties a power of sale as to any property that is subject to the lien and
security interest granted hereunder, such power to be exercised in the manner
provided by applicable law or otherwise in a commercially reasonable manner
and upon reasonable notice. Each Party agrees that the other Parties shall be
entitled to utilize the provisions of any applicable oil and gas lien law or
other lien law to enforce the Secured Obligations of each Party hereunder.

    21.2  In the event any Non-operator should fail to pay its share of the
charges, costs and expenses incurred under this Agreement within forty-five
(45) days after actual receipt of a statement of same for any month, except
as to amounts which are being disputed in good faith, such Non-operator shall
be deemed delinquent. If after fifteen (15) days following actual receipt of
notice of delinquency by a Non-Operator (or by an officer of the Non-operator
if it is a corporation), Operator has not received payment, or the
Non-operator has not made other arrangements for payment satisfactory to
Operator, the delinquent Non-operator shall be deemed to be in default and
Operator, without prejudice to other existing remedies, is authorized, at its
election, to collect from the purchaser or purchasers of Hydrocarbons, the
proceeds accruing to the working interest or interests in the Property of the
delinquent Non-operator free and clear of all liens and encumbrances and of
any burdens thereon to the extent provided in Paragraph 21.5, up to the
amount owed by such Non-operator plus interest thereon at the rate specified
in Paragraph 3.3, and each purchaser of oil and gas is authorized to rely
upon Operator's statement as to the amount owed by such Non-operator.

    21.3  In the event of neglect or failure of any Non-operator promptly to
pay its share of the costs and expenses of development and operation when
due, and provided that the Operator has asserted its lien granted under
Paragraph 21.1 and 21.2 to production proceeds, and the proceeds from the
sale of oil and gas, if any, accruing to the delinquent Non-Operator's
Participating Interest in the Property are being paid to the Operator by the
purchaser or purchasers, the other Non-operators and Operator, within thirty
(30) days after the rendition of statements therefor by Operator, shall, in
proportion to their Participating Interests, contribute to the payment of
such delinquent indebtedness and the Non-operators so contributing shall be
entitled to the same lien rights as are granted in Paragraphs 21.1 and 21.2
to Operator. Upon the payment by the delinquent or defaulting Non-operator to
Operator of any amount or amounts on such delinquent indebtedness, or upon
any recovery on behalf of the Parties under the lien conferred in Paragraph
21.1, the amount or amounts so paid or recovered shall be distributed and
paid by Operator to the other Non-operators and Operator proportionately in
accordance with the contributions theretofore made by them.

    21.4  Any Party in default shall, until such time as such Party's
payments are current, have no access to the maps, records, data,
interpretations or other information obtained in connection with the
operations under this Agreement after the default has occurred, shall not be
represented in the Policy Committee and shall not be entitled to vote on any
matter. Furthermore, such Party shall not be entitled to receive any notice
of meetings or decisions of the Policy Committee.

    21.5  If any Party hereto should create any overriding royalty,
production payment, or other burden against its working interest production
and if any other Party or Parties shall become entitled to receive the
working interest production otherwise belonging to another Party hereto
pursuant to any provisions of this Agreement, the Party or Parties entitled
to receive the working interest production of the other Party shall receive
such production free and clear of such burdens against such production which
may have been created, except as to such Party's or Parties' proportionate
part of any overriding royalty interest, production payment or other burden
that proportionately burdens the interests of all Parties hereto, and the
Party or Parties creating such burdens shall save the other Party or Parties
harmless with respect to the receipt of such working interest production.

                                  19
<PAGE>

    21.6  The Non-operators have acquired their respective interests in the
Lease and the Equipment from the Operator pursuant to that certain Assignment
and Conveyance effective June 5, 1990 (the "Assignment and Conveyance") and
that certain Bill of Sale effective June 5, 1990 (the "Bill of Sale").
Pursuant to the Assignment and Conveyance and the Bill of Sale, each
Non-operator has agreed to indemnify and defend the Operator for certain
obligations, liabilities and indemnities more particularly described therein,
and the Operator has agreed to indemnify and defend the Non-operators for
certain obligations, liabilities and indemnities more particularly described
therein. As used herein, the term "Secured Obligations" of each of the
respective Parties shall include without limitation the respective
obligations, liabilities and indemnities owed by each of the Non-operators to
the Operator, and owed by the Operator to the Non-operators, under the
Assignment and Conveyance and the Bill of Sale.

                             XXII.  LAWS AND REGULATIONS

    22.1  All the terms and provisions of this Agreement are hereby expressly
made subject to all federal and state laws and to all orders, rules and
regulations of any duly constituted authority having jurisdiction in the
premises, and no Party shall suffer a forfeiture or be liable in damages for
failure to comply with any of the provisions of this Agreement if such
compliance is prevented by or if such failure results from compliance with
any such law, order, rule or regulation.

                                   XXIII.  DISPUTES

    23.1  In the event of disagreement between any of the Parties as to the
intent and interpretation hereof, this Agreement shall be subject to and
interpreted in accordance with the laws of the State of Louisiana and the
laws of the United States.

                                 XXIV.  NO PARTITION

    24.1  Prior to the termination of this Agreement, a Party or its
successors or assigns shall not resort to any action to partition the
Property and, to such extent, each Party waives the benefits of all laws
authorizing such action.

                                     XXV.  WAIVER

    25.1  The failure or omission by either Party to enforce any provision of
this Agreement shall not be considered to be a waiver of that provision or of
the default of another Party of its obligations under that provision or under
any other provision of this Agreement.

                                 XXVI.  SEVERABILITY

    26.1  It is understood and agreed by the Parties that if any part, term
or provision of this Agreement is held by a court of competent jurisdiction
to be illegal or unenforceable or both, the Parties desire that the court of
competent jurisdiction reform that part, term or provision in such a manner
as to approximate the intent of the Parties as expressed in this Agreement,
and the validity of the remaining portions or provisions shall not be
affected.

                      XXVII.  DECLARATION OF OPERATING AGREEMENT

    27.1  The Parties hereto agree to execute the Declaration for the purpose
of imparting notice to all persons of the rights and obligations of the
Parties under this Agreement and for the further purpose of perfecting those
rights capable of perfection. The Parties hereto further agree to execute and
thereafter register, file or record or cause to be registered, filed or
recorded, in any appropriate governmental office, any document or instrument
supplemental to or confirmatory of this Agreement or the Declaration or
otherwise which may be necessary or desirable for the continued validity,
perfection or priority of the rights of the Parties under this Agreement and
the Declaration.

                                  20
<PAGE>

    IN WITNESS WHEREOF, this instrument is executed as of the date
hereinabove first written. This document may be executed in one or more
counterpart copies hereof, each of which shall constitute an original hereof
upon execution by every Party of such a counterpart.

Witnesses:                                         Freeport-McMoRan Resource
                                                   Partners, Limited Partnership


/s/ signed but illegible                           By:  /s/ Robert B. Foster
- -------------------------------                    ------------------------
                                                             Robert B. Foster
/s/ signed but illegible                                  Senior Vice President
- -------------------------------


Witnesses:                                         IMC Fertilizer, Inc.


/s/ Mary J. Smith                                  By:  /s/ R. E. Jones, Jr.
- -------------------------------                    ------------------------
                                                                R. E. Jones, Jr.
/s/ Virginia H. Germond                                         Vice President
- -------------------------------


Witnesses:                                         Felmont Oil Corporation


/s/ Linda C. Sellers                               By:  /s/ W. J. Gedwed
- -------------------------------                    ------------------------
                                                                 W.J. Gedwed
/s/ Suzanne Pyle                                        Executive Vice President
- -------------------------------



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