OIL AND GAS LEASE



  STATE OF TEXAS                       ss.


  COUNTY OF CALHOUN                    ss.



THIS OIL AND GAS LEASE is made this 31st day of August, 2004, by and between The
Northern Trust Bank of Texas, N.A., as Successor Trustee of the Leila Clark Wynn
Mineral  Trust,  whose  address is 2121 San  Jacinto  Street,  P.O.  Box 226270,
Dallas, Texas 75222,  hereinafter "Lessor," and Petrogen,  Inc. whose address is
3200 Southwest Freeway, Suite 3300, Houston, Texas 77027, hereinafter "Lessee."

                                   WITNESSETH

         1. That  Lessor,  in  consideration  of Ten Dollars  ($10.00) and other
valuable consideration,  the receipt of which is hereby acknowledged, and of the
covenants and  agreements of Lessee  hereinafter  contained,  does hereby grant,
lease and let unto Lessee the land covered  hereby for the purposes  hereinafter
described   and with the  exclusive  right of  exploring,  drilling,  mining and
operating for, producing and owning oil, gas and sulphur, together with right to
make surveys on said land, lay pipe lines,  establish and utilize facilities for
surface or subsurface disposal of salt water, construct roads and bridges, build
tanks, power stations,  telephone lines, employee houses and other structures on
said land,  necessary or useful in Lessee's  operations in  exploring,  drilling
for, producing,  treating,  storing and transporting  minerals produced from the
land covered  hereby or adjacent  thereto.  The land  covered  hereby and herein
referred  to as the "land" or "said  land" is located in the County of  Calboun,
State of Texas, and is described as follows:

         TRACT ONE: Being all of the ISAAC W. BOONE SURVEY No. 15,  Abstract No.
         56, Calhoun County, Texas, containing  approximately 801.26 acres, more
         or less,  and being a part of that  certain  land  described  in a Deed
         dated July 15, 1949,  Edwin Hawes.  Jr., et al to George Rust Hawes. as
         recorded in Volume 70, Page 209, Deed Records of Calhoun County, Texas.

         TRACT TWO: Being all of the ISAAC W. BOONE SURVEY No. 16,  Abstract No.
         57, Calhoun County, Texas, containing  approximately 770.24 acres, more
         or less,  and being the same land  described in that certain Deed dated
         July 15,  1949,  Edwin  Hawes,  Jr.,  et al to George  Rust  Hawes,  as
         recorded in Volume 70, Page 211, Deed Records of Calhoun County, Texas.

         For the  purposes  of  determining  the  amount  of any  bonus or other
payment hereunder,  said land shall be deemed to contain, 1,571,3 acres, whether
actually  containing  more or less,  arid.  the above  recital of acreage in any
tract shall be deemed to be the true acreage  thereof.  Lessor accepts the bonus
as lump sum consideration for this lease and all rights and options hereunder.

         2.  Unless  sooner  terminated  or  longer  kept in force  under  other
provision hereof,  this lease shall remain in force for a term of six (6) months
from the effective date hereof,  hereinafter  called "primary term", and as long
thereafter  as oil, gas and/or  sulphur is produced  from the land or other land
pooled therewith in commercial quantities or operations, as hereinafter defined,
are  conducted  upon said  laud with no  cessation  for more  than  ninety  (90)
consecutive days.




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         3. As royalty, Lessee covenants and agrees:

              (a) To deliver to the credit of Lessor,  in the pipe line to which
         Lessee may connect its wells,  the equal 1/5th part of all oil produced
         and saved by Lessee from said land, or from time to time, at the option
         of Lessee,  to pay Lessor the average posted market price of such l/5th
         part of such oil at the  wells as of the day it is run to the pipe line
         or storage tanks;

              (b) To pay Lessor on gas and  casinghead  gas  produced  from said
         land (1) when sold by Lessee,  I/5tli of the amount realized by Lessee,
         computed at the mouth of the well,  or (2) when used by Lessee off said
         land or in the  manufacture of gasoline or other  products,  the market
         value,  at the mouth of the well,  of l/5th of such gas and  casinghead
         gas;

              (c) To pay  Lessor  on all other  minerals  mined or  marketed  or
         utilized by Lessee from said land, one-tenth either in kind or value at
         the well or mine at Lessee's election, except that on sulphur mined and
         marketed the royalty shall be $2.50 per long ton. If at the  expiration
         of the primary  term or at any time or times  thereafter,  there is any
         well on said  land or on lands  with  which  said  land or any  portion
         thereof has been pooled, capable of producing oil and gas. and all each
         wells are shut-in, this lease shall, nevertheless, continue in force as
         though operations were being conducted on said land for so long as said
         wells are shut-in,  and thereafter this lease may be continued in force
         as if no  shut-in  had  occurred.  Lessee  covenants  and agrees to use
         reasonable  diligence  to  produce,  utilize,  or market  the  minerals
         capable of being produced from said wells,  but in the exercise of such
         diligence,  Lessee  shall  not  be  obligated  to  install  or  furnish
         facilities  other than well facilities and ordinary lease facilities of
         flow lines,  separator,  and lease  tank,  and shall not be required to
         settle  labor  trouble  or to market  gas upon  terms  unacceptable  to
         Lessee.  If at any time or times  after the  expiration  of the primary
         term,  all such wells are  shut-in  for a period of ninety  consecutive
         days,  and during such time there are no operations on said land,  then
         at or before the expiration of said ninety day-period, Lessee shall pay
         or  tender  by  check  or  draft  of  Lessee,  as  royalty,  the sum of
         $7,857.50.  Upon making said payment,  it will be considered  that each
         such well is producing gas in paying  quantities  within the meaning of
         this  lease for a period of one (I) year after the  expiration  of said
         ninety (90) day period, In like manner and upon like payment being made
         annually on or before the  expiration  of the last  preceding  year for
         which such payment or tender has been made, it will be considered  that
         said well or wells  are  producing  gas in  commercial  quantities  for
         successive  periods of one (I) year each.  Each such  payment or tender
         shall  be made to the  parties  who at the  time of  payment  would  be
         entitled to receive the royalties  which would be paid under this lease
         if the wells were  producing,  and may be deposited  in the  depository
         bank provided for below.  Nothing herein shall impair Lessee's right to
         release as provided in paragraph 4 hereof.  In event of  assignment  of
         this lease in whole or in part,  liability for payment  hereunder shall
         rest  exclusively on the then owner or owners of this lease,  severally
         as to acreage owned by each.

         4. If at any time or times  during  the  primary  term  operations  are
conducted on said land and if all operations are discontinued,  this lease shall
thereafter  terminate on the date next  following  the  ninetieth day after such
discontinuance  unless  on or  before  such  date  Lessee  conducts  operations;
provided,  however,  if such date is at the end of the primary term,  this lease
shall  terminate  at  the  end  of  such  term  or on the  ninetieth  day  after
discontinuance  of all operations,  whichever is the later date,  unless on such
late date either (1) Lessee is  conducting  operations  or (2) the shut-in well
provisions  of paragraph 3 or the  provisions  of  paragraph 10 are  applicable.
Whenever used in this lease the word "operations"  shall mean operations for and
any of the following:  drilling, testing, completing,  reworking,  recompleting,
deepening, plugging back or repairing of a well in search for or in an. endeavor
to  obtain  production  of  oil,  gas or  sulphur,  whether  or  not  in  paying
quantities.



                      OIL AND GAS LEASE. PAGE 2 OF 7 PAGES

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         5.  Lessee  shall  have  the use,  free  from  royalty,  of oil and gas
produced from said land in ail operations hereunder. Lessee shall have the right
at any time to remove all machinery and fixtures placed on said land,  including
the right to draw and remove  casing.  No well shall be drilled  nearer than 200
feet to the house or barn now on said land  without  the  consent of the Lessor.
Lessee  shall pay for  damages  caused by its  operations  to growing  crops and
timber on said land.

         6. The rights and estate of any party hereto may be assigned  from time
to time in  whole  or in  part  and as to any  minerals  or  horizon.  AH of the
covenants,  obligations, and considerations of this lease shall extend to and be
binding  upon  the  parties  hereto,  their  heirs,  successors,   assigns,  and
successive  assigns,  No change  or  division  in the  ownership  of said  land,
royalties,  or other moneys,  or any part  thereof,  howsoever  effected,  shall
increase the  obligations or diminish the rights of Lessee,  including,  but not
limited  to,  the  location  and  drilling  of  wells  and  the  measurement  of
production. Notwithstanding any Other actual or constructive knowledge or notice
hereof or to Lessee,  its  successors  or assigns,  no change or division in the
ownership  of said  lands of the  royalties,  or other  moneys,  or the right to
receive  the same,  howsoever  effected,  shall be binding  upon the then record
owner of this lease until  thirty (30) days after  there has been  furnished  to
such  record  owner at his or its  principal  place of  business  by  Lessor  or
Lessor's  heirs,  successors,  or assigns,  notice of such  change or  division,
supported by either originals or duly certified copies of the instruments  which
have been property  filed for record and which evidence such change or division,
and of such court records and  proceedings,  transcripts,  or other documents as
shall be necessary in the opinion of such record owner to establish the validity
of such change or division,  If any such change in ownership occurs by reason of
death of the owner,  Lessee may  nevertheless  pay or tender such royalties,  or
other  moneys,  or part  thereof,  to the credit of the decedent in a depository
bank provided for above.

         7. In the event Lessor  considers that Lessee has not complied with all
its obligations hereunder, both express and implied, Lessor shall, notify Lessee
in writing,  setting out  specifically in what respects Lessee has breached this
contract.  Lessee  shall then have sixty  (60) days after the  receipt:  of said
notice  within which to meet or commence to meet all or any part of the breaches
alleged by Lessor. The service of said notice shall be precedent to the bringing
of any action by Lessor on said lease for any cause, and no such action shall be
brought  until the lapse of sixty  (60) days  after  service  of such  notice on
Lessee.  Neither  the service of said notice nor the doing of any acts by Lessee
aimed to meet all or any of the alleged breaches shall be deemed an admission or
presumption: that Lessee has failed to perform all its obligations hereunder. If
this lease is cancelled for any cause, it shall nevertheless remain in force and
effect as to (I)  sufficient  acreage  around  each  well as to which  there are
operations to constitute a drilling or maximum  allowable unit under  applicable
governmental regulations,  (but in no event less than forty acres), such acreage
to be  designated  by Lessee as  nearly as  practicable  in the form of a square
centered at the well, or in such shape as then existing  spacing rules  require;
and (2) any part of said  land  included  in a pooled  unit on which  there  are
operations.  Lessee shall also have such easements on said land as are necessary
to operations on the acreage so retained.

         8. Lessor's rights and interests  hereunder shall be charged  primarily
with any mortgages,  taxes or other liens, or interest and other charges on said
land,  bat Lessor  agrees that Lessee shall have the right at any time to pay or
reduce same for Lessor,  either before, or after maturity,  and be surrogated to
the rights of the bolder thereof and to deduct amounts so paid from royalties or
other  payments  payable or which may become  payable to Lessor  and/or  assigns
under this  lease.  If this lease  covers a less  interest  in the oil,  gas and
sulphur in all or any part of said land than the entire and undivided fee simple
estate (whether  Lessor's  interest is herein  specified or not), or no interest
therein, then the royalties, and other moneys accruing from any part as to which
this  lease  covers  less  than such  full  interest,  shall be paid only in the
proportion which the interest therein,  if any, covered by this lease,  bears to
the whole and undivided fee simple estate therein.  All royalty interest covered
by this lease  (whether or not owned by Lessor) shall be paid out of the royalty
herein  provided.  This lease shall be binding  upon each party who  executes it
without regard to whether it is executed by all those named herein as Lessor.

         9. If, while this lease is in force, at, or after the expiration of the
primary term hereof,  it is not being continued in force by reason of production
or the  shut-in  well  provisions  of  paragraph  3  hereof,  and  Lessee is not
conducting  operations  of said land by reason  of (1) any law,  order,  rule or
regulation,  (whether or not  subsequently  determined to be invalid) or (2) any
other cause, whether similar or dissimilar, (except




                      OIL AND GAS LEASE, PAGE 3 OF ? PAGES

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financial)  beyond the  reasonable  control of Lessee,  the primary  term hereof
shall be extended until the first  anniversary date hereof occurring one hundred
and eighty (180) days  following  the removal of such delaying  cause,  and this
lease  may be  extended  thereafter  by  operations  as if  such  delay  had not
occurred.

         10.  Notwithstanding  anything  hereinabove  to the contrary,  there is
excepted  herefrom and reserved to the Lessor herein all uranium,  fissionable
materials and all bentonite, fullers earth and other clay like substances, it is
specifically  understood  and  agreed  that this  lease  covers  only oil,  gas,
sulphur,  and associated  liquid or liquefiable  hydrocarbons or the constituent
elements of any of the elements named,  but this lease does not cover or include
any other  minerals with all other such  minerals,  being reserved to the Lessor
herein.  Accordingly,  the words "oil,  gas" when used herein,  shall mean, oil.
gas,  sulphur  and  associated  liquid  or  liquefiable  hydrocarbons  and their
constituent  elements and the words "all other  minerals",  whenever used herein
shall be stricken from this lease, so that such "all other minerals", as defined
herein are reserved to the Lessor,

         11. Lessee's  employees and others entitled to admission upon said land
shall  confine  themselves  to their  business and duties in the performance of
this lease, and no hunting,  fishing or other  trespassing shall be permitted by
them; and Lessee shall not permit its employees or any other person to bring any
guns of any kind upon the lease premises.

         12. In the event production be established.  Lessee agrees to construct
roads  sufficient to carry Lessee's  equipment and vehicles to all drillsites on
said premises, and such roads shall be maintained by Lessee in good condition so
long as this  lease  remains  in  force  on the land on  which  said  roads  are
situated.

         13. Lessee binds Lessee to hold Lessor harmless  against and to protect
Lessor from any and all claims of  whatsoever  kind or character  growing out of
the use,  occupation and operation of the herein leased premises by Lessee,  its
successors or assigns.

         14. Upon  completion or abandonment of any well drilled upon the leased
premises by Lessee,  the surface of the ground appurtenant to such well shall be
smoothed,  all excavations and slush pits shall be forthwith  filled in, and the
surface of the land  restored  to  substantially  the same  condition  as it was
before the commencement of operations by Lessee, all cost and expense thereof to
be borne by the Lessee,  and the surface rights of Lessor in the leased premises
shall  be  impaired  as  little  as  reasonably  possible.  Promptly  after  the
completion of drilling operations of any well or wells drilled hereunder, Lessee
shall  erect a fence  around the pits and  excavations  caused by Lessee in such
operations,  until such time as the ground is in condition  that the pits may be
satisfactorily  covered (not to exceed in any event 90 days after the completion
of such  operations),  at which time Lessee shall remove from the land of Lessor
all dumps made by Lessee in such  operations,  and shall remove from the land of
Lessor all foundations and construction  work and debris placed by Lessee on the
leased premises,  and shall restore the surface of the land to substantially the
same condition as it was before the commencement of such operations.

         15.  Lessee shall have the right to pool and combine the lands  covered
by this lease, or a portion  thereof,  with other lands,  lease or leases in the
immediate vicinity thereof so as to form a unit or units for the development and
production of oil, gas and gas distillate, provided that no such unit for gas or
gas distillate  shall exceed three hundred twenty (320) surface acres plus a ten
percent  (10%)  tolerance,  and for oil, and shall not exceed forty (40) surface
acres plus a ten per cent (10%) tolerance. If Lessee creates any such unit, then
all of the lands  constituting the block shall be included in such unit.  Lessee
shall execute in writing an instrument  identifying  and  describing  the pooled
acreage and each unit thereof,  and same shall be filed for record in the County
Clerk's Records in the County in which said land is located. Drilling operations
and  production  from any part of the pooled acreage shall be treated as if such
drilling  operations  were upon or such production was from the part of the land
covered by this lease  which is within  such pool or unit,  whether  the well or
wells be located on land covered by this lease or not. In iieu of the  royalties
on oil, gas and gas distillate elsewhere herein specified,  Lessor shall receive
on  such  production  from  a unit  pooled  only  such  portion  of the  royalty
stipulated  herein  as the  amount  of the  acreage  placed in the unit or their
royalty  interest  therein on an  acreage  basis  bears to the total  acreage so
pooled  in  the  particular  unit  involved,   provided,   however,   that  this
proportionate  reduction  of the  Lessor's  royalty  shall not apply to  shut-in
royalty.





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         16.  Notwithstanding  anything in paragraph  numbers three (3) and four
(4) contained to the  contary,  this lease shall not be kept in force by paying
of shut-in gas  royalties as provided in  paragraph  Nos.. 3 and 4 of this lease
for a period of more than three (3) years beyond the  expiration  of the primary
term of this lease.

         17. In the event a portion or  portions of the land  described  in this
lease are pooled or unitized  with other  land,  lease or leases so as to form a
pooled unit or units, operations for drilling, drilling, or reworking operations
on such unit or units,  or production of oil or gas from such unit or units,  or
payment  of shut-in  gas  royalties  on a well or wells  drilled on such unit or
units shall  maintain this lease in effect only as to the portion or portions of
the land described in this lease ?which is included in such unit or units. As to
any portion or portions of the land not included in a pooled unit or units, this
lease may be maintained in force and effect in any manner elsewhere  provided in
this lease.

         18.  In the  event of  termination  of this  lease as to a  portion  or
portions hereof, Lesee promptly execute and file for record in the office of the
County Clerk of said  county,  a written  release  and  surrender  of all such
portion or  portions  of this lease as shall have  terminated  under the mail to
Lessor an executed copy of such release.  A copy of said recorded  release shall
be furnished to Lessor within thirty (30) days of its execution.

         19. Unless Lessee,  in its discretion,  elects to rework or reenter a<<
oil or gas well in existence on the effective  date of this lease,  Lessee shall
have no  obligation  to plug and abandon or conduct  clean up  operations on any
such well(s) so as to comply with any governmental regulations or requirements.

         20. If during the  primary  term of this  lease  Lessee  commences  the
actual  drilling of a well in search of oil or gas on the lease  premises,  then
said drilling  operations shall be prosecuted with reasonable  diligence and the
well completed as a producing well or plugged and abandoned as a dry hole within
one hundred  and twenty  (120) days after  spudding.  Thereafter,  Lessee  shall
continue  drilling  operations  on the lease  premises  with not more than three
hundred and sixty-five {365} days elapsing between  completion o r plugging of a
well and spudding of the next well;  completion date shall be deemed the date of
filing the initial potential test with the Railroad  Commission of Texas, but in
any event not more than thirty (30) days after reaching total depth in such well
aad plugging date shal! be the date of actual plugging or thirty (30) days after
reaching total depth,  whichever first occurs. If in the drilling of any of said
wells,  Lessee  encounters  mechanical  difficulties  rendering further drilling
impractical  in the good faith  judgment of Lessee,  Lessee may plug and abandon
said well and commence  another well within sixty (60) days after such  plugging
and abandoning and thereafter  drill said well in the same manner and within the
same time as provided for the well having mechanical difficulties. In such event
such  well  shall be  considered  a  substitute  well and  shall  be  deemed  in
compliance with the terms hereof.

         Upon cessation of such continuous development program, this lease shall
ipso facto  terminate and all lands covered by this lease shall revert to Lessor
free of any lease or burden of whatsoever nature, save and except each producing
well and the tract upon which it is  situated as  specified  and  designated  by
Lesee. If production of oil or gas from the lease premises should cease from any
cause,  this lease shall  nevertheless  continue in force as long as  additional
drilling  operation or reworking  operations are conducted on this tease with no
cessation of more than ninety (90) days between the abandonment of operations on
one well and the actual  spudding of another well and if production is obtained,
this lease shall  thereafter  continue as long as oil and gas are produced  from
said land.

         21.  With the prior  consent  of  Lessor,  which  consent  shall not be
unreasonably  withheld,  Lessee may by written  assignment assign this Lease and
its rights and interests  arising  thereunder either in whole or in part. In the
event of such  assignment,  Lessee shall notify  Lessor of such  assignment  and
provide  Lessor  with the  identity  and address of the party in whose favor the
assignment has been made

         22. In the event of any conflict  between the terms and  provisions  of
this Lease and division orders that may be issues in connection, with production
from the  lease  premises  the  terms  and  provisions  of this  Lease  shall be
controlling.




                      OIL AND GAS LEASE, PAGE 5 OF 7 PAGES

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         23.  Attached  hereto and made a part of this Lease for all purposes is
an Addendum to Oil, Gas and Mineral Lease.

IN WITNESS WHEREOF, this instrument is executed on the date first above written.
If this lease is  executed in  counterparts,  then each is to be  considered  an
original.


LESSOR:

The Northern Trust Bank of Texas, N.A.
as Successor Trustee of the Leila Clark
Wynn Mineral Trust

/s/ SIGNATURE UNKNOWN












                      OIL AND GAS LEASE, PAGE 6 OF 7 PAGES



 8-23-04





<PAGE>


State of Texas

                        }SS.

County of Dallas


On September  30, 2004 before me, the  undersigned,  a Notary  Public in and for
County and State,  personally  appeared Thomas M, Ruoker,  a Vice President with
Northern  Trust Bank, of Texas N.A.  personally  known to me (or proved to me on
the basis of  satisfactory  evidence) to be the person(s)  whose name(s) IS/ARE
subscribed to the within  instrument  and  acknowledged  to me that  HE/SHE/THEY
executed  the  same  in  HIS/HER/THEIR  authorized  capacity(ies),  and  that by
HIS/HER/THEIR signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

/s/ CAROL PERASON
------------------
    SIGNATURE



                           THIS AREA FOR NOTARY SEAL

                           [NOTARY SEAL GOES HERE]

                           CAROL PEARSON
                           MY COMMISSION EXPIRES
                           AUGUST 26, 2005


<PAGE>


                     ADDENDUM TO OIL, GAS AND MINERAL LEASE

 1.  It is understood and agreed that this lease is made, executed and delivered
     by Lessor only in the capacity of Trustee and not  otherwise,  and that it
     shall be liable and  responsible  hereunder  only in that  capacity and not
     otherwise.  Lessee for himself his successors and assigns,  hereby waives,
     releases and relinquishes all recourse against Lessor save as such Trustee,
     hereby  agreeing  to look  solely to the  assets of said  Trust  estate for
     satisfaction  of any claim or demand  of  whatsoever  nature he may have or
     assert under or by virtue hereof.

 2.  It is further  agreed by all  parties to this  lease that  Lessor  does not
     warrant  title to the subject  lands nor to the  minerals  or  hydrocarbons
     located in the subject lands.

 3.  It is understood and agreed by Lessee that all rights granted in this lease
     pertain only to oil, gas, and other associated hydrocarbon substances.

 4.  This lease shall not be  continued in effect more than two (2) years beyond
     the end of the  primary  term by the payment of shut-in  royalty,  by force
     majeure or by any other means except  continuous  operations  or the actual
     production  of oil,  gas, and other  associated  hydrocarbon  substances in
     paying quantities from the leased premises or lands with which the premises
     are pooled hereunder.  hi the case of force majeure or shut-in royalty, the
     period of lease  maintenance is not to exceed a cumulative  period of three
     (3) years.

 5.  Notwithstanding  anything  to  the  contrary  contained  herein  after  the
     expiration  of five  years from the end of the  primary  term and after all
     continuous operations have ceased, Lessee ?and/or its heirs, successors and
     assigns  shall release all acreage not then  dedicated to a proration  unit
     designated by the appropriate  regulatory body.  Lessee,  and/or its heirs,
     successors  and  assigns,  shall also  release  all  acreage,  which  maybe
     included with in the  boundaries of a producing  proration or spacing unit,
     covering all depths and horizons 100 feet below the deepest depth  drilled,
     in any well  commenced  during the  primary  terra of this Lease or at such
     time continuous operations have ceased.

 6.  Upon completion of a well, either as a dry bole or one capable of producing
     in paying  quantities,  Lessee agrees to adequately  bury all drilling mud,
     pit  lining,  and  other  foreign  substances  in the pits for the well and
     restore  the pit  area to as  close  as its  original  state  prior  to the
     commencement of operations,  as a reasonably prudent Operator would conduct
     under same and similar  circumstances.  Also,  Lessee  agrees to remove all
     caliche and other base  material  hauled on to a well location and the road
     thereto for the drilling of a well,  which upon completion of the well, are
     not necessary to conduct prudent oilfield operations.

 7.  Lessee a grees to indemnify and hold harmless  Lessor,  and L essor's
     surface  tenants,  from any and all loss,  damage and expense  sustained or
     incurred  (including  but  not  limited  to  reasonable   attorneys'  fees,
     reasonable  accountants'  fees and  punitive  damages)  with respect to any
     claim,  demand, cause and cause of action of any third party (including the
     present or future tenants of the surface  rights)  emanating  from,  either
     directly or indirectly. Lessee's, operations on the leased premises.


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  8.  Lessee  agrees  that as to any well  which may be  abandoned  by it on the
      leased  premises,  it will leave the surface  casing therein in conformity
      with the  requirements  of the  Texas  Railroad  Commission  and any other
      governmental authority having jurisdiction.

  9.  Any  contamination  of ground water on the leased premises  resulting from
      Lessee's  activities or omissions shall be their sole  responsibility  and
      Lessee  shall bear the full cost of  cleanup,  including  any fines by any
      governmental agency.

  10. The "free use of gas, oil and water from the leased premises" as set forth
      in the lease  herein,  shall only apply to the storage and  extraction  of
      same from the leased premises and shall not apply to pooling agreements.

  11. Lessee  shall  deliver to the credit of the Lessor,  free of all costs the
      oil, gas, and associated hydrocarbon substances into the pipeline to which
      the wells may be connected. These costs,  include  but are not  limited to
      the   costs  and  expenses  of   dehydrating,  transporting,  compressing,
      treating,  gathering,  or otherwise rendering marketable  the gas produced
      from  said well, if  any, into the pipeline to  which  the  wells  may  be
      connected.

  12. Lessee  shall  bear all  costs  for utilities  in  connection  with  their
      operations  on the leased  premises, including  the costs of pumping their
      "free" water from wells they have developed on the leased premises.

  13. No fluids other than gas or water may be injected into the leased premises
      without the express written consent of Lessors, and without  environmental
      clearances from the appropriate  governmental agencies,  such as the Texas
      Railroad Commission.

  14. Except as otherwise  required by  governmental  authority, spacing for oil
      shall be:

                40 Acres       0 feet to 8,000 feet
                80 Acres       8,000 feet to 10,000 feet
               160 Acres       10,000 feet to 14,000 feet
               320 Acres       A depth greater than 14,000 feet

      Spacing for gas shall be:

              160 Acres       0 feet to 6,000 feet
              320 Acres       6,000 feet to 12,000 feet
              640 Acres       A. depth greater than 14,000 feet

  15. It is agreed and  understood by all parties hereto that the  provisions of
      this  Addendum  supersede any  provisions to  the  contrary in the printed
      lease hereof.



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