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                                                                  Exhibit 10-(1)


                                   AGREEMENT
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     This Agreement is entered into between AMERAC ENERGY CORPORATION ("Amerac")
and WILLIAM P. NICOLETTI ("Nicoletti") with regard to the engagement of 
Nicoletti by Amerac to serve as a Member of a Special Committee to undertake a 
process to explore strategic alternatives for Amerac.  The Special Committee 
will be responsible for developing and recommending various alternatives to the
Board of Directors which may include a possible merger, business combination on
similar transaction involving of the Company with another entity (a 
"Transaction").  A Transaction will include (1) any merger, consolidation, 
reorganization, recapitalization or other Transaction or series of related 
Transactions pursuant to which the Company is acquired by or combined with 
another person or entity or (2) the acquisition, directly or indirectly, by 
another person or entity, in a single Transaction or series of related 
Transactions, or (i) all or a substantial portion of the assets or business of 
the Company, or (ii) securities representing fifty percent (50%) or more of the 
total voting power of the Company in the election of Directors.

     NOW, THEREFORE, in consideration of the agreements set forth herein, the 
parties agree as follows:

     1.  Amerac hereby engages Nicoletti and Nicoletti hereby accepts the 
engagement and agrees to serve as a Member of the Special Committee.

     2.  Amerac shall pay to Nicoletti on a monthly basis on or about the last 
day of each calendar month (or on the last day of this agreement if the same is 
other than the last day of a month) beginning on the effective date of this 
Agreement and terminating on the sooner

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thereafter of (1) the consummation of a Transaction, or (2) the termination of 
this Agreement, the sum of Two Thousand Five Hundred Dollars ($2,500.00).

     3.  In addition to the consideration described in paragraph 2 above, Amerac
shall deliver to Nicoletti on execution of this Agreement, three thousand 
(3,000) shares of restricted common stock of Amerac.  Such shares shall vest in 
Nicoletti on a monthly basis at the rate of five hundred (500) shares per month 
on or about the last day of each calendar month (or on the last day of this 
Agreement if the same is other than the last day of a month) beginning on the 
effective date of this Agreement and terminating on the sooner thereafter of (1)
six (6) months from the effective date or (2) the consummation of a Transaction.

    4.  The engagement is continued on an at will basis, terminable by either 
party with or without cause on seven (7) days written notice to the other party.
Notwithstanding the right of termination by Amerac, if this Agreement is 
terminated by Amerac without cause prior to the termination hereof by 
Consummation of a Transaction, (i) Nicoletti shall be entitled to the cash 
payment provided in paragraph 2 through the date of termination, and (ii) any 
unvested portion of the three thousand (3,000) shares of stock provided in 
paragraph 3 shall be fully vested on the date of termination.

     5.  It is agreed that the parties to this Agreement, and their agents, 
attorneys, successors and assigns, shall keep the terms of this Agreement 
confidential and shall not disclose such matters to anyone else other than 
prospective successors or assigns to the stock or assets of Amerac (and except 
as may be required by law or ordered by court order).


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     6.  This Agreement shall be binding upon and inure to the benefit of the 
parties hereto, their respective heirs, representatives, successors, 
administrators, assigns, employees, attorneys and agents, and any parties 
claiming by, through or under them.

     7.  This Agreement may not be altered or amended except by agreement 
in writing signed by all of the parties hereto.

     8.  This Agreement shall be construed and enforced under and in accordance 
with and shall be governed by the laws of the State of Texas.

     EXECUTED this 20th day of October, 1997, to be effective August 4, 1997.


AMERAC ENERGY CORPORATION



By: /s/ Walter C. Wilson                   /s/ William P. Nicoletti
   -----------------------------           -----------------------------------
Its: Chairman, Compensation Committee      William P. Nicoletti



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