EXHIBIT 10.6


                            STOCK EXCHANGE AGREEMENT
                                  BY AND AMONG
                               CAPCO ENERGY, INC.
                             CAPCO ASSET MANAGEMENT
                                       AND
                               THE SHAREHOLDER OF
                             CAPCO ASSET MANAGEMENT

                            STOCK EXCHANGE AGREEMENT

        STOCK  EXCHANGE  AGREEMENT  made this 16th day of August,  2000,  by and
among Capco Energy,  Inc. a Colorado  corporation ( " Purchaser " ), Capco Asset
Management,  Inc. a Nevada corporation  ("Company"),  and the Shareholder of the
Company ("Shareholder").

     WHEREAS,  Purchaser  desires to acquire  all of the issued and  outstanding
common  stock  of  the  Company,  (the  "Common  Stock")  in  exchange  for  the
consideration and upon the terms described herein (the "Purchase"); and

     WHEREAS,  the  Shareholder  desires to sell all of the  outstanding  Common
Stock of the Company; and

     WHEREAS,  Shareholder has previously assigned all right, title and interest
in Greka Energy Corporation
(" Greka "  ) common stock to the Company; and

     WHEREAS, Company authorized Shareholder to engage in settlement discussions
with Greka on behalf of the Company with proceeds from said settlement reverting
to the Company; and

     WHEREAS,  the  acquisition  by Purchaser of the common stock of the Company
will be accomplished with a trade of common shares of Chaparral Resources,  Inc.
( " Chaparral " ); and

     WHEREAS,  in order to avoid a purchase and sale agreement between Purchaser
and  Chaparral and a subsequent  assignment  of the  Chaparral  common shares to
Shareholder, Purchaser authorized Shareholder to enter into the letter agreement
and amendments between  Shareholder and Chaparral dated September 21, 2000, with
Purchaser bearing all costs in connection therewith; and

     WHEREAS,  Purchaser,  the Company and  Shareholder  desire to make  certain
representations,  warranties,  covenants and  agreements in connection  with the
Purchase  and also  desire to  prescribe  various  conditions  precedent  to the
Purchase;

        NOW,  THEREFORE,  in consideration  of the mutual  promises,  covenants,
provisions,  and  representations  contained herein, THE PARTIES HERETO AGREE AS
FOLLOWS:



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                                    ARTICLE 1

                                  THE PURCHASE

        1.1 Sale and  Delivery  of Common  Stock.  Subject  to all the terms and
conditions of this Agreement, the Company and Shareholder shall transfer, convey
and deliver to  Purchaser  at the Closing (as defined in  paragraph  1.2 hereof)
good,  valuable and marketable title to the Common Stock,  free and clear of all
liens,  claims  and  encumbrances  except  those  created by this  Agreement  in
exchange for the  consideration  described in this Article 1. The  consideration
described  in this  Article  1 hereof  shall be  delivered  to a  closing  agent
mutually  agreeable to the parties hereto (the "Closing  Agent").  Closing Agent
shall then disburse such  consideration  in accordance  with this  Agreement and
pursuant to joint written instructions to be prepared by the parties hereto in a
form substantially  similar to that which is, attached hereto as Exhibit 1.1 and
delivered to Closing Agent at Closing.

        1.2 Effective Date and Closing.  The effective date of this  transaction
shall be at closing  (the " Effective  Date" ). The  closing of the  transaction
contemplated  herein (the "Closing")  shall occur on the day on which all of the
obligations  and conditions  precedent  contained  herein are complied with. The
Closing date shall be immediately  following the closing of the Greka Settlement
as disclosed  by Capco  Energy,  Inc.(estimated  to be October 30,  2000),  (the
"Closing Date").

        1.3 Purchase  Price.  Subject to the terms of Section 1.5 and subject to
all of the other terms and conditions set forth in the Agreement and in reliance
on  the  representations,   warranties  and  covenants  hereinafter  set  forth,
Purchaser  shall deliver to Closing Agent 1,612,903  shares of Chaparral  common
stock (hereinafter referred to as the "Purchase Price").

        1.4    Payment of Purchase Price. The total Purchase Price shall be paid
as follows:

        (a)  Shareholder  shall enter into a Letter  Agreement with Chaparral to
acquire the 1,612,903 shares of Chaparral common stock.  Purchaser shall deliver
directly to Chaparral all costs of the transaction.  Shareholder  shall consider
this transaction, a trade of stock of Chaparral for stock of the Company, rather
than a purchase of Chaparral stock.

        1.5  Distributions.  Between the effective date of this  transaction and
the Closing Date the Company may not pay to its  Shareholder  or  employees  any
dividends or bonuses without the written permission of the Purchaser.

                                    ARTICLE 2

                         REPRESENTATIONS AND WARRANTIES
                         OF THE COMPANY AND SHAREHOLDER

        As an  inducement  to the  Purchaser to enter into this  Agreement,  the
Company and the Shareholder hereby represent and warrant to Purchaser that:

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        2.1 Organization.  The Company is a corporation duly organized,  validly
existing,  and in good  standing  under the laws of  Nevada,  has all  necessary
corporate powers to own its properties and to carry on its business as now owned
and operated by it, and is duly qualified to do business and is in good standing
in each of the states where its business requires qualification.

        2.2 Capital. All of the issued and outstanding shares of the Company are
duly  and  validly  issued,  fully  paid,  and  non-assessable.   There  are  no
outstanding subscriptions,  options, rights, warrants, debentures,  instruments,
convertible  securities,  or other  agreements  or  commitments  obligating  the
Company,  or any  subsidiary to issue or to transfer  from  treasury  additional
shares of its capital stock. Except for the common stock outstanding,  there are
no other  equity  securities  of the  Company.  No taxes  or other  payments  to
governmental  authorities  will be due from the  Purchaser  upon transfer of the
Common Stock as contemplated by this Agreement.

        2.3 Corporate Books and Records. The minute books of the Company contain
accurate records of all meetings and accurately  reflect all other actions taken
by the Board of  Directors,  all  committees  of the Board of Directors  and the
Shareholder  of the Company.  Complete  and  accurate  copies of all such minute
books and of the stock  register of the Company have been made  available by the
Company for inspection by the Purchaser.  At the Closing, all of those books and
records will be in the possession of the Company.

        2.4 Subsidiaries.  The Company does not have any subsidiaries or own any
interest in any other  enterprise,  except as  described in Exhibit 2.4 attached
hereto.

        2.5 Directors and Officers.  Exhibit 2.5 to this Agreement  contains the
names and titles of all directors and officers of the Company.

        2.6 Financial  Statements.  Exhibit 2.6 to this Agreement  includes true
and complete copies of the reviewed financial statements.  The Company Financial
Statements  are true,  accurate and complete,  and fairly  present the financial
position of the Company.

        2.7  Absence of Changes.  Since the  respective  dates of the  Financial
Statements, there has not been any change in the business of the Company, except
for changes in the ordinary course of business.

        2.8 Absence of Undisclosed  Liabilities.  As of the respective  dates of
the Financial  Statements  included in Exhibit 2.6, the Company did not have any
material  debt,  liability,  or  obligation  of  any  nature,  whether  accrued,
absolute, contingent or otherwise, and whether due or to become due, that is not
reflected in the Financial Statements.  As of the Closing Date, the Company does
not have  any  material  liabilities  not  disclosed  in the  Company  Financial
Statements.

        2.9 Taxes.  Within the times and in the manner  prescribed  by law,  the
Company  has  filed  all tax  returns  required  by law and has paid all  taxes,
assessments  and penalties due and payable.  The provisions  for taxes,  if any,
reflected  in the Company  Financial  Statements,  are  adequate for any and all
taxes for the periods  ending on the date of such  financial  statements and for
all prior periods,  whether or not disputed. There are no present disputes as to
taxes of any nature payable by the Company.

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        2.10  Compliance  with Laws.  The Company has  complied in all  material
respects with, and is not in violation of, applicable  federal,  state, or local
statutes,  laws or regulations  (including  without  limitation,  any applicable
building,  zoning,  environmental,   or  other  law,  ordinance  or  regulation)
affecting its properties or the operation of its business.

        2.11  Litigation.  (1) The  Company is not a party to any suit,  action,
arbitration  or  legal,  administrative  or other  proceeding,  or  governmental
investigation  pending or  threatened  against or  affecting  the Company or its
business,  assets or financial condition (hereinafter referred to as "Actions");
(2) the Company is not in default with respect to any order, writ, injunction or
decree of any federal,  state,  local or foreign  court,  department,  agency or
instrumentality  applicable  to them;  (3) the  Company  is not  engaged  in any
lawsuits to recover monies due to it.

        2.12 Authority. The Board of Directors of the Company has authorized the
execution  of  this  Agreement  and  the   consummation   of  the   transactions
contemplated  herein,  and the  Company  and  Shareholder  have  full  power and
authority to execute, deliver and perform this Agreement and this Agreement is a
legal,  valid and binding  obligation  of the Company  and  Shareholder,  and is
enforceable in accordance with its terms.

        2.13 Ability to Carry Out  Obligations.  The  execution  and delivery of
this Agreement by the Company and Shareholder and the performance by the Company
and  Shareholder of their  obligations  hereunder will not cause,  constitute or
conflict with or result in (a) any breach or violation of any of the  provisions
of or  constitute a default  under any license,  indenture,  mortgage,  charter,
instrument, articles of incorporation, by-laws, or other agreement or instrument
to which  the  Company  is a party,  or by which it may be  bound,  nor will any
consents or authorizations of any party other than those hereto be required, (b)
an event that would permit any party to any agreement or instrument to terminate
such agreement or instrument or to accelerate  the maturity of any  indebtedness
or other  obligation  of the  Company,  or (c) an event that would result in the
creation or imposition of any lien,  charge,  or encumbrance on any asset of the
Company

        2.14 Validity of the Company  Shares.  The shares of the Company  Common
Stock to be delivered to Purchaser pursuant to this Agreement,  when transferred
in accordance  with the provisions of this  Agreement,  will be duly  authorized
validly issued, fully paid and non-assessable;  and free and clear of all liens,
claims and encumbrances.

        2.15 Assets.  The Company has good and marketable and insurable title to
all its property and such  property is not subject to any liens,  claims  and/or
encumbrances other than disclosed in Exhibit 2.6.

        2.16  Material  Contracts.  Exhibit  2.16  lists  each of the  following
material  contracts and  agreements  (including,  without  limitation,  oral and
informal arrangements.  The Company has delivered,  or will deliver on or before
the execution of this Agreement, to the Purchaser correct and complete copies of
all Material Contracts:

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        2.17   Trade Names and  Rights. The Company has no  trademarks,  service
marks, trade names, and copyrights required in its business.  .

        2.18  Proprietary  and  Intellectual  Property  Rights.  The Company has
proprietary  rights and  intellectual  property rights owned by or registered in
the name of the Company or any of its  subsidiaries  or used in the  business of
the  Company or any of its  subsidiaries  and is not in default in any  material
respect,  under any agreement  relating to any proprietary right or intellectual
property right.

        2.19  Employees.  There are,  except as  disclosed in Exhibit  2.19,  no
collective  bargaining,  bonus,  profit  sharing,  severance,   indemnification,
compensation  or  other  agreements,   trusts,   funds,  plans  or  arrangements
maintained  by the Company or any  subsidiary  of the Company for the benefit of
its directors,  officers or employees, and there are no employment,  consulting,
severance or indemnification arrangements,  agreements or understandings between
the Company or any of its affiliates

        2.20 Labor Matters. There are no activities or controversies, including,
without limitation, any disputes with individuals,  labor organizing activities,
proceedings  preparatory  thereto,  unfair  labor  practice  complaints,   labor
strikes, disputes, slowdowns or work stoppages,  pending or threatened,  between
the Company or any of its employees.

        2.21  Accounts  Receivable.  Notwithstanding  any allowance for doubtful
accounts booked in the Company's Financial  Statements,  all accounts receivable
of the Company and  including  those  created  between the date of the Financial
Statements  and the Closing,  whether or not reflected in the Company  Financial
Statements,  represent  transactions in the ordinary course of business, and are
current  and  collectible  in the  ordinary  course of  business  in the amounts
recorded on the Books of the Company and arising  from a bona fide,  arms length
transaction

        2.22  Inventories.  All  inventories  of  the  Company  whether  or  not
reflected  in the Company  Financial  Statements,  are of a quality and quantity
usable and salable in the ordinary course of business and comply in all material
respects with applicable standards and regulations of governmental authorities.

        2.23 Accounts  Payable.  The accounts  payable  reflected on the Company
Financial  Statements,  and those  reflected  on the books of the Company at the
time of the  Effective  Date will,  reflect all  amounts  owed by the Company in
respect of trade accounts due and other payables.

        2.24  Insurance.  The Company has  insurance  policies in full force and
effect,  which  provide for coverage  's,  which are usual and  customary in its
business as to amount and scope, and are adequate to protect the Company against
any reasonably foreseeable risk of loss

        2.25 Title to and  Utilization  of  Properties.  Exhibit  2.25  attached
hereto lists all of the Company  owned and leased  properties,  the Company owns
fee simple, insured title to all real property owned by it and has the unbridled
right to use the same,  and is not aware of any  claim,  notice or threat to the
effect that its right to own and use such  property is subject in any way to any
challenge,  claim,  assertion  of rights,  proceedings  toward  condemnation  or
confiscation in whole or in part, or is otherwise subject to challenge.
No rights of first refusal encumber such Company owned Properties

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        2.26  Facilities.  The Company  facilities are (as to physical plant and
structure)  structurally  sound  and  none  of its  facilities,  nor  any of the
vehicles or other equipment used by The Company in connection with its business,
has any material  defects and all of them are in all  material  respects in good
operating  condition  and repair and are adequate for the uses to which they are
being  put.  None  of  such  plants,  structures,  or  equipment  is in  need of
maintenance and repairs except ordinary routine maintenance and repairs.  All of
the Company's facilities comply with all laws and government regulations.

        2.27   Environmental and Other Permits and Licenses; Related Matters.

        (a) The  Company  currently  holds all the  health  and safety and other
        permits,   licenses,   authorizations,   certificates,   exemptions  and
        approvals  of  governmental   authorities   (collectively,   "PERMITS"),
        including, without limitation,  environmental permits, necessary for the
        current use,  occupancy  and operation of each asset and property of the
        Company  and the  conduct  of its  business,  and all such  permits  and
        environmental permits are in full force and effect.  Neither the Company
        nor any of the Shareholder has received any notice from any governmental
        authority  revoking,  canceling,  rescinding,  materially  modifying  or
        refusing  to renew any  permit  or  environmental  permit  or  providing
        written notice of violations under any  environmental law which have not
        been  resolved.  The Company is in all material  respects in  compliance
        with the permits and all applicable Environmental Laws

        (b)  All  equipment  owned  or used by the  Company,  is in  substantial
        compliance  with all applicable  Permits and  Environmental,  and can be
        operated in the ordinary  course of business in  substantial  compliance
        with all applicable Permits and Environmental Laws.

        2.28  Customers  and  Suppliers. Exhibit  2.28 lists all major customers
and  suppliers,  which are material to the financial  condition or operations of
the Company

        2.29 Bank  Accounts.  Exhibit 2.29 sets forth the names and locations of
all banks,  trust companies,  savings and loan  associations and other financial
institutions at which the Company  maintains  current accounts of any nature and
the  names  of all  persons  authorized  to draw  thereon  or  make  withdrawals
therefrom.

        2.30  Share  Ownership.  The  Shareholder  holds all of the  outstanding
common  shares of the Company  Common Stock as set forth in Exhibit 2.30 hereto.
Such  shares  are  owned  and  the  Shareholder'  ownership  is  of  record  and
beneficially  owned by each holder  thereof,  and such shares are not subject to
any claim, lien,  encumbrance or pledge.  Each Shareholder has authority to sell
and exchange such shares pursuant to this Agreement.

        2.31 Other Information. None of the information and documents which have
been furnished or made available by The Company or any of its representatives to
Purchaser or any of its  representatives  in  connection  with the  transactions
contemplated by this Agreement is materially false or misleading or contains any
material  misstatement of fact or omits any material fact necessary to be stated
in order to make the statements and information therein not misleading.

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                                    ARTICLE 3

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

        As an inducement to the Company and the  Shareholder  to enter into this
Agreement,  the Purchaser represents and warrants to the Company and Shareholder
that:

        3.1  Organization.  Purchaser is a corporation  duly organized,  validly
existing,  and in good  standing  under the law of Colorado,  has all  necessary
corporate powers to own properties and to carry on its business as now owned and
operated by it, and is duly  qualified to do business and is in good standing in
each of the states were its business requires qualification.

        3.2 Capital.  All of the issued and outstanding  shares of Purchaser are
duly and validly issued, fully paid and non-assessable.

        3.3  Authority.  The Board of Directors of Purchaser has  authorized the
execution  of this  agreement  and the  transactions  contemplated  herein,  and
Purchaser  has full power and  authority  to execute,  deliver and perform  this
Agreement  and this  Agreement  is the legal,  valid and binding  obligation  of
Purchaser, and is enforceable in accordance with its terms and conditions.

        3.4 Ability to Carry Out Obligations. The execution and delivery of this
Agreement  by Purchaser  and the  performance  by  Purchaser of its  obligations
hereunder  will not cause,  constitute,  or  conflict  with or result in (a) any
breach or violation of any of the  provisions  of or  constitute a default under
any  license,   indenture,   mortgage,  charter,   instrument,   certificate  of
incorporation,  bylaw,  or other agreement or instrument to which Purchaser is a
party, or by which it may be bound, nor will any consents or  authorizations  of
any party other than those  hereto be  required,  (b) an event that would permit
any party to any agreement or  instrument  to terminate it or to accelerate  the
maturity of any indebtedness or other  obligation or Purchaser,  or (c) an event
that  would  result  in the  creation  or  imposition  of any lien,  charge,  or
encumbrance on any asset of Purchaser.

        3.5 Directors and Officers.  Exhibit 3.5 of this Agreement  contains the
names and titles of all directors and officers of Purchaser.

        3.6 Investment Intent.  Purchaser is purchasing the Common Stock for its
own account for investment purposes and not with a view to public  distribution.
Purchaser  has the capacity to evaluate the merits and risks of the  acquisition
of the Common Stock and  understands  that the Common Stock is subject to resale
restrictions under various state and federal securities laws.


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                                    ARTICLE 4

                                    COVENANTS

        4.1  Investigative  Rights.  From the Effective Date of this transaction
until the Closing Date, the Company shall provide to Purchaser, and its counsel,
accountants,  auditors, and other authorized representatives,  reasonable access
to all of The Company's properties,  books, contracts,  commitments, and records
for the purpose of examining the same. The Company shall furnish  Purchaser with
all  information  concerning  its affairs as Purchaser may  reasonably  request.
Without in any manner  reducing  or  otherwise  mitigating  the  representations
contained  herein,   Purchaser  and/or  its   representatives   shall  have  the
opportunity  to meet with  accountants  and  attorneys to discuss the  financial
condition  of  the  Company.  If  the  transaction  contemplated  hereby  is not
completed,  all  documents  received  by  Purchaser  and/or  its  attorneys  and
accountants shall be returned to the Company upon request.

        4.2 Conduct of Business. From the Effective Date of this transaction and
except as approved  in writing by  Purchaser,  the  Company and the  Shareholder
covenant  that they:  (1) shall  conduct  the  Company's  business in the normal
course,  and shall not sell,  pledge,  or assign any  assets,  without the prior
written approval of Purchaser,  except in the regular course of business;  shall
not amend the Company's Articles of Incorporation or Bylaws,  declare dividends,
redeem or sell  stock or other  securities,  incur  additional  or  newly-funded
liabilities,  acquire or dispose of fixed assets, change employment terms, enter
into any  material or long-term  contract,  guarantee  obligations  of any third
party,  settle or discharge any balance  sheet  receivable  for less amount,  or
enter into any other  transactions other than in the regular course of business;
(3) shall not  directly  or  indirectly  solicit,  initiate,  or  encourage  any
inquiries  or proposals  from,  discuss or negotiate  with,  provide  non-public
information  to, or consider the merits of any  unsolicited  inquiry or proposal
from any person (other than the Purchaser) relating to the merger, consolidation
or  acquisition of the Company or any of the assets or properties of the Company
(other than acquisitions of inventories in the ordinary course of business);  or
(4) shall not agree or commit to do or authorize  any of the  foregoing,  unless
such action complies with the terms of this Agreement.

        4.3  Indemnification of the Company and Shareholder.  Purchaser shall be
liable for and shall indemnify,  defend and hold The Company and the Shareholder
and its officers,  directors,  affiliates,  agents and the Shareholder  harmless
against and in respect of any and all claims, demands,  losses, costs, expenses,
obligations,   liabilities,  damages,  recoveries  and  deficiencies,  including
interest,  penalties,  and reasonable  attorney  fees,  that they shall incur or
suffer,  which  result  from or  relate  to any  activities  of the  Company  or
Purchaser  subsequent  to the Closing Date or which result from or relate to any
breach of, or  failure  by  Purchaser  to  perform  any of its  representations,
warranties,  covenants  or  agreements  in this  Agreement  or in any  schedule,
certificate,  exhibit  or  other  instrument  furnished  or to be  furnished  by
Purchaser under this Agreement.

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        4.4  Indemnification of Purchaser.  The Company and Shareholder shall be
liable  for and shall  agree to  indemnify,  defend and hold  Purchaser  and its
officers,  directors,  affiliates and agents harmless  against and in respect of
any and all claims, demands, losses, costs, expenses, obligations,  liabilities,
damages,  recoveries  and  deficiencies,   including  interest,  penalties,  and
reasonable  attorney fees,  that it shall incur or suffer,  which result from or
relate to any  breach  of, or  failure  by The  Company  to  perform  any of its
respective  representations,   warranties,  covenants  and  agreements  in  this
Agreement or in any exhibit, schedule, certificate or other instrument furnished
or to be furnished by The Company or Shareholder under this Agreement.

        4.5  Representations  and Warranties.  Through the Closing Date, each of
the parties shall refrain from taking any action,  which would render any of its
representations  or  warranties in this  Agreement  inaccurate as of the Closing
Date.

                                    ARTICLE 5

                                   TAX MATTERS

        5.1  Cooperation  and  Exchange  of   Information.   The  Company,   the
Shareholder and the Purchaser will provide each other with such  cooperation and
information as any of them reasonably may request of the other in filing any Tax
(as defined in Section 5.7) return  determining a liability for Taxes or a right
to a refund of  Taxes,  or  participating  in or  conducting  any audit or other
proceeding in respect of Taxes.

                                    ARTICLE 6

                 CONDITIONS PRECEDENT TO PURCHASER'S PERFORMANCE

        6.1 Conditions.  Purchaser's  obligations  hereunder shall be subject to
the satisfaction,  at or before the Closing,  of all the conditions set forth in
this Article 6.  Purchaser may waive any or all of these  conditions in whole or
in  part  without  prior  notice;  so long as such  waiver  is in  writing;  and
provided,  however, that no such waiver of a condition shall constitute a waiver
by  Purchaser  of any other  condition  or any of  Purchaser's  other  rights or
remedies,  at law or in  equity,  if the  Company  and  Shareholder  shall be in
default of any of their  representations,  warranties,  or covenants  under this
Agreement.

        6.2 Accuracy of  Representations.  Except as otherwise permitted by this
Agreement,  all representations and warranties by the Company and Shareholder in
this Agreement or in any written  statement that shall be delivered to Purchaser
by the Company under this Agreement  shall be true and accurate when made and on
and as of the  Closing  Date with the same  force  and  affect as if made at the
Closing.

        6.3  Performance.  Purchaser  shall  be  reasonably  satisfied  that the
Company and Shareholder shall have performed,  satisfied,  and complied with all
covenants, agreements, and conditions required by this Agreement to be performed
or complied with by it, on or before the Closing Date.

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        6.4 Absence of  Litigation.  No action,  suit, or proceeding  before any
court or any  governmental  body or  authority,  pertaining  to the  transaction
contemplated  by  this  Agreement  or  to  its  consummation,  shall  have  been
instituted or threatened against any party hereto on or before the Closing Date.

        6.5 Acceptance by Shareholder.  The holders of not less than 100% of the
issued and outstanding shares of Common Stock of the Company have agreed to sell
and deliver their shares to Purchaser in accordance with this Agreement.

        6.6 Directors of the Company. Effective on the Closing Date the Board o
Directors shall be one.

        6.7  Financial  Conditions.  No assets of the Company will be encumbered
other than by notes payable shown on the Company's Financial Statements.

        6.8   Tax Return. The Company shall complete, file and deliver a copy to
Purchaser, its federal and state income tax return for the year ended

        6.9 Opinions.  The Company  shall deliver the opinion of its  management
dated the Closing Date, in form and substance satisfactory to Purchaser,  to the
effect that:

        (a) The Company is a corporation duly organized, validly existing and in
        good standing under the laws of the State of Nevada.

        (b) The Company's authorized and issued capital stock is as set forth in
        paragraph 2.2 hereof.

        (c) The  execution and  consummation  of this  Agreement  have been duly
        authorized  and  approved  by  the  Company's  Board  of  Directors  and
        consummation  of this  Agreement  will not  constitute  or result in any
        breach or default of the character described in paragraph 2.12 hereof of
        which management has knowledge.

        (d) The shares of Common Stock to be purchased by Purchaser  pursuant to
        this Agreement are duly and validly authorized and issued, and are fully
        paid and nonassessable.

        (e) Management has no knowledge of any undisclosed liabilities.

        (f) Other such items as the Purchaser and the Shareholder shall mutually
        agree.

        6.11   Closing  Documents.  The  Company  and  the  Shareholder shall be
prepared  to  deliver  the  closing  documents  set  forth in  Article 7 of this
Agreement;

        6.12  Purchaser's  Board  Approval.   Within  five  (5)  days  following
execution of this Agreement,  the Board of Directors of the Purchaser shall have
authorized   the  execution  and  delivery  of  this  Agreement  and  the  other
agreements, documents and instruments referenced herein, and the consummation of
the transactions contemplated hereby.

                                       10
<PAGE>

        6.13 Due Diligence.  The Purchaser  shall be satisfied in its discretion
with the results of its due diligence investigation of the Company.

        6.14 Rights of First  Refusal.  All rights of first  refusal held by any
person or entity relating to the Company or the business or any of the assets or
properties of the Company or the business shall have been waived (with each such
waiver  to be in  form  and  substance  satisfactory  to  the  Purchaser  in its
reasonable discretion) or shall have expired without exercise.

        6.15  Officer's  Certificate.   The  Company  shall  have  delivered  to
Purchaser a certificate,  dated the Closing Date, and signed by the President of
the Company,  certifying  that each of the  conditions  specified in Section 6.2
through 6.9 and 6.14 hereof have been fulfilled.

                                    ARTICLE 7

                      CONDITIONS PRECEDENT TO THE COMPANY'S
                          AND SHAREHOLDER'S PERFORMANCE

        7.1 Conditions.  The Company's and  Shareholder'  obligations  hereunder
shall be  subject to the  satisfaction,  at or before  the  Closing,  of all the
conditions  set forth in this Article 7. The Company and  Shareholder  may waive
any or all of these conditions in whole or in part without prior notice; so long
as such waiver is in writing;  and provided,  however,  that no such waiver of a
condition shall  constitute a waiver by the Company and Shareholder of any other
condition of or any of the Company's or Shareholder' rights or remedies,  at law
or in equity,  if Purchaser  shall be in default of any of its  representations,
warranties, or covenants under this Agreement.

        7.2 Accuracy of  Representations.  Except as otherwise permitted by this
Agreement,  all representations and warranties by Purchaser in this Agreement or
in  any  written  statement  that  shall  be  delivered  to the  Company  and/or
Shareholder by Purchaser  under this Agreement shall be true and accurate on and
as of the Closing Date as though made at that time.

        7.3 Performance. Purchaser shall have performed, satisfied, and complied
with all covenants,  agreements, and conditions required by this Agreement to be
performed or complied with by it, on or before the Closing Date.

        7.4 Absence of Litigation. No action, suit or preceding before any court
or  any  governmental   body  or  authority,   pertaining  to  the  transactions
contemplated  by  this  Agreement  or  to  its  consummation,  shall  have  been
instituted or threatened against Purchaser on or before the Closing Date.

        7.5 Officers' Certificate. Purchaser shall have delivered to the Company
and  Shareholder  a  certificate,  dated  the  Closing  Date and  signed  by the
President  of  Purchaser  certifying  that each of the  conditions  specified in
Sections 7.2 through 7.5 have been fulfilled.

                                       11
<PAGE>

                                    ARTICLE 8

                                     CLOSING

        8.1  Closing.  The  Closing  of this  transaction  shall  be held at the
offices of the Closing Agent; to be mutually  agreed upon by the parties,  on or
before October 30,2000, or as soon thereafter as reasonably practicable, or such
other  place as shall be  mutually  agreed  upon,  and on such  date as shall be
mutually agreed upon by the parties. At the Closing:

        (a) Purchaser shall deliver the Chaparral shares to the Closing Agent as
        required by Article I of this Agreement.

        (b) Shareholder  shall present the certificates  representing its shares
        of the Company being sold to Purchaser,  and such  certificates  will be
        duly endorsed; and

        (c)  Shareholder  shall  receive from the Closing Agent its share of the
        Purchase Price.

        (d) Purchaser shall deliver an officer's certificate,  dated the Closing
        Date,  stating  that  all  representations,  warranties,  covenants  and
        conditions  set forth in this  Agreement on behalf of Purchaser are true
        and correct as of, or have been fully  performed  and complied  with by,
        the Closing Date.

        e) The Company  shall  deliver a  certificate,  dated the Closing  Date,
        stating that all  representations,  warranties  covenants and conditions
        set  forth in this  Agreement  on  behalf  of the  Company  are true and
        correct as of, or have been fully  performed  and complied  with by, the
        Closing Date.

        (f) Each  party  shall  deliver  such  other  documents  or  information
        required to be furnished by Closing pursuant to this Agreement.


                                    ARTICLE 9

                                  MISCELLANEOUS

         9.1 Captions and Headings.  The Article and paragraph/section  headings
through this Agreement are for  convenience  and reference only, and shall in no
way be deemed to define,  limit,  or add to the meaning of any provision of this
Agreement.

         9.2 No Oral Change. This Agreement and any provision hereof, may not be
waived,  changed  modified,  or discharged  orally,  but it can be changed by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, or discharge is sought.


                                       12
<PAGE>

         9.3 Waiver. Except as otherwise expressly provided herein, no waiver of
any covenant,  condition, or provision of this Agreement shall be deemed to have
been made unless  expressly in writing and signed by the party against whom such
waiver is charged; and (i) the failure of any party to insist in any one or more
cases upon the performance of any of the provisions, covenants, or conditions of
this Agreement or to exercise any option herein contained shall not be construed
as a waiver or relinquishment for the future of any such provisions,  covenants,
or conditions,  (i) the  acceptance of performance of anything  required by this
Agreement to be performed with knowledge of the breach or failure of a covenant,
condition,  or  provision  hereof shall not be deemed a waiver of such breach or
failure,  and (iii) no waiver by any party of one breach by another  party shall
be construed as a waiver with respect to any other or subsequent breach.

         9.4 Entire Agreement.  This Agreement contains the entire Agreement and
understanding  between the parties hereto,  and supersedes all prior  agreements
and understandings.

         9.5 Choice of Law.  The laws of the State of  California  shall  govern
this Agreement and its application.

         9.6 Counterparts.  This Agreement may be executed simultaneously in one
or more  counterparts,  each of which  shall be deemed an  original,  but all of
which together shall constitute one and the same instrument.

         9.7 Notices. All notices,  requests,  demands, and other communications
under this  Agreement  shall be in writing and shall be deemed to have been duly
given on the date of receipt if served personally on the party to whom notice is
to be given, by telecopy or telegram,  or mailing if mailed to the party to whom
notice is to be given,  by first class mail,  registered or  certified,  postage
prepaid, and properly addressed as follows:

        Purchaser:           Ilyas Chaudhary, President
                             Capco Energy, Inc.
                             2922 E. Chapman Ave.
                             Orange, Ca. 92869

        The Company:         Capco Asset Management
                             2922 E. Chapman Ave.
                             Orange, Ca. 92869

        Shareholder:         Dennis R. Staal, President
                             Capco Resources Ltd.
                             2922 E. Chapman Ave.
                             Orange, Ca. 92869

         9.8 Binding  Effect.  This Agreement shall inure to and be binding upon
the heirs, executors,  personal representatives,  successors and assigns of each
of the parties to this Agreement.

         9.9 Mutual  Cooperation.  The parties hereto shall  cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be necessary or
convenient to effect the transaction described herein.

                                       13
<PAGE>

         9.10 Brokers.  Each of the parties hereto shall  indemnify and hold the
other harmless against any and all claims, losses, liabilities or expenses which
may be  asserted  against  it as a  result  of  its  dealings,  arrangements  or
agreements with any broker, finder or person, including Charles P. Hauser.

         9.11 Announcements.  Purchaser Shareholder and the Company will consult
and cooperate with each other as to the timing and content of any  announcements
of the transactions  contemplated  hereby to the general public or to employees,
customers or suppliers. Except to the extent that the parties consent in writing
otherwise, no party to this Agreement shall make, or cause to be made, any press
release or public  announcement in respect of this Agreement or the transactions
contemplated   hereby   or   otherwise   communicate   with  any   news   media.
Notwithstanding the preceding sentence,  the parties agree that the Purchaser or
an affiliate of the  Purchaser may make such  disclosure  (on Form 8-K, by press
release or otherwise) regarding the terms of this Agreement and the transactions
contemplated  hereby as it deems necessary to comply with applicable  securities
laws or the rules and  regulations  of any  Exchange,  including a press release
following the execution of this Agreement.

         9.12 Expenses.  Except as specifically provided in this Agreement,  all
costs and  expenses  including  legal,  accounting  and any other  out-of-pocket
expenses  incurred by the Company or its  Shareholder,  in connection  with this
transaction,  shall be paid by the Shareholder. All costs and expenses including
legal,   accounting  and  any  other  out-of-pocket  expenses  incurred  by  the
Purchaser, in connection with this transaction, shall be paid by the Purchaser.

         9.13 Survival of  Representations  and Warranties.  Except as otherwise
provided in this Section 9.13, the  representations,  warranties,  covenants and
agreements  of the parties  set forth in this  Agreement  or in any  instrument,
certificate,  opinion,  or other writing  providing for in it, shall survive the
Closing for a period of five years  irrespective of any investigation made by or
on behalf of any party.  Notwithstanding  the  above,  the  representations  and
warranties  set forth in Article 5 relating  to tax issues  shall  survive for a
period  equal to the  applicable  statute  of  limitations  with  respect to any
circumstances described therein or related thereto.

        9.14 Assignment.  This Agreement may not be assigned by operation of Law
or otherwise by the Shareholder, the Company or the Purchaser.

         9.15 No Third Party Beneficiaries. This Agreement shall be binding upon
and inure  solely to the  benefit  of the  parties  hereto  and their  permitted
assigns and nothing herein,  express or implied,  is intended to or shall confer
upon any other Person,  including,  without  limitation,  any employee or former
employee of the Company,  any legal or equitable right, benefit or remedy of any
nature whatsoever,  including,  without limitation, any rights of employment for
any specified period, under or by reason of this Agreement.

                                       14
<PAGE>

         9.16 Specific  Performance.  The parties hereto agree that  irreparable
damage  would  occur  in the  event  any  provision  of this  Agreement  was not
performed  in  accordance  with the terms  hereof and that the parties  shall be
entitled to specific  performance of the terms hereof,  in addition to any other
remedy at law or equity without the necessity of demonstrating the inadequacy of
monetary damages.

        AGREED TO AND ACCEPTED as of the date first above written.


                               CAPCO ENERGY, INC.

                                         /signed/
                               By --------------------------
                                  Ilyas Chaudhary, President


                               CAPCO ASSET MANAGEMENT, INC

                                         /signed/
                               By -------------------------
                                  Dennis R. Staal, President

                               CAPCO RESOURCES LTD.

                                         /signed/
                               By -------------------------
                                   Dennis R. Staal, President