AGREEMENT OF SALE AND PURCHASE
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         This  Agreement  dated  as of  October  16,  2000,  by and  between  JN
EXPLORATION & PRODUCTION  LIMITED  PARTNERSHIP,  a Delaware limited  partnership
("JN E&P"),  COLT RESOURCES  CORPORATION,  a Delaware  corporation  ("Colt") and
PRINCEPS PARTNERS,  INC., a Colorado corporation  ("Princeps") (JN E&P, Colt and
Princeps being hereinafter called the "JN Group"), THE WILLIAM G. HELIS COMPANY,
L.L.C., a Louisiana limited liability company ("Helis"), (the JN Group and Helis
being hereinafter  called "Sellers") and ST. MARY LAND & EXPLORATION  COMPANY, a
Delaware corporation (hereinafter called "Buyer").


                              W I T N E S S E T H:

1. Property to be Sold and Purchased. Sellers agree to sell and convey and Buyer
agrees to purchase, for the consideration  hereinafter set forth, and subject to
the terms and provisions herein contained,  the following described  properties,
rights and interests:

(a)      All of Sellers' right, title and interest in and to the oil, gas and/or
         mineral  leases  described  in Exhibit A hereto (and any  ratifications
         and/or amendments to such leases,  whether or not such ratifications or
         amendments are described in Exhibit A) (the "Leases"); and

(b)      Without  limitation  of the  foregoing,  all  other  right,  title  and
         interest (of whatever  kind or  character,  whether legal or equitable,
         and whether vested or contingent) of Sellers in and to the oil, gas and
         other  minerals in and under or that may be produced from the lands and
         depths  described in Exhibit A hereto or described in any of the Leases
         (including,  without  limitation,  interests in oil, gas and/or mineral
         leases covering such lands and depths, overriding royalties, production
         payments  and net  profits  interests  in such lands and depths or such
         leases,  and fee mineral  interests,  fee royalty  interests  and other
         interests in such oil, gas and other  minerals),  even though  Sellers'
         interest  in  such  oil,  gas and  other  minerals  may be  incorrectly
         described in, or omitted from, such Exhibit A; and

(c)      All right,  title and  interest  of  Sellers  in and to all  materials,
         supplies,  machinery,   equipment,   improvements  and  other  personal
         property and fixtures,  including,  but not by way of  limitation,  all
         wells and Sellers' ownership interest therein as set forth on Exhibit B
         (the  "Wells"),  together  with  the  production  therefrom,   wellhead
         equipment,  pumping  units,  flowlines,  tanks,  buildings,   injection
         facilities,  saltwater  disposal  facilities,  compression  facilities,
         gathering  systems,  and  other  equipment,  which are  located  on the
         properties  described in subsections (a), (b) and (d) in this Section 1
         and used in connection with the exploration,  development, operation or
         maintenance thereof; and

(d)      All  right,  title and  interest  of  Sellers  in and to, or  otherwise
         derived from, all presently  existing and valid oil, gas and/or mineral
         unitization,  pooling, and/or communitization agreements,  declarations
         and/or orders,  including,  without limitation,  all units formed under
         orders,  rules,  regulations,  or other  official  acts of any federal,
         state,  or  other   authority   having   jurisdiction,   and  voluntary
         unitization agreements,  designations and/or declarations,  relating to
         the properties  described in subsections (a), (b) and (c) above, to the
         extent, and only to the extent,  such rights,  titles and interests are
         attributable  to the properties  described in subsections  (a), (b) and
         (c) above; and

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(e)       All right,  title and  interest  of  Sellers  in and to all  presently
          existing  permits,  licenses,  servitudes,   rights-of-way,   division
          orders,  gas  purchase  and sale  agreements  (wherein any Seller is a
          selling party),  crude oil purchase and sale  agreements  (wherein any
          Seller is a selling party), surface leases, farmin agreements, farmout
          agreements,  bottomhole agreements,  acreage contribution  agreements,
          operating agreements, unit agreements,  processing agreements, and all
          other  contracts or agreements that are appurtenant to or used or held
          for use in connection  with the operation of the leases,  which relate
          to any of the properties  described in  subsections  (a), (b), (c) and
          (d) above, to the extent, and only to the extent, such rights,  titles
          and  interests  are  attributable  to  the  properties   described  in
          subsections (a), (b), (c) and (d) above; and

(f)      All of  Sellers'  original  title,  contract  and  lease  files,  title
         opinions,  abstracts and other title information,  production  records,
         well files,  accounting  records (but not including  general  financial
         accounting or tax accounting records), all technical information in the
         possession  of Sellers,  seismic  records and surveys,  electric  logs,
         geological or geophysical  data and records (to the extent that Sellers
         have the legal right to transfer such  technical  information,  seismic
         records  and other  geological  and  geophysical  data and  records  to
         Buyer),  and  other  files  and  copies of  Sellers'  computer  records
         relating  or  pertaining  to the Leases,  lands,  wells,  equipment  or
         contracts  which affect or relate to the  Properties  described  above,
         documents and records which directly relate to the properties described
         above.


         The  properties  and interests  specified in the foregoing  subsections
(a),  (b) and (c) are  herein  sometimes  collectively  called  the "Oil and Gas
Properties,"  and  the  properties  and  interests  specified  in the  foregoing
subsections  (a), (b), (c), (d), (e) and (f) are herein  sometimes  collectively
called the "Properties".

2. Purchase Price.  The purchase price for the Properties  shall be Thirty-Seven
Million,  Two Hundred  Thousand Dollars  ($37,200,000)  (herein called the "Base
Purchase  Price").  Such Base  Purchase  Price may be  adjusted  as  hereinafter
provided (the Base Purchase Price, as so adjusted, and as the same may otherwise
be  adjusted  by mutual  agreement  of the  parties,  being  herein  called  the
"Purchase  Price").  The Purchase  Price shall be paid in cash at the Closing as
hereinafter provided, to the Sellers in the proportions set forth on Exhibit B-1
attached hereto and made a part hereof.

3. Deposit.  Contemporaneously  with the execution of this Agreement,  Buyer has
paid to Sellers  the  amount of Three  Million  Seven  Hundred  Twenty  Thousand
Dollars  ($3,720,000.00)   (hereinafter  called  the  "Deposit").  If  the  sale
hereunder is consummated in accordance with the terms hereof,  the Deposit shall
be  applied to the  Purchase  Price to be paid by Buyer at the  Closing.  In the
event this  Agreement is terminated  by Buyer or Sellers in accordance  with the
terms  hereof,  or in the  event  the  transaction  contemplated  hereby  is not
consummated due to a default by Sellers which occurs in the absence of a default
by Buyer,  then the  Deposit  shall be  promptly  returned  to Buyer.  Except as
provided in the preceding sentence,  if Buyer fails or refuses to consummate the
transaction  contemplated  by this  Agreement  and in the  absence of default by
Sellers,  Sellers shall retain the Deposit as liquidated damages and Buyer shall
have no further  liability  hereunder  except as set forth in Sections  6(a) and
20(e).  The  parties  agree  that  damages in such an event  would be  extremely
difficult  to  determine,  that the  Deposit  represents  a fair and  reasonable
estimate of such damages under the  circumstances,  and that such a retention of
the Deposit does not constitute a Penalty.

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<PAGE>

4.       Representations  and  Warranties  of  Sellers.  Each  Seller  severally
and  individually  (and not jointly and  severally)  represents  and warrants to
Buyer that:

(a)      Such Seller is an entity duly  formed and  legally  existing  under the
         laws of the state of its formation,  and is qualified to do business in
         and in good  standing  under (to the extent  that the law of such state
         provide  therefor)  each state in which its Oil and Gas  Properties are
         located  where the laws of such state require such an entity owning the
         Oil and Gas Properties to qualify to do business;

(b)      Such Seller has full power under the  provisions of  applicable  law to
         enter into and perform its  obligations  under this  Agreement  and has
         taken all proper action to authorize  entering into this  Agreement and
         performance of its obligations hereunder;

(c)      Other than requirements (if any)  that  there be obtained  consents  to
         assignment  or  waivers of  preferential  rights to purchase from third
         parties, and  except for approvals ("Routine  Governmental  Approvals")
         required to  be obtained  from  governmental  entities  who are lessors
         under  leases  forming  a  part of the Oil and Gas  Properties  (or who
         administer   such  leases  on  behalf  of  such  lessors)   which   are
         customarily obtained post-closing,  neither  the execution and delivery
         of   this  Agreement,   nor  the   consummation  of  the   transactions
         contemplated  hereby,  nor  the compliance with the terms hereof,  will
         violate or result in  any default  under any agreement or instrument to
         which such Seller is  a party or by which such Seller or the Properties
         are bound, or violate  any order, writ, judgment,  injunction,  decree,
         statute,  rule  or  regulation  applicable  to such  Seller  or  to the
         Properties  or result in a lien,  charge or other  encumbrance  on  the
         Properties;

(d)      This Agreement constitutes,  and the Conveyance and all other documents
         required to be delivered at Closing will,  when executed and delivered,
         constitute,  the legal,  valid and binding  obligation  of such Seller,
         enforceable  in  accordance  with  its  terms,  except  as  limited  by
         bankruptcy or other laws applicable  generally to creditor's rights and
         as limited by general equitable principles;

(e)      Except as disclosed in Exhibit D to this Agreement, to the knowledge of
         the  officers  (or other  similar  representatives)  of such Seller set
         forth on Exhibit  "G"  hereto  (the  knowledge  of such  persons  being
         hereinafter called "Seller's Knowledge"),  there is no written claim or
         demand or pending lawsuit, nor any compliance order, notice of probable
         violation or similar governmental action,  pending or threatened before
         any court or governmental agency that (i) would result in an impairment
         or loss of title  to any part of the  Property,  or  impairment  of the
         value  thereof,  (ii)  would  hinder or  impede  the  operation  of the
         Property,  or  (iii)  seeks  to  restrain  or  prohibit,  or to  obtain
         substantial damages from such Seller, with respect to this Agreement or
         the  consummation  of all or part of the  transactions  contemplated in
         this Agreement;

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(f)      To Seller's  Knowledge and subject to the provisions of this paragraph,
         the  historical  production and expense data described on  the Albrecht
         ARIES  Engineering  disk and in  the JN Resources,  Inc/The  William G.
         Helis  Company,  L.L.C.  Summary  Brochure  and  Detail  Brochure - Mid
         Continent"  which  were  provided  on behalf of  Sellers to  Buyer (the
         "Information"), and any supplement thereto, was substantially  complete
         and  correct as of the date of such  delivery.  Except as set forth  in
         this paragraph 4(f) no representation or warranty of any  kind are made
         by  Sellers as to the  Information  or with respect to the interests to
         which  the  Information  relates  and Buyer  expressly  agrees that any
         conclusions drawn therefrom shall  be the result of its own independent
         review and judgment.  The representations  contained in  this paragraph
         shall  apply  only  to  matters  of fact,  and  shall  not apply to any
         information,    data,    printouts,    extrapolations,     projections,
         documentation,  maps, graphs, charts, or tables which  reflect, depict,
         present,  portray,  or  represent,  or which are based  upon or derived
         from,  in  whole  or  in   part,   interpretation  of  the  Information
         including,  but  not limited to,  matters of  geological,  geophysical,
         engineering, or scientific interpretation;

(g)      The transfer of the  Properties to Buyer does not violate any covenants
         or  restrictions  imposed on such Seller by any bank or other financial
         institution  under any mortgage or other similar  instrument,  and will
         not result in the  creation or  imposition  of a lien on any portion of
         the Properties;

(h)      Except as disclosed by such Seller in writing,  to Seller's  Knowledge,
         such  Seller  is  in  material   compliance   with  all  laws,   rules,
         regulations,  ordinances,  codes,  orders,  licenses,  concessions  and
         permits  pertaining  to the  Properties.  The  representation  in  this
         paragraph 4(h) does not extend to compliance with  environmental  laws,
         rules, regulations, or permits pertaining to the ownership or operation
         of the Properties, which is separately addressed in other provisions of
         this Agreement;

(i)      To Seller's  Knowledge,  (i) such Seller has all material  governmental
         licenses  and  permits  and has  properly  made all  material  filings,
         necessary or  appropriate  to obtain those  licenses and permits to own
         and operate the Properties, (ii) such licenses, permits and filings are
         in full force and effect, (iii) no material violations exist in respect
         of any such  licenses,  permits or filings,  and (iv) no  proceeding is
         pending or has been threatened in writing  challenging,  or seeking the
         revocation or limitation of any such licenses, permits or filings;

(j)      To Seller's  Knowledge,  and except with respect to matters that would
         not have a  material adverse effect on the Oil and Gas Properties taken
         as a whole (a "Material  Adverse Effect") (i) the  terms of the Leases,
         operating agreements,  production sales contracts,  farmout  agreements
         and  other  contracts or agreements  respecting  the  Properties can be
         found  either of  record in the  counties in which the  Properties  are
         located or are reflected  or referenced in Sellers' files, and (ii) the
         Leases and  the  contracts  affecting  the Leases are currently in full
         force and effect  in  accordance  with  their  applicable  terms.  Such
         Seller has  not  received any written  notice  asserting a claim of any
         defaults,  offsets,  or cancellations from  any lessors with respect to
         the  Leases,  or  from any other party  under any of the  contracts  or
         agreements  to which  such  Seller  is a party  and  which  affect  the
         Properties,  which  would  reasonably  be  expected to have a  Material
         Adverse Effect;

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<PAGE>

(k)      To  Seller's  Knowledge,  and  except as  described  on Exhibit E, such
         Seller is not obligated by virtue of any prepayment  arrangement  under
         any  contract  for the sale of  hydrocarbons,  including  "take or pay"
         obligation,  hedging or forward sale agreements,  or similar provisions
         or  a  production   payment  or  any  other   arrangement   to  deliver
         hydrocarbons  from the  Properties  at some future time without then or
         thereafter receiving full payment therefor;

(l)      To Seller's  Knowledge,  there are no surface use or access  agreements
         currently in force and effect that materially interfere with the manner
         in which  oil and gas  operations  are  currently  taking  place on the
         Leases;

(m)      To Seller's Knowledge, none of the Wells included within the Properties
         has been represented by its operator,  either in a pending AFE or other
         written  proposal,  to  other  well  participants  as  being  currently
         required to be plugged and abandoned;

(n)      All ad valorem, property,  production,  severance and similar taxes and
         assessments  based on or measured by the  ownership  of property or the
         production of  hydrocarbons  or the receipt of proceeds  therefrom with
         respect to the  Properties  for all periods prior to the Effective Date
         have been properly paid and all such taxes and  assessments  which must
         be paid prior to the Closing shall have been properly paid by Seller;

(o)      To Seller's  Knowledge,  the oil and gas operations  being  conducted
         on the  Properties  do  not  violate  any  Federal,  state,  or  local,
         (including  common law),  ordinance,  rule, standard,  prohibition,  or
         regulation relating to health,  safety, or  the environment  including,
         without   limitation,   the   Comprehensive   Environmental   Response,
         Compensation  and  Liability  Act  42 U.S.C.  9601 et seq.,  as amended
         ("CERCLA"),  the Resource Conservation  and Recovery Act ("RCRA"),  the
         Clean Air Act, the Clean  Water Act and the Safe Drinking Water Act, or
         any  other  pertinent  rule,  order,  regulation,  or statute,  whether
         state,  federal or local, and pertaining  to  environmental  matters as
         the same exist as of  the Effective Date  (collectively  "Environmental
         Laws").  To  Seller's  Knowledge,  such  Seller  has  timely  filed all
         required  reports,  obtained  all required  approvals and permits,  and
         generated and  maintained all required data,  documentation and records
         which  such   Seller  is   required   to  file  under  any   applicable
         Environmental Laws;

(p)      To Seller's  Knowledge,  there has not been, and is not occurring,  any
         discharge or release of any "Hazardous Substances" in, on or around any
         of the  Properties  of  Sellers  in  amounts  or  concentrations  which
         reasonably could be expected to give rise to liabilities or obligations
         exceeding  $50,000  in  any  instance  or  exceeding  $150,000  in  the
         aggregate  (net to the  interests  of Sellers  therein) and such Seller
         warrants  that Buyer does not,  and after  Closing  will not,  have any
         liabilities  or  obligations  in excess of the  aforesaid  amounts with
         respect  to  the   introduction   of  Hazardous   Substances  into  the
         environment for activities  relating to the operation of the Properties
         prior to Closing.  For purposes of this Agreement,  the term "Hazardous
         Substances"  shall mean any material  regulated as such or addressed as
         such under any Environmental Laws;

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(q)      Such Seller has not sent Hazardous  Substances to a site which pursuant
         to  CERCLA,  RCRA,  or any  similar  state law has been  placed,  or is
         proposed to be placed,  on the  "National  Priority  List" of hazardous
         waste sites or which is subject to a claim, an administrative  order or
         other request to take any cleanup,  removal,  or remedial  action or to
         pay for any costs relating to such site;

(r)      To  Seller's  Knowledge,  there  is  no  existing  naturally  occurring
         radioactive  material  (NORM) within the Properties in excess of levels
         permitted by applicable Environmental Laws;
(s)      To Seller's Knowledge there are no pending or threatened claims nor any
         basis for claims against such Seller  relating to the Properties  under
         Environmental  Laws  which  would  reasonably  be  expected  to  have a
         Material Adverse Effect;

(t)      Such Seller has not constructed, placed, deposited, stored, disposed of
         nor located on the Properties any polychlorinated  biphenyls (PCBs) nor
         transformers, compressors nor other equipment which contains PCBs; and

(u)      Except  as set  forth on  Exhibit  F  attached  hereto  and made a part
         hereof,  to Seller's  Knowledge,  there are no calls on  production  or
         production  purchase  agreements  that cannot be terminated  with sixty
         (60) days (or less) prior  written  notice,  in place which will burden
         the Oil and Gas  Properties in any material  respect from and after the
         Closing.

5.   Representations and Warranties of Buyer.  Buyer represents  and warrants to
Sellers that:

(a)      Buyer is a corporation  duly  organized and legally  existing and under
         the laws of the State of Delaware,  and is qualified to do business and
         in good standing in each of the states in which Oil and Gas  Properties
         are located  where the laws of such state would  require a  corporation
         owning the Oil and Gas  Properties  located in such state to qualify to
         do business.

(b)      Buyer has full power to enter into and  perform its  obligations  under
         this  Agreement and has taken all proper  action to authorize  entering
         into this Agreement and performance of its obligations hereunder.

(c)      Neither  the  execution  and  delivery  of  this  Agreement,   nor  the
         consummation  of  the  transactions   contemplated   hereby,   nor  the
         compliance with the terms hereof,  will result in any default under any
         agreement  or  instrument  to which  Buyer  is a party or by which  the
         Properties are bound, or violate any order, writ,  injunction,  decree,
         statute, rule or regulation applicable to Buyer or to the Properties.

(d)      This Agreement  constitutes,  and the Conveyance provided for herein to
         be delivered at Closing will, when executed and delivered,  constitute,
         the  legal,  valid and  binding  obligation  of Buyer,  enforceable  in
         accordance  with its terms,  except as limited by  bankruptcy  or other
         laws  applicable  generally  to  creditor's  rights  and as  limited by
         general equitable principles.

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<PAGE>

(e)      There are no pending  suits,  actions,  or other  proceedings  in which
         Buyer is a party  which  affect  the  execution  and  delivery  of this
         Agreement or the consummation of the transactions contemplated hereby.

(f)      Buyer is a knowledgeable  purchaser,  owner and operator of oil and gas
         properties, has the ability to evaluate (and in fact has evaluated) the
         Properties  for purchase,  and is acquiring the  Properties for its own
         account  and not with the  intent  to make a  distribution  within  the
         meaning of the  Securities  Act of 1933 (and the rules and  regulations
         pertaining thereto) or a distribution thereof in violation of any other
         applicable securities laws.

6.       Certain Covenants of Sellers Pending Closing.  Between the date of this
Agreement and the Closing Date:

(a)      Each  Seller will continue to  give  Buyer and its attorneys and  other
         representatives  access  at all  reasonable  times and upon  reasonable
         notice  to  the  Properties  and,  at  such  Seller's  office,  to such
         Seller's  records  pertaining to  the ownership and/or operation of the
         Properties,  (including, without limitation, title  files, lease files,
         land files, division order files, well  files,  environmental  records,
         production  records,  accounting  records,  marketing files,  equipment
         inventories,  and  production,  severance  and ad  valorem tax records)
         relating to the  Properties.  No  Seller  shall be obligated to provide
         Buyer with access to any  records  or data which such Seller  considers
         to be  proprietary or  confidential  to it  or which such Seller cannot
         legally provide to Buyer without, in  such Seller's opinion, breaching,
         or risking a  breach of, confidentiality agreements with other parties.
         Buyer  recognizes  and  agrees that all materials  made available to it
         (whether pursuant to  this Section or otherwise) in connection with the
         transaction  contemplated  hereby  are  made  available  to  it  as  an
         accommodation,  and except to the limited  extent set forth in  Section
         4(f) above,  without  representation or warranty of any  kind as to the
         accuracy and completeness of such materials. Buyer  waives and releases
         all claims against each  Seller,  its  respective  parent or subsidiary
         companies,  partners or other affiliates, and its and  their directors,
         officers, employees and  agents, for injury to, or death of, persons or
         for  damage to  property  arising  in any way from the  conduct of  the
         investigations  and  examinations  contemplated by this Section or  the
         conduct of its employees,  agents  or  contractors  in connection  with
         such  investigations  and examinations (or the exercise of such  rights
         of access).

(b)      Each  Seller  will continue  to  cause the operation of the Oil and Gas
         Properties  in the  ordinary  course of  its business  (or,  where such
         Seller is  not the operator of an Oil and Gas  Property,  will continue
         its actions  as a non-operator in the ordinary course of its business),
         and will  not sell or  otherwise  dispose of any portion of the Oil and
         Gas Properties,  without the prior written consent of  Buyer.  From and
         after  the date hereof  until the  Closing,  no Seller will propose the
         drilling of  any additional  wells, or propose the deepening,  plugging
         back or  reworking of any existing  wells, or propose the conducting of
         any  other  operations  which  require  consent  under  the  applicable
         operating  agreement, or propose the conducting of any other operations
         other than  the normal  operation of the existing  wells on the Oil and
         Gas Properties, or propose  the abandonment of any wells on the Oil and
         Gas  Properties;  Sellers  will advise Buyer of any such proposals made
         by third  parties  and  will  respond to each such  proposal  made by a
         third party in  the manner reasonably  requested by Buyer. Should Buyer
         fail to respond  to any such  proposal  sufficiently  in advance of the
         time that  an  election  must be made  under the  applicable  operating
         agreement or other  relevant  agreement,  Sellers may  take such action
         (or  fail  to  take  action)  as  they  deem  appropriate   under   the
         circumstances, and neither such action or any effect on  the Properties
         arising  from or  in  connection  with such  action  shall  affect  the
         obligations  or  Buyer   hereunder  or  result  in  any  liability   or
         responsibility of Sellers to Buyer hereunder.

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(c)      Each Seller will use reasonable  commercial  efforts,  consistent  with
         industry  practices in  transactions of  this type, to identify (i) all
         preferential  rights  to  purchase  and  all  rights  to  require  that
         consents to  assignment  be  obtained  which would be applicable to the
         transactions  contemplated  hereby and (ii) the  parties  holding  such
         rights;  in attempting  to identify  the same,  such Seller shall in no
         event be  obligated  to go beyond its  own  records.  Each  Seller will
         request,  from the  parties so identified,  and in accordance  with the
         documents creating such rights,  waivers of  the preferential rights to
         purchase and requirements  that consent to assignment be obtained which
         were so  identified.  No Seller  shall have  any  obligation  hereunder
         other  than to so  attempt to  identify  such  preferential  rights and
         requirements for  consent to assignment and to so request such waivers.
         Without limiting the foregoing, each  Seller specifically shall have no
         obligation  to assure that  such waivers are obtained nor to expend any
         sums to obtain  such  waivers.  Except to  the  extent  that  Buyer can
         establish  that a Seller failed  to fulfill the  obligations  set forth
         above in  this  subsection,  Buyer shall indemnify and hold each Seller
         harmless from  and against all claims, actions,  liabilities,  damages,
         losses,  costs  or expenses (including court costs and attorney's fees)
         whatsoever  that  arise  out  of  the  failure  to  obtain  waivers  of
         preferential  rights   to  purchase  or  requirements  for  consent  to
         assignment  with  respect  to any  transfer by a Seller to Buyer of any
         part of the Properties  and  with respect to any subsequent  transfers;
         provided  however  should  Buyer be compelled to transfer after Closing
         any  portion  of  the  Properties  to  a  party  holding  an   unwaived
         preferential right to purchase,  Buyer shall  be entitled to retain all
         sums paid by this third party for such  portion of the Properties. If a
         party  from  whom a waiver  of  a  preferential  right to  purchase  is
         requested refuses to give such  waiver, the affected Seller will tender
         the  required  interest  in  the  Property  affected  by such  unwaived
         preferential  right to the holder, or holders,  of such right who have
         elected  not  to  waive  such  preferential  right  to  purchase.  Each
         affected Seller  will tender such required interest at a price equal to
         the amount specified  in Exhibit B hereto for the Wells or specifically
         identified and valued  undrilled  location  or  non-producing  interval
         located  on such  Property  and for  the units in which  such  Property
         participates, reduced appropriately, as  determined by Sellers, if less
         than the entire Property must be tendered. If, and  to the extent that,
         such  preferential  right to  purchase  is  exercised  by such party or
         parties,  and such  interest  in such Property is actually sold to such
         party or parties  so  exercising  such  right,  such  interest  in such
         Property will  be excluded from the transaction contemplated hereby and
         the Base Purchase  Price payable to the affected Seller will be reduced
         by the  amount due to  such  Seller by the party or parties  exercising
         such right.

                                       8
<PAGE>

(d)      Each Seller shall exercise  reasonable  commercial efforts to cause all
         policies of insurance  currently in force and effect and  pertaining to
         the Properties (or policies containing coverage  substantially  similar
         to such policies) be maintained by such Seller in full force and effect
         through Closing.

7.       Due Diligence Reviews.

(a)      Buyer may, to the  extent it  deems appropriate,  conduct, at  its sole
         cost, such title  examination or investigation,  and other examinations
         and  investigations,  as  it may choose to conduct  with respect to the
         Properties.   Should,   as   a   result   of  such   examinations   and
         investigations,  or  otherwise, matters come to Buyer's attention which
         would constitute "Defects" (as below defined), and  should there be one
         or more of such  Defects  which Buyer is  unwilling  to waive and close
         the  transaction  contemplated  hereby so long  as such Defects  exist,
         Buyer  shall  notify JN E&P in writing  of  such  Defects no later than
         December 15, 2000. To  be effective,  Buyer's notice of Defects (herein
         called a "Defect Notice") must include (i) a  brief  description of the
         matter  constituting  the Defect so asserted,  (ii)  the title opinion,
         other  reports of experts,  or other  documentation  on  which  Buyer's
         assertion  of a  Defect  is  based,  (iii)  such  supporting  documents
         reasonably  necessary  for  Sellers (or  a title  attorney  retained by
         Sellers) to verify the existence of any such Defect,  and  (iv) Buyer's
         estimate of the diminution in the sum to be paid  at Closing  resulting
         from such  alleged  Defect.  Such  Defects of which  Buyer  so provides
         notice are  herein called "Asserted  Defects".  All matters which would
         constitute Defects  with respect to which Buyer fails to so give JN E&P
         notice will be deemed waived for all purposes.

(b)      The term "Defect" as used in this Section shall mean the following:

(i)               Any  Seller's  ownership of  the  Properties is such that,
                  with respect to  a Well  or specifically identified and valued
                  undrilled  location or non producing  interval or  unit listed
                  on Exhibit B hereto,  (A) Sellers  are  entitled to receive  a
                  decimal  share  of  the  oil,  gas   and  other   hydrocarbons
                  produced  from, or allocated  to, such  Well  or  specifically
                  identified  and valued  undrilled  location or  non producing
                  interval  or  unit less  than the  decimal  share set forth on
                  Exhibit B in connection with such  Well or unit  in the column
                  headed "Net  Revenue  Interest" or (B) Sellers  are  obligated
                  to bear  a  decimal  share of the cost  of  operation  of such
                  Well  or   specifically   identified  and   valued   undrilled
                  location or  non  producing  interval or unit greater than the
                  decimal share set forth on  Exhibit B  in connection therewith
                  in the column headed "Working Interest"; or

(ii)              Any  Seller's  ownership of an Oil and Gas Property is subject
                  to a  mortgage,  lien or other  encumbrance  other than (A) as
                  reflected  on  Exhibit A hereto,  (B) a lien for taxes not yet
                  delinquent,  or (C) a  mechanic's  or  materialmen's  lien (or
                  other similar lien), or a lien under an operating agreement or
                  similar agreement,  to the extent the same relates to expenses
                  incurred which are not yet due, or which is being contested by
                  such Seller in good faith and for which such Seller has agreed
                  to remain responsible and to indemnify Buyer therefor; or

                                       9
<PAGE>

(iii)             Any  Seller's  ownership of an Oil and Gas Property is subject
                  to a  preferential  right to purchase or a requirement  that a
                  consent to assignment be obtained which is actually applicable
                  to the  transaction  contemplated  hereby,  unless a waiver of
                  such right has been obtained  with respect to the  transaction
                  contemplated hereby or, in the case of a preferential right to
                  purchase, an appropriate tender of the applicable interest has
                  been made to the party holding such right,  and such party has
                  either  declined to exercise such right, or the period of time
                  required  for such party to  exercise  such right has  expired
                  without such party exercising such right; or

(iv)              Any  Seller's  ownership of an Oil and Gas Property is subject
                  to an imperfection in title which, if asserted,  would cause a
                  Defect,  as defined in clause  (i) above,  to exist,  and such
                  imperfection  in title is not such as would normally be waived
                  by  persons  engaged  in the oil and gas  business  purchasing
                  producing property; or

(v)               An  Oil  and  Gas  Property  is  in  violation  of  applicable
                  environmental  laws in any material  respect.  As used herein,
                  the  term  "applicable  environmental  laws"  shall  mean  all
                  federal,  state or local laws,  rules,  orders or  regulations
                  pertaining  to  health  or the  environment,  including  those
                  relating to waste materials and/or hazardous substances.

(vi)              Sellers  are in  Material  Breach  of any  representations  or
                  warranties made herein. A breach shall be a Material Breach if
                  the  liability  associated  with the matter  affected  by such
                  breach shall  exceed  $50,000 as to any single  occurrence  or
                  $150,000 in the aggregate as to all such events of breach.

(c)      After  the  execution  of  this  Agreement,  Buyer and  its  authorized
         representatives  shall  have  physical  access  to  the  Properties  at
         Buyer's sole cost,  risk and expense for the  purpose of inspecting the
         Properties,  conducting such  tests,  examination,  investigations  and
         assessments  as  may be  reasonable  and  necessary or  appropriate  to
         evaluate  the environmental and physical  conditions of the Properties,
         including  the  identification of wetlands.  For those Properties which
         are  not operated by Sellers,  Buyer shall obtain  permission  from the
         operator  to conduct  such  inspections.  Sellers  shall   provide  all
         reasonable  assistance in  obtaining this  permission for Buyer.  Buyer
         shall defend and indemnify  Sellers from any and all liability, claims,
         causes of action,  injury to  Buyer's employees,  agents or contractors
         or to Buyer's  property, and/or injury to Sellers' property, employees,
         agents or  contractors which may arise out of Buyer's inspections,  but
         only to  the extent of Buyer's  negligence.  Buyer agrees to provide to
         Sellers,  upon  request,  a  copy  of  any  environmental  assessments,
         including any reports, data, and  conclusions.  Likewise, Sellers shall
         furnish to Buyer a copy of  any  environmental  assessments,  including
         any reports, data, and  conclusions pertaining to the Properties in the
         possession  of Sellers.  Buyer and  Sellers shall keep any and all data
         or information  acquired by  all such  examinations  and results of all
         analysis of such data and  information  strictly  confidential  and not
         disclose  same to  any  person or  agency  without  the  prior  written
         approval  of  both  Buyer and  Sellers.  The  foregoing  obligation  of
         confidentiality  shall survive Closing or termination of this Agreement
         without Closing.

                                       10
<PAGE>

(d)      Buyer waives and releases all claims against Sellers,  their respective
         parent  or  subsidiary  companies  or  other  affiliates,   and   their
         directors, officers, employees and agents, for injury to, or  death of,
         persons or for damage to property  arising in any way from  the conduct
         of the  investigations  and examinations  contemplated  by this Section
         (or the exercise of rights of access under  Section  7(a) above) or the
         conduct of its employees,  agents or  contractors  in  connection  with
         such  investigations  and examinations (or the exercise  of such rights
         of access). Buyer shall indemnify Sellers, their  respective parent and
         subsidiary  companies  and  other  affiliates,  and   their  directors,
         officers,  employees  and agents  from and against any and  all claims,
         actions,  liabilities,  losses,  damages, costs  or expenses (including
         court  costs  and  attorney  fees)  to   Buyer's   employees,   agents,
         representatives, contractors, or  subcontractors whatsoever arising out
         of the exercise of such  rights of  investigation  and  examination (or
         exercise  of  such  rights  of  access).  THE   FOREGOING  RELEASE  AND
         INDEMNIFICATION  SHALL  APPLY  WHETHER  OR  NOT SUCH  CLAIMS,  ACTIONS,
         CAUSES OF ACTION,  LIABILITIES,  DAMAGES,  LOSSES,  COSTS, OR  EXPENSES
         ARISE  OUT  OF  (i)  NEGLIGENCE  (INCLUDING  SOLE   NEGLIGENCE,  SINGLE
         NEGLIGENCE,  CONCURRENT  NEGLIGENCE,  ACTIVE  NEGLIGENCE,  OR   PASSIVE
         NEGLIGENCE,  BUT EXPRESSLY NOT INCLUDING  GROSS  NEGLIGENCE OR  WILLFUL
         MISCONDUCT) OF SELLERS OR ANY OTHER INDEMNIFIED  PARTY, OR  (ii) STRICT
         LIABILITY.

(e)      Upon request by Sellers, Buyer agrees to provide Sellers with a copy of
         the results of any investigations or examinations conducted pursuant to
         this Section 7,  including  but not limited to, any results of sampling
         of soil or water or any  environmental  assessments of the  Properties.
         Buyer agrees that any results of such  investigations  or  examinations
         are confidential and shall not be disclosed to any third party.

8.  Certain  Price  Adjustments.  In the event  that  Buyer  notifies  JN E&P of
Asserted  Defects,  Sellers  shall  have the right (but not the  obligation)  to
attempt to cure, prior to Closing,  such Asserted Defects. If Sellers are unable
(or unwilling) to cure such Asserted  Defects prior to Closing,  or in the event
that Buyer has elected to treat an Oil and Gas  Property  affected by a casualty
loss as if it was an Oil and Gas Property affected by an Asserted Defect, then

(a)      Buyer and  Sellers  shall,  with  respect to each Oil and Gas  Property
         affected  by  such  matters,  attempt  to  agree  upon  an  appropriate
         adjustment  to the  Purchase  Price to  account  for such  matters,  in
         accordance with the following principles:

(i)               If the Asserted  Defect is a mortgage,  lien,  encumbrance  or
                  other charge which is  undisputed  and  liquidated  in amount,
                  then (subject to the  provisions of paragraph  (iv) below) the
                  adjustment  would be the amount necessary to be paid to remove
                  the Asserted Defect from the affected Property;

(ii)              If there shall be an Asserted  Defect (or "NRI  Increase",  as

                  defined  below)  which (A)  represents a discrepancy  between
                  (1) the Net Revenue  Interest  to  which  Sellers are entitled
                  to  receive  from  any   Property  and  (2)  the  Net  Revenue
                  Interest  stated  on  Exhibit  B, and  (B) there is a Working
                  Interest  change  proportionate  to  the  change  in  the  Net
                  Revenue Interest  resulting  from  the Asserted Defect (or NRI
                  Increase),  then the amount of  the  adjustment  shall be  the
                  product of the value  allocated  to Sellers'  interest in  the
                  applicable Property as  set forth on  Exhibit B (herein called
                  the  "Allocated  Value")   multiplied   by  a  fraction,   the
                  numerator  of which  shall  be the change in  the Net  Revenue
                  Interest  of Sellers and  the  denominator  of which  shall be
                  the Net Revenue Interest of  Sellers set forth on Exhibit B;

                                       11
<PAGE>

(iii)             If the  Asserted  Defect  represents  a  matter  of a type not
                  described  in  paragraphs  (i) or (ii) above,  the  adjustment
                  amount  shall  be   determined  by  taking  into  account  the
                  Allocated  Value of the Property so  affected,  the portion of
                  the Property affected by the Asserted Defect, the legal effect
                  of the Asserted Defect,  the potential  economic effect of the
                  Asserted  Defect over the life of the  affected  Property  and
                  such  other   factors  as  are  necessary  to  make  a  proper
                  evaluation of the value of the Asserted Defect;

(iv)              Notwithstanding  any other  provision  contained  herein,  the
                  aggregate  adjustment   attributable  to  the  effect  of  all
                  Asserted  Defects related to a given Property shall not exceed
                  the Allocated Value of such Property;  provided, however, that
                  Buyer,  may  elect  to have a  Property  affected  by a Defect
                  excluded  from the  transaction  contemplated  hereby  if such
                  Property is subject to a Defect  which will either (A) require
                  remediation   operations  to  be  performed  on  the  affected
                  Property,  the cost of which is reasonably expected to exceed,
                  or (B) otherwise  require the current  expenditure of funds in
                  an amount  exceeding,  the  Allocated  Value  thereof,  unless
                  Sellers agree to adjust the Purchase  Price in an amount equal
                  to the full  costs of such  remediation  obligations  or other
                  required expenditure of funds.

(b)      Should Sellers  determine,  or should Buyer, in  the course of  its due
         diligence  reviews  contemplated  by Section 7  above,  have reasonable
         cause to believe,  that the  ownership  of  the  Properties  by Sellers
         entitles  the Sellers  (whether  individually  or  collectively)  to  a
         decimal share of the production  from a Well or  item listed on Exhibit
         B greater than the decimal share shown for such Well or item under  the
         column  headed "Net Revenue  Interest" on Exhibit B (herein  called  an
         "NRI Increase"),  then the party making  the  determination  (or having
         such cause to believe)  that an  NRI  Increase  exists  shall  promptly
         notify the other party thereof. JN E&P or  Helis may thereafter propose
         an upward  adjustment to the Purchase  Price  to account for such fact,
         in which case such  adjustment  shall be  handled in the same manner as
         provided  above with  respect  to  adjustments  for  Asserted  Defects;
         provided  that the party  making such  determination  shall notify  the
         other party no later than December 15, 2000.

(c)      Should the parties be unable to agree upon  an  appropriate  adjustment
         in light of  the  factors  set  forth  above,  then  each of JN E&P (on
         behalf of the  JN Group) and Helis (each a "Seller  Group")  shall have
         the right to  separately  elect  to either (i) require that the Closing
         take place,  deposit that portion of  the  estimated  diminution in the
         Allocated Value of the Property  affected  thereby  as set forth in the
         Defect  Notice (but in no event to exceed  the  Allocated  Value of the
         Property  affected  thereby)  attributable  to  such Seller Group in an
         escrow account and attempt to cure one or  more Asserted  Defects after
         the Closing;  (ii) refer the matter for  arbitration in accordance with
         the  provisions  of Section  8(d)  below,  in  which  case,  subject to
         Section  8(a)(iv)  above and the final two  sentences  of  this Section
         8(c),  the price to be paid at Closing shall be reduced  by the average
         of Sellers' and Buyer's  estimates of the  diminution in  the Allocated
         Value of the Property  affected  thereby  resulting  from such Asserted
         Defect,  or (iii)  exclude the  interest  of such  Seller  Group in the
         Property affected thereby from the transaction  contemplated hereby, in
         which case the Purchase  Price will be reduced  by the Allocated  Value
         of  the Property  affected  thereby,  subject to Section 8(a)(iv) above
         and  the final two  sentences  of this  Section  8(c).  If the Purchase
         Price  reduction  (or  increase)  attributable  to  the interest of all
         Sellers  which would  result  from  the above  provided  for  procedure
         (whether determined at Closing o r pursuant to the arbitration pursuant
         to Section  8(d) below) does not exceed  $300,000,  then  the  Purchase
         Price shall not be adjusted,  and if pursuant to the  provisions  above
         set forth,  Properties were to be excluded from  the transaction,  none
         of the Properties  which would be excluded  by such procedure  shall be
         excluded,  except for those properties which  Buyer, may, nevertheless,
         elect to have excluded notwithstanding the fact that no Purchase Price
         adjustment   occurs.  If   the  Purchase  Price  reduction   (increase)
         attributable  to the  interest of  all Sellers  which would result from
         the above provided for procedure exceeds $300,000,  the  Purchase Price
         shall be adjusted by the total  amount of such reduction (or increase).

                                       12
<PAGE>

(d)      If Sellers or Buyer are unable to agree as  to whether a Defect exists,
         the value to be  attributable  to an  Asserted  Defect prior to Closing
         and any Seller Group has elected  not to exclude the affected  Property
         pursuant to the provisions of  paragraph 8(c) above,  then either Buyer
         or any such Seller  Group may  elect to refer the matter to be resolved
         by a Defect Expert ("Defect  Expert"),  to be selected by the parties.
         Such Defect  Expert  shall be  an attorney or other party with not less
         than 15 years  experience  in the oil and  gas industry such that he or
         she is considered an expert in oil and gas  title  matters.  The Defect
         Expert may enlist the advice of a  petroleum  engineer  mutually agreed
         by the  parties  with  respect  to any  valuation  issues and any other
         experts as such Defect Expect shall  deem reasonably necessary.  Within
         10 business days after referral of such matter  to Defect Expert,  each
         of Buyer and the  Seller  Group(s)  participating  in  such  proceeding
         acting as a single  party (the  "Participating  Sellers") shall deliver
         to each  other  and to  the  Defect  Expert a notice  setting  forth in
         adequate  detail the issues to be  determined  by the Defect Expert and
         the  decision  (on a word for word basis) that such party  desires  the
         Defect Expert to make with respect to the issues being  determined (the
         "Decision  Notice");  provided,  however,  in  preparing  the  Decision
         Notice each party (as well as the Defect Expert) shall be  bound by the
         provisions of Section  8(a)(iv) above.  Within two  business days after
         giving of the two Decision Notices, the Parties shall  attend a meeting
         with the  Defect  Expert at a  mutually  acceptable  time and  place to
         discuss  fully the content of such  Decision  Notice and  based thereon
         whether  either or both wish to modify their  Decision  Notices in  any
         way.  Any such  modifications  shall be  discussed,  so  that when each
         party  finalizes  its  Decision  Notice,  it  shall  do  so  with  full
         knowledge of the content of the  other parties' final Decision  Notice.
         The  finalization of such Decision  Notices and  the deliver of same by
         each party to the other shall occur at  such  meeting  unless by mutual
         agreement they agree to have one or  more additional  meetings for such
         purposes.  The Defect Expect shall be  required to adopt a decision set
         forth in either  Decision  Notice and  shall have no power to reach any
         other result. Such Defect Expert shall adopt  a decision that in his or
         her judgment is more fair and  equitable  and  in  conformity  with the
         principles set forth in  subparagraphs  (a)(i) through (a)(iv) of  this
         Section 8, the Allocated Value of affected Property, the  likelihood of
         its economic effect on the affected Property and such  other reasonable
         and  customary  standards  as are  applicable  to  the  situation.  The
         decision,  to be made in writing and signed by  the Defect Expert shall
         determine  such  dispute.  Such  decision  shall  be made,  signed  and
         delivered to the parties at the meeting unless otherwise  agreed by the
         parties.  The  expenses  of the  Defect  Expert  and  any other  expert
         retained  by  the  Defect  Expert  shall   be  borne  one-half  by  the
         Participating  Sellers and  one-half  by  Buyer  except that such party
         shall pay fees and expenses of its  counsel,  witnesses and  employees.
         The  determination  and award of  the Defect  Expect shall be final and
         binding upon the parties and  judgment  may be  entered  thereon in any
         court of  competent  jurisdiction  upon  the  application  therefore of
         either party. Within five (5) business days from  the execution of such
         decision, any payment resulting from the decision shall be made.

                                       13
<PAGE>

9.       Conditions  Precedent to the  Obligations of Buyer.  The obligations of
Buyer under this Agreement are subject to each of the following conditions being
met:

(a)      Each and every  representation  and  warranty  of  Sellers  under  this
         Agreement shall be true and accurate in all material respects as of the
         date when made and shall be deemed to have been made again at and as of
         the time of Closing and shall at and as of such time of Closing be true
         and  accurate  in  all  respects  except  as  to  changes  specifically
         contemplated by this Agreement or consented to by Buyer.

(b)      Sellers shall have performed and complied in all material respects with
         (or  compliance  therewith  shall have been  waived by Buyer)  each and
         every covenant,  agreement and condition  required by this Agreement to
         be performed or complied with by Sellers prior to or at the Closing.

(c)      No suit, action or other proceedings shall, on the date of Closing,  be
         pending or threatened  before any court or governmental  agency seeking
         to restrain,  prohibit, or obtain damages or other relief in connection
         with  the  consummation  of  the  transactions   contemplated  by  this
         Agreement.

(d)      The Purchase  Price  reduction  arising under Section 8 hereof will not
         reduce  the  Purchase  Price by more than  twenty  five  percent  (25%)
         (inclusive of exercised preferential purchase rights).


         If any such condition on the  obligations of Buyer under this Agreement
is not met as of the Closing Date, or in the event the Closing does not occur on
or before  December  29, 2000 (herein  called the  "Termination  Date"),  and in
either case Buyer is not in breach of its obligations hereunder,  this Agreement
may, at the option of Buyer, be terminated.

                                       14
<PAGE>

10.      Conditions  Precedent to the  Obligations of Sellers.  The  obligations
of Sellers under this Agreement are subject to each of  the following conditions
being met:

(a)      Each  and  every  representation  and  warranty  of  Buyer  under  this
         Agreement shall be true and accurate in all material respects as of the
         date when made and shall be deemed to have been made again at and as of
         the time of Closing and shall at and as of such time of Closing be true
         and  accurate  in  all  respects  except  as  to  changes  specifically
         contemplated by this Agreement or consented to by Sellers.

(b)      Buyer shall have  performed and complied in all material  respects with
         (or  compliance  therewith  shall have been waived by Sellers) each and
         every covenant,  agreement and condition  required by this Agreement to
         be performed or complied with by Buyer prior to or at the Closing.

(c)      The  Purchase   Price   reduction  (if  any)  which  results  from  the
         application  of Section 8 does not exceed  twenty  five  percent  (25%)
         percent of the Base Purchase Price (inclusive of exercised preferential
         purchase rights).

(d)      Sellers shall have been furnished with evidence reasonably satisfactory
         to them that  Buyer  shall  have  caused  to have in  effect  any bonds
         required  in  connection  with  the  ownership  and  operation  of  the
         Properties  subsequent  to the Closing,  such that the bonds of Sellers
         presently in place may be released in the ordinary course of business.

(e)      No suit, action or other proceedings shall, on the date of Closing,  be
         pending or threatened  before any court or governmental  agency seeking
         to restrain,  prohibit, or obtain damages or other relief in connection
         with  the  consummation  of  the  transactions   contemplated  by  this
         Agreement.


         If any  such  condition  on  the  obligations  of  Sellers  under  this
Agreement  is not met as of the Closing  Date,  or in the event the Closing does
not occur on or before the Termination Date and (in either case) Sellers are not
in breach of its  obligations  hereunder  in the  absence of Buyer also being in
breach of its  Obligations  hereunder,  this Agreement may, at the option of any
Seller Group, be terminated.

11.      Termination of Agreement.

(a)      If this  Agreement is  terminated  by Buyer as set forth in Section 9

         above,  then the  Deposit  shall be promptly  returned to Buyer,  which
         shall be Buyer's sole remedy  hereunder,  unless such  termination is a
         result  of  Sellers'   willful  and   wrongful  failure  to  close  the
         transaction  contemplated  hereby  under  circumstances  in  which  all
         conditions  precedent to Sellers'  obligations as  set forth in Section
         10 shall  have been  performed  or  satisfied  (herein  called  "Seller
         Default"),  in  which  event  Buyer  shall be  entitled  to pursue  any
         remedies existing at  law or in equity.  From and after termination due
         to the first  instance  set  forth  above in this  Section  11(a),  the
         parties  shall have no further  obligations  to one  another  hereunder
         (other than the obligations under Section 16  hereof and under the last
         two   sentences   of  Section  7  hereof,   which   will  survive  such
         termination),  but such  termination  will not  affect any liability or
         obligation   related  to  the  failure  of  a  party  to  perform   its
         obligations hereunder prior to such termination.

                                       15
<PAGE>

(b)      If this  Agreement is  terminated by Sellers as set forth in Section 10
         above,  then the Deposit  shall be  retained  by Sellers as  liquidated
         Damages,  unless  at such  time  Buyer  shall  not be in  breach of its
         obligations  hereunder,  in which case the  Deposit  shall be  promptly
         returned to Buyer.  Upon such  termination,  the parties  shall have no
         further   obligations  to  one  another   hereunder   (other  than  the
         obligations under Section 16 hereof and under the last two sentences of
         Section 7 hereof,  which will  survive such  termination).  The parties
         agree  that  time  is of  the  essence  for  the  consummation  of  the
         transaction  contemplated  hereby and that the amount of damages caused
         by Buyer's  breach would be very  difficult to calculate  exactly.  The
         provision  for  liquidated   damages  shall  be  Sellers'  sole  remedy
         hereunder.

(c)      Upon the termination of this Agreement,  whether  pursuant to paragraph
         (a) or (b) above,  Sellers  shall be free to sell the  Property (or any
         portion  thereof) to any other party without any limitation under or by
         reason of this  Agreement,  unless at such time a  condition  of Seller
         Default shall exist. Buyer shall cooperate with Sellers in effectuating
         any such sale and shall promptly execute any instrument  evidencing the
         termination  of  Buyer's  right  to  acquire  the  Property  as  may be
         reasonably requested by Sellers. Buyer shall also immediately return to
         Sellers  all data  and  other  information  (and  all  copies  thereof)
         furnished to Buyer by or on behalf of Sellers in  connection  with this
         transaction.

12. The Closing.  The closing  (herein called the "Closing") of the  transaction
contemplated  hereby  shall  take place in the  offices  of JN E&P in  Billings,
Montana,  on or before  December 29, 2000, at 10 a.m.  Mountain Time, or at such
other date and location (i) as the Buyer and Sellers may mutually  agree upon or
(ii) to which  Sellers may  postpone  the  Closing  pursuant to Section 7 hereof
(such date and  location,  as changed  pursuant to clauses  (i) and (ii),  being
herein called the "Closing Date"). At the Closing:

(a)      Sellers shall:

(i)               execute,  acknowledge and deliver to Buyer a conveyance of the
                  Properties, (the "Conveyance"), in the form attached hereto as
                  Exhibit C (and with Exhibit A hereto being attached  thereto),
                  effective  as to runs of oil and  deliveries  of gas and other
                  products as of 7:00 a.m.,  local time at the  locations of the
                  Properties, respectively, on September 1, 2000, (herein called
                  the "Effective Date"); and

(ii)              execute  and  deliver to Buyer  letters  in  lieu of  transfer
                  orders (or similar  documentation),  in  form  acceptable   to
                  both parties; and

(iii)             deliver  to  Buyer  affidavits  or  other   certification  (as
                  permitted  by such code) from each  Seller that such Seller is
                  not a "foreign  person" within the meaning of Section 1445 (or
                  similar  provisions)  of the Internal  Revenue Code of 1986 as
                  amended  (i.e.,  no Seller is a  non-resident  alien,  foreign
                  corporation,  foreign  partnership,  foreign  trust or foreign
                  estate as those terms are defined in such code and regulations
                  promulgated thereunder); and

                                       16
<PAGE>

(iv)              turn over possession of the Properties.

(v)               within thirty (30) days after Closing, Sellers will deliver to
                  Buyer the records  and other  materials  described  in Section
                  1(f) above.

(b)      Buyer shall:

(i)               deliver to each Seller  Group,  by wire transfer to an account
                  designated by Sellers in a bank located in the United  States,
                  an amount equal to the proportionate  part of (a) the Purchase
                  Price  allocated  to such Seller Group as set forth on Exhibit
                  B-1 (b) less the Deposit; and

(ii)              with respect to properties operated by any Seller, execute and
                  deliver to Sellers  appropriate  evidence reflecting change of
                  operation  as required  by  applicable  authorities,  and such
                  evidence  as  Sellers  may  reasonably  require  that Buyer is
                  qualified  with such  authorities  to succeed  such  Seller as
                  operator.

(c)      With respect to  each  Oil and Gas  Property with  respect to which any
         Seller is  disbursing  proceeds  of  production  attributable  to other
         parties  entitled  thereto,  (i) such  Seller shall continue to collect
         proceeds of production  during the  month in which  Closing  occurs and
         shall be responsible for  making disbursements,  in accordance with its
         normal procedures (and at normal times) of  such proceeds of production
         so  collected  to the parties  entitled  to same,  with any proceeds of
         production   thereafter  collected   by  such  Seller  to  be  promptly
         forwarded  to Buyer  (who  shall  thereafter  account  for same  to the
         parties  entitled  thereto),  (ii) such Seller  shall,  as  promptly as
         possible  after Closing  deliver to Buyer (A) a copy  of its "pay list"
         for  each  such  property,  (B) a  list of all  parties  for whom it is
         holding in suspense  proceeds  of  production,  and (C) a check  (which
         shall be  delivered  within  thirty  days after the end of the month in
         which the Closing  occurs) in an  amount equal to all suspended  funds.
         Following  delivery of the  materials referred to in clause (ii) above,
         Buyer shall become  responsible for all  disbursements  of  proceeds of
         production (including suspense and other disbursements  attributable to
         periods prior to the Effective Date) and  such disbursement  activities
         shall be included in the matters which  Buyer assumes,  and indemnifies
         Sellers with respect to, under  Section 14 below.  It is understood and
         agreed  that such Seller  does  not  represent  or warrant to Buyer the
         accuracy of the pay lists so delivered.


13.  Certain  Accounting  Adjustments.  Appropriate  adjustments  shall  be made
between  Buyer and Sellers so that (i) all  expenses  which are  incurred in the
operation of the  Properties  before the Effective Date will be borne by Sellers
and all proceeds (net of applicable  production,  severance,  and similar taxes)
from sale of oil,  gas  and/or  other  minerals  produced  therefrom  before the
Effective  Date will be  received by Sellers,  and (ii) all  expenses  which are
incurred in the operation of the  Properties  after the  Effective  Date will be
borne by Buyer and all proceeds (net of applicable  production,  severance,  and
similar  taxes)  from  the  sale of oil,  gas  and/or  other  minerals  produced
therefrom after the Effective Date will be received by Buyer. It is agreed that,
in making  such  adjustments:  (i) oil which was  produced  from the Oil and Gas
Properties and which was, on the Effective Date,  stored in tanks located on the
Oil and Gas  Properties  (or located  elsewhere but used by Sellers to store oil
produced from the Oil and Gas  Properties  prior to delivery to oil  purchasers)
and natural gas above pipeline connections shall be deemed to have been produced
before the Effective  Date, and (ii) ad valorem taxes assessed with respect to a
period which the  Effective  Date splits  (regardless  of whether such taxes are
computed based upon production in a prior period) shall be prorated based on the
number of days in such  period  which  fall on each side of the  Effective  Date
(with the day on which the  Effective  Date  falls  being  counted in the period
after the Effective Date), and shall, where the current year's taxes are not yet
known, be based on the previous year's taxes,  (iii) no  consideration  shall be
given to the local,  state or federal income tax  liabilities of any party,  and
(iv) in calculating expenses, with respect to each well or wells as to which any
Seller is the operator,  there shall be included in expenses for the period from
the  Effective  Date to Closing an amount (A) equal to the  overhead  rate which
would be  chargeable  to such  Seller  during  such time  under the terms of the
applicable joint operating agreement if such Seller were a non-operator,  or (B)
if there is no applicable joint operating agreement, at the applicable rates set
forth under Exhibit H attached hereto. On or before 75 days after Closing, Buyer
and Sellers shall determine the amounts of such adjustments, and shall make such
adjustments  by  appropriate  payments  from  Sellers  to Buyer or from Buyer to
Sellers.

                                       17
<PAGE>

         Buyer and Sellers agree that the net gas imbalance  attributable to the
Properties as of the Effective Date is believed to be that which is set forth on
Exhibit "I" (the "Agreed Imbalance"),  notwithstanding that the actual imbalance
may be lesser or  greater.  Buyer and  Sellers  shall  verify the actual net gas
imbalance in the Post-Closing accounting, if not before, and any imbalance shall
be  accounted  for between the parties at the price of $1.50 per MCF but only as
to those volumes which exceed or are less than the Agreed  Imbalance;  provided,
however,  that if an applicable  operating or gas balancing  agreement  requires
cash balancing upon  conveyance of the  Properties,  the adjustment  price shall
equal the price received in the cash  balancing.  Such  settlement  shall become
final  ninety (90) days after  Closing,  it being  understood  and agreed by the
parties that should any variance in the gas  imbalance be  discovered  after the
Post-Closing  accounting  within the  period of time  ending  ninety  days after
Closing,  the parties  will  adjust  therefor in the same manner as set forth in
this  paragraph,  and  thereafter  neither party shall make claim upon the other
concerning the gas balances of the Properties. Upon Closing, Buyer shall own and
assume all rights and liabilities  relating to gas imbalances  discovered  after
the ninety day period set forth above,  including any revenue  adjustment caused
by such subsequently discovered imbalance.

14.      Assumption and Indemnification.

(a)      Buyer  shall,  on the date of  Closing,  agree (and,  upon the delivery
         to Buyer of the  Conveyance  shall be  deemed to  have  agreed)  (a) to
         assume,  and to  timely pay and perform,  all duties,  obligations  and
         liabilities   relating  to  the  ownership  and/or  operation  of   the
         Properties  after the Effective  Date (including,  without  limitation,
         those arising under the  contracts and agreements  described in Section
         1(d) above), and (b) to  indemnify and hold each Seller, its parent and
         subsidiary   companies  and  other  affiliates,   and   its  and  their
         directors,  officers,  employees and  agents  harmless from and against
         any and all claims,  actions,  liabilities,  losses, damages,  costs or
         expenses  (including  court costs and attorneys'  fees) of  any kind or
         character arising out of or otherwise relating to  the ownership and/or
         operation of the  Properties  after  the Effective  Date. In connection
         with (but not in  limitation  of) the  foregoing,  it  is  specifically
         understood  and  agreed  that  matters  arising  out  of  or  otherwise
         relating to the ownership and/or operation of  the Properties after the
         Effective Date shall include all matters  arising  out of the condition
         of   the   Properties  on  the  Effective  Date   (including,   without
         limitation,  within  such matters all  obligations to properly plug and
         abandon, or replug and re-abandon, wells located on the Properties, to
         restore the surface of  the  Properties and to comply with, or to bring
         the Properties into  compliance with,  applicable  environmental  laws,
         including conducting any  remediation  activities which may be required
         on or otherwise in  connection  with  activities  on  the  Properties),
         regardless  of  when  the  events  occurred  which  give  rise to  such
         condition  (and  regardless  of   whether  any  Seller,  its  officers,
         employees,  agents or  other representatives,  were wholly or partially
         negligent  or  otherwise,  at  fault),  and   the  above  provided  for
         assumptions  and  indemnifications  by  Buyer shall expressly cover and
         include  such  matters so arising  out  of such  condition.  Buyer also
         assumes,  and  agrees  to timely  pay  and  perform,  and to  indemnify
         Sellers with respect to, all  obligations and liabilities  with respect
         to any sales and/or use tax that  may be applicable to the  transaction
         contemplated  by this  Agreement.  This  indemnifications  contained in
         this  Section 14  expressly  includes any claims that arise as a result
         of strict liability.

                                       18
<PAGE>

(b)      Subject to the terms and  conditions of  this Section 14, Sellers shall
         severally (and not jointly  and severally) indemnify,  defend, and hold
         harmless  Buyer from and  against any and all costs,  expenses or other
         liabilities asserted against,  resulting  to, imposed upon, or incurred
         by Buyer,  directly or indirectly,  by  reason of or resulting from any
         proceeding  initiated  by a person  or entity  other  than Buyer or any
         affiliate of Buyer (a "Third Party")  against Buyer or with  respect to
         the Properties as a result of a condition  existing on  the Oil and Gas
         Properties as of the Closing which constitutes a  violation of existing
         Applicable Environmental Laws (an "Environmental Claim"), with  respect
         to which  Buyer has given  written  notice to Sellers  prior  to 5 p.m.
         Mountain Time on April 15, 2001, except  for  Environmental  Claims for
         which Purchase Price adjustments  under Section 8 hereof have been made
         or which were  asserted  prior to  the Defect Date,  and as further set
         forth in this section.  Buyer  covenants  and agrees that neither Buyer
         nor any  affiliate of Buyer will  disclose  or otherwise  reveal to any
         Third Party  any facts or other  information  concerning or relating to
         any  matter  which  might be  the  subject of an  Environmental  Claim.
         Without  limiting the  foregoing,  neither  Buyer nor  any affiliate of
         Buyer  shall  solicit  or  encourage  Third  Parties  to  commence  any
         Environmental  Claim against  Buyer or with respect  to the  Properties
         for which  Buyer  would  be  entitled  to  indemnification  under  this
         Section 14. To  the extent that Buyer (or its affiliates)  breaches its
         covenants set forth in  the preceding  sentences,  the  indemnification
         set  forth  in   this  Section  14  shall  not  be  applicable  to  any
         Environmental  Claim in any  way arising from or  connection  with such
         breach.

15.  Disclaimer  of  Warranties.  The  Properties  are being sold by each Seller
"where is" and "as is" without any warranty of title, except with respect to the
Oil and Gas  Properties,  as to those claiming by, through or under such Seller.
Each Seller hereby expressly disclaims any and all representations or warranties
(other  than those  expressly  set out in Section 4 above)  with  respect to the
Properties or the  transaction  contemplated  hereby.  Specifically as a part of
(but not a limitation of) the foregoing,  Buyer  acknowledges that no Seller has
made, and each Seller hereby expressly disclaims, any representation or warranty
(express, implied, under common law, by statute or otherwise) relating to titles
of  the  properties,   the  condition  of  the  properties   (INCLUDING  WITHOUT
LIMITATION, SELLERS DISCLAIM ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY,
FITNESS  FOR A  PARTICULAR  PURPOSE,  OR  CONFORMITY  TO  MODELS OR  SAMPLES  OF
MATERIALS),   the  extent  of  oil,  gas  and/or  other  mineral  reserves,  the
recoverability  of or the cost of covering  any of such  reserves,  the value of
reserves, prices (or anticipated prices) at which production has been or will be
sold, the ability to sell oil or gas  production  from the  Properties,  and the
environmental  condition  of the  Oil  and Gas  Properties,  including,  but not
limited to,  practices or  conditions  that may have  resulted in  environmental
contamination or violations of applicable environmental laws.

                                       19
<PAGE>

16.  Commissions.  Sellers agree to indemnify  and hold harmless  Buyer from and
against any and all claims, obligations,  actions, liabilities, losses, damages,
costs or  expenses  (including  court costs and  attorneys  fees) of any kind or
character  arising  out of or  resulting  from  any  agreement,  arrangement  or
understanding alleged to have been made by, or on behalf of, any Seller with any
broker  or  finder  in  connection   with  this  Agreement  or  the  transaction
contemplated  hereby.  Buyer agrees to indemnify  and hold  harmless each Seller
from and against any and all claims, obligations,  actions, liabilities, losses,
damages,  costs or expenses  (including  court costs and attorneys  fees) of any
kind or character arising out of or resulting from any agreement, arrangement or
understanding  alleged  to have been made by, or on behalf  of,  Buyer  with any
broker  or  finder  in  connection   with  this  Agreement  or  the  transaction
contemplated hereby.

17.  Casualty  Loss.  In the event of damage  by fire or other  casualty  to the
Properties prior to the Closing,  then this Agreement shall remain in full force
and effect,  and (unless Buyer and Sellers shall otherwise  agree) in such event
as to any  Properties  so damaged,  then, at Buyer's  election,  either (A) such
Property shall be treated as if it had an Asserted Defect associated with it and
the procedure provided for in Section 8 shall be applicable  thereto, or (B) the
Purchase  Price will not be  adjusted,  and if any Seller  should be entitled to
make any claims under any  insurance  policy with  respect to such damage,  such
Seller shall, at such Seller's election,  either collect (and when collected pay
over to Buyer),  or assign to Buyer,  such  claims.  To the extent that sums are
properly paid over to Buyer under this Section 17 less the  deductible  provided
in such insurance  policy,  Sellers shall reimburse Buyer for the amount of such
deductible amount so withheld.

18. Notices. All notices and other communications  required under this Agreement
shall  (unless  otherwise  specifically  provided  herein) be in writing  and be
delivered  personally,  by  recognized  commercial  courier or delivery  service
(which provides a receipt), by telex or telecopier (with receipt  acknowledged),
or  by  registered  or  certified  mail  (postage  prepaid),  at  the  following
addresses:



                                       20
<PAGE>



               If to Buyer:

                                 St. Mary Land & Exploration Company
                                 7060 S. Yale, Suite 800
                                 Tulsa, Oklahoma  74136-5741
                                 Facsimile: Tulsa, Oklahoma  (918) 488-0105
                                 Attention: Julian C. Pope

            With a copy to:

                                 St. Mary Land & Exploration Company
                                 1776 Lincoln Street, Suite 1100
                                 Denver, Colorado  80203
                                 Facsimile: (303) 863-1040
                                 Attention: Milam Randolph Pharo

             If to Sellers:

                                 JN Exploration & Production Limited Partnership
                                 c/o JN Oil and Gas, Inc.
                                 550 North 31st Street, Suite 300
                                 Billings, Montana  59101
                                 Facsimile: (406) 248-5253
                                 Attention: G.K. Nelson
            With a copy to:

                                 The William G. Helis Company, L.L.C.
                                 228 St. Charles Avenue, Suite 912
                                 New Orleans, Louisiana 70130
                                 Facsimile: (504) 522-6486
                                 Attention: David Kerstein


and shall be  considered  delivered on the date of receipt.  Either Buyer or any
Seller may specify as its proper  address any other post office  address  within
the continental limits of the United States by giving notice to the other party,
in the  manner  provided  in this  Section,  at least ten (10) days prior to the
effective date of such change of address.

19. Survival of Provisions.  The  representations  and warranties made herein by
Buyer and Sellers shall expire at the Closing  hereof and shall be of no further
force or effect  thereafter.  If the Closing  occurs under this  Agreement,  all
conditions of Closing shall be deemed to have been waived or satisfied and after
such Closing,  neither  party shall have any  liability  whatsoever to the other
arising out of,  resulting  from,  or  attributable  to any such  conditions  of
Closing,  irrespective  of whether such  conditions  of Closing  were,  in fact,
explicitly waived or satisfied. Notwithstanding the foregoing, nothing contained
in this  Section  19 shall  alter,  limit or  otherwise  affect  the  rights and
obligations of the parties set forth in Sections 13 through 20 inclusive,  which
rights and  obligations  shall also  survive the Closing and the delivery of the
Conveyance.

                                       21
<PAGE>


20.      Miscellaneous Matters.

(a)      After  the  Closing,  Sellers  shall  execute  and  deliver,  and shall
         otherwise  cause to be executed and delivered,  from time to time, such
         further  instruments,  notices,  division  orders,  transfer orders and
         other documents,  and do such other and further acts and things, as may
         be reasonably necessary to more fully and effectively grant, convey and
         assign the Properties to Buyer.

(b)      Neither  party  shall have the right to assign  its  rights  under this
         Agreement,  without the prior written  consent of the other party first
         having been obtained.

(c)      On  the date of Closing  (and,  upon  the  delivery  to  Buyer  of  the
         Conveyance),  Buyer  shall  succeed to  the  position  of Sellers  with
         respect to all gas  imbalances  and  to the  position  of Sellers  with
         respect to  all  make-up  obligations.  As a result of such  succession
         Buyer shall (i) be  entitled to receive any and all benefits, including
         payments of proceeds of  production in excess of amounts which it would
         otherwise be entitled to  produce and receive by virtue of ownership of
         the Oil and Gas  Properties,  which Sellers would have been entitled to
         receive by virtue  of such  position,  and (ii) shall be  obligated  to
         suffer any detriments  (whether the same be  in the form of obligations
         to deliver  production which would  have otherwise been attributable to
         its ownership of the  Oil and Gas  Properties  without  receiving  full
         payment therefor,  or be  in the form of the obligation to make payment
         in cash) which Sellers  would  have been  obligated to suffer by virtue
         of such positions.

(d)      To the extent applicable to the transaction  contemplated hereby or any
         portion  thereof,  Buyer waives the  provisions of the Texas  Deceptive
         Trade Practices Act,  Chapter 17,  Subchapter E, Sections 17.41 through
         17.63, inclusive (other than Section 17.555 which is not waived), Texas
         Business and  Commerce  Code.  In  connection  with such waiver,  Buyer
         hereby  represents and warrants to each Seller that Buyer (a) is in the
         business  of seeking or  acquiring  by  purchase  or lease,  goods,  or
         services,  for  commercial  or  business  use,  (b) has  knowledge  and
         experience in financial and business matters that enable it to evaluate
         the merits and risks of the transaction  contemplated hereby and (c) is
         not in a significantly disparate bargaining position.

(e)      In connection with Buyer's evaluation of the Properties,  Sellers shall
         disclose  to  Buyer   certain   confidential   information,   which  is
         proprietary,   and  includes,   but  is  not  necessarily  limited  to,
         geological and geophysical data; maps, models, and interpretations; and
         commercial,  contractual,  and  financial  information.  All such  data
         disclosed  by any Seller to Buyer shall  hereinafter  be referred to as
         the "Confidential Information". If, for any reason the Closing does not
         occur,  Buyer agrees that the  Confidential  Information  shall be kept
         strictly  confidential  and shall not be sold,  traded,  published,  or
         otherwise  disclosed to anyone in any manner  whatsoever,  including by
         means of  photocopy  or  reproduction,  without JN E&P'  prior  written
         consent,  except as  provided  in  Sections  20(e)(i),  20(e)(ii),  and
         20(e)(iii) below.

(i)               Buyer  may  disclose  the   Confidential  Information  without
                  JN  E&P'  prior  written  consent  only  to  the  extent  such
                  information:

                                       22
<PAGE>

(A)                     is already known to Buyer as of the date of disclosure
                        hereunder;

(B)                     is  already  in  possession  of  the  public or  becomes
                        available to the public other than through  the  act  or
                        omission of Buyer;

(C)                     is required to be disclosed  under  applicable law or by
                        a   governmental  order,  decree,  regulation,  or  rule
                        (provided that Buyer shall give  written  notice  to  JN
                        E&P prior to such disclosure); or

(D)                     is acquired independently from a third  party  that  has
                        the right to disseminate such information at the time it
                        is acquired by Buyer.

(ii)              Buyer  shall  be  entitled   to  disclose   the   Confidential
                  Information  without JN E&P's prior written consent to such of
                  the  following  persons who have a clear need to know in order
                  to evaluate  Sellers'  petroleum  exploration  and  production
                  rights:

(A)                     employees, officers, and directors of Buyer;

(B)                     any   professional  consultant  or  agent  retained   by
                        Buyer for the purpose  of  evaluating  the  Confidential
                        Information.

(iii)             Prior  to  making  any  such   disclosures  to  persons  under
                  subparagraph  20(e)(ii) above, however,  Buyer shall obtain an
                  undertaking of  confidentiality,  in the same form and content
                  as this Agreement, from each such person.

(iv)              Buyer shall use, or  permit  the  use  of   the   Confidential
                  Information disclosed  under Section 20 (e)(ii) or  20(e)(iii)
                  above, only  to evaluate petroleum exploration and  production
                  rights held by Sellers.

(v)               Buyer shall be  responsible  for ensuring  that all persons to
                  whom the  Confidential  Information  is  disclosed  under this
                  Agreement shall keep such  information  confidential and shall
                  not disclose or divulge the same to any  unauthorized  person.
                  Neither  Sellers  nor  Buyer  shall  be  liable  in an  action
                  initiated by one against the other for special,  indirect,  or
                  consequential  damages  resulting  from or arising out of this
                  Agreement,  including,  without limitation,  loss of profit or
                  business interruptions, however same may be caused.

(vi)              The  Confidential  Information  shall  remain the  property of
                  Sellers,  and any Seller may demand the return  thereof at any
                  time upon giving written notice to Buyer. Within ten (10) days
                  of  receipt  of such  notice,  Buyer  shall  return all of the
                  original Confidential Information and shall destroy all copies
                  and  reproductions   (both  written  and  electronic)  in  its
                  possession  and in the  possession  of  persons to whom it was
                  disclosed   pursuant  to  Sections  20(e)(ii)  and  20(e)(iii)
                  hereof.

                                       23
<PAGE>

(vii)             The term of this Section 20(e) and the rights and  obligations
                  created  hereunder  shall  commence  upon the date  hereof and
                  shall  continue  for a period  of two (2)  years  or  Closing,
                  whichever first occurs.

(viii)            No Seller makes any representations or warranties,  express or
                  implied, as to the quality,  accuracy, and completeness of the
                  Confidential   Information  disclosed  hereunder.   No  Seller
                  (including  its  affiliated  companies,  and  their  officers,
                  directors, employees) shall have any liability whatsoever with
                  respect  to  the  use of or  reliance  upon  the  Confidential
                  Information by Buyer.

Buyer and Sellers  agree,  to the best of their  ability,  to keep the terms and
conditions  of this  sale  confidential,  both  prior to and for a period of six
months  after  Closing,  except upon  written  consent of the other or as may be
required by law, rule or regulation.

(f)      Each party  hereto  shall bear and pay all  expenses  incurred by it in
         connection with the transaction contemplated by this Agreement.

(g)      Notwithstanding  any other provision of this Agreement to the contrary,
         the representations, warranties, covenants and other obligations of the
         Sellers under this Agreement are and shall be several and not joint and
         several.

(h)      No  assignment  or  other  transfer  by Buyer  of any  interest  in the
         Properties or of its rights  and/or  obligations  under this  Agreement
         shall  relieve  or  release  Buyer  from  any   liabilities   or  other
         obligations  to Sellers  under this  Agreement.  Without  limiting  the
         foregoing,  Buyer agrees that it shall cause the transferee of any such
         assignment or other transfer to  specifically  agree to be bound by and
         to  perform  all  obligations  and  liabilities  of  Buyer  under  this
         Agreement.

(i)      This  Agreement and the  documents to be delivered at Closing  contains
         the entire  understanding  of the parties  hereto  with  respect to the
         subject   matter   hereof   and   supersedes   all  prior   agreements,
         understandings,  negotiations,  and discussions  among the parties with
         respect to such subject matter.  The descriptive  headings contained in
         this Agreement are for convenience only and shall not control or affect
         the meaning or construction of any provision of this Agreement.  Within
         this Agreement words of any gender shall be held and construed to cover
         any other gender, and words in the singular shall be held and construed
         to cover the plural, unless the context otherwise requires.  Time is of
         the essence in this Agreement.

(j)      This  Agreement  may be amended,  modified,  supplemented,  restated or
         discharged (and provisions  hereof may be waived) only by an instrument
         in  writing  signed  by  the  party  against  whom  enforcement  of the
         amendment,  modification,  supplement,  restatement  or  discharge  (or
         waiver) is sought.

(k)      The Agreement  shall  be  binding  on  the  parties  hereto  and  their
         respective successors and assigns.

            [The remainder of this page is intentionally left blank.]



                                       24
<PAGE>


         IN WITNESS WHEREOF, this Agreement is executed by the parties hereto on
the date set forth above.


                   SELLERS:

                                 JN EXPLORATION & PRODUCTION LIMITED PARTNERSHIP
                                 By JN Oil and Gas, Inc., Its General Partner


                                 By:    /s/G.K. NELSON
                                        --------------
                                 Name:  G. K. Nelson
                                 Title: President

                                 COLT RESOURCES CORPORATION


                                 By:    /s/G.K.NELSON
                                        -------------
                                 Name:  G. K. Nelson
                                 Title: President

                                 PRINCEPS PARTNERS, INC.


                                 By:    /s/G.K.NELSON
                                        -------------
                                 Name:  G. K. Nelson
                                 Title: President

                                 THE WILLIAM G. HELIS COMPANY, L.L.C.


                                 By:    /s/DAVID A. KERSTEIN
                                        --------------------
                                 Name:  David A. Kerstein
                                 Title: President of Helis Oil & Gas Corporation
                                        Manager and a Member of
                                        The William G. Helis Company, L.L.C.

                   BUYER:

                                 ST. MARY LAND & EXPLORATION COMPANY


                                 By:    /s/MILAM RANDOLPH PHARO
                                        -----------------------
                                 Name:  Milam Randolph Pharo
                                 Title: Vice President - Land & Legal


Signature Page 1


                                       25
<PAGE>



THE STATE OF  MONTANA

COUNTY OF  YELLOWSTONE

         This  instrument  was  acknowledged  before  me on  this    17   day of
                                                                   ------

October,  2000, by G. K. Nelson as President of JN Oil and Gas,  Inc., a Wyoming
corporation,   Managing   Partner  for  JN  EXPLORATION  &  PRODUCTION   LIMITED
PARTNERSHIP,  a  Delaware  limited  partnership,  for  and  on  behalf  of  such
corporation.



  [SEAL]                                      /s/MELODY MYHRE
                                              -------------------------------
                                              Notary Public, State of Montana
                                              My Commission expires: 3/15/2004



THE STATE OF  MONTANA

COUNTY OF  YELLOWSTONE

         This  instrument  was  acknowledged  before  me  on  this   17   day of
                                                                   ------
October,  2000, by G. K. Nelson as President of COLT  RESOURCES  CORPORATION,  a
Delaware corporation, for and on behalf of such corporation.



  [SEAL]                                      /s/MELODY MYHRE
                                              -------------------------------
                                              Notary Public, State of Montana
                                              My Commission expires: 3/15/2004



THE STATE OF  MONTANA

COUNTY OF  YELLOWSTONE

         This  instrument  was  acknowledged  before  me  on  this   17   day of
                                                                   ------
October,  2000,  by G. K. Nelson as  President  of PRINCEPS  PARTNERS,  INC.,  a
Colorado corporation, for and on behalf of such corporation.



  [SEAL]                                      /s/MELODY MYHRE
                                              -------------------------------
                                              Notary Public, State of Montana
                                              My Commission expires: 3/15/2004



Signature Page 2


                                       26
<PAGE>


THE STATE OF  LOUISIANA

PARISH OF  ORLEANS

         This  instrument  was  acknowledged  before  me  on  this   20  day  of
                                                                    -----
October,  2000,  by   David  A.  Kerstein  as  President  of   Helis Oil  &  Gas
Corporation,  Manager and  a  Member of  THE  WILLIAM  G. HELIS COMPANY, L.L.C.,
a Louisiana limited partnership,  for and on behalf of such corporation.



  [SEAL]                                      /s/MARY ANN MEYER
                                              Notary Public, State of Louisiana
                                              My Commission expires: at death





THE STATE OF COLORADO

COUNTY OF DENVER

         This  instrument  was  acknowledged  before  me  on  this   18   day of
                                                                    -----
October, 2000,   by  Milam  Randolph  as  Vice  President  -  Land  &  Legal  of
St. Mary Land & Exploration Company, a Delaware  corporation,  on behalf of such
corporation.



[SEAL]                                        /s/PATRICIA FLANIGAN
                                              --------------------------------
                                              Notary Public, State of Colorado
                                              My Commission expires: 5/15/03


        [fix acknowledgement if states not using above form are included]


Signature Page 2



                                       27