CONFIDENTIAL TREATMENT



                           PURCHASE AND SALE AGREEMENT


                                 by and between

                            Hall-Houston Oil Company

                            Hall-Houston Oil Company
                             Employee Royalty Trust

                                  Hall-Houston
                              1996 Exploration and
                              Development Facility
                            Overriding Royalty Trust

                                Hall Family Trust

                                  Gulf Royalty
                                 Interests, Inc.

                                   ("Sellers")


                                       and


                             Basin Exploration, Inc.

                                    ("Buyer")


            Eugene Island Blocks 64 and 65 and East Cameron Block 378


                               Offshore Louisiana


                                February 13, 1997








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                                TABLE OF CONTENTS
                                -----------------


ARTICLE I         DEFINITIONS........................................... 1

         1.1      "Agreement"........................................... 1
         1.2      "Assets".............................................. 1
         1.3      "Assumed Obligations"................................. 2
         1.4      "Closing"............................................. 2
         1.5      "Closing Date"........................................ 2
         1.6      "Effective Time"...................................... 2
         1.7      "Excluded Assets"..................................... 2
         1.8      "Exploration Rights".................................. 3
         1.9      "First Closing"....................................... 3
         1.10     "Hydrocarbons"........................................ 3
         1.11     "Interests"........................................... 3
         1.12     "Leases".............................................. 3
         1.13     "Personal Property and Incidental Rights"............. 3
         1.14     "Purchase Price"...................................... 4
         1.15     "Reserve Report"...................................... 4
         1.16     "Second Closing"...................................... 4
         1.17     "Termination Amount".................................. 4
         1.18     "Threshold for Adjustment"............................ 4

ARTICLE II        PURCHASE AND SALE AND OPTIONS......................... 5

         2.1      Sale and Purchase..................................... 5
         2.2      Reservations.......................................... 5
         2.3      Exploration Rights.................................... 5
         2.4      Right of First Offer.................................. 5
         2.5      Approval of AFE....................................... 5

ARTICLE III       PURCHASE PRICE AND PAYMENT............................ 6

         3.1      Purchase Price........................................ 6
         3.2      Adjustments to Purchase Price......................... 6

ARTICLE IV        SELLERS' REPRESENTATIONS AND WARRANTIES............... 7

         4.1      Sellers' Representations and Warranties............... 7
         4.2      HHOC's Representations and Warranties................. 9
         4.3      Assurance of Accuracy.................................11

ARTICLE V         BUYER'S REPRESENTATIONS AND WARRANTIES................11

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         5.1      Buyer's Representations and Warranties................11

ARTICLE VI        ACCESS TO INFORMATION AND INSPECTION..................12

         6.1      Records...............................................12
         6.2      Confidentiality Agreement.............................12
         6.3      Inspections...........................................12

ARTICLE VII       TITLE AND OTHER ADJUSTMENT MATTERS....................13

         7.1      Limitation of Warranties and Representations..........13
         7.2      Buyer's Title Review..................................13
                  (a)      Notice.......................................13
                  (b)      Buyer's Remedies.............................13
                  (c)      Arbitration..................................14
         7.3      Casualty Loss.........................................15
         7.4      Adjustment of Cash Consideration for Other Breaches...15
         7.5      Limitation on Recoveries for Casualty Losses and
                  Other Breaches........................................15
         7.6      East Cameron Block 378 Termination....................16

ARTICLE VIII      PREFERENTIAL PURCHASE RIGHTS AND CONSENTS.............16

         8.1      Preferential Purchase Rights and Consents.............16
         8.2      Consents..............................................16
         8.3      Required Actions......................................16

ARTICLE IX        COVENANTS OF HHOC.....................................17

         9.1      HHOC's Covenants......................................17
                  (a)      Maintenance of Interests.....................17
                  (b)      Eugene Island Blocks 64 and 65 Operations....17
                  (c)      Restrictions.................................17
                  (d)      Notification of Claims.......................17
                  (e)      Maintenance of Confidentiality...............18
                  (f)      Compliance with Law..........................18
                  (g)      Obligation To Inform.........................18
                  (h)      Exclusivity..................................18
                  (i)      Operations in Progress.......................18

ARTICLE X         CLOSINGS..............................................19

         10.1     Closings..............................................19
         10.2     Sellers' Closing Obligations..........................19
         10.3     Buyer's Closing Obligations...........................19

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ARTICLE XI        EFFECT OF CLOSING.....................................20

         11.1     Assumed Obligations; Pre-Closing Liabilities..........20
         11.2     Revenues and Expenses.................................20
         11.3     HHOC Operated Properties..............................20
         11.4     AMI...................................................20

ARTICLE XII       LIMITATIONS OF WARRANTIES AND REMEDIES................21

         12.1     Limitations...........................................21
         12.2     Survival..............................................21

ARTICLE XIII      DEFAULT AND REMEDIES..................................21

         13.1     Liabilities Upon Termination or Breach................21
         13.2     Attorneys Fees........................................22

ARTICLE XIV       INDEMNITY.............................................22

         14.1     Buyer's Indemnification...............................22
         14.2     Eugene Island Block 65 Well No. 2 Indemnification.....22
         14.3     HHOC's Indemnification................................22
         14.4     Scope and Procedure for Indemnification...............23

ARTICLE XV        TERMINATION...........................................24

         15.1     Termination Pursuant to Section 7.6...................24
         15.2     Expiration of Rights Under Sections 2.3 and 2.4.......24
         15.3     Effect of Termination.................................24

ARTICLE XVI       MISCELLANEOUS.........................................24

         16.1     Certain Governmental Approvals........................24
         16.2     Record Title in Seller................................24
         16.3     Public Announcements..................................25
         16.4     Filing and Recording of Assignments...................25
         16.5     Further Assurances and Records........................25
         16.6     Notices...............................................26
         16.7     Incidental Expenses...................................26
         16.8     Entire Agreement......................................27
         16.9     Governing Law.........................................27
         16.10    Exhibits..............................................27
         16.11    Audits................................................27
         16.12    Counterparts......................................... 27
         16.13    Waiver................................................27

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         16.14    Binding Effect; Assignment..........................27
         16.15    Taxes...............................................28


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                                                                    CONFIDENTIAL



                           PURCHASE AND SALE AGREEMENT


         This PURCHASE AND SALE AGREEMENT ("AGREEMENT") dated as of the 13th day
of  February,  1997,  is made by and among  Hall-Houston  Oil  Company,  a Texas
corporation ("HHOC"), Hall-Houston Oil Company Employee Royalty Trust ("HHERT"),
Hall-Houston 1996 Exploration and Development  Facility Overriding Royalty Trust
("HHEDFORT"),  Hall Family Trust ("HALL TRUST"), Gulf Royalty Interests, Inc., a
Texas  corporation  ("GULF  ROYALTY"  and HHERT,  HHEDFORT,  Hall Trust and Gulf
Royalty,  collectively,  "SELLERS")  and Basin  Exploration,  Inc.,  a  Delaware
corporation,  doing business in Louisiana under the name Basin Exploration, Inc.
(Delaware)  ("BUYER").  Sellers  and Buyer are  sometimes  together  referred to
herein as "PARTIES," and individually as a "PARTY".

                              W I T N E S S E T H:

         A.      Sellers own or have the right to acquire oil and gas  leasehold
and other  interests in Eugene  Island Blocks 64, 65 and East Cameron Block 378
(the "BLOCKS"),  such Blocks being  situated in federal waters in the Gulf of
Mexico, Offshore of Louisiana, and described in EXHIBIT "A" attached hereto.

         B.       Sellers desire to sell portions of their right, title and
interest in the Blocks to Buyer under the terms of this Agreement.

         C.       HHOC desires to grant, and Buyer desires to acquire
options relating to CONFIDENTIAL PORTION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter  set  forth,  and  subject  to the  terms  and  conditions  of  this
Agreement, the Parties agree as follows:

                                    ARTICLE I
                                   DEFINITIONS


         In addition  to any terms  defined  elsewhere  in this  Agreement,  the
following terms, as used herein, shall have the following meanings:

         1.1      "AGREEMENT" shall mean this Purchase and Sale Agreement
among HHOC, the other Sellers and Buyer, including the Exhibits





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                                                                   CONFIDENTIAL

annexed  or  referred  to  herein,  as the  same may be  amended,  supplemented,
restated or otherwise  modified from time to time in accordance  with applicable
provisions hereof.

         1.2 "ASSETS"  shall mean all of Seller's  right,  title and interest in
and to the following (except to the extent constituting Excluded Assets):

                  (a)      the Interests; and

                  (b)      the Personal Property and Incidental Rights.

         1.3 "ASSUMED  OBLIGATIONS"  shall mean (i) all liabilities,  duties and
obligations  that  arise from and after the  Effective  Time from  ownership  or
operation of the Assets;  (ii) all  liabilities and obligations of HHOC prior to
the Effective Time and of Buyer on and after the Effective Time, with respect to
the installation of platforms or subsea facilities  (including,  but not limited
to,  pipeline  pipe and umbilical  ordered by HHOC),  plugging,  replugging  and
abandoning any wells,  the  restoration of any well sites,  the proper  removal,
disposal  and  abandonment  of any  platforms  or other  fixtures and the proper
capping and burying of all flow lines,  which are included in the Assets;  (iii)
all duties,  liabilities and obligations  arising on or after the Effective Time
under any  contracts  or  agreements  affecting  the Assets in  existence at the
Effective Time and listed on EXHIBIT "B" attached  hereto or to which Buyer is a
party, (iv) all duties,  liabilities and obligations that arise under the Leases
after the Effective Time, and (v) all other duties,  liabilities and obligations
expressly assumed by Buyer under this Agreement.

         1.4      "CLOSING" shall mean either the First Closing or the
Second Closing, as the case may be.

         1.5 "CLOSING  DATE" shall mean either the date of the First  Closing or
the date of the Second Closing, as the case may be.

         1.6      "EFFECTIVE TIME" shall mean 12:01 a.m. Central Standard
Time on February 13, 1997.

         1.7      "EXCLUDED ASSETS" shall mean the following:

         1.7.1 All cash, trade credits,  accounts  receivable,  notes receivable
and other  receivables  attributable  to  Sellers'  interest  in the Assets with
respect to any period of time prior to the Effective  Time,  including  payments
received by any Seller after the





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                                                                    CONFIDENTIAL

Effective Time and which are  attributable  to the period prior to the Effective
Time under generally accepted accounting principles.

         1.7.2 All  corporate,  financial  and tax records of Sellers;  however,
Buyer shall be entitled to receive copies of any financial and tax records which
directly relate to the Assets or any Assumed Obligations, or which are necessary
for Buyer's ownership, administration or operation of the Assets;

         1.7.3    Except as provided in Section 7.3, all claims and causes of 
action of any Seller () arising from acts, omissions or events, or damage to or 
destruction of property, occurring prior to the Effective Time, or () with 
respect to any  of the Excluded Assets;

         1.7.4    Except as otherwise provided in Section 7.3, all rights,
title, claims and interests of any Seller arising prior to the Effective Time 
() under any policy or agreement of insurance or indemnity, () under any bond, 
or () to any insurance or condemnation proceeds or awards; and

         1.7.5 All Hydrocarbons produced from or attributable to the Assets with
respect to all periods prior to the Effective  Time,  together with all proceeds
from or of such Hydrocarbons, if any;

         1.8      "EXPLORATION RIGHTS" shall mean the following:

         CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION

         1.9 "FIRST  CLOSING" shall mean the closing of the purchase and sale of
the Assets relating to Eugene Island Blocks 64 and 65.

         1.10 "HYDROCARBONS"  shall mean crude oil, natural gas, casinghead gas,
condensate,   sulphur,   natural  gas  liquids  and  other   liquid  or  gaseous
hydrocarbons  (including  C02),  and shall also refer to all other  minerals  of
every kind and  character  which may be covered by or included in the Leases and
Assets.

         1.11 "INTERESTS"  shall mean the working interests (and the net revenue
interest attributable thereto) and overriding royalty interests owned by Sellers
or which Seller has the right to acquire in the Leases in Eugene  Island  Blocks
64 and 65 and East Cameron Block 378 as described in EXHIBIT A.

         1.12 "LEASES" shall mean the leases  described in EXHIBIT A, as therein
limited by acreage and/or depth.





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                                                                   CONFIDENTIAL

         1.13 "PERSONAL  PROPERTY AND  INCIDENTAL  RIGHTS" shall mean all right,
title and interest of Sellers in and to or derived from the  following,  insofar
as  the  same  do  not  constitute   Excluded  Assets  and  are  assignable  and
attributable to, appurtenant to, incidental to, or used for the operation of the
Leases:

                  (a)      all easements, rights-of-way, permits, licenses,
         servitudes or other interests;

                  (b) all  contracts,  agreements  and title  instruments to the
         extent  attributable  to and  affecting  the Assets in existence at the
         Effective  Time  or  otherwise   entered  into  as  permitted  in  this
         Agreement,  including,  but not  limited  to,  all  Hydrocarbon  sales,
         purchase, gathering,  transportation,  treating,  marketing,  exchange,
         processing   and   fractionating    contracts,    farmout   agreements,
         participation  agreements and joint  operating  agreements,  including,
         without  limitation,  the  Material  Agreements  listed  on  EXHIBIT  B
         attached hereto; and

                  (c)  all  wells,   equipment  and  other  personal   property,
         inventory,  spare parts, tools, fixtures,  pipelines,  platforms,  tank
         batteries,  appurtenances and improvements situated upon the Leases and
         used or held for use in connection with the development or operation of
         the  Leases  or  the  production,   treatment,   storage,  compression,
         processing or  transportation  of  Hydrocarbons  from or in the Leases,
         including,  without  limitation,  those wells and facilities  listed on
         EXHIBIT C

         attached hereto;

                  (d) all of the files, records, and data of Sellers relating to
         the items  described  in  subsections  (a),  (b),  and (c)  above  (the
         "Records"), including, without limitation, lease records, well records,
         and  division  order  records;  well files and  prospect  files;  title
         records  (including  abstracts of title,  title opinions and memoranda,
         and title  curative  documents  related to the Leases);  contracts  and
         contract  files;  correspondence;  computer  software  and data  files;
         micro-fiche data files; geological, geophysical and seismic records (to
         the  extent   transfer  is  not  prohibited  by  existing   contractual
         restriction previously disclosed to Buyer), interpretations, data, maps
         and information; production records, electric logs, core data, pressure
         data, decline curves and graphical production curves;  reserve reports;
         and accounting records.






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                                                                    CONFIDENTIAL

         1.14     "PURCHASE PRICE" shall have the meaning provided in
Section 3.1.

         1.15 "RESERVE  REPORT" shall mean the  cashflows  (including  projected
capital  costs) dated as of January 1, 1997 by Ryder Scott  Company  relating to
East Cameron  Block 378, a copy of which Seller has  delivered to Buyer prior to
the execution of this Agreement.

         1.16  "SECOND  CLOSING"  shall  mean  the  date of the  closing  of the
purchase and sale of the Assets relating to East Cameron Block 378.

         1.17 "TERMINATION AMOUNT" shall mean an aggregate amount of adjustments
to the Purchase Price allocated to the Assets relating to East Cameron Block 378
proposed by Buyer pursuant to Section 7.2, Section 7.3 and Section 7.4 equalling
$1,300,000.

         1.18  "THRESHOLD  FOR  ADJUSTMENT"  shall mean an  aggregate  amount of
adjustments  to the  Purchase  Price  proposed  by  Buyer  pursuant  to  Section
7.2(b)(3), Section 7.3 and Section 7.4 equalling $100,000.


                                     ARTICLE
                          PURCHASE AND SALE AND OPTIONS

         2.1 SALE AND  PURCHASE.  Subject  to the terms and  conditions  of this
Agreement,  and subject to the  reservations  described in Section 2.2,  Sellers
agree to sell and convey to Buyer and Buyer  agrees to purchase  and pay for the
Assets and to assume the Assumed Obligations.

         2.2  RESERVATIONS.  HHOC  shall  reserve  from the  assignments  of the
Interests an undivided  50% of its working  interest and the  remaining  Sellers
shall reserve all of their  overriding  royalty  interests in (a) the South Half
(S/2)  North  Half (N/2)  South  Half (S/2) and the South Half (S/2)  South Half
(S/2)  East  Cameron  Block  378  as  to  those  depths  below  100'  below  the
stratigraphic  equivalent  of  3,743  feet  true  vertical  depth as seen in the
electric  log for the  Anadarko  Petroleum  Corporation  OCS-G  6660  No. 1 well
located in East Cameron  Block 378 and (b) the balance of East Cameron Block 378
as to all depths.  The interests reserved by Sellers under this Section shall be
deemed Excluded Assets.

         2.3      EXPLORATION RIGHTS.  Should Buyer elect to exercise its
option to acquire any Exploration Rights as provided in EXHIBIT G,
HHOC and Buyer shall schedule a closing, to occur no later than 5
days following the exercise of such option, but subject to





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                                                                   CONFIDENTIAL

extension  for up to an  additional  30-day  period as may be required to obtain
necessary  waivers of (or the expiration of the exercise period with respect to)
preferential  purchase  rights,  releases  and  consents  to  assignment  and to
negotiate mutually acceptable  processing  agreements.  At such closing,  Seller
shall convey to Buyer its proportionate  interest in the applicable  Exploration
Rights  acquired,  with special  warranty of title  against  claims  arising by,
through  or under  Seller,  and Buyer  will  deliver to Seller the amount of the
consideration  allocated to the Exploration  Rights conveyed as shown on EXHIBIT
G.

                      CONFIDENTIAL PORTION APPEARS IN BOLD

         2.4 RIGHT OF FIRST OFFER. After the Second Closing, with respect to the
interests  to be retained by HHOC in East  Cameron  Block 378 and,  should Buyer
exercise its option granted in Section 2.3 as to Exploration Rights CONFIDENTIAL
PORTION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION  ,
HHOC agrees that, should HHOC intend to dispose of any such retained  interests,
it will advise Buyer in writing,  no less than 10 days prior to  contacting  any
other person or entity regarding such retained interests, of HHOC's intention to
make any such disposition.  For a period of 10 days following any such notice by
HHOC to Buyer,  Buyer  shall have an  exclusive  right to offer to  acquire  the
interests  which HHOC  proposes to dispose of. HHOC shall be under no obligation
to accept  any such  offer made by Buyer  and,  upon  expiration  of such 10 day
exclusivity  period,  HHOC may negotiate a disposition of the relevant interests
with others, whether on terms less or more favorable to HHOC than any offered by
Buyer,  and shall be under no  further  obligation  to Buyer as to the  relevant
interests.

         2.5 APPROVAL OF AFE. As a material part of the  consideration  to Buyer
for  the   transactions   contemplated   herein  and  in  consideration  of  the
indemnification by Buyer provided in Section 14.2, HHOC hereby agrees to approve
the drilling of a second well on Eugene Island Block 65 when a proposal for such
well is generated by Buyer under the joint  operating  agreement  covering  such
Block 65 and agrees to deliver prior to the First Closing an executed  authority
for expenditure  ("AFE") for the drilling of such well (the "Eugene Island Block
65 Well No. 2 AFE"), if such AFE is issued by Buyer prior to such Closing.  If a
competing  proposal  is  generated  for such well  under  such  joint  operating
agreement, HHOC agrees to support Buyer's proposal.







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                                                                    CONFIDENTIAL

                                   ARTICLE III
                           PURCHASE PRICE AND PAYMENT

         3.1  PURCHASE  PRICE.  The  Purchase  Price  payable to Sellers for the
Assets shall be Fourteen  Million Four Hundred  Twenty Five  Thousand and No/100
($14,425,000.00) Dollars, subject to adjustment as set forth below and allocated
to the Assets as set forth in EXHIBIT D attached hereto.

         3.2 ADJUSTMENTS TO PURCHASE PRICE.  The Purchase Price  attributable to
the Assets to be acquired  from HHOC shall be adjusted by an amount equal to the
difference between Buyer's Credits (as hereinafter defined) and Sellers' Credits
(as hereinafter defined).

                           (a) "SELLERS'  CREDITS" shall equal Sellers' share of
         the amount of all direct production and operating  expenses  (including
         overhead  paid  to  third-party  operators)  and  capital  expenditures
         incurred by Seller  attributable  to the  operation of the Assets after
         the  Effective  Time  and  prior  to the  Closing  in  accordance  with
         generally accepted accounting  principles and applicable  provisions of
         relevant joint  operating  agreements.  Such expenses and  expenditures
         shall include, without limitation, royalties, rentals and other similar
         charges, ad valorem, property,  production,  excise, severance, and any
         other taxes (except  income or franchise  taxes) based upon or measured
         by the ownership of property or the production of  Hydrocarbons  or the
         receipt of proceeds therefrom.

                  (b)      "BUYER'S CREDITS" shall equal the sum of the
         following:

                                            (1) Sellers'  share of the amount of
                           all   unpaid  ad   valorem,   property,   production,
                           severance and similar taxes and assessments  (but not
                           including  income or  franchise  taxes) based upon or
                           measured  by  the   ownership   of  property  or  the
                           production of Hydrocarbons or the receipt of proceeds
                           therefrom which taxes and assessments  become due and
                           payable  or  accrue  to  the  Assets   prior  to  the
                           Effective Time,  which amount shall,  where possible,
                           be  computed  based  upon  the tax  rate  and  values
                           applicable to the tax period in question; and






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                                                                   CONFIDENTIAL

                                            (2) Sellers'  unpaid joint  interest
                           billings  invoiced or accrued to the  Effective  Time
                           with respect to operations on Eugene Island Blocks 64
                           and 65.

                  (c) Prior to each  Closing,  Buyer and HHOC shall agree upon a
         good-faith   estimated   accounting   (the   "PRELIMINARY    SETTLEMENT
         STATEMENT")  showing the estimated  amount of Sellers'  Credits and the
         estimated amount of Buyer's Credits,  subject to being finally adjusted
         within 90 days after the Closing as hereinafter  provided,  but subject
         in any event to audit rights  under  applicable  agreements.  Within 90
         days after the Closing,  Buyer and HHOC shall  attempt to agree upon an
         accounting (the "FINAL SETTLEMENT  STATEMENT") of the actual amounts of
         Sellers' Credits and Buyer's Credits for the adjustment set out in this
         Section  3.2. If Buyer and HHOC cannot  reach  mutual  agreement  as to
         either Final Settlement  Statement then the matter shall be resolved by
         submittal to Arthur Andersen LLP or other comparable independent public
         accounting firm, which decision shall be binding on the Parties.  Those
         credits  agreed  upon by Buyer and HHOC  shall be netted  and the final
         settlement  shall  be  paid  in  cash as  directed  in  writing  by the
         receiving Party.


                                   ARTICLE IV
                     SELLERS' REPRESENTATIONS AND WARRANTIES

         4.1 SELLERS' REPRESENTATIONS AND WARRANTIES.  Sellers,  severally as to
each  Seller or the  Assets  owned by such  Seller,  as the case may be, and not
jointly (except that HHOC makes such representations and warranties as to itself
and all other  Sellers),  represent and warrant to Buyer,  as of the date hereof
and as of each Closing Date, that:

                  (a) If such  Seller is a  corporation,  it is duly  organized,
         validly  existing,  and in good standing under the laws of its state of
         incorporation,  and is duly  qualified  to  carry  on its  business  in
         Louisiana,  and in the Outer  Continental  Shelf, Gulf of Mexico, or if
         such  Seller is another  form of entity,  it is duly formed and validly
         existing;

                  (b) Such Seller has all requisite power and authority to carry
         on its business as presently  conducted,  to enter into this  Agreement
         and the other  documents and  agreements  contemplated  hereby,  and to
         perform its obligations under this





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                                                                   CONFIDENTIAL

         Agreement and the other documents and agreements  contemplated  hereby.
         The  consummation  of the  transactions  contemplated by this Agreement
         will  not  violate,  nor be in  conflict  with,  any  provision  of its
         governing  documents  or,  other  than  as  provided  in  any  Material
         Agreement to which Buyer is a party,  any  agreement or  instrument  to
         which it is a party or by  which it is bound or any  judgment,  decree,
         order, statute, rule or regulation applicable to such Seller;

                  (c) The execution, delivery, and performance of this Agreement
         and the consummation of the transaction  contemplated  hereby have been
         duly and validly authorized by all requisite action on the part of such
         Seller. This Agreement  constitutes,  and all documents and instruments
         required  hereunder  to be  executed  and  delivered  by such Seller at
         Closing constitute, legal, valid and binding obligations of such Seller
         enforceable  in  accordance  with their  respective  terms,  subject to
         applicable  bankruptcy  and other  similar laws of general  application
         with respect to creditors;

                  (d)      There are no bankruptcy, reorganization or
         receivership proceedings pending, being contemplated by, or to
         the actual knowledge of Seller threatened against Seller;

                  (e) Such  Seller has Good and  Marketable  Title to the Assets
         owned by it, which for purposes of this  Agreement  shall mean, for the
         Interests in East Cameron Block 378,  title  deducible of record in the
         Cameron  Parish  clerk's  office and from the  records of the  Minerals
         Management  Service,  and for all of the  Interests  title (i) which is
         free and clear of all

(x)  operating  agreements,   farmout  agreements,   participation   agreements,
exploration  agreements,   unit  agreements,   production  purchase  agreements,
marketing agreements,  pipeline or other transportation  agreements,  processing
agreements,  and  other  agreements  material  to  the  ownership,  development,
operation and marketing of  production  except for those  described in EXHIBIT B
attached  hereto or to which  Buyer is a party),  and (y) all  defects,  claims,
liens,  encumbrances  and burdens except for those which could not reasonably be
expected  to  have  an  adverse  effect  on  the  ownership,  operation,  value,
mortgageability  or use of any of the  Assets  and (ii)  which at and  after the
Effective Time entitles  Buyer to receive not less than the undivided  interests
set  forth in  EXHIBIT  A as "Net  Revenue  Interests"  or  "Overriding  Royalty
Interests" of all Hydrocarbons produced,  saved and marketed from the respective
Leases and all wells located thereon or on land pooled or unitized  therewith at
all times through the plugging,





                                        9

<PAGE>


                                                                   CONFIDENTIAL

abandonment and salvage  thereof,  and at and after the Effective Time obligates
Buyer to bear costs and expenses  relating to the  development of and operations
on the  Leases  and all wells  located  thereon  or on land  pooled or  unitized
therewith at all times  through the  plugging,  abandonment  and salvage of such
wells not greater than the "Working Interests" set forth in EXHIBIT A.

                  (f) Such  Seller has not  incurred  liability,  contingent  or
         otherwise,  for brokers' or finders' fees relating to the  transactions
         contemplated   by  this  Agreement  for  which  Buyer  shall  have  any
         responsibility whatsoever.

                  (g) No suit, action, claim, investigation, or other proceeding
         is  pending  or,  to the  best of such  Seller's  knowledge  after  due
         inquiry,  threatened before any court or governmental agency and to the
         best of such  Seller's  knowledge  after due inquiry no cause of action
         exists that relates to the Assets or that might result in impairment or
         loss of such  Seller's  title to any portion of the Assets or the value
         thereof or that  might  hinder or impede  the  operation  of any of the
         Assets or wells  thereon or such  Seller's  ability to  consummate  the
         transactions contemplated by this Agreement.

                  (h) With  respect  to those  Assets  in which  Buyer  does not
         currently own an interest, all consents required to be obtained by such
         Seller for the  assignment  of the  relevant  Assets to Buyer have been
         obtained and are in full force,  and,  except for those  existing under
         any  Material  Agreement  to  which  Buyer  is a  party,  there  are no
         preferential  purchase  rights with respect to the Assets that have not
         been waived or have not expired.

                  (i) Such Seller is not aware of any material adverse change in
         the Assets  which could  reasonably  be expected to affect their value,
         use or operation that is not known to Buyer.

                  (j) No  Seller  is  obligated,  by  virtue  of any  prepayment
         arrangement,  "take or pay" arrangement,  production payment, crediting
         agreement,  or any other arrangement,  to deliver Hydrocarbons produced
         from or  attributable to the Assets at some future time without then or
         thereafter receiving full payment therefor.

                  (k) Except pursuant to a Material  Agreement to which Buyer is
         a party, no Hydrocarbons  produced from Seller's interest in the Assets
         are subject to a sales contract (other





                                       10

<PAGE>


                                                                    CONFIDENTIAL

         than  division  orders or spot sales  agreements  terminable on no more
         than 30 days  notice)  and no  person  has any  call  upon,  option  to
         purchase or similar rights with respect to the production from Sellers'
         interest in the Assets.

         4.2      HHOC'S REPRESENTATIONS AND WARRANTIES.  HHOC represents
and warrants to Buyer, as of the date hereof and the Closing Date,
that:

                  (a) All information  heretofore  provided by HHOC with respect
         to the Assets, including, but not limited to, the information set forth
         in the  Exhibits  hereto,  was  true  and  accurate  as of the  date of
         delivery. Without limiting the foregoing, the factual data on which the
         Reserve  Report was based has been  provided to Buyer and HHOC makes no
         representation  with  respect  thereto  other  than that the  projected
         capital  expenditures  included in the Reserve Report  represent  those
         reasonably anticipated by HHOC to be required to place the East Cameron
         Block 378 No. 2 Well on  production.  Seller  has no  knowledge  of any
         matter which materially and adversely affects the operations, prospects
         or condition of any of the Leases in which Buyer does not currently own
         an interest or wells  located  thereon  which has not been set forth in
         this Agreement or the Exhibits attached hereto.

                  (b) There exist no  contracts  or  agreements  material to the
         ownership,  operation,  value,  or  use of the  Assets,  including  the
         marketing, transportation, or processing of production therefrom, other
         than those agreements listed in EXHIBIT B (the "MATERIAL  AGREEMENTS").
         With respect to the Material  Agreements in all  respects:  (i) neither
         HHOC nor, to HHOC's  knowledge,  any other party  thereto is in default
         thereunder;  (ii) all payments  (including,  without limitation,  joint
         interest or other billings under unit or operating  agreements)  due by
         HHOC  thereunder have been made by HHOC; and (iii) none of the Material
         Agreements  creates a  material  financial  commitment  or  imposes  an
         obligation  or  otherwise  has a financial  impact on HHOC that has not
         been reflected in the Reserve Report or disclosed to Buyer.

                  (c)  With  respect  to  those  Leases  to  which  Buyer is not
         currently  a party:  the  Leases  are in full  force and effect and are
         valid and subsisting; no other party to any Lease is in material breach
         or default  with  respect  to any of its  obligations  thereunder;  and
         Seller does not know of any present default existing under any Lease.






                                       11

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                                                                   CONFIDENTIAL

                  (d) With respect to the joint operating agreements relating to
         the Assets to which Buyer is not a party:  (i) there are no outstanding
         calls or payments due by HHOC under AFE's; (ii) HHOC has informed Buyer
         of the status of all material operations by less than all parties known
         to HHOC;  and  (iii)  there  are no  operations  under  such  operating
         agreements  with  respect  to which  HHOC has  become a  non-consenting
         party;

                  (e) With  respect to those wells on the Leases  which were not
         drilled by Buyer as operator or which Buyer does not currently operate:
         Every such well has been  drilled  and  completed  within the Leases or
         within the limits  otherwise  permitted  by  contract,  pooling or unit
         agreement and by law; the drilling, completing, equipping and operating
         of all wells,  the  construction,  installation  and  operation  of all
         production facilities,  pipelines and other equipment,  and the conduct
         of all other  operations on or affecting the Leases have been performed
         in  accordance  with  all  necessary  permits  and  authorizations,  in
         compliance with all applicable lease and contract  provisions and laws,
         ordinances, rules, regulations and permits of any court or governmental
         body or agency and in accordance with prudent and generally  recognized
         industry practices and standards; and all such wells have been drilled,
         completed, equipped and operated and all related fixtures and equipment
         have been  maintained  in a state of repair  so as to be  adequate  for
         normal operations and are in good working order.

                  (f) With  respect to those  Assets not  currently  operated by
         Buyer and as to  operations  previously  conducted or  presently  being
         conducted:   All  necessary   plans  for   development,   applications,
         inspection  reports,  certificates and other instruments  pertaining to
         environmental matters have been filed with the appropriate  authorities
         and all permits necessary for the legal operation of the Assets in full
         compliance,  in all material respects,  with all Environmental Laws (as
         hereafter  defined) have been  obtained;  HHOC and the operator of such
         Assets  are  in  compliance,   in  all  material  respects,   with  all
         Environmental  Laws;  HHOC has not  received  nor, to the  knowledge of
         HHOC,  has any other past or  present  operator  of any of such  Assets
         received,  notice of any past,  present or future  events,  conditions,
         circumstances, activities, practices, incidents, actions or plans which
         are  reasonably   likely  to  interfere   with  or  prevent   continued
         compliance, in all material respects, or which are reasonably likely to
         give rise to any material liability under, any





                                       12

<PAGE>


                                                                   CONFIDENTIAL

         Environmental  Laws;  the Assets  have been used solely for oil and gas
         operations and related operations; at no time have the Assets been used
         for the  generation,  storage or disposal of a Hazardous  Substance (as
         defined below) or as a landfill or other waste disposal site, and there
         are no Hazardous  Substances currently on the Leases that would subject
         Buyer  to  a  material  liability.   "Hazardous  Substance"  means  any
         hazardous substance, pollutant,  contaminant, solid or hazardous waste,
         hazardous waster  constituents,  hazardous material or toxic substance,
         including,  without  limitation,   asbestos,   radioactive  substances,
         petroleum or  petroleum-derived  substances,  or any other substance or
         material  that  would   constitute   or  cause  a  health,   safety  or
         environmental  hazard on or at the  Assets  under  Environmental  Laws.
         "Environmental  Laws"  shall mean the Clean Air Act,  Clean  Water Act,
         Coastal Zone  Management  Act,  Comprehensive  Environmental  Response,
         Compensation,  and Liability  Act  ("CERCLA"),  Emergency  Planning and
         Community   Right-to-Know   Act,   Endangered  Species  Act,  Hazardous
         Materials  Transportation Act,  Occupational Safety and Health Act, Oil
         Pollution  Act of 1990,  Resource  Conservation  and Recovery Act, Safe
         Drinking   Water  Act  and  Toxic   Substances  and  Control  Act;  any
         regulations promulgated under the foregoing federal statutes; any state
         law  counterparts;   any  similar  state  or  local  statutes,   rules,
         regulations  or  ordinances;  any judicial or  administrative  order or
         judgment, or any permit,  license or other authorization,  under any of
         the  foregoing;  any  federal,  state or local law or  regulation,  and
         administrative  actions thereunder,  relating to occupational health or
         safety;  and  common law  relating  to such  matters,  as to all of the
         foregoing  as such  are in  effect  as of the  date  hereof  or  during
         ownership of the Assets by HHOC.

                  (g) With  respect  to those  Assets  in which  Buyer  does not
         currently own an interest, all consents required to be obtained by HHOC
         for the assignment of the Assets to Buyer have been obtained and are in
         full force, and, except for those existing under any Material Agreement
         to which Buyer is a party,  there are no  preferential  purchase rights
         with  respect  to the  Assets  that  have not been  waived  or have not
         expired.

                  (h) HHOC is unaware of any fact or  circumstance  which  would
         preclude or inhibit  unconditional  approval of Seller's  assignment to
         Buyer of the Assets  relating to East  Cameron  Block 378 by the United
         States  Minerals  Management  Service or any  governmental  entity with
         jurisdiction over same.





                                       13

<PAGE>


                                                                    CONFIDENTIAL

         4.3 ASSURANCE OF ACCURACY. Each Seller shall use all reasonable efforts
to assure that the warranties and representations made by it herein with respect
to it are true and  correct  as of each  Closing  and will give  prompt  written
notice to Buyer after  execution of this  Agreement of any matter which  affects
any warranty or  representation  herein contained or which renders such warranty
or representation untrue.


                                    ARTICLE V
                     BUYER'S REPRESENTATIONS AND WARRANTIES

         5.1      BUYER'S REPRESENTATIONS AND WARRANTIES.  Buyer represents
and warrants to each Seller that as of the date hereof and the
Closing Date:

                  (a) Buyer is a corporation duly organized,  validly  existing,
         and in good  standing  under the laws of the State of  Delaware  and is
         duly  qualified to carry on its business in Louisiana  and in the Outer
         Continental Shelf, Gulf of Mexico;

                  (b) Buyer has all  requisite  power and  authority to carry on
         its business as presently  conducted,  to enter this  Agreement and the
         other  documents and agreements  contemplated  hereby,  to purchase the
         Assets on the terms  described  in this  Agreement,  and to perform the
         obligations under this Agreement and the other documents and agreements
         contemplated hereby;

                  (c) The consummation of the transactions  contemplated by this
         Agreement  will not violate,  nor be in conflict with, any provision of
         Buyer's  charter,  by-laws  or  governing  documents,  or any  material
         agreement  or  instrument  to which  Buyer is a party or by which it is
         bound,  or any judgment,  decree,  order,  statute,  rule or regulation
         applicable to Buyer,  and the  execution,  delivery and  performance of
         this Agreement and the  transactions  contemplated  hereunder have been
         duly and validly  authorized by all requisite  corporate  action on the
         part of Buyer;

                  (d)  This  Agreement   constitutes,   and  all  documents  and
         instruments required hereunder to be executed and delivered by Buyer at
         Closing will constitute,  legal, valid and binding obligations of Buyer
         in accordance with their  respective  terms,  subject to bankruptcy and
         other similar laws of general application with respect to creditors;






                                       14

<PAGE>


                                                                    CONFIDENTIAL

                  (e)      There are no bankruptcy, reorganization or
         receivership proceedings pending, being contemplated by, or to
         its actual knowledge, threatened against Buyer;

                  (f)      Buyer has funds available with which to acquire the
         Assets; and

                  (g) Buyer has no knowledge,  as of the relevant  Closing Date,
         of any adjustments to the Purchase Price pursuant to Article VII or any
         breach  by  any  Seller  with  respect  to  the  relevant   Assets  not
         communicated to Sellers.

Buyer  shall use all  reasonable  efforts  to  assure  that the  warranties  and
representations  herein  contained  are true and correct as of each  Closing and
will give prompt  written notice to Seller after the execution of this Agreement
of any matter which affects any warranty or  representation  herein contained or
which renders such warranty or representation untrue.


                                   ARTICLE VI
                      ACCESS TO INFORMATION AND INSPECTION

         6.1 RECORDS.  Upon  execution of this  Agreement,  Sellers shall permit
Buyer to review and copy at HHOC's offices, but at Buyer's expense, all Records.
To the  extent  any of the  Records or any  files,  records,  or data  otherwise
related to the  Assets are not in HHOC's  possession,  HHOC shall  exercise  all
reasonable efforts to () obtain such materials from third-party operators of the
Assets or other parties having custody thereof or () if such materials cannot be
obtained,  obtain  access for Buyer to the records of  third-party  operators or
other third parties in the offices of such third-party  operators or other third
parties.  Buyer  shall also have the right to consult  with  Seller's  officers,
employees,  attorneys  and  agents  (including,  but not  limited  to,  Sellers'
reservoir  engineers or consulting  petroleum  engineers,  if any),  third-party
operators, production purchasers or other parties with respect to all Records or
any other matter or information affecting the Assets.

         6.2 CONFIDENTIALITY  AGREEMENT.  All such information made available to
Buyer shall be maintained  confidential by Buyer until the earlier of Closing as
to the Assets  which are the  subject of such  Closing  or  termination  of this
Agreement without there being a Closing.  Any  confidentiality  agreements Buyer
has previously executed with Seller to the extent applicable to the Assets shall
continue in force until Closing, at which time such agreement shall terminate as
to the Assets which are the subject of such Closing.





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<PAGE>


                                                                    CONFIDENTIAL

Buyer shall  further take  whatever  reasonable  steps which may be necessary to
ensure that Buyer's employees, consultants and agents comply with the provisions
of this Section 6.2.  Notwithstanding  anything to the contrary,  any seismic or
geophysical  data made  available to Buyer shall be maintained  confidential  by
Buyer in accordance with existing data license agreements.

         6.3  INSPECTIONS.  At all  times  prior to the  Closing,  Buyer and the
employees,  agents and  representatives of Buyer shall have access to the Assets
not operated by Buyer and shall have the right to witness well tests thereon and
to conduct environmental,  operational and production audits thereof,  including
the right to consult  with  third-party  operators  or  regulatory  authority in
connection  therewith.  To the  extent  Seller is not the  operator  of any such
properties,  HHOC shall exercise all reasonable efforts to secure access to such
properties for Buyer for such purposes.


                                   ARTICLE VII
                       TITLE AND OTHER ADJUSTMENT MATTERS

         7.1 LIMITATION OF WARRANTIES AND  REPRESENTATIONS.  SELLER SHALL CONVEY
SELLER'S  INTERESTS IN AND TO THE ASSETS TO BUYER WITHOUT ANY WARRANTY OF TITLE,
EXPRESS OR IMPLIED, EXCEPT SEPARATELY AS TO TITLE CLAIMS ARISING BY, THROUGH AND
UNDER SELLER (BUT NOT OTHERWISE),  AS PROVIDED IN THE FORMS OF ASSIGNMENT,  BILL
OF SALE AND  CONVEYANCE  OF LEASES  ATTACHED AS EXHIBIT  "E"  HERETO.  EXCEPT AS
EXPRESSLY STATED IN THIS AGREEMENT,  SELLER MAKES NO WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, WITH RESPECT TO THE ACCURACY, COMPLETENESS OR MATERIALITY OF
THE INFORMATION,  RECORDS AND DATA NOW, HERETOFORE,  OR HEREAFTER MADE AVAILABLE
TO BUYER IN CONNECTION  WITH THE ASSETS OR THIS  AGREEMENT  (INCLUDING,  WITHOUT
LIMITATION,  QUALITY OR QUANTITY OF HYDROCARBON  RESERVES,  IF ANY, RECOMPLETION
OPPORTUNITIES,  DECLINE RATES, POTENTIAL FOR PRODUCTION OF HYDROCARBONS FROM THE
LEASES,  OR ANY OTHER  MATTERS  RELATING TO THE  VALUATION  OR  CONDITION OF THE
ASSETS.

         7.2      BUYER'S TITLE REVIEW.

         (a) NOTICE. If any information or records reviewed by Buyer reflect the
existence of any encumbrance, encroachment, defect in or objection to title that
renders any Seller's warranties under Section 4.1(e) untrue or incorrect ("Title
Defects"),  Buyer may  deliver  written  notice of the Title  Defects to HHOC on
behalf of the relevant Seller no later than the Closing Date with respect to the
relevant Assets. If Title Defects shall be so specified,  HHOC, on behalf of the
relevant Seller, shall make all reasonable efforts





                                       16

<PAGE>


                                                                    CONFIDENTIAL

to cure or remove the Title  Defects at the expense of such  Seller,  and to the
extent they are not cured by the relevant  Closing,  the value allocated to such
Title Defects by Buyer in its notices shall be withheld from the Purchase  Price
payable at such Closing.

         (b) BUYER'S  REMEDIES.  If the Title  Defects so notified to any Seller
are not cured or removed to the reasonable  satisfaction of Buyer within 90 days
of Buyer's  delivery of notice to such  Seller of such Title  Defects or 90 days
after the Closing, whichever is later, Buyer shall elect as follows:

                  (1) Buyer may elect to grant a further  period or  periods  of
                  time,  not to  exceed  90 days  after  the end of such  90-day
                  period, within which the relevant Seller shall attempt to cure
                  or remove such Title Defects.  If such Title Defects are cured
                  within such 90-day  period,  Buyer shall pay the amount of the
                  withheld  Purchase  Price  to  HHOC  for  the  account  of the
                  relevant  Seller  within  three days of receipt of evidence of
                  such cure.  If such Title  Defects are not cured by the end of
                  such 90-day period, the Purchase Price for the affected Assets
                  shall be adjusted as provided in Section 7.1(b)(3) below.

                  (2) In the event the Net  Revenue  Interest  to be conveyed to
                  Buyer  in the  affected  Lease  or well is less  than  the Net
                  Revenue Interest for such Lease or well shown on EXHIBIT A, or
                  in the event the  Working  Interest in the  affected  Lease or
                  well to be  conveyed  to Buyer  is  greater  than the  Working
                  Interest  for such  Lease  or well  shown  on  EXHIBIT  A, the
                  Purchase  Price  shall be  reduced  by an amount  equal to the
                  decrease  caused by such variance in the  Allocated  Value for
                  the affected Lease or well contained in EXHIBIT D hereto. Such
                  decrease or increase shall be calculated by  multiplying  such
                  Allocated  Value by whichever of the following is  applicable:
                  (A) a  fraction,  the  numerator  of which is the  actual  Net
                  Revenue  Interest in the affected Lease or well to be conveyed
                  to Buyer and the  denominator of which is Buyer's share of the
                  Net Revenue  Interest  shown for such Lease or well on EXHIBIT
                  A, or (B) a fraction,  the numerator of which is Buyer's share
                  of the  Working  Interest  for such  Lease or well as shown on
                  EXHIBIT A, and the  denominator of which is the actual Working
                  Interest in such Lease or well to be conveyed to Buyer.

                  (3)      For Title Defects other than the variances described
                  in subsection (2) above, Buyer shall be entitled to





                                       17

<PAGE>


                                                                    CONFIDENTIAL

                  reduce  the  Purchase  Price to the  extent  the Title  Defect
                  causes a decrease in the value of the affected  Lease or well.
                  For  purposes  of this  paragraph,  the amount of  decrease in
                  value of the  affected  Lease or well shall be  determined  by
                  taking into account the Allocated  Value assigned to the Lease
                  or well on EXHIBIT D, the method of  arriving  at such  value,
                  the legal and practical  effect of the Title  Defect,  and the
                  potential economic effect of the Title Defect over the life of
                  the property involved. In the event the value of such decrease
                  cannot  mutually be agreed,  any affected Party may submit the
                  question of value or existence of the defect to arbitration in
                  accordance  with  Section  7.2(c)  below,  in which  event the
                  amount of the value  allocated  to the  defect by Buyer in its
                  defect  notices  shall  be  retained  by Buyer  pending  final
                  resolution of the arbitration proceeding.

Completion  of any  Closing  shall not operate as a waiver by Buyer of any Title
Defects for which the  Purchase  Price has not been  adjusted or which Buyer has
otherwise  not  specifically  waived and Buyer  shall be entitled to enforce the
warranties  and  representations  and  indemnifications  hereunder to the extent
applicable to such Title Defect. Following each Closing, Sellers shall cooperate
with Buyer in performing title curative work with respect to any of the Assets.

         (c) ARBITRATION.  In the event any Seller and Buyer cannot agree on the
amount of a Title Defect  adjustment or on whether a Title Defect  exists,  then
such issue shall be  submitted to binding  arbitration  in  accordance  with the
following  procedures.  No later  than 5 days  following  the end of the  90-day
period  following  the relevant  Closing,  or following  the end of any extended
90-day  period  granted  by Buyer to Seller to cure  Title  Defects  after  such
Closing, either affected Party may deliver to the other an election to arbitrate
such dispute. Within 15 days following delivery of such notice, the Parties will
each designate an arbitrator, and the two arbitrators will, within 10 days after
their designation, select a third arbitrator; provided, however, that if the two
arbitrators are not able to agree on a third  arbitrator,  the third  arbitrator
shall be selected as soon as possible by the Chief United States  District Judge
for the Southern District of Texas or by any party designated by him or her. The
three arbitrators so selected shall conduct a hearing in Houston, Texas no later
than 30 days following their selection,  at which the relevant Seller or Sellers
and Buyer shall present such evidence and witnesses as they may choose,  with or
without  counsel.  Adherence to formal rules of evidence  shall not be required,
but the arbitrators shall consider





                                       18

<PAGE>


                                                                    CONFIDENTIAL

any evidence and  testimony  that they  determine to be relevant,  in accordance
with  procedures that they determine to be  appropriate.  The arbitrators  shall
render  their  decision  within 30 days  following  conclusion  of the  hearing;
decision by a majority of the arbitration panel shall be final and binding. Such
decision may be filed in any court of competent jurisdiction and may be enforced
by any party as a final judgment of such court.  In determining  the amount of a
Title Defect  adjustment  or the  existence  of a contested  Title  Defect,  the
arbitrators shall consider the same factors listed in Section 7.2(b).  The costs
and fees of the  arbitrators  shall be borne  equally by Buyer and the  relevant
Seller or Sellers,  and each party shall bear its own attorneys'  fees and other
expenses of the arbitration.

         7.3 CASUALTY LOSS. If, prior to the Closing,  any portion of the Assets
shall be  destroyed by fire or other  casualty,  or if any portion of the Assets
shall be taken in  condemnation  or under  the  right of  eminent  domain  or if
proceedings  for such purposes shall be pending or threatened,  Buyer may elect,
subject to the  provisions of Section 7.5, to reduce the Purchase  Price for the
affected  Asset to reflect the estimated cost to repair or replace with property
of equivalent  value. If Buyer does not elect such option,  this Agreement shall
remain in full force and effect, notwithstanding any such destruction or taking,
and Seller shall at the relevant Closing or thereafter upon receipt pay to Buyer
all sums paid to the relevant Seller and  attributable to the affected Assets by
reason of such destruction or taking and, at the relevant Closing, shall assign,
transfer  and set over unto Buyer all of the right,  title and  interest  of the
relevant  Seller  in and to any  unpaid  insurance  proceeds,  awards  or  other
payments arising out of such destruction or taking.  No Seller shall voluntarily
compromise,  settle or adjust any amounts payable by reason of such  destruction
or taking without first obtaining the written consent of Buyer.

         7.4 ADJUSTMENT OF CASH CONSIDERATION FOR OTHER BREACHES. Subject to the
provisions  of  Section  7.5 and the right of any  affected  Seller to submit to
arbitration,  in the  manner  set forth in Section  7.2(c),  any such  reduction
proposed  by Buyer in the event it is  discovered  prior to a  Closing  that any
Seller  has  breached  any  of  the  representations,  warranties  or  covenants
contained in this  Agreement and applicable to the Assets to be conveyed by such
Seller at such Closing,  other than the title warranties for which an adjustment
procedure  is provided in Section  7.2, and if Buyer does not elect to terminate
its obligations  hereunder for such breach as may be permitted by this Agreement
or applicable law, then for each such breach the Purchase Price shall





                                       19

<PAGE>


                                                                    CONFIDENTIAL

be adjusted at the relevant Closing to the extent of such expected loss or cost.
Consummation  of any Closing  shall not operate as a waiver of any breach by any
Seller of a  provision  of this  Agreement  unless the  Purchase  Price has been
adjusted to account for such breach.

         7.5  LIMITATION ON RECOVERIES FOR CASUALTY  LOSSES AND OTHER  BREACHES.
Notwithstanding  any provision of Section 7.2(b)(3),  Section 7.3 or Section 7.4
to the contrary, Buyer shall not be entitled to any recovery (including, but not
limited to, under the indemnification  provided in Section 14.3) or reduction of
the Purchase  Price unless the aggregate  amount of losses and costs asserted by
Buyer pursuant to Section  7.2(b)(3),  Section 7.3 or Section 7.4, whether prior
to or after any Closing, equals the Threshold for Adjustment; provided, however,
once the  Threshold  for  Adjustment  is  reached,  Buyer  shall be  entitled to
recovery or Purchase Price  reductions for all such losses and costs,  including
those aggregating the Threshold for Adjustment.

         7.6 EAST CAMERON BLOCK 378 TERMINATION.  Notwithstanding  any provision
of this  Agreement to the  contrary,  should Buyer  propose  adjustments  to the
Purchase Price with respect to the Assets relating to East Cameron Block 378 and
such adjustments equal or exceed, in the aggregate, the Termination Amount, then
either Sellers or Buyer may terminate this Agreement as to such Assets.


                                  ARTICLE VIII
                    PREFERENTIAL PURCHASE RIGHTS AND CONSENTS

         8.1 PREFERENTIAL PURCHASE RIGHTS AND CONSENTS.  All Material Agreements
containing consent to assignment  obligations and preferential right to purchase
provisions  that must be complied with prior to the  assignment of the Assets to
Buyer and to which Buyer is not otherwise a party are so identified in EXHIBIT B
hereto (except such agreements  with respect to which all necessary  consents to
assignment or waivers of preferential purchase rights have already been obtained
by  Sellers).  Sellers  shall  send  prior to  Closing  such  notices  and other
documents as may be required in order to trigger  preferential  purchase  rights
which have been  identified or Sellers shall obtain prior to Closing a waiver of
the exercise of any preferential purchase rights; provided, however, the Closing
shall not be delayed  pending  the running of the period  during  which any such
right may be exercised  or as a result of  inability  to obtain  waivers of such
rights  and Buyer  shall  acquire  the Assets  subject to any such  preferential
rights.  If a third party who has been offered an interest in an Asset  pursuant
to a





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                                                                    CONFIDENTIAL

preferential  right to purchase  elects prior to Closing to purchase all or part
of such Asset pursuant to the aforesaid offer and Seller receives written notice
of such  election  prior to the Closing  Date,  the  interest or part thereof so
affected  will be eliminated  from the Assets and the Purchase  Price reduced by
the portion of the Purchase  Price  allocated to such  interest or part thereof.
Should any such right be exercised subsequent to the Closing, Buyer shall convey
the  relevant  assets  to the  exercising  party and  shall be  entitled  to the
consideration to be paid therefor.

         8.2  CONSENTS.  Seller shall use all  reasonable  efforts to obtain all
consents to  assignment  prior to the Closing.  If a lessor or other third party
who has the right to consent to the assignment of an Asset (or portion  thereof)
or a Material  Agreement refuses such consent prior to Closing,  Buyer may elect
to eliminate the Block so affected from the Assets and the Purchase  Price shall
be reduced by the portion of the Purchase Price allocated to such Block.  Absent
such election by Buyer, the absence of any required consent shall not constitute
a Title  Defect or breach of any warranty or  representation  of the Sellers and
Buyer shall  accept the risk  associated  with its  inability to obtain any such
required consent prior to or after the Closing.

         8.3 REQUIRED  ACTIONS.  The Parties each agree to use their  respective
reasonable  efforts  to take or  cause to be taken  all  such  action  as may be
necessary to consummate and make effective the purchase and sale as set forth by
this Agreement and to assure that each will not be under any material corporate,
legal or  contractual  restriction  that  would  prohibit  or delay  the  timely
consummation of such purchase and sale.


                                   ARTICLE IX
                                COVENANTS OF HHOC

         9.1      HHOC'S COVENANTS.  HHOC covenants as follows:

         (a)  MAINTENANCE OF INTERESTS.  Prior to the Closing,  HHOC shall cause
those  Assets not operated by Buyer to be  maintained  and operated in a prudent
and  workmanlike  manner,  in good condition and working  order,  shall maintain
insurance now in force with respect to the Assets,  shall timely pay or cause to
be paid all costs and expenses incurred in connection therewith,  shall keep the
Leases and Material  Agreements  in full force and effect and shall  perform and
shall comply with the  covenants and  conditions  contained  therein;  provided,
however, that, except as authorized pursuant to





                                       21

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                                                                    CONFIDENTIAL

subsection (b) below, HHOC shall not commence or participate in the commencement
of operations  for the drilling of any new well or the  redrilling or completion
of an existing well included  within the Assets after the date of this Agreement
and prior to the Closing without the prior written consent of Buyer.

         (b) EUGENE ISLAND BLOCKS 64 AND 65 OPERATIONS. Prior to the Closing, if
Buyer so directs,  HHOC will execute AFE's circulated by Buyer for operations on
existing wells, including installation of production facilities on Eugene Island
Blocks 64 and 65, and the drilling of a second well on Eugene Island Block 65 as
contemplated in the Eugene Island Block 65 Well No. 2 AFE.

         (c)  RESTRICTIONS.  HHOC will promptly inform Buyer of all requests for
commitments  to expend  funds with  respect  to the  Assets.  Without  the prior
written consent of Buyer, and except as provided in Section 9.1(b), Seller shall
not enter into any new  agreements  or  commitments  with  respect to the Assets
which extend beyond the Closing,  shall not commit to or incur any  expenditures
in excess of $25,000  (net to HHOC's  interest)  with respect to any part of the
Assets,  shall not make any  nonconsent  elections  with  respect to  operations
affecting  the Assets,  shall not abandon or consent to the  abandonment  of any
well or release or  consent to the  release of all or any  portion of any of the
Leases, shall not modify or terminate any of the Material Agreements or waive or
relinquish any right thereunder, shall not agree to any renegotiated price, take
or other terms under  existing gas purchase  agreements,  shall not agree to any
credit or prepayment  arrangement that would reduce the share of gas deliverable
with respect to the Assets  following the Effective  Time,  shall not enter into
any  agreement or  instrument  for the sale,  treatment,  or  transportation  of
production  from the Assets (except for sales  agreements  terminable on no more
than 30 days' notice), and shall not encumber,  sell or otherwise dispose of any
of the Assets,  other than  personal  property  that is  replaced by  equivalent
property or consumed in the normal operation of the Assets.

         (d)  NOTIFICATION  OF CLAIMS.  HHOC shall promptly  notify Buyer of any
suit, action or other proceeding before any court or governmental agency and any
cause of action that relates to the Interests or that might result in impairment
or loss of any Seller's  title to any portion of the Assets or the value thereof
or that might hinder or impede the operation of the Leases arising or threatened
prior to the Closing.

         (e)      MAINTENANCE OF CONFIDENTIALITY.  HHOC shall exercise all
due diligence in safeguarding and maintaining secure all





                                       22

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                                                                    CONFIDENTIAL

engineering,  geological and geophysical  data,  reports and maps, and all other
confidential data in the possession of HHOC relating to the Assets.

         (f) COMPLIANCE WITH LAW. HHOC will comply,  and will use its reasonable
efforts to cause all  third-party  operators  of the Leases to comply,  with all
laws, rules, regulations, permits, ordinances and orders of all local, state and
federal governmental  bodies,  authorities and agencies having jurisdiction over
the Assets at all times until the Closing.

         (g)  OBLIGATION  TO  INFORM.   HHOC  shall  keep  Buyer  currently  and
completely  informed as to all material  developments  affecting or  potentially
affecting the Assets not operated by Buyer.  Without limiting the foregoing,  if
at or  prior  to the  Closing  HHOC  becomes  aware of any  material  change  or
inaccuracy in any  information  furnished to Buyer by or on behalf of any Seller
or any  material  adverse  change in the  operation  or  condition of any of the
Assets not operated by Buyer, HHOC shall promptly notify Buyer of such change or
inaccuracy.

         (h) EXCLUSIVITY.  Until the Closing or the earlier  termination of this
Agreement,  neither  HHOC nor any other  Seller will (1)  solicit,  discuss,  or
otherwise  entertain,  directly or  indirectly,  any offer to acquire any of the
Assets,  (2) provide  information to others concerning the Assets (except in the
ordinary  course of operation of the Assets) or (3) enter into any  negotiations
with, or enter into any agreement that provides for acquisition of the Assets or
any portion thereof by, a person other than Buyer.

         (i)  OPERATIONS  IN PROGRESS.  EXHIBIT F is a complete and correct list
and  description of all operations on the Leases,  other than those conducted by
Buyer,  as to  which  it is  anticipated  that  on and  after  the  date of this
Agreement HHOC will be participating,  including,  but not limited to, drilling,
completion,  installation of production or pipeline  facilities (the "Operations
in  Progress").  Seller shall notify Buyer of any such  activities  prior to the
implementation  thereof and shall consult with Buyer  regarding all such matters
and operations.  HHOC shall not make any election with respect thereto under any
operating  agreement or other  agreement or abandon or permit the abandonment of
any  Operations  in Progress  without the prior written  consent of Buyer.  HHOC
shall promptly notify Buyer in writing if the costs and expenses relating to any
Operation  in  Progress  are  likely to exceed  the AFE  estimates  by more than
fifteen  percent (15%) as to the costs incurred by HHOC under each AFE estimate.
Buyer shall





                                       23

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                                                                    CONFIDENTIAL

not be liable for any costs or expenses in excess of such fifteen  (15%) margin,
unless HHOC notifies Buyer as provided  herein and Buyer  expressly  approves in
writing the  continuation of the operation giving rise to such excess expense or
unless  the  excess  expense  cannot  reasonably  be  avoided by reason of legal
obligations or prudent operating practices,  including,  but not limited to, the
necessity of plugging and  abandoning a well in  compliance  with  regulatory or
contractual requirements.

                                    ARTICLE X
                                    CLOSINGS

         10.1 CLOSINGS.  The closings of the  transactions  contemplated by this
Agreement  shall be held  beginning  at 10:00 a.m.  Local Time at the offices of
HHOC, 700 Louisiana,  Suite 2100, Houston,  Texas 77002, as follows: on February
14,  1997 as to the Assets  relating  to Eugene  Island  Blocks 64 and 65 and on
February  20, 1997 as to the Assets  relating  to East  Cameron  Block 378.  All
events of each Closing shall each be deemed to have occurred simultaneously with
the other, regardless of when actually occurring,  and each shall be a condition
precedent  to the other;  provided,  however,  HHOC's  delivery of the  executed
Eugene Island Block 65 Well No. 2 AFE shall be a condition to the  occurrence of
the First Closing.

         10.2     SELLERS' CLOSING OBLIGATIONS.  At each Closing, except to
the extent comprising the Excluded Assets, Sellers shall deliver to
Buyer the following:

                  (a) Duly executed and acknowledged  assignments  substantially
         in the form attached hereto as EXHIBIT "E," and such other documents as
         may be  reasonably  necessary  in the  opinion of counsel  for Buyer to
         convey Sellers'  interest in the Assets to Buyer in accordance with the
         provisions hereof;

                  (b)      Possession of the relevant Assets, including copies
         of the relevant Records;

                  (c)      A non-foreign person affidavit executed by each
         Seller pursuant to Section 1445 of the Internal Revenue Code;

                  (d) An  opinion of John H.  Peper,  Esq.,  General  Counsel of
         HHOC, counsel to Seller, in form reasonably satisfactory to Buyer, with
         respect to the matters stated in Sections 4.1(a), (b), (c) and (g), but
         as to HHOC only and only as to the First Closing; and

                  (e)      The Preliminary Settlement Statement.





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<PAGE>


                                                                    CONFIDENTIAL

         10.3 BUYER'S CLOSING OBLIGATIONS.  At each Closing, Buyer shall deliver
to HHOC (for its  account  and the  account  of all other  Sellers,  such  other
Sellers hereby expressly  consenting to such  disbursement of the Purchase Price
by Buyer):

                  (a)      The Purchase Price, adjusted pursuant to the
         provisions hereof, by wire transfer of immediately available
         funds;

                  (b)      The Preliminary Settlement Statement; and

                  (c) An opinion of Howard L. Boigon,  Esq.,  General Counsel to
         Buyer, in form reasonably  satisfactory to Sellers, with respect to the
         matters stated in Sections 5.1(a), (b), (c) and (d).

                                   ARTICLE XI
                                EFFECT OF CLOSING

         11.1  ASSUMED  OBLIGATIONS;  PRE-CLOSING  LIABILITIES.  Subject  to the
provisions of Section 16.1, upon and after Closing,  Buyer shall own the Assets,
together with all the rights, duties, obligations and liabilities accruing after
Closing,  and Buyer shall be obligated to assume and pay,  perform,  fulfill and
discharge  all  Assumed  Obligations.  To the  extent  not  included  in Assumed
Obligations  or in those  matters  for  which  Seller  is  indemnified  by Buyer
hereunder,  Seller  agrees to pay,  perform,  fulfill and  discharge  all costs,
expenses  and  liabilities  attributable  to the  ownership  or operation of the
Assets and accruing prior to the Effective Time.

         11.2     REVENUES AND EXPENSES.

         (a) To the extent not accounted for in Buyer's and Seller's Credits and
adjustments under Section 3.2 hereto, all proceeds, accounts receivable, income,
revenues and other items included in or  attributable to the Excluded Assets (as
described  in Section  1.7) and the  Assets  prior to the  Effective  Time shall
belong to and be retained or paid to Sellers,  and all other proceeds,  accounts
receivable,  income, revenues and other items included on or attributable to the
Assets after the Effective Time shall belong to and be paid over to Buyer.

         (b)      POST-CLOSING OBLIGATIONS.  If any funds are received by
a Party  which belong to any other Party, the Party receiving such
funds shall immediately pay the funds over to such other Party
entitled thereto.  If an invoice or other obligation to be





                                       25

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                                                                    CONFIDENTIAL

discharged is under the terms of this Agreement  partially the obligation of any
Seller and partially the obligation of Buyer,  the Party  receiving such invoice
or request to discharge the  obligation  shall  promptly  notify the other Party
which shall promptly pay over its share thereof after receipt of such notice.

         11.3 HHOC  OPERATED  PROPERTIES.  After  Closing  and until a successor
operator  has been  approved  by the  Minerals  Management  Service,  HHOC shall
continue to operate those Assets which it is currently operating. Such continued
operations  by HHOC shall be for the  account  of Buyer and other  owners of the
relevant  Assets and shall be  conducted  in  accordance  with the  covenants in
Article IX of this  Agreement,  subject,  however,  to  provisions of applicable
joint operating  agreements.  In connection with any such continued operation of
the Assets by HHOC, HHOC shall be reimbursed by Buyer for all costs and expenses
incurred by HHOC with respect thereto,  including a charge for overhead,  in the
same manner as provided in the applicable joint operating  agreement.  All costs
and expenses  incurred by HHOC in conjunction  with such continued  operation of
the Assets shall be  considered  and handled as "Sellers'  Credits"  pursuant to
Section  3.2(a) to the extent such credits  offset same. To the extent  Sellers'
Credits are not  sufficient  to offset the costs and  expenses  incurred,  Buyer
shall remain responsible therefor.

         11.4 AMI.  Should HHOC (or any affiliate of HHOC),  within 18 months of
the date hereof, acquire any interest within Eugene Island Block 64 or 65, Buyer
shall be  entitled  to acquire  75% of the  interest  so acquired by HHOC (or an
affiliate of HHOC) in exchange for its payment of 75% of the out-of-pocket  cost
of acquisition.


                                   ARTICLE XII
                     LIMITATIONS OF WARRANTIES AND REMEDIES

         12.1 LIMITATIONS. THE EXPRESS REPRESENTATIONS AND WARRANTIES OF SELLERS
CONTAINED  IN  THIS  AGREEMENT  ARE  EXCLUSIVE  AND  ARE IN  LIEU  OF ALL  OTHER
REPRESENTATIONS  AND  WARRANTIES,  EXPRESS,  IMPLIED  OR  STATUTORY,  INCLUDING,
WITHOUT LIMITATION,  ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THE QUALITY,
QUANTITY  OR VOLUME OF THE  RESERVES,  IF ANY, OF  HYDROCARBONS  IN OR UNDER THE
LEASES,  OR THE  ENVIRONMENTAL  CONDITION  OF THE ASSETS.  THE ITEMS OF PERSONAL
PROPERTY, EQUIPMENT, IMPROVEMENTS,  FIXTURES, AND APPURTENANCES CONVEYED AS PART
OF THE ASSETS ARE SOLD  HEREUNDER "AS IS, WHERE IS" AND "WITH ALL FAULTS" AND NO
WARRANTIES  OR  REPRESENTATIONS  OF ANY KIND OR  CHARACTER,  EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTY OF





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                                                                    CONFIDENTIAL

QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
CONDITION, ARE GIVEN BY OR ON BEHALF OF SELLER, EXCEPT THOSE
EXPRESSLY STATED HEREIN.

         12.2   SURVIVAL.    Except   as   otherwise   provided   therein,   all
representations,  warranties,  covenants, indemnities and agreements made herein
shall  survive  the  Closings  and  remain  in  effect  for a period of one year
following  the Second  Closing  or the date on which it was to occur;  provided,
however,  Article XI, Section 13.2, Section 14.1, Section 14.2, Section 14.3(i),
Section  14.4  and  Article  XVI  shall  survive  indefinitely,   as  shall  the
representations  and warranties of the Sellers provided in Sections 4.1(a),  (b)
and (c) and those of Buyer provided in Sections 5.1(a), (b), (c) and (d).


                                  ARTICLE XIII
                              DEFAULT AND REMEDIES

         13.1  LIABILITIES  UPON  TERMINATION  OR  BREACH.  In  addition  to the
remedies  provided  under  applicable  law,  each Party  shall have the right to
recover  damages for the breach by the other  Party or Parties of any  warranty,
covenant or agreement contained herein or for the failure of a representation of
the other Party or Parties  contained in this Agreement to be true. In the event
any Party wrongfully  fails to consummate a Closing,  the other Party or Parties
shall have the  following  remedies in addition to any remedies  provided  under
applicable law: If Buyer is the Party wrongfully failing to close, Sellers shall
have the right to terminate Buyer's right to acquire any Assets not yet acquired
by Buyer  hereunder and the options  provided for in Section 2.3 and Section 2.4
and Sellers shall have the right to recover all damages suffered by Sellers as a
result of such failure and, if such failure occurs with respect to Eugene Island
Blocks  64 and 65,  Sellers  shall in  addition  have the right to  recover  any
amounts expended with respect to all AFEs approved as required under Section 2.5
or Section 9.1(b). If Sellers wrongfully fail to close, Sellers acknowledge that
the remedies  provided at law would be inadequate  and that, as a result,  Buyer
shall be entitled  to, and  Sellers  shall not object to, the remedy of specific
performance to compel such performance.

         13.2  ATTORNEYS  FEES.  The  prevailing  Party in any legal  proceeding
brought under or to enforce this  Agreement  shall be  additionally  entitled to
recover  court  costs and  reasonable  attorney's  fees from the  non-prevailing
Party.






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                                                                    CONFIDENTIAL

                                   ARTICLE XIV
                                    INDEMNITY

         14.1  BUYER'S  INDEMNIFICATION.  After  the  Closing,  Buyer  agrees to
indemnify,  defend and hold Sellers and their  respective  directors,  officers,
shareholders, employees, trustees, partners, agents and attorneys (collectively,
the "Seller  Indemnified  Parties") harmless from and against any and all Losses
(as defined below) with respect to any liabilities and  obligations,  or alleged
or threatened liabilities or obligations,  including, but not limited to, claims
for personal  injury,  illness,  disease,  wrongful death,  damages to property,
liability  based on strict  liability  or  condition  of the Assets,  and fines,
penalties  and other  regulatory  sanctions  relating  to or  arising  out of ()
Buyer's  ownership  or operation of the Assets for the period from and after the
Effective  Time;  ()  the  Assumed  Obligations;  and  ()  the  failure  of  any
representation  of  Buyer  in this  Agreement  to be true or the  breach  of any
warranty,  covenant or agreement of Buyer in this  Agreement BUT EXCLUDING  from
Buyer's indemnity  obligation  hereunder any Loss resulting from or attributable
to the negligence or willful  misconduct of any Seller  Indemnified  Party,  its
officers,  employees or agents with respect to the operation and  maintenance of
the Assets prior to the Effective Time or the failure of any  representation  of
any Seller in this Agreement to be true or the breach of any warranty,  covenant
or agreement of any Seller in this Agreement.

         14.2 EUGENE ISLAND BLOCK 65 WELL NO. 2 INDEMNIFICATION.  Further to the
provisions  of Section  14.1,  Buyer  agrees to  indemnify,  defend and hold the
Seller Indemnified Parties harmless from and against (a) any amounts expended by
any Seller  with  respect to the  Eugene  Island  Block 65 Well No. 2 AFE should
Buyer  wrongfully  fail or refuse to close  hereunder with respect to the Assets
relating to Eugene  Island  Blocks 64 and 65 and (b)  regardless  of whether the
First Closing occurs,  any and all Losses with respect to claims of other owners
of the Leases  covering Eugene Island Blocks 64 and 65 based on approval by HHOC
of the  proposal  with  respect to the Eugene  Island Block 65 Well No. 2 or the
Eugene  Island  Block 65 Well No. 2 AFE or any  other  AFE  approved  by HHOC as
required pursuant to Section 9.1(b).

         14.3  HHOC'S  INDEMNIFICATION.   After  the  Closing,  HHOC  agrees  to
indemnify,  defend and hold  Buyer and its  directors,  officers,  shareholders,
employees, agents and attorneys (collectively,  the "Buyer Indemnified Parties")
harmless from and against any and all Losses with respect to all liabilities and
obligations or alleged or threatened liabilities and obligations, including, but
not





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                                                                    CONFIDENTIAL

limited to, claims for personal injury, illness, disease, wrongful death, damage
to property, liability based on strict liability or condition of the Assets, and
fines, penalties and other regulatory sanctions resulting from or arising out of
(i) ownership or operation of the Assets prior to the Effective  Time;  and (ii)
the failure of any  representation of Seller in this Agreement to be true or the
breach of any warranty or covenant or agreement of Seller in this  Agreement BUT
EXCLUDING from HHOC's indemnity  obligation hereunder any Loss resulting from or
attributable  to the negligence or willful  misconduct of any Buyer  Indemnified
Party with  respect to the  operation  and  maintenance  of the Assets after the
Effective Time or the failure of any  representation  of Buyer in this Agreement
to be true or the breach of any warranty, covenant or agreement of Buyer in this
Agreement.

         14.4     SCOPE AND PROCEDURE FOR INDEMNIFICATION.

         (a) The indemnity  provided for by each of Sections 14.1 and 14.2 shall
extend to any loss,  cost,  expense,  liability or damage  ("Loss")  incurred or
suffered by the Seller Indemnified Party or Buyer Indemnified Party, as the case
may be, including  reasonable fees and expenses of attorneys,  technical experts
and expert witnesses  reasonably  incident to matters indemnified  against.  The
amount  of  each  payment  claimed  by  a  Seller  Indemnified  Party  or  Buyer
Indemnified  Party, as the case may be, to be owing as described in each of such
Sections,  together with a list identifying,  to the extent reasonably possible,
each separate  item of Loss for which payment is so claimed,  shall be set forth
by such  claiming  party in a  statement  delivered  to the  indemnifying  Party
setting  forth  the basis of such  claim and shall be paid by such  indemnifying
Party as and to the extent required herein within thirty (30) days after receipt
of such  statement.  Within  sixty  (60)  days  after  notification  to a Seller
Indemnified Party or Buyer  Indemnified  Party, as the case may be, with respect
to any claim or legal  action or other  matter  that could  result in a Loss for
which  indemnification may be sought under this Article XIV, but in any event in
time  sufficient  for the  indemnifying  Party to contest any  action,  claim or
proceeding  that has  become  the  subject  of  proceedings  before any court or
tribunal,  such Seller Indemnified Party or Buyer Indemnified Party, as the case
may be, shall give written notice of such claim, legal action or other matter to
the indemnifying  Party and, at the request of such  indemnifying  Party,  shall
furnish the  indemnifying  Party or its counsel with copies of all pleadings and
other  information with respect to such claim,  legal action or other matter and
shall,  at the  election of the  indemnifying  Party made within sixty (60) days
after receipt of such notice, permit the indemnifying Party to assume control of





                                       29

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                                                                    CONFIDENTIAL

such claim,  legal  action or other  matter (to the extent only that such claim,
legal action or other matter relates to a Loss for which the indemnifying  Party
is  liable),  including  the  determination  of  all  appropriate  actions,  the
negotiation of settlements  on behalf of the Seller  Indemnified  Party or Buyer
Indemnified  Party,  as the case may be, and the conduct of  litigation  through
attorneys of the indemnifying  Party's choice.  In the event of such an election
by the indemnifying  Party,  (i) any expense incurred by the Seller  Indemnified
Party  or  Buyer   Indemnified   Party,  as  the  case  may  be  thereafter  for
investigation or defense of the matter shall be borne by the Seller  Indemnified
Party or Buyer  Indemnified  Party,  as the  case  may be,  and (ii) the  Seller
Indemnified Party or Buyer Indemnified Party, as the case may be, shall give all
reasonable   information  and  assistance,   other  than  pecuniary,   that  the
indemnifying Party shall deem reasonably necessary to the proper defense of such
claim,  legal  action,  or  other  matter,  subject  to  reimbursement  for  its
out-of-pocket expenses incurred in rendering such assistance.

         (b) In the absence of such an election, the Seller Indemnified Party or
Buyer Indemnified Party, as the case may be, will use its best efforts to defend
any  claim,  legal  action or other  matter to which such  indemnifying  Party's
indemnification under this Article XIV applies. Failure to provide timely notice
pursuant  to  this   Section   14.3  shall  not   deprive   the  party   seeking
indemnification  of its right to  indemnification  pursuant to this Article XIV,
although  such party shall be liable for any damages  occasioned by its delay in
affording  the party  entitled  to  notice  with  such  notice  and shall not be
entitled to  indemnification  for any costs  incurred  during the period of such
delay that could  reasonably  have been  avoided  by the  indemnifying  Party if
timely notice had been given.

         (c) In the event Buyer makes a claim for  indemnification for breach of
any Environmental  Laws, upon Buyer's request HHOC shall,  without limitation of
Buyer's   remedies   hereunder,   assign   to  Buyer   any  right  of  HHOC  for
indemnification for such matter from HHOC's predecessors in title.


                                   ARTICLE XV
                                   TERMINATION

         15.1     TERMINATION PURSUANT TO SECTION 7.6.  Should Buyer or
Sellers elect, pursuant to the provisions of Section 7.6, to
terminate this Agreement as to the Assets relating to East Cameron





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                                                                    CONFIDENTIAL

Block 378, then, as part of such  termination,  the then  unexercised  rights of
Buyer under Sections 2.3 and 2.4 shall terminate also.

        15.2 EXPIRATION OF RIGHTS UNDER SECTIONS 2.3 AND 2.4. Rights of Buyer 
under Sections 2.3 and 2.4 unexercised as of December 31, 1997, shall expire on
such date; provided, however, that if HHOC has not yet offered Buyer a right
with respect to the Exploration Rights associated with a particular offshore
block, but has acquired certain (although less than all required) rights with
respect to such block, HHOC shall then be obligated to offer to Buyer the right
to acquire a portion of such rights acquired by HHOC as provided in Section 2.3,
but paying therefor the consideration set forth in EXHIBIT G as to such block.

         15.3 EFFECT OF TERMINATION.  Any termination of this Agreement, whether
in whole or in part,  shall not impact any previous  performance  of portions of
this  Agreement or impair any rights or  obligations  accrued or vested prior to
such termination.  Furthermore,  all indemnifications provided in this Agreement
shall survive any such termination of this Agreement and the Closings.


                                   ARTICLE XVI
                                  MISCELLANEOUS

         16.1 CERTAIN GOVERNMENTAL  APPROVALS.  Buyer agrees that promptly after
Closing  it  shall  actively  pursue  unconditional  approval  by  the  Minerals
Management  Service of the assignment of the Assets,  and  operatorship of those
Assets HHOC is currently  operating.  Buyer obligates itself to take any and all
action  required  by the  Minerals  Management  Service or any other  regulatory
agency  in order to  obtain  such  unconditional  approval,  including,  but not
limited to, posting any and all bonds or other  securities which may be required
of it or its  Operating  Agent,  in  excess  of such  parties'  existing  lease,
pipeline or area-wide bond.

         16.2 RECORD TITLE IN SELLER. Until the governmental  approvals provided
for in Section 16.1 are obtained,  however,  HHOC shall  continue to hold record
title to the  Assets as  nominee  for Buyer,  during  which time (i)  subject to
Article  XIV,  Buyer shall  indemnify  and hold HHOC  harmless  from any and all
claims, expenses of any kind or character relating to such Assets accruing after
Closing and (ii) HHOC shall act as Buyer's  nominee but shall be  authorized  to
act only upon and in accordance with Buyer's specific  written  instructions and
HHOC shall have no authority,  responsibility or discretion to perform any tasks
or  functions  with  respect  to the Assets  other  than those  which are purely
administrative or





                                       31

<PAGE>


                                                                    CONFIDENTIAL

ministerial in nature, unless otherwise specifically requested and
authorized by Buyer in writing.

         16.3 PUBLIC  ANNOUNCEMENTS.  Prior to making any public announcement or
statement with respect to the transactions  contemplated by this Agreement,  the
Party desiring to make such public  announcement or statement shall consult with
the other  Parties and exercise its best efforts to (i) agree upon the text of a
joint public announcement or statement to be made by all of such Parties or (ii)
obtain  approval  of the  other  Party  or  Parties  to  the  text  of a  public
announcement or statement to be made solely by Sellers or Buyer, as the case may
be, such approval not to be  unreasonably  withheld.  Nothing  contained in this
paragraph  shall be  construed  to require  any Party to obtain  approval of the
other Party or Parties to disclose  information with respect to the transactions
contemplated by this Agreement to any state or federal governmental authority or
agency to the extent  required by  applicable  law or by any  applicable  rules,
regulations   or  orders  of  any   governmental   authority  or  agency  having
jurisdiction  or necessary to comply with  disclosure  requirements of any stock
exchange and applicable securities laws.

         16.4  FILING  AND  RECORDING  OF  ASSIGNMENTS.  Buyer  shall be  solely
responsible  for all filings and recording of  assignments  and other  documents
related to the Assets and for all fees connected therewith,  except as otherwise
provided in this  Agreement.  Buyer  shall  furnish  Sellers  with copies of all
filings made by it pursuant to this  Agreement  and of the  pertinent  recording
data pertaining to same.  Sellers shall not be responsible for any loss to Buyer
because of Buyer's  failure to file or record  documents  correctly or promptly.
Buyer  shall  promptly  file  all  appropriate  forms or  declarations  with the
Minerals Management Service relative to this Agreement and its assumption of the
Leases and  operation  to the  extent  provided  hereunder,  and  Sellers  shall
cooperate with Buyer in connection with such filings.

         16.5     FURTHER ASSURANCES AND RECORDS.

         (a) Each of the Parties will  execute,  acknowledge  and deliver to the
other Party or Parties  such further  instruments  and take such other action as
may be reasonably  requested in order to more  effectively  assure to such Party
all of  the  respective  properties,  rights,  titles,  interests,  estates  and
privileges intended to be assigned,  delivered or inuring to the benefit of such
Party in consummation of the transactions contemplated hereby.






                                       32

<PAGE>


                                                                    CONFIDENTIAL

         (b) Buyer  agrees to maintain the files and records of Sellers that are
acquired  pursuant to this  Agreement for seven (7) years after  Closing.  Buyer
shall provide  Sellers and their  representatives  reasonable  access to and the
right to copy such files and  records  for the  purposes  of (i)  preparing  and
delivering  any  accounting  provided for under this  Agreement  and  adjusting,
prorating and settling the charges and credits  provided for in this  Agreement,
(ii) complying with any law, rule or regulation  affecting  Sellers' interest in
the relevant  Assets prior to the relevant  Closing  Date,  (iii)  preparing any
audit of the books and records of any third party relating to Sellers'  interest
in the relevant Assets prior to the relevant  Closing Date, or responding to any
audit prepared by such third parties, (iv) preparing tax returns, (v) responding
to or disputing any tax audit or (vi) asserting,  defending or otherwise dealing
with any claim or dispute under this Agreement.

         (c) Buyer agrees that, as soon as  practicable  after each Closing,  it
will  remove or cause to be  removed  the names and marks used by Seller and all
variations and derivatives  thereof and logos relating thereto from the relevant
Assets and will not thereafter make any use whatsoever of such names,  marks and
logos.

         (d) To the extent not obtained or satisfied as of the relevant Closing,
Sellers  agree to  continue  to use all  reasonable  efforts,  but  without  any
obligation  to  incur  any  cost or  expense  in  connection  therewith,  and to
cooperate with Buyer's efforts to obtain for Buyer access to files,  records and
data  relating to the relevant  Assets in the  possession  of either  Sellers or
third parties. In the event Buyer shall obtain such files,  records and data for
the account of Sellers or in the name of Sellers,  Sellers shall maintain files,
records, and data pursuant to Section 16.6(b) of this Agreement.

         16.6  NOTICES.  Except as  otherwise  expressly  provided  herein,  all
communications  required or permitted  under this Agreement  shall be in writing
and any  communication  or delivery  hereunder shall be deemed to have been duly
given and received when actually delivered to the address set forth below of the
party to be notified,  addressed as follows, or when a legible facsimile copy is
received by the party's  facsimile  equipment at the number shown below (and the
Sellers other than HHOC expressly agree that notice given or received by HHOC in
such manner shall be binding on them):

                           If to any of Sellers:

                           Hall-Houston Oil Company





                                       33

<PAGE>


                                                                    CONFIDENTIAL

                           Attn:  John H. Peper
                           700 Louisiana, Suite 2100
                           Houston, Texas 77002
                           Phone:  (713) 228-0711
                           Fax:  (713) 225-7600

                           If to Buyer:

                           Basin Exploration, Inc.
                           Attn:  Sam D. Winegrad
                           370  17th Street, Suite 3400
                           Denver, Colorado 80202
                           Phone:  (303) 685-8000
                           Fax:  (303) 685-8020

Provided,  however,  that any notice  required or permitted under this Agreement
will be effective if given verbally  within the time  provided,  so long as such
verbal  notice is  followed  by written  notice  thereof in the manner  provided
herein within  twenty-four (24) hours following the end of such time period. Any
party may, by written  notice so delivered  to the other,  change the address or
facsimile number to which delivery shall thereafter be made.

         16.7  INCIDENTAL  EXPENSES.  Buyer  shall bear and pay (i) all state or
local government sales, transfer, gross proceeds or similar taxes incident to or
caused by the transfer of any Assets to Buyer,  (ii) all  documentary,  transfer
and other  state and local  government  taxes  incident  to the  transfer of any
Assets to Buyer,  (iii)  all  filing,  recording  or  registration  fees for any
assignment or conveyance delivered  hereunder,  and (v) all normal costs or fees
required to obtain  consent to assign any Assets.  Each party shall bear its own
respective expenses incurred in connection with each Closing,  including its own
consultants' fees,  attorneys' fees,  accountants' fees, and other similar costs
and expenses.

         16.8 ENTIRE AGREEMENT.  This Agreement  (including all Exhibits to this
Agreement)  embodies the entire  agreement  among the parties  (superseding  all
prior agreements,  arrangements and understandings related to the subject matter
hereof),  and may be  supplemented,  altered,  amended,  modified  or revoked by
writing  only,  signed  by the  parties  hereto.  The  headings  herein  are for
convenience only and shall have no significance in the interpretation hereof.

         16.9     GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS.






                                       34

<PAGE>


                                                                    CONFIDENTIAL

         16.10 EXHIBITS.  All Exhibits hereto, and the terms thereof,  which are
referred  to herein are hereby  made a part  hereof and  incorporated  herein by
reference.

         16.11 AUDITS.  Buyer shall have the right,  during reasonable  business
hours,  to audit all records of Sellers  pertaining to the Assets for the period
from the relevant Closing in which such Assets were conveyed until two (2) years
from the end of the calendar year in which such Closing occurs.

         16.12  COUNTERPARTS.  This  Agreement  may be executed in any number of
counterparts,  and each and every  counterpart  shall be deemed for all purposes
one agreement.

         16.13 WAIVER. Any of the terms, provisions, covenants, representations,
warranties  or  conditions  hereof  may be waived  only by a written  instrument
executed by the Party waiving compliance. Except as otherwise expressly provided
in this  Agreement,  the  failure  of any Party at any time or times to  require
performance of any provision hereof shall in no manner affect such Party's right
to enforce the same. No waiver by any Party of any  condition,  or of the breach
of any term, provision,  covenant,  representation or warranty contained in this
Agreement,  whether by conduct or otherwise, in any one or more instances, shall
be  deemed to be or  construed  as a further  or  continuing  waiver of any such
condition  or  breach  or  waiver  of  any  other  term,  provision,   covenant,
representation or warranty.

         16.14 BINDING  EFFECT;  ASSIGNMENT.  It is  understood  and agreed that
Buyer may  designate  or make any party  other  than Buyer the  operator  of the
Assets  acquired  by Buyer with the  Minerals  Management  Service  without  the
consent  of  Sellers.  All  the  terms,  provisions,   covenants,   obligations,
indemnities, representations,  warranties and conditions of this Agreement shall
be binding  upon and inure to the benefit of and be  enforceable  by the Parties
hereto and their respective successors and assigns.

         16.15  TAXES.  Seller  and Buyer  agree  that this  transaction  may be
subject to the  reporting  requirement  of Section 1060 of the Internal  Revenue
Code of 1986, as amended, and that, therefore,  IRS Form 8594, Asset Acquisition
Statement,  may be required to be filed for this  transaction.  In the event the
parties mutually agree that a filing of Form 8594 is required,  the parties will
confer and cooperate in the preparation and filing of their  respective forms to
reflect a consistent  reporting of the agreed-upon  allocation.  Seller shall be
responsible  for and shall pay all taxes  attributable  to or  arising  from the
ownership or operation of the





                                       35

<PAGE>


                                                                    CONFIDENTIAL

Assets prior to the Effective Time. Buyer shall be responsible for and shall pay
all taxes  attributable  to or arising  from the  ownership  or operation of the
Assets after the Effective Time.

                     [SIGNATURES APPEAR ON FOLLOWING PAGES]







                                       36

<PAGE>


                                                                    CONFIDENTIAL

         IN WITNESS  WHEREOF,  the  parties  have caused  this  Agreement  to be
executed by their duly authorized officers as of the date first above written.

                                         SELLERS:

                                         Hall-Houston Oil Company


                                         By:________________________________
                                                Wayne P. Hall
                                                President

                                         Hall-Houston Oil Company Employee
                                         Royalty Trust


                                         By:________________________________
                                                Gary L. Hall
                                                Trustee


                                         By:________________________________
                                                Wayne P. Hall
                                                Trustee

                                         Hall-Houston 1996 Exploration and
                                         Development Facility Overriding
                                         Royalty Trust


                                         By:________________________________
                                                Gary L. Hall
                                                Trustee


                                         By:________________________________
                                                Wayne P. Hall
                                                Trustee

                                         Hall Family Trust


                                         By:________________________________
                                                Gary L. Hall
                                                Trustee






                                       37

<PAGE>



                                                                   CONFIDENTIAL


                                         Gulf Royalty Interests, Inc.


                                         By:________________________________
                                                Gary L. Hall
                                                President

                                         BUYER:

                                         Basin Exploration, Inc., a Delaware
                                         corporation, doing business in
                                         Louisiana as Basin Exploration,
                                         Inc. (Delaware)


                                         By:________________________________
                                                Sam D. Winegrad
                                                Vice President of
                                                Corporate Development






                                       38

<PAGE>


                                                                    CONFIDENTIAL


                                    EXHIBITS


EXHIBIT A:        LEASES AND INTERESTS

EXHIBIT B:        MATERIAL AGREEMENTS

EXHIBIT C:        INVENTORY OF WELLS, FACILITIES AND EQUIPMENT

EXHIBIT D:        ALLOCATED VALUES

EXHIBIT E:        FORMS OF ASSIGNMENT

EXHIBIT F:        EXISTING OPERATIONS

EXHIBIT G:        EXPLORATION RIGHTS AND CONSIDERATION THEREFOR






                                       39

<PAGE>

                                                                    CONFIDENTIAL

                                   EXHIBIT "A"

                  Attached to and made a part of that certain  Purchase and Sale
                  Agreement   effective   February  13,  1997,  by  and  between
                  Hall-Houston  Oil  Company  et  al,  as  Sellers,   and  Basin
                  Exploration,
                  Inc., as Buyer.

                            THE LEASES AND INTERESTS


1.       Oil and Gas Lease  bearing  Serial No. OCS-G 12856,  effective  June 1,
         1991 between the United States of America,  as Lessor, and Hall-Houston
         Oil Company,  as Lessee,  covering all of BLOCK 378, EAST CAMERON AREA,
         SOUTH ADDITION, OCS Leasing Map, Louisiana Map No. 2A, INSOFAR AND ONLY
         INSOFAR as said Lease covers:

         A.       The S/2S/2 and S/2N/2S/2 of Block 378, from the surface of the
                  earth down to 100 feet below the  stratigraphic  equivalent of
                  3743 feet true  vertical  depth (TVD) as found on the electric
                  log for the  Anadarko  OCS-G 6660 #1 well located in Block 378
                  ("Productive Depth
                  Limitation").

                  Working Interest:                            46.47059%
                  Net Revenue Interest:                        35.19762%

                  Overriding Royalty Interest:

                           Gulf Royalty Interests, Inc.        0.500000%

                           Hall-Houston Oil Company
                              Employee Royalty Trust           0.500000%

                           Hall Family Trust                   0.55556%

                           Hall-Houston 1996 Exploration
                              and Development Facility
                              Overriding Royalty Trust         1.85882%

                           Total                               3.41438%

         B.       (I) the S/2S/2 and S/2N/2S/2 of Block 378 as to all
                  depths below the Productive Depth Limitation described





                                       40

<PAGE>


                                                                    CONFIDENTIAL

                  above, and (ii) the N/2 and N/2N/2S/2 of Block 378 as to
                  all depths.

                  Working Interest:                  23.23529%
                  Net Revenue Interest:              17.59881%

2.       Oil and Gas Lease bearing Serial No. OCS-G 2098 effective
         February 1, 1971, by and between the United States of America,
         as Lessor, and Chevron Oil Company, as Lessee, covering the
         S/2 OF BLOCK 64, EUGENE ISLAND AREA, Official Leasing Map,
         Louisiana Map No. 4, containing approximately 2,500 acres.

         Working Interest:           25.00000%         Before Project Payout
                                     20.00000%         After Project Payout

         Net Revenue Interest:       17.86458%         Before Project Payout
                                     14.29167%         After Project Payout

3.       Oil and Gas Lease bearing  Serial No. OCS-G 16343  effective  August 1,
         1996, by and between the United States of America, as Lessor, and Basin
         Exploration,  Inc., as Lessee,  covering all of BLOCK 65, EUGENE ISLAND
         AREA, OCS Leasing Map,  Louisiana Map No. 4,  containing  approximately
         5,000 acres.

         Working interest:           25.00000%         Before Project Payout
                                     20.00000%         After Project Payout

         Net Revenue Interest:       20.36458%         Before Project Payout
                                     16.29167%         After Project Payout




                               END OF EXHIBIT "A"







                                       41

<PAGE>


                                                                    CONFIDENTIAL

                                   EXHIBIT "B"

                  Attached to and made a part of that certain  Purchase and Sale
                  Agreement   effective   February  13,  1997,  by  and  between
                  Hall-Houston  Oil  Company  et  al,  as  Sellers,   and  Basin
                  Exploration, Inc., as Buyer.

                               MATERIAL AGREEMENTS

A.       OCS-G 12856 EAST CAMERON AREA, BLOCK 378:

         1.       Operating Agreement effective September 23, 1996 between
                  Hall-Houston Oil Company, as Operator, and Zilkha Energy
                  Company and Ocean Front Oil & Gas, Inc., as Non-
                  Operators;

         2.       Letter of Intent  dated  December  10, 1996  between  Anadarko
                  Petroleum Corporation and Hall-Houston Oil Company,  regarding
                  East Cameron Block 378 and East Cameron  Block 359  Production
                  Processing and Sharing.

B.       OCS-G 2098 EUGENE ISLAND AREA, BLOCK 64:

         1.       Farmout Agreement dated August 15, 1996, as amended, by
                  and between Chevron U.S.A. Production Company, as
                  Farmoutor, and Basin Exploration, Inc., as Farmoutee.

         2.       Participation Agreement dated August 25, 1996, by and
                  between Basin Exploration, Inc. and Hall-Houston Oil
                  Company.

         3.       Operating Agreement dated August 25, 1996, by and between
                  Basin Exploration, Inc., as Operator, and Hall-Houston
                  Oil Company et al, as Non-Operators.

C.       OCS-G 16343 EUGENE ISLAND AREA, BLOCK 65:

         1.       Participation Agreement dated August 25, 1996, by and
                  between Basin Exploration, Inc. and Hall-Houston Oil
                  Company.

         2.       Operating Agreement dated August 25, 1996, by and between
                  Basin Exploration, Inc., as Operator, and Hall-Houston
                  Oil Company et al, as Non-Operators.

                               END OF EXHIBIT "B"





                                       42

<PAGE>


                                                                    CONFIDENTIAL

                                   EXHIBIT "C"


                  Attached to and made a part of that certain  Purchase and Sale
                  Agreement   effective   February  13,  1997,  by  and  between
                  Hall-Houston  Oil  Company  et  al,  as  Sellers,   and  Basin
                  Exploration, Inc., as Buyer.


                               INVENTORY OF WELLS


1.       OCS-G 12856 Well #2, East Cameron Area, Block 378

2.       OCS-G 2098 Well #2, Eugene Island Area, Block 64

3.       OCS-G 16343 Well #1, Eugene Island Area, Block 65



                            FACILITIES AND EQUIPMENT


A.       OCS-G 12856 East Cameron Area, Block 378:

         1.       Well #2:  Cameron 3-1/6" 5,000 pound Subsea Tree and
Control Panel

B.       OCS-G 2098 Eugene Island Area, Block 64:

         N/A

C.       OCS-G 16343 Eugene Island Area, Block 65:

         N/A



                               END OF EXHIBIT "C"








                                       43

<PAGE>


                                                                    CONFIDENTIAL

                                   EXHIBIT "D"

                  Attached to and made a part of that certain  Purchase and Sale
                  Agreement   effective   February  13,  1997,  by  and  between
                  Hall-Houston  Oil  Company  et  al,  as  Sellers,   and  Basin
                  Exploration, Inc., as Buyer.



<TABLE>
<CAPTION>

WORKING INTEREST AND ASSOCIATED NET REVENUE INTEREST:


         Eugene Island 64/65                                 $7,000,000.00

         East Cameron 378                                    $6,500,000.00


OVERRIDING ROYALTY INTERESTS:

<S>                   <C>                                      <C>             <C>
         East Cameron 378                                      $925,000.00     3.41438% of 8/8ths

         ALLOCATED BY ENTITY AS FOLLOWS:

              Gulf Royalty Interests, Inc.                     $135,456.51     0.50000% of 8/8ths

              Hall-Houston Oil Company
               Employee Royalty Trust                          $135,456.51     0.50000% of 8/8ths

              Hall Family Trust                                $150,508.44     0.55556% of 8/8ths

              Hall-Houston 1996 Exploration
               and Development Facility
               Overriding Royalty Trust                        $503,578.54     1.85882% of 8/8ths
                                                                ----------     -------


              Totals                                           $925,000.00     3.41438% of 8/8ths


</TABLE>

                               END OF EXHIBIT "D"





                                       44

<PAGE>


                                                                    CONFIDENTIAL

                                  EXHIBIT "E-1"

                  Attached to and made a part of that certain  Purchase and Sale
                  Agreement   effective   February  13,  1997,  by  and  between
                  Hall-Houston  Oil  Company  et  al,  as  Sellers,   and  Basin
                  Exploration, Inc., as Buyer.

                         ASSIGNMENT OF OIL AND GAS LEASE
                                                            [East Cameron 378]
THE UNITED STATES OF AMERICA          ss.
OUTER CONTINENTAL SHELF               ss.        KNOW ALL MEN BY THESE PRESENTS:
OFFSHORE LOUISIANA                    ss.

      THAT, HALL-HOUSTON OIL COMPANY, a Texas corporation,  whose address is 700
Louisiana,  Suite 2100, Houston,  Texas 77002 (hereinafter sometimes referred to
as "Assignor"),  for and in consideration of Ten and no/100 Dollars ($10.00) and
other  good  and  valuable  consideration  in hand  paid to  Assignor  by  BASIN
EXPLORATION,  INC., a Delaware  corporation,  whose  address is 370 17th Street,
Suite  3400,  Denver,  Colorado  80202  (hereinafter  sometimes  referred  to as
"Assignee"),  the receipt and sufficiency of which are hereby acknowledged,  has
transferred,  sold,  assigned and  conveyed,  and by these  presents does hereby
TRANSFER,  SELL,  ASSIGN AND CONVEY unto  Assignee an  undivided  _____  percent
(___%) of 100%  interest,  subject to the  Permitted  Encumbrances  (as  defined
below), in and to the following described oil and gas lease:

          Oil and Gas Lease  bearing  Serial No. OCS-G 12856  effective  June 1,
          1991,   between  the  United  States  of  America,   as  Lessor,   and
          Hall-Houston Oil Company, as Lessee, covering all of BLOCK 378, EUGENE
          ISLAND AREA,  OCS Leasing Map,  Louisiana Map No.2A,  INSOFAR AND ONLY
          INSOFAR as concerns the aliquots __________(the "Lease").

          This  Assignment is expressly made subject to the terms and conditions
of the following agreements, overriding royalty interests, burdens, encumbrances
and other items (the "Permitted Encumbrances"):

          4.   The Lease and all limitations, restrictions, terms, covenants and
               conditions thereof;






                                       45

<PAGE>


                                                                    CONFIDENTIAL

          5.   Operating Agreement effective September 23, 1996 between
               Hall-Houston Oil Company, as Operator, and Zilkha Energy Company
               and Ocean Front Oil & Gas, Inc., as Non-Operators.

          6.   An undivided ____% of a .375% of 8/8ths overriding royalty
               interest in favor of Summit Development Corporation;

          7.   An undivided ___% of a .25% of 8/8ths overriding royalty interest
               in favor of Summit Royalty Company;

          8.   An undivided ___% of a .20% of 8/8ths overriding royalty interest
               in favor of Larry C. Flowers;

          9.   An undivided ___% of a .10% of 8/8ths overriding royalty interest
               in favor of Karen Mann Flowers;

          10.  An undivided ___% of a 1.11111% of 8/8ths overriding royalty
               interest in favor of Nuevo Energy Corporation.

          11.  Purchase and Sale Agreement effective February 13, 1997, between
               Hall-Houston Oil Company, Hall-Houston Oil Company Employee
               Royalty Trust, Hall-Houston 1996 Exploration and Development
               Facility Overriding Royalty Trust, and Gulf Royalty Interests,
               Inc., as Sellers, and Basin Exploration, Inc., as Buyer
               ("Purchase and Sale Agreement").

          For the same consideration and subject to the Permitted  Encumbrances,
Assignor hereby sells, assigns, transfers and conveys unto Assignee an undivided
____  percent  (___  %) of 100%  interest  in and to the  hereinafter  described
property ("Assets"):

          (A)  All contractual rights and other rights and claims against third
               parties that arise out of the Lease and that accrue from and
               after the effective date hereof;

          (B)  All of the real, personal and mixed property used or held for use
               directly in operation thereof (whether located on or off such
               Lease), which is owned by Assignor, in whole or in part (the
               "Related Assets"), including, without limitation, the wells, well
               equipment, casing, subsea tree and all other improvements used in
               the operation thereof owned by Assignor; provided, however, that
               Assignor and Assignee hereby acknowledge that, except as
               otherwise specifically provided herein, the Related Assets do not
               include (i) any cash, certificates of deposit, securities, claims
               for federal or state income tax refunds, or other claims of
               Assignor which do not arise out of ownership of the





                                     Page 46

<PAGE>


                                                                    CONFIDENTIAL

                  Lease; (ii) any other tangible or intangible asset of Assignor
                  which are not used directly in  connection  with the operation
                  of the Lease.

          Assignee  hereby  assumes  and agrees to pay and fully  perform  those
obligations  and  liabilities  in respect of the  interest  assigned to Assignee
under this Assignment as set forth in the Purchase and Sale Agreement.

          This Assignment  shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

          This Assignment is made expressly  subject to the terms and provisions
of the Purchase and Sale  Agreement.  If any of the terms and provisions of this
Assignment  conflict  with the terms and  provisions  of the  Purchase  and Sale
Agreement, the Purchase and Sale Agreement shall prevail.

          TO HAVE AND TO HOLD the Lease and the Assets and all rights thereunder
unto Assignee and its  successors  and assigns  forever.  Assignor  hereby binds
itself  and its  successors  and  assigns  to  warrant  and  forever  defend the
interests  assigned  hereby unto Assignee and its successors and assigns against
every  person  whomsoever  lawfully  claiming  or to claim  the same or any part
thereof by, through or under  Assignor,  but not otherwise.  NO OTHER  WARRANTY,
WHETHER STATUTORY, EXPRESS OR IMPLIED, IS MADE HEREIN.


          IN WITNESS  WHEREOF,  this  Assignment is executed on this ____ day of
February,  1997,  but shall be  effective  for all  purposes  as of 12:01  a.m.,
Central Standard Time, February 13, 1997.


                                          ASSIGNOR:


WITNESSES:                                HALL-HOUSTON OIL COMPANY

------------------------------

                                          By: __________________________________
______________________________                   Kelly D. Fry
                                                 Vice President  - Land








                                     Page 47

<PAGE>


                                                                    CONFIDENTIAL

                                          ASSIGNEE:


WITNESSES:                                BASIN EXPLORATION, INC.

------------------------------

                                          By: __________________________________
______________________________                   Sam D. Winegrad
                                                 Vice President of
                                                 Corporate Development



STATE OF TEXAS                      ss.

COUNTY OF HARRIS                    ss.


          On this_____ day of February,  1997,  before me appeared KELLY D. FRY,
to me personally  known,  who, being by me duly sworn (or affirmed) did say that
he  is  the  VICE  PRESIDENT  -  LAND  of  HALL-HOUSTON  OIL  COMPANY,  a  Texas
corporation,  and that the instrument was signed on behalf of the corporation by
the authority of its Board of Directors and that KELLY D. FRY  acknowledged  the
instrument to be the free act and deed of the corporation.



                                          --------------------------------------
                                          NOTARY PUBLIC IN AND FOR
                                          THE STATE OF TEXAS



STATE OF TEXAS                      ss.

COUNTY OF HARRIS                    ss.


          On this ___ day of February, 1997, before me appeared SAM D. WINEGRAD,
to me personally  known,  who, being by me duly sworn (or affirmed) did say that
he is the Vice President of Corporate Development of BASIN EXPLORATION,  INC., a
Delaware corporation, and





                                     Page 48

<PAGE>


                                                                    CONFIDENTIAL

that the instrument was signed on behalf of the  corporation by the authority of
its Board of Directors and that SAM D. WINEGRAD  acknowledged  the instrument to
be the free act and deed of the corporation.


                                          --------------------------------------
                                          NOTARY PUBLIC IN AND FOR
                                          THE STATE OF TEXAS








                                     Page 49

<PAGE>


                                                                    CONFIDENTIAL

                                  EXHIBIT "E-2"

                  Attached to and made a part of that certain  Purchase and Sale
                  Agreement   effective   February  13,  1997,  by  and  between
                  Hall-Houston  Oil  Company  et  al,  as  Sellers,   and  Basin
                  Exploration, Inc., as Buyer.

                         ASSIGNMENT OF OPERATING RIGHTS
                                                              [East Cameron 378]

THE UNITED STATES OF AMERICA           ss.
OUTER CONTINENTAL SHELF                ss.       KNOW ALL MEN BY THESE PRESENTS:
OFFSHORE LOUISIANA                     ss.
          THAT, BASIN EXPLORATION,  INC., a Delaware corporation,  whose address
is 370 17th Street,  Suite 3400, Denver,  Colorado 80202 (hereinafter  sometimes
referred to as "Assignor"),  for and in  consideration of Ten and no/100 Dollars
($10.00) and other good and valuable  consideration  in hand paid to Assignor by
HALL-HOUSTON OIL COMPANY, a Texas  corporation,  whose address is 700 Louisiana,
Suite  2100,  Houston,   Texas  77002  (hereinafter  sometimes  referred  to  as
"Assignee"),  the receipt and sufficiency of which are hereby acknowledged,  has
transferred,  sold,  assigned and  conveyed,  and by these  presents does hereby
TRANSFER,  SELL,  ASSIGN AND CONVEY unto Assignee an undivided  ________ percent
(___%) of 100% operating rights interest,  subject to the Permitted Encumbrances
(as defined below), in and to the following described oil and gas lease:

          Oil and Gas Lease  bearing  Serial No. OCS-G 12856  effective  June 1,
          1991,   between  the  United  States  of  America,   as  Lessor,   and
          Hall-Houston Oil Company, as Lessee, covering all of BLOCK 378, EUGENE
          ISLAND AREA,  OCS Leasing Map,  Louisiana Map No.2A,  INSOFAR AND ONLY
          INSOFAR  as  concerns  the  aliquots  __________and  the  depths  (the
          "Lease").

          This  Assignment is expressly made subject to the terms and conditions
of the following agreements, overriding royalty interests, burdens, encumbrances
and other items (the "Permitted Encumbrances"):

          12.  The Lease and all limitations, restrictions, terms, covenants and
               conditions thereof;






                                     Page 50

<PAGE>


                                                                    CONFIDENTIAL

          13.  Operating Agreement effective September 23, 1996 between
               Hall-Houston Oil Company, as Operator, and Zilkha Energy Company
               and Ocean Front Oil & Gas, Inc., as Non-Operators.

          14.  An undivided __% of a .375% of 8/8ths overriding royalty interest
               in favor of Summit Development Corporation;

          15.  An undivided __ % of a .25 % of 8/8ths overriding royalty
               interest in favor of Summit Royalty Company; 

          16.  An undivided ____% of a .20% of 8/8ths overriding royalty
               interest in favor of Larry C. Flowers;

          17.  An undivided _____% of a .10% of 8/8ths overriding royalty
               interest in favor of Karen Mann Flowers;

          18.  An undivided ____% of a 1.11111% of 8/8ths overriding royalty
               interest in favor of Nuevo Energy Corporation.

          19.  Purchase and Sale Agreement effective February 13, 1997, between
               Hall-Houston Oil Company, Hall-Houston Oil Company Employee
               Royalty Trust, Hall-Houston 1996 Exploration and Development
               Facility Overriding Royalty Trust, and Gulf Royalty Interests,
               Inc., as Sellers, and Basin Exploration, Inc., as Buyer
               ("Purchase and Sale Agreement").

          For the same consideration and subject to the Permitted  Encumbrances,
Assignor hereby sells, assigns, transfers and conveys unto Assignee an undivided
____ percent (___%) of 100% operating  rights interest in and to the hereinafter
described property ("Assets"):

          (A)  All contractual rights and other rights and claims against third
               parties that arise out of the Lease and that accrue from and
               after the effective date hereof;

          (B)  All of the real, personal and mixed property used or held for use
               directly in operation thereof (whether located on or off such
               Lease), which is owned by Assignor, in whole or in part (the
               "Related Assets"), including, without limitation, the wells, well
               equipment, casing, subsea tree and all other improvements used in
               the operation thereof owned by Assignor; provided, however, that
               Assignor and Assignee hereby acknowledge that, except as
               otherwise specifically provided herein, the Related Assets do not
               include (i) any cash, certificates of deposit, securities, claims
               for federal or state income tax refunds, or other claims of
               Assignor which do not arise out of ownership of the





                                     Page 51

<PAGE>


                                                                    CONFIDENTIAL

                Lease; (ii) any other tangible or intangible asset of Assignor
                which are not used directly in  connection  with the operation
                of the Lease.

          Assignee  hereby  assumes  and agrees to pay and fully  perform  those
obligations  and  liabilities  in respect of the  interest  assigned to Assignee
under this Assignment as set forth in the Purchase and Sale Agreement.

          This Assignment  shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

          This Assignment is made expressly  subject to the terms and provisions
of the Purchase and Sale  Agreement.  If any of the terms and provisions of this
Assignment  conflict  with the terms and  provisions  of the  Purchase  and Sale
Agreement, the Purchase and Sale Agreement shall prevail.


          TO HAVE AND TO HOLD the Lease and the Assets and all rights thereunder
unto Assignee and its  successors  and assigns  forever.  Assignor  hereby binds
itself  and its  successors  and  assigns  to  warrant  and  forever  defend the
operating rights interests  assigned hereby unto Assignee and its successors and
assigns against every person  whomsoever  lawfully claiming or to claim the same
or any part thereof by, through or under Assignor,  but not otherwise.  NO OTHER
WARRANTY, WHETHER STATUTORY, EXPRESS OR IMPLIED, IS MADE HEREIN.

          IN WITNESS  WHEREOF,  this Assignment is executed on this _____ day of
February,  1997,  but shall be  effective  for all  purposes  as of 12:01  a.m.,
Central Standard Time, February 13, 1997.


                                          ASSIGNOR

WITNESSES:                                BASIN EXPLORATION, INC.

----------------------------------

                                          By: _____________________________
__________________________________              Sam D. Winegrad
                                                Vice President of
                                                Corporate Development







                                     Page 52

<PAGE>


                                                                   CONFIDENTIAL

                                          ASSIGNEE:

WITNESSES:                                HALL-HOUSTON OIL COMPANY

----------------------------------

                                          By: _____________________________
__________________________________              Kelly D. Fry
                                                Vice President - Land






                                     Page 53

<PAGE>


                                                                    CONFIDENTIAL


STATE OF TEXAS                      ss.
COUNTY OF HARRIS                    ss.

          On  this  ____  day of  February,  1997,  before  me  appeared  SAM D.
WINEGRAD,  to me personally known, who, being by me duly sworn (or affirmed) did
say that he is the Vice President of Corporate Development of BASIN EXPLORATION,
INC., a Delaware  corporation,  and that the  instrument was signed on behalf of
the  corporation  by the  authority  of its Board of  Directors  and that SAM D.
WINEGRAD,  acknowledged  the  instrument  to be the  free  act  and  deed of the
corporation.



                                          --------------------------------
                                          NOTARY PUBLIC IN AND FOR
                                          THE STATE OF TEXAS




STATE OF TEXAS                          ss.
COUNTY OF HARRIS                        ss.

          On this ____ day of February,  1997,  before me appeared KELLY D. FRY,
to me personally  known,  who, being by me duly sworn (or affirmed) did say that
he  is  the  VICE  PRESIDENT  -  LAND  of  HALL-HOUSTON  OIL  COMPANY,  a  Texas
corporation,  and that the instrument was signed on behalf of the corporation by
the authority of its Board of Directors and that KELLY D. FRY  acknowledged  the
instrument to be the free act and deed of the corporation.




                                          ---------------------------------
                                          NOTARY PUBLIC IN AND FOR
                                          THE STATE OF TEXAS









                                     Page 54

<PAGE>


                                                                    CONFIDENTIAL

                                  EXHIBIT "E-3"

                  Attached to and made a part of that certain  Purchase and Sale
                  Agreement   effective   February  13,  1997,  by  and  between
                  Hall-Houston  Oil  Company  et  al,  as  Sellers,   and  Basin
                  Exploration, Inc., as Buyer.

                    ASSIGNMENT OF OVERRIDING ROYALTY INTEREST
                                                              [East Cameron 378]

UNITED STATES OF AMERICA        ss.
OUTER CONTINENTAL SHELF         ss.       KNOW ALL MEN BY THESE PRESENTS:
OFFSHORE LOUISIANA              ss.

          That,  HALL-HOUSTON  OIL COMPANY  EMPLOYEE  ROYALTY  TRUST,  whose Tax
Identification  No is  ____________________  and whose address is 700 Louisiana,
Suite 2100, Houston,  Texas 77002 ("Assignor"),  for and in consideration of One
Thousand  Dollars  ($1,000.00)  and other good and valuable  consideration,  the
receipt of which is hereby  acknowledged,  does hereby SELL,  ASSIGN,  TRANSFER,
CONVEY and DELIVER unto BASIN EXPLORATION,  INC., a Delaware corporation,  whose
Tax Identification No. is _________ and whose address is 370 17th Street,  Suite
3400, Denver,  Colorado 80202  ("Assignee"),  all of Assignor's right, title and
interest in and to that certain oil and gas lease ("Lease") described on Exhibit
"A", attached hereto and made a part hereof,  being the same interest  described
in  that  certain   Assignment  of  Overriding   Royalty   Interest  granted  by
Hall-Houston Oil Company in favor of Assignor,  executed on  __________________,
199__,   but  effective  as  of   __________________________   and  recorded  in
_____________________________   (hereinafter   referred  to  as  the   "ASSIGNED
INTEREST").

          TO HAVE AND TO HOLD,  said ASSIGNED  INTEREST in and to the Lease unto
Assignee,  its  successors  and  assigns  forever,  subject  to  the  terms  and
conditions of the Lease.

          Assignor  does  hereby  bind  itself,   its  heirs,   representatives,
successors  and  assigns to warrant  and forever  defend the  ASSIGNED  INTEREST
against every person  whosoever  lawfully  claiming the same or any part thereof
by, through, or under Assignor, but not otherwise,  however, Assignee shall have
the rights of full substitution and subrogation in and to any and all rights and
actions of warranty which Assignor may have against any and all preceding owners
of the Lease and ASSIGNED  INTEREST.  In addition,  Assignor hereby warrants and
represents as against every person whosoever  lawfully  claiming the same or any
part thereof,  by,  through,  or under  Assignor,  but not  otherwise,  that the
ASSIGNED  INTEREST  hereby  conveyed  to  Assignee  in the Lease  shall  entitle
Assignee  to  receive  not less than ____  percent of  eight-eighths  (____ % of
8/8ths) of all hydrocarbons produced, saved and marketed from the Lease and the





                                     Page 55

<PAGE>


                                                                    CONFIDENTIAL

wells associated therewith.  NO OTHER WARRANTY, WHETHER STATUTORY, EXPRESS
OR IMPLIED IS MADE HEREIN.

          This  Assignment is subject to the terms of that certain  Purchase and
Sale Agreement  between Assignor and Assignee dated February 13, 1997. If any of
the provisions of this Assignment  conflict with the terms and provisions of the
Purchase and Sale Agreement, the Purchase and Sale Agreement shall prevail.

          IN WITNESS WHEREOF, this Assignment is executed before the undersigned
witnesses by Assignor and Assignee on the _____ day of February, 1997, but shall
be effective for all purposes as of 12:01 a.m., Central Standard Time,  February
13, 1997.

                                          ASSIGNOR:

WITNESSES TO BOTH                         HALL-HOUSTON OIL COMPANY
SIGNATURES:                               EMPLOYEE ROYALTY TRUST

------------------------------------
                                          By: __________________________________
                                                Gary L. Hall, Trustee

------------------------------------
                                          By: __________________________________
                                                Wayne P. Hall, Trustee


                                          ASSIGNEE:

WITNESSES:                                BASIN EXPLORATION, INC.

------------------------------------
                                          By: __________________________________
                                                Sam D. Winegrad
____________________________________            Vice President of
                                                Corporate Development

STATE OF TEXAS                  ss.

COUNTY OF HARRIS                ss.






                                     Page 56

<PAGE>


                                                                    CONFIDENTIAL

          On this ________ day of February,  1997,  before me appeared  WAYNE P.
HALL AND GARY L. HALL, to me personally  known,  who, being by me duly sworn (or
affirmed)  did say that  they  are the  Trustees  of  HALL-HOUSTON  OIL  COMPANY
EMPLOYEE ROYALTY TRUST and that the instrument was signed on behalf of the trust
and that WAYNE P. HALL AND GARY L. HALL  acknowledged  the  instrument to be the
free act and deed of the trust.


                                          -------------------------------------
                                          NOTARY PUBLIC IN AND FOR
                                          THE STATE OF TEXAS



THE STATE OF TEXAS             ss.

COUNTY OF HARRIS               ss.

          On  this  ____  day of  February,  1997,  before  me  appeared  SAM D.
WINEGRAD,  to me personally known, who, being by me duly sworn (or affirmed) did
say that he is the Vice President of Corporate Development of BASIN EXPLORATION,
INC., a Delaware  corporation,  and that the  instrument was signed on behalf of
the  corporation  by the  authority  of its board of  directors  and that SAM D.
WINEGRAD  acknowledged  the  instrument  to be the  free  act  and  deed  of the
corporation.



                                          --------------------------------------
                                          NOTARY PUBLIC IN AND FOR
                                          THE STATE OF TEXAS








                                     Page 57

<PAGE>


                                                                    CONFIDENTIAL

                                  EXHIBIT "E-4"

                  Attached to and made a part of that certain  Purchase and Sale
                  Agreement   effective   February  13,  1997,  by  and  between
                  Hall-Houston  Oil  Company  et  al,  as  Sellers,   and  Basin
                  Exploration, Inc., as Buyer.

                              ASSIGNMENT OF RIGHTS


                        OCS-G 2098 EUGENE ISLAND BLOCK 64
                       OCS-G 16343 EUGENE ISLAND BLOCK 65
                               OFFSHORE LOUISIANA



          THIS  ASSIGNMENT is made February 14, 1997,  but effective as of 12:01
a.m.,  Central  Standard Time,  February 13, 1977 (the  "Effective  Time") among
HALL-HOUSTON OIL COMPANY, a Texas corporation ("HHOC"), HALL-HOUSTON OIL COMPANY
EMPLOYEE  ROYALTY  TRUST,  a Texas  trust  ("HHOCERT"),  and  HALL-HOUSTON  1996
EXPLORATION AND  DEVELOPMENT  FACILITY  OVERRIDING  ROYALTY TRUST, a Texas trust
("HHOCEDF"),  (HHOC,  HHOCERT and  HHOCEDF,  collectively  referred to herein as
"Sellers"),  and BASIN EXPLORATION,  INC., a Delaware corporation doing business
in Louisiana under the name Basin Exploration, Inc. (Delaware) ("Buyer").

          For and in  consideration  of Seven Million Dollars  ($7,000,000)  and
other good and valuable consideration,  the receipt and sufficiency of which are
hereby acknowledged,  Sellers hereby assign and relinquish to Buyer all of their
respective  rights,  titles and  interests  in and to Federal Oil and Gas Leases
OCS-G 2098  covering the  south-half  (S/2) of Eugene  Island Block 64 and OCS-G
16343  covering all of Eugene  Island Block 65  (hereinafter  collectively,  the
"Blocks"),  situated in Federal waters offshore  Louisiana,  and in all property
and rights related thereto,  real, personal or mixed,  including but not limited
to (a) the  rights  and  interests  of Sellers in the OCS-G 2098 #2 Well and the
OCS-G 16343 #1 Well located in the Blocks and the production therefrom,  (b) the
rights and interests of HHOC arising under the  Participation  Agreement and the
Operating  Agreement,  both dated and effective August 25, 1996 between HHOC and
Buyer,  (c) the rights and interests of HHOC arising under that certain  Farmout
Agreement dated August 15, 1996, as amended,  between Chevron U.S.A.  Production
Company, as Farmoutor, and Buyer, as Farmoutee, and (d) the rights and interests
of HHOC in all permits, agreements, reservations, claims, and other benefits and
properties related to the ownership of or the right to acquire interests in said
Blocks or to the conduct of operations with respect thereto.





                                     Page 58

<PAGE>


                                                                    CONFIDENTIAL

          This  Assignment  is given  pursuant to and is subject to that certain
Purchase and Sale  Agreement  dated as of the  Effective  Time between Buyer and
among others, the Sellers and is subject in all respects to such Agreement.

          IN WITNESS WHEREOF, Sellers and Buyer have executed this Assignment as
of the Effective Time stated above.

                                          SELLERS:

WITNESSES FOR ALL SIGNATURES:             HALL-HOUSTON OIL COMPANY


                                          By:______________________________
____________________________                    Wayne P. Hall
                                                President

                                          HALL-HOUSTON OIL COMPANY
____________________________              EMPLOYEE ROYALTY TRUST


                                          By:________________________________
                                                Gary L. Hall, Trustee


                                          By:________________________________
                                                Wayne P. Hall, Trustee

                                          HOUSTON 1996 EXPLORATION AND
                                          DEVELOPMENT FACILITY OVERRIDING
                                          ROYALTY TRUST


                                          By:________________________________
                                                Gary L. Hall, Trustee


                                          By:________________________________
                                                Wayne P. Hall, Trustee







                                     Page 59

<PAGE>


                                                                    CONFIDENTIAL

                                          BUYER:

WITNESSES:                                BASIN EXPLORATION, INC., a Delaware
                                          corporation doing business in
__________________________                Louisiana under the name of Basin
(Delaware)                                Exploration, Inc.

--------------------------
                                          By:_________________________________
                                               Sam D. Winegrad
                                               Vice President of
                                               Corporate Development

STATE OF TEXAS                 ss.

COUNTY OF HARRIS               ss.

          On this 14th day of February,  1997, before me appeared WAYNE P. HALL,
to me personally  known,  who, being by me duly sworn (or affirmed) did say that
he is the PRESIDENT OF HALL-HOUSTON OIL COMPANY, a Texas  corporation,  and that
the instrument  was signed on behalf of the  corporation by the authority of its
Board of Directors and that WAYNE P. HALL  acknowledged the instrument to be the
free act and deed of the corporation.


                                          ------------------------------------
                                          NOTARY PUBLIC IN AND FOR
                                          THE STATE OF TEXAS



                                     Page 60

<PAGE>

 THE STATE OF TEXAS                 ss.
                                    ss.
 COUNTY OF HARRIS                   ss.

          On this ____ day of February, 1997, before me appeared GARY L. HALL to
me personally  known,  who, being by me duly sworn (or affirmed) did say that he
is a TRUSTEE of the  HALL-HOUSTON  OIL COMPANY  EMPLOYEE ROYALTY TRUST, and that
the  instrument  was  signed  on  behalf  of said  trust  and that  GARY L. HALL
acknowledged said instrument to be the free act and deed of said trust.


                                          --------------------------------------
                                          NOTARY PUBLIC IN AND FOR
                                          THE STATE OF TEXAS


THE STATE OF TEXAS                  ss.
                                    ss.
 COUNTY OF HARRIS                   ss.

          On this ____ day of February,  1997,  before me appeared WAYNE P. HALL
to me personally  known,  who, being by me duly sworn (or affirmed) did say that
he is a TRUSTEE of the HALL-HOUSTON OIL COMPANY EMPLOYEE ROYALTY TRUST, and that
the  instrument  was  signed  on behalf  of said  trust  and that  WAYNE P. HALL
acknowledged said instrument to be the free act and deed of said trust.



                                          -------------------------------------
                                          NOTARY PUBLIC IN AND FOR
                                          THE STATE OF TEXAS

THE STATE OF TEXAS                  ss.
                                    ss.
 COUNTY OF HARRIS                   ss.

          On this ____ day of February, 1997, before me appeared GARY L. HALL to
me personally  known,  who, being by me duly sworn (or affirmed) did say that he
is a TRUSTEE of the  HALL-HOUSTON  1996  EXPLORATION  AND  DEVELOPMENT  FACILITY
OVERRIDING  ROYALTY TRUST,  and that the instrument was signed on behalf of said
trust and that GARY L. HALL  acknowledged said instrument to be the free act and
deed of said trust.


                                          --------------------------------------
                                          NOTARY PUBLIC IN AND FOR
                                          THE STATE OF TEXAS

 THE STATE OF TEXAS                 ss.
                                    ss.
 COUNTY OF HARRIS                   ss.

          On this ____ day of February,  1997,  before me appeared WAYNE P. HALL
to me personally  known,  who, being by me duly sworn (or affirmed) did say that
he is a TRUSTEE of the HALL-HOUSTON  1996  EXPLORATION AND DEVELOPMENT  FACILITY
OVERRIDING





                                     Page 61

<PAGE>


                                                                    CONFIDENTIAL

ROYALTY  TRUST,  and that the  instrument was signed on behalf of said trust and
that WAYNE P. HALL  acknowledged  said instrument to be the free act and deed of
said trust.


                                          -------------------------------------
                                          NOTARY PUBLIC IN AND FOR
                                          THE STATE OF TEXAS

STATE OF TEXAS                      ss.

COUNTY OF HARRIS                    ss.

          On  this  14th  day of  February,  1997,  before  me  appeared  SAM D.
WINEGRAD,  to me personally known, who, being by me duly sworn (or affirmed) did
say that he is the Vice President of Corporate Development of BASIN EXPLORATION,
INC., a Delaware  corporation  doing business in Louisiana  under the name Basin
Exploration, Inc. (Delaware) and that the instrument was signed on behalf of the
corporation  by the authority of its Board of Directors and that SAM D. WINEGRAD
acknowledged the instrument to be the free act and deed of the corporation.


                                          ------------------------------------
                                          NOTARY PUBLIC IN AND FOR
                                          THE STATE OF TEXAS






                                     Page 62

<PAGE>


                                                                    CONFIDENTIAL
                                   Exhibit "G"

                  Attached to and made a part of that certain  Purchase and Sale
                  Agreement   effective   February  13,  1997,  by  and  between
                  Hall-Houston  Oil  Company  et  al.,  as  Sellers,  and  Basin
                  Exploration, Inc. as Buyer.


                   CONFIDENTIAL TREATMENT REQUESTED FOR ENTIRE
                     EXHIBIT WHICH HAS BEEN FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION

                               END of Exhibit "G"






                                     Page 63

<PAGE>