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                                                                 EXHIBIT 10.26.3


                   RATIFICATION OF AND AMENDMENT TO MORTGAGE,
                       DEED OF TRUST, SECURITY AGREEMENT,
                     FINANCING STATEMENT, FIXTURE FILING AND
                            ASSIGNMENT OF PRODUCTION

      This instrument, dated effective as of the 28th day of December, 2004, is
by F-W OIL EXPLORATION L.L.C., a Delaware limited liability company (herein
"Mortgagor"), whose Taxpayer Identification Number is 76-0688905, the address
for which for all purposes hereof is 9821 Katy Freeway, Suite 1050, Houston,
Texas 77024, and GUARANTY BANK, FSB, a Federal savings bank, as Agent for the
Lenders identified in the Credit Agreement as defined below, the mailing address
for which is 333 Clay Street, Suite 4400, Houston, Texas 77002-4400 (herein
"Mortgagee").

                              W I T N E S S E T H:

      WHEREAS, Mortgagor has heretofore executed certain security instruments
more particularly described in Exhibit A attached hereto and incorporated herein
for all purposes by this reference (the "Security Instruments," whether one or
more); and

      WHEREAS, the Security Instruments were executed and delivered to secure
the payment or performance of certain indebtedness and other obligations of
Mortgagor, as more fully described in said instruments (the "Indebtedness"); and

      WHEREAS, pursuant to the Credit Agreement by and between Mortgagor and
Mortgagee, dated effective as of December 28, 2004 (as amended, restated, or
supplemented from time to time, the "Credit Agreement"), the parties desire to
amend the Security Instruments as described below;

      NOW, THEREFORE, in consideration of the foregoing, the benefits to be
derived by Mortgagor and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by Mortgagor, the parties hereto
agree as follows, with capitalized terms used but not defined herein having
meanings assigned to such terms in the Credit Agreement:

      1. AMENDMENTS.

            (a) AMENDMENT OF CREDIT AGREEMENT. All references to the Credit
Agreement in the Security Instruments are hereby amended to refer to the Credit
Agreement as defined above.

            (b) SUBSTITUTION OF SPECIFIC EVIDENCE OF INDEBTEDNESS. The Security
Instruments are hereby amended to delete Section 2.1 and to substitute therefor
the following:

            2.1 Specific Obligations. The Obligations, including, without
      limitation, the indebtedness evidenced by (a) the Credit Agreement and (b)
      the Promissory Note executed by Mortgagor to the order of the respective
      Lenders pursuant to the Credit Agreement in the aggregate face amount of
      up to

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      $50,000,000.00, bearing interest and payable as provided therein or as
      provided in the Credit Agreement (the "Note").

      2. WARRANTIES, REPRESENTATIONS, AND COVENANTS. The warranties,
representations and covenants of Mortgagor contained in the Security Instruments
are hereby remade by Mortgagor to Mortgagee and are in full force and effect as
of the date hereof.

      3. REAFFIRMATION OF SECURITY INSTRUMENTS. To secure the Indebtedness,
Mortgagor has granted, bargained, sold, mortgaged, assigned, transferred and
conveyed, and by these presents does grant, bargain, sell, mortgage, assign,
transfer and convey, unto the Trustee named in the Security Instruments as
amended herein, for the benefit of Mortgagee, and grants to Mortgagee a security
interest in, all of Mortgagor's right, title and interest, whether now owned or
hereafter acquired, in and to the Mortgaged Property.

      TO HAVE AND TO HOLD the Mortgaged Property, together with the rights,
privileges and appurtenances now or hereafter at any time before the release of
the Security Instruments in anywise belonging or appertaining thereto, unto said
Trustee, as Trustee forever, IN TRUST, NEVERTHELESS, for the benefit of
Mortgagee, to secure the payment of the Indebtedness and the performance of the
agreements and covenants of Mortgagor herein and in the Security Instruments.

      4. MISCELLANEOUS. This instrument shall be considered as an amendment to
and ratification of the Security Instruments, and the Security Instruments, as
herein expressly amended, are hereby ratified, approved and confirmed in every
respect. All liens created, extended or renewed by the Security Instruments are
hereby extended, renewed and carried forward by this instrument and incorporated
herein. All references to the Security Instruments in any documents heretofore
or hereafter executed shall be deemed to refer to the Security Instruments as
amended by this instrument.

      For the convenience of the parties, this instrument may be executed in
multiple counterparts. Each of the counterparts hereof so executed shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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      IN WITNESS WHEREOF, Mortgagor and Mortgagee have executed this instrument
on the dates of their respective acknowledgments below but effective as of the
date first above written.

                            MORTGAGOR:

                            F-W OIL EXPLORATION L.L.C.

                            By:/s/ Jim R. Brock
                               ------------------------------------------------
                                  Jim R. Brock
                                  President and CFO
                                  Taxpayer Identification No. 76-0688905

                            MORTGAGEE:

                            GUARANTY BANK, FSB, Agent

                            By:/s/ Arthur R. Gralla
                               ------------------------------------------------
                                  Arthur R. Gralla, Jr.
                                  Managing Director
                                  Taxpayer Identification No. 74-2511478

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THE STATE OF TEXAS            Section
                              Section
COUNTY  OF  HARRIS            Section

      BEFORE ME, the undersigned authority, on this day personally appeared JIM
R. BROCK, President and CFO of F-W OIL EXPLORATION L.L.C., a Delaware limited
liability company, and known to me to be the person whose name is subscribed to
the foregoing instrument, and acknowledged to me that he executed the same for
the purposes and consideration therein expressed, as the act and deed of such
limited liability company, and in the capacity therein stated.

      GIVEN UNDER MY HAND AND SEAL OF OFFICE this 28 day of December, 2004.

     [NOTARY PUBLIC LOGO]
                                                /s/ Mary Phares
         MARY PHARES                            --------------------
Notary Public, State of Texas                   NOTARY PUBLIC in and for
    My Commission Expires                       the State of Texas
      September 16, 2005

THE STATE OF TEXAS            Section
                              Section
COUNTY OF HARRIS              Section

      BEFORE ME, the undersigned authority, on this day personally appeared
ARTHUR R. GRALLA, JR., Managing Director of GUARANTY BANK, FSB, a Federal
savings bank, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed, as the act and deed of such
banking association, and in the capacity therein stated.

      GIVEN UNDER MY HAND AND SEAL OF OFFICE this _____ day of December, 2004.


                                              /s/ Kim Link
                                              --------------------
                                              NOTARY PUBLIC in and for
                                              the State of Texas

                                               [NOTARY PUBLIC LOGO]

                                                      KIM LINK
                                                   Notary Public,
                                                   STATE OF TEXAS
                                              My Comm. Exp. 09-03-2007

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                                    EXHIBIT A
                                       TO
                   RATIFICATION OF AND AMENDMENT TO MORTGAGE,
                       DEED OF TRUST, SECURITY AGREEMENT,
                     FINANCING STATEMENT, FIXTURE FILING AND
                            ASSIGNMENT OF PRODUCTION

1.    Mortgage, Deed of Trust, Security Agreement, Financing Statement and
      Assignment of Production dated effective September 22, 2003, from F-W Oil
      Exploration L.L.C. to Arthur R. Gralla, Jr., Trustee for the benefit of
      Guaranty Bank, FSB, Agent, filed and recorded as follows:

JURISDICTION                               FILING DATA

TEXAS

Aransas County         Filed November 17, 2003, as Instrument No. 260083

Fort Bend County       Filed October 2, 2003, as Instrument No.
                       2003139498, Official Public Records; re-filed
                       (because of deficient notary) November 26, 2003,
                       as Instrument No. 2003165638

Kenedy County          Filed October 6, 2003, under Clerk's Entry No.
                       7730, in Volume 28, Page 287, Official Records;
                       re-filed (because of deficient notary) November
                       17, 2003, under Clerk's Entry No. 7788, in Volume
                       28, Page 225

2.    UCC-1 Financing Statement from F-W Oil Exploration L.L.C. to Guaranty
      Bank, FSB, as Agent, filed and recorded as follows:

      JURISDICTION            FILING DATA

      DELAWARE

<PAGE>

Secretary of State            Filed October 2, 2003, as Financing Statement No.
                              32562083

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