Exhibit 10.2

                           CONVERTIBLE PROMISSORY NOTE


$5,000,000.00                  Houston, Texas                      March 5, 2007

     FOR VALUE  RECEIVED  and WITHOUT  GRACE,  in the  installments  hereinafter
provided,  the undersigned ("Maker") promises to pay to the order of WELLS FARGO
ENERGY  CAPITAL,  INC.  (""Payee")  the sum of FIVE  MILLION AND NO/100  DOLLARS
($5,000,000.00),  together  with  interest as set forth in that  certain  Credit
Agreement dated of even date herewith between Maker and Payee (as may be amended
from time to time, the "Credit Agreement").

     All payments of  principal  and interest are payable in lawful money of the
United States of America to Payee at its offices at 1000  Louisiana,  9th Floor,
Houston, Harris County, Texas as set forth in the Credit Agreement.

     Each advance by Payee to Maker and each  payment of principal  hereunder by
Maker  shall be  reflected  by a notation  made by Payee on its  records and the
aggregate unpaid amount of advances  reflected by said notations shall be deemed
rebuttably presumptive evidence of the principal amount owing under this Note.

     This Note is issued pursuant to the Credit Agreement, and reference is made
to the  Credit  Agreement  for  matters  governed  thereby,  including,  without
limitation,  certain  events which will entitle the holder  hereof to accelerate
the maturity of all amounts due hereon.  Capitalized  terms used but not defined
herein shall have the same meanings as in the Credit Agreement.

     It is the  intention  of  Maker  and  Payee  to  comply  strictly  with all
applicable  usury laws as in effect from time to time; and there is no intention
to contract for, nor shall there ever be collected,  charged or received on this
Note,  interest in excess of that which would accrue and be payable on the basis
of the Highest  Lawful Rate.  To the extent that the  interest  rate Laws of the
State of Texas are  applicable to this Note,  for purposes of Chapter 303 of the
Texas Finance Code, as amended, Maker agrees that the maximum rate to be charged
shall be the "weekly rate ceiling" as defined in said Chapter 303; provided that

Payee  may also  rely on  alternative  maximum  rates of  interest  under  other
applicable laws, if greater.

     If under any  circumstances the aggregate amounts paid on this Note include
amounts  which by Law are deemed  interest  and which  would  exceed the maximum
non-usurious amount of interest which could lawfully have been collected on this
Note,  Maker stipulates that such payment and collection will have been and will
be deemed to have been the result of mathematical error on the part of Maker and
Payee or the holder of this Note, and the party  receiving such excess  payments
shall  promptly  refund  the amount of such  excess (to the extent  only of such
interest  payments  above the maximum  non-usurious  amount which could lawfully
have been  collected  and  retained)  upon  discovery of such error by the party
receiving such payment or notice thereof from the party making such payment.

     The  principal  indebtedness  evidenced by this Note is payable on March 1,
2010.  All  interest  accrued  on the  principal  indebtedness  shall be payable
pursuant to the terms of the Credit Agreement, with the last payment thereof due
on or before March 1, 2010. If any  installment of interest  provided for in the
Credit  Agreement is not paid when due, then Payee or the owner or holder hereof
may, at its option,  without notice (including,  without  limitation,  notice of
intention to accelerate  maturity  and/or notice of acceleration of maturity) or
demand,  declare this Note at once matured, due and payable in full, and in such
case the  entire  amount of unpaid  principal  hereunder  and  accrued  interest
thereon shall immediately become due and payable.

<PAGE>


     If  default  is made in the  payment  of this  Note and it is placed in the
hands of an attorney for collection,  or collected through probate or bankruptcy
proceedings,  or if suit is brought on the same,  Maker agrees to pay reasonable
attorneys' fees and other costs of collection.

     Maker and any and all endorsers,  guarantors and sureties  severally  waive
notice  (including,  without  limitation,  notice  of  intention  to  accelerate
maturity  and/or notice of acceleration  of maturity),  demand,  presentment for
payment,  protest  and the  filing  of suit  hereon  for the  purpose  of fixing
liability  and  consent  that the time of  payment  hereof may be  extended  and
reextended  from  time to time  without  notice  to them or any of  them.  Maker
acknowledges and understands  that under the Laws of the State of Texas,  unless
waived,  Maker  has the  right to notice of  Payee's  intent to  accelerate  the
indebtedness  evidenced  by  this  Note,  the  right  to  notice  of the  actual
acceleration  of the  indebtedness  evidenced  by this  Note,  and the  right to
presentment of this Note by Payee's demand for payment.  Maker acknowledges that
it understands  that it can waive these rights and by Maker's  execution of this
Note it agrees to waive its right to notice of intent to  accelerate,  its right
to notice of  acceleration,  and its right to  presentment  or other  demand for
payment.

     Except as set forth in the  Credit  Agreement,  Maker  may not  prepay  the
principal amounts evidenced by this Note.

     This  Note is  convertible  into  shares  of the  common  stock of Maker in
accordance with Section 2.15 of the Credit Agreement

     THIS NOTE SHALL BE GOVERNED  AND  CONTROLLED  BY THE  INTERNAL  LAWS OF THE
STATE OF TEXAS.

                  Without being limited thereto or thereby, this Note is secured
by the Security Documents more particularly described in the Credit Agreement.



                                                  CUBIC ENERGY, INC.

                                                   By:  /s/ Calvin A. Wallen III
                                                        ------------------------
                                                        Calvin A. Wallen III
                                                        President