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                                                                   EXHIBIT 10.12


                             AWARD AGREEMENT UNDER
                           CROSS TIMBERS OIL COMPANY
                        1998 ROYALTY TRUST OPTION PLAN
                        ------------------------------


     THIS AGREEMENT is entered into this ___ day of ________, ____ (the
"Agreement Date"), between Cross Timbers Oil Company, a Delaware corporation
(the "Company"), and _____ ("Grantee"), pursuant to the provisions of the Cross
Timbers Oil Company 1998 Royalty Trust Option Plan (the "Plan"). The
Compensation Committee of the Board of Directors of the Company has determined
that Grantee is eligible to be a participant in the Plan and, to carry out its
purposes, has this day authorized the conditional grant, pursuant to the Plan,
of the options set forth below to Grantee.

     NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties do hereby agree as follows:

     1.   Conditional Grant of Options. Subject to all of the terms, conditions,
and provisions of the Plan and of this Agreement, the Company hereby
conditionally grants to Grantee options pursuant to which Grantee shall have the
right and option under the Plan to purchase from the Company all or any part of
an aggregate of _____ of the units of beneficial interest (the "Units") of the
Hugoton Royalty Trust (the "Trust"). The actual number of Units to be granted
will be determined by dividing the aggregate dollar amount of Units set forth
above by the option price (defined below). Any resulting fractional Units will
not be granted and the number of Units to be granted will be rounded down to the
nearest whole Unit. The condition to the grant of these options shall be
satisfied, and this grant shall become effective, only if the initial public
offering of Units of the Hugoton Royalty Trust shall be completed within six
months after the Agreement Date, and the grant of these options shall become
effective on the date of the first sale in such initial public offering. This
conditional option grant will become void if the above condition shall not have
been satisfied within six months after the Agreement Date. Grantee will not have
any rights under this Agreement until the option grant is no longer conditional.

     2.   Option Price. The option or purchase price per Unit payable by Grantee
to the Company in exercise of these options shall be the initial public offering
price of the Units. Upon exercise of any option granted hereunder, Grantee must
pay to the Company, in full, the option price for the Units issuable pursuant to
such exercise. Grantee may pay the option price in whole or in part in cash or
in common stock of the Company owned by Grantee, valued at Fair Market Value (as
defined in Section 9(a) of the Plan) on the date of the option exercise.

     3.   Exercise Period.

          (a)  The options will be exercisable immediately upon the satisfaction
               of the condition contained in paragraph 1.
          (b)  No option may be exercised for fewer than 100 Units unless the
               remaining Units purchasable are fewer than 100 Units.
          (c)  Any options that remain unexercised on the third anniversary of
               the Agreement Date will expire and no longer be exercisable.
          (d)  Options may be exercised only if the Units are duly registered
               under the Securities Act of 1933 and applicable state securities
               laws, or unless the issuance is exempt from such registrations.

     4.   No Employment Commitment. Grantee acknowledges that neither the grant
of options nor the execution of this Agreement by the Company shall be
interpreted or construed as imposing upon the Company an obligation to retain
Grantee's services for any stated period of time, which employment shall
continue to be at the pleasure of the Company at such compensation as it shall
determine, unless otherwise provided in a written employment agreement.
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     5.   Additional Agreements. Grantee expressly and specifically agrees that:

          (a)  With respect to the calendar year in which such options are
               exercised, Grantee shall include in his gross income for federal
               income tax purposes the amount, if any, by which the Fair Market
               Value of the Units on the date of exercise, as determined in
               Section 9(a) of the Plan, exceeds the option price;
          (b)  The grant of options is special incentive compensation which
               shall not be taken into account as "wages" or "salary" in
               determining the amount of payment or benefit to Grantee under any
               pension, thrift, stock, or deferred compensation plan of the
               Company; and
          (c)  Such grant shall not affect the amount of any life insurance
               coverage available to any beneficiary of Grantee under any life
               insurance plan covering employees of the Company or any
               subsidiary.

     6.   Other Terms, Conditions, and Provisions. As previously provided, the
options herein granted by the Company to Grantee are granted subject to all of
the terms, conditions, and provisions of the Plan. Grantee hereby acknowledges
receipt of a copy of the Plan certified by the Secretary of the Company, and the
parties agree that the entire text of such Plan be, and it is hereby
incorporated herein by reference as fully as if copied herein in full. Reference
to such Plan is therefore made for a full description of the rights and methods
of exercise of the options, the effect of Grantee's termination of employment,
the adjustments to be made in the event of changes in the capital structure of
the Company, and of all of the other provisions, terms, and conditions of the
Plan applicable to the options granted herein. If any of the provisions of this
Agreement shall vary from or be in conflict with the Plan, the provisions of the
Plan will be controlling.

     7.   Transferability. The options granted hereunder are not transferable or
assignable by Grantee except by will or the laws of descent and distribution.

     IN WITNESS WHEREOF, this Agreement is executed and entered into effective
on the day and year first above expressed.

ATTEST:                            CROSS TIMBERS OIL COMPANY


_________________________          By:_________________________________
Virginia Anderson,                 Name:  Bob R. Simpson
Secretary                          Title:  Chairman of the Board and
                                           Chief Executive Officer