MEMORANDUM OF AGREEMENT

                                     Between

                                 Tengasco, Inc.

                                       and

                           The University of Tennessee

              Concerning Cooperation on Matters Pertaining to the
                            Use of Seismic Equipment

PURPOSE

The purpose of this Agreement is to identify the roles and  responsibilities  of
Tengasco,  Inc.  (Tengasco),  a  publicly  held  company  with  headquarters  in
Knoxville, Tennessee, and The University of Tennessee in certain matters related
to  cooperative  use and  maintenance  of  seismic  equipment,  and to specify a
cost-effective  means of cooperation to enhance the  effectiveness of each party
in carrying out its mission.

BACKGROUND

The Department of Geological  Sciences at The University of Tennessee  possesses
certain  instruments,  vehicles,  and equipment that comprise a vibroseis system
for  producing  tomographic  images  of  subsurface  geologic  structures.   The
vibroseis  system can be used for  educational  and research  purposes  that are
beneficial to the University as an institution of research and higher  learning.
Tengasco is in the business of exploring  for and producing oil and natural gas,
and supplies natural gas to certain municipalities and businesses, in Tennessee.
Tengasco uses vibroseis imaging in the course of their business operations.

Central to a vibroseis system is the servo-hydraulic  vibrator, a truck-mounted,
hydraulically operated engine capable of applying approximately 14 tons of force
to the surface of the earth for the purpose of  generating  seismic  waves.  The
vibrator  requires specially trained operators and routine,  expert maintenance.
The University  possesses one model Y-1100A vibrator  manufactured by the George
E. Failing Company.  Tengasco owns two Y-1100A vibrators. The cost operating and
maintaining a vibroseis  system at The University for  educational  and research
purposes exceeds the resources  available at the  institution.  For this reason,
the vibroseis  system owned  by the University remained unused since about 1994.
The condition of the vehicles and other vibroseis equipment  deteriorates due to
inactivity and lack of routine maintenance.

GENERAL AGREEMENT

The parties agree on the following points:

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COOPERATION.  The University of Tennessee and Tengasco agree to cooperate in the
maintenance and operation of their vibroseis systems.

EQUIPMENT.  The Equipment covered by this Agreement includes the servo-hydraulic
vibrators,  together with the electronic controls,  radios,  geophones,  cables,
seismographs,  and  vehicles  used  to  produce  seismic  data at  remote  field
locations.  Not  included  under  this  Agreement  are  computers  or other data
processing equipment  permanently installed in laboratories at The University of
Tennessee.  Also not  included is  equipment  installed  as part of the regional
seismic   network  used  for  monitoring   earthquakes  in  East  Tennessee  and
surrounding areas.

OWNERSHIP.  The Equipment currently in possession of the University shall at all
times remain the property of The University of Tennessee. The Equipment owned by
Tengasco shall remain the sole property of Tengasco.

USE.  Tengasco shall have the right to use the Equipment as it deems appropriate
for its business objectives. The University of Tennessee shall have the right to
use the Equipment for educational and research projects.  When Tengasco uses the
Equipment,   the  persons  permitted  to  operate  the  equipment  will  include
employees,  contractors,  and agents of Tengasco.  When the University  uses the
Equipment,  the persons permitted to operate the Equipment will include faculty,
staff, and students at the University.

COSTS. The University and Tengasco  understand that use of the Equipment entails
costs to the owner for routine  maintenance  and operation.  Tengasco  agrees to
reimburse  The  University  for  all  regular  and  routine  maintenance  on the
Equipment  subject to this Agreement,  as required to keep the Equipment in good
operating  condition.  Tengasco  further  agrees to reimburse The University for
costs of  operation  when  Tengasco  employees,  contractors,  or agents use the
Equipment.  Tengasco  further  agrees  to an  additional  reimbursement  to  The
University  for  indirect  costs at the rate of 15% over and  above  the  direct
costs.

INDEMNIFY AND HOLD  HARMLESS.  Tengasco  agrees to indemnify  The  University of
Tennessee  from and against any claims or judgments  for damage to any person or
property arising out of the operation or maintenance of any Equipment subject to
this Agreement when operated by employees,  contractors,  or agents of Tengasco.
Tengasco agrees that its obligation to indemnify shall be supported by liability
insurance, naming The University of Tennessee as an additional insured, obtained
and maintained in force by Tengasco at its sole cost and expense.

NOT  EXCLUSIVE.  The parties  understand  and agree that this  Agreement  is not
exclusive. Other companies may enter into similar agreements to share equipment,
scientific  expertise,  or other  resources  with The  University  of Tennessee.
Tengasco  understands and acknowledges  that the University has an obligation to
cooperate with other agencies of the State or Federal government, and with other
companies  even if such  companies  may be in  competition  with Tengasco in the
business of oil and gas exploration. Other parties who may enter into agreements
with The University  should interpret  nothing in this Agreement to allow access
to Tengasco data or Equipment.

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<PAGE>


PROVISION OF SEISMIC INFORMATION AND DATA

The University of Tennessee  recognizes that the information  gathered by use of
the  Equipment  subject  to this  Agreement  and the  processed  results of that
information  is  or  may  be  of a  sensitive  and  proprietary  nature  to  the
exploration  business of Tengasco.  The University of Tennessee  agrees that any
information  obtained by Tengasco through use of the Equipment and the processed
results of that information  shall be held confidential and not disclosed to any
third  party  for a period  of one year  from the date any such  information  is
recorded  by  use of the  Equipment,  unless  required  to be  disclosed  by the
Tennessee Public Records Act, Tenn. Code Ann. ss. 10-7-503. Tengasco agrees that
use of this information by The University of Tennessee, its professors, students
or agents is not subject to this confidentiality requirement; provided, however,
that no  publication  of any  study  or  research  based  in whole or in part on
information  acquired by Tengasco  through  use of the  Equipment  shall be made
during the same one year period unless express written  permission is granted by
Tengasco.

IMPLEMENTING ARRANGEMENTS

The parties  agree to respect and  observe  the roles and  responsibilities  set
forth in this Agreement.

The Associate  Vice  President for Research for The  University of Tennessee and
the Chief  Executive  Officer for Tengasco are the  responsible  executives  for
implementing  this  Agreement.  If a disagreement  arises on the  implementation
requirements for this Agreement,  the issue will be submitted to the responsible
executives to this Agreement for adjudication.

In order to carry out the  Agreement,  separate  arrangements  will be  executed
between The University and Tengasco.  Those separate  arrangements  will provide
for, among other things, the statement of work and budget,  confidentiality  and
nondisclosure agreement, and will reference this Agreement.

Either party may terminate  this  agreement by providing  written  notice to the
other twelve months in advance of the effective date of termination.

For The University of Tennessee                 For Tengasco, Inc.


/s/ Kenneth R. Walker                           /s/ M. E. Ratliff
---------------------                           -----------------
Kenneth R. Walker                               M. E. Ratliff
Associate Vice President for Research           Chief Executive Officer
Date: 13 Feb. 01                                Date:
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