<PAGE>   1
PREPARED BY AND                                                    EXHIBIT 10.34
WHEN RECORDED RETURN TO:
VINSON & ELKINS L.L.P.
First City Tower, Suite 3562
1001 Fannin Street
Houston, TX 77002-6760
Attn: Linda Daugherty


               MORTGAGE, DEED OF TRUST, ASSIGNMENT OF PRODUCTION,
                   SECURITY AGREEMENT AND FINANCING STATEMENT


                                      FROM


                             CORRIDA RESOURCES, INC.


                                       TO


                          JAMES A. WHITMORE, AS TRUSTEE


                                       AND


                                BANK OF MONTREAL,
                                    AS AGENT,


                               FOR THE BENEFIT OF

                      FOR THE LENDERS AS HEREAFTER DEFINED




A CARBON, PHOTOGRAPHIC, OR OTHER REPRODUCTION OF THIS INSTRUMENT IS SUFFICIENT
AS A FINANCING STATEMENT.

A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT. IN CERTAIN STATES, A POWER
OF SALE MAY ALLOW THE TRUSTEE OR THE AGENT TO TAKE THE MORTGAGED PROPERTY AND
SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON DEFAULT BY THE
MORTGAGOR UNDER THIS INSTRUMENT.

THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS.

THIS INSTRUMENT SECURES PAYMENT OF FUTURE ADVANCES.

THIS INSTRUMENT COVERS PROCEEDS OF MORTGAGED PROPERTY.

THIS INSTRUMENT COVERS MINERALS AND OTHER SUBSTANCES OF VALUE WHICH MAY BE
EXTRACTED FROM THE EARTH (INCLUDING WITHOUT LIMITATION OIL AND GAS) AND WHICH
WILL BE FINANCED AT THE WELLHEADS OF THE WELL OR WELLS LOCATED ON THE PROPERTIES
DESCRIBED IN EXHIBIT A HERETO. THIS FINANCING STATEMENT IS TO BE FILED
<PAGE>   2
OR FILED FOR RECORD, AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS OR SIMILAR
RECORDS OF THE COUNTY RECORDERS OF THE COUNTIES LISTED ON EXHIBIT A HERETO AND
WITH A CLERK OF COURT (OR, AS TO ORLEANS PARISH, THE RECORDER OF MORTGAGES) IN
ANY PARISH IN THE STATE OF LOUISIANA. THE MORTGAGOR HAS AN INTEREST OF RECORD IN
THE REAL ESTATE CONCERNED, WHICH INTEREST IS DESCRIBED IN EXHIBIT A ATTACHED
HERETO.

PORTIONS OF THE MORTGAGED PROPERTY ARE GOODS WHICH ARE OR ARE TO BECOME AFFIXED
TO OR FIXTURES ON THE LAND DESCRIBED IN OR REFERRED TO IN EXHIBIT A HERETO. THIS
FINANCING STATEMENT IS TO BE FILED FOR RECORD OR RECORDED, AMONG OTHER PLACES,
IN THE REAL ESTATE RECORDS OR SIMILAR RECORDS OF EACH COUNTY IN WHICH SAID LAND
OR ANY PORTION THEREOF IS LOCATED AND WITH A CLERK OF COURT (OR, AS TO ORLEANS
PARISH, THE RECORDER OF MORTGAGES) IN ANY PARISH IN THE STATE OF LOUISIANA. THE
MORTGAGOR IS THE OWNER OF RECORD INTEREST IN THE REAL ESTATE CONCERNED. THIS
INSTRUMENT IS ALSO TO BE INDEXED IN THE INDEX OF FINANCING STATEMENTS.

THIS IS DEEMED TO BE A LINE OF CREDIT MORTGAGE UNDER THE PROVISIONS OF SECTION
48-7-4 N.M.S.A.



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<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS


                                                     ARTICLE I

                                       Grant of Lien and Indebtedness Secured
<S>                        <C>                                                                                   <C>
         Section 1.01      Grant of Liens.........................................................................1
         Section 1.02      Grant of Security Interest.............................................................4
         Section 1.03      Indebtedness Secured...................................................................4
         Section 1.04      Fixture Filing, Etc....................................................................5
         Section 1.05      Pro Rata Benefit.......................................................................5
         Section 1.06      Defined Terms..........................................................................6

                                                     ARTICLE II

                                              Assignment of Production

         Section 2.01      Assignment.............................................................................6
         Section 2.02      Rights Under Certain Lien Statutes.....................................................6
         Section 2.03      No Modification of Payment Indebtedness................................................7
         Section 2.04      Payments to Mortgagor..................................................................7

                                                    ARTICLE III

                                     Representations, Warranties and Covenants

         Section 3.01      Title..................................................................................7
         Section 3.02      Defend Title...........................................................................7
         Section 3.03      Not a Foreign Person...................................................................8
         Section 3.04      Power to Create Lien and Security......................................................8
         Section 3.05      Revenue and Cost Bearing Interest......................................................8
         Section 3.06      Rentals Paid; Leases in Effect.........................................................8
         Section 3.07      Operation By Third Parties.............................................................8
         Section 3.08      Abandon, Sales.........................................................................8
         Section 3.09      Failure to Perform.....................................................................8
         Section 3.10      Operation of Mortgaged Property, Etc...................................................9

                                                     ARTICLE IV

                                                Rights and Remedies

         Section 4.01      Event of Default......................................................................10
         Section 4.02      Foreclosure and Sale..................................................................10
         Section 4.03      Substitute Trustees and Agents........................................................11
         Section 4.04      Judicial Foreclosure; Receivership....................................................11
         Section 4.05      Foreclosure for Installments..........................................................12
         Section 4.06      Separate Sales........................................................................12
         Section 4.07      Possession of Mortgaged Property......................................................12
         Section 4.08      Occupancy After Foreclosure...........................................................12
         Section 4.09      Remedies Cumulative, Concurrent and Nonexclusive......................................12
         Section 4.10      No Release of Indebtedness............................................................13


                                                        -i-
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<PAGE>   4
<TABLE>
<CAPTION>
<S>                        <C>                                                                                   <C>
         Section 4.11      Release of and Resort to Mortgaged Property...........................................13
         Section 4.12      Waiver of Redemption, Notice and Marshalling of Assets, Etc...........................13
         Section 4.13      Discontinuance of Proceedings.........................................................14
         Section 4.14      Application of Proceeds...............................................................14
         Section 4.15      Resignation of Operator...............................................................14
         Section 4.16      INDEMNITY.............................................................................14
         Section 4.17      Power of Sale in Oklahoma.............................................................15

                                                     ARTICLE V

                                                    The Trustee

         Section 5.01      Duties, Rights, and Powers of Trustee.................................................15
         Section 5.02      Successor Trustee.....................................................................15
         Section 5.03      Retention of Moneys...................................................................16

                                                     ARTICLE VI

                                                   Miscellaneous

         Section 6.01      Instrument Construed as Mortgage, Etc.................................................16
         Section 6.02      Release of Lien.......................................................................16
         Section 6.03      Severability..........................................................................16
         Section 6.04      Successors and Assigns of Parties.....................................................17
         Section 6.05      Satisfaction of Prior Encumbrance.....................................................17
         Section 6.06      Subrogation of Trustee................................................................17
         Section 6.07      Nature of Covenants...................................................................17
         Section 6.08      Notices...............................................................................17
         Section 6.09      Counterparts..........................................................................17
         SECTION 6.10      GOVERNING LAW.........................................................................17
         Section 6.11      Financing Statement; Fixture Filing...................................................18
         SECTION 6.12      EXCULPATION PROVISIONS................................................................19
         Section 6.13      No Paraph.............................................................................19

                                                    ARTICLE VII

                                            Special Louisiana Provisions

         Section 7.01      Maximum Amount........................................................................19
         Section 7.02      Keeper................................................................................19
         Section 7.03      Confession of Judgment................................................................19
         Section 7.04      Waivers...............................................................................20

                                                    ARTICLE VIII

                                           Special Mississippi Provisions

         Section 8.01      Mortgaged Property....................................................................20

         Exhibit A         -        Mortgaged Property



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<PAGE>   5
               MORTGAGE, DEED OF TRUST, ASSIGNMENT OF PRODUCTION,
                   SECURITY AGREEMENT AND FINANCING STATEMENT


         THIS MORTGAGE, DEED OF TRUST, ASSIGNMENT OF PRODUCTION, SECURITY
AGREEMENT AND FINANCING STATEMENT (this "Mortgage") is entered into as of the
effective time and date hereinafter stated (the "Effective Date") by CORRIDA
RESOURCES, INC., a Nevada corporation with principal offices at 3500 Oak Lawn
Drive, Suite 380, Dallas, Texas 75219 ("Mortgagor"), for the benefit of BANK OF
MONTREAL, as Agent, with offices at 700 Louisiana, Suite 4400, Houston, Texas
77002, (together with any successor agents, "Agent") for the Lenders
(hereinafter defined), and for the benefit of the Lenders.

                                R E C I T A L S:

         A. On even date herewith, Queen Sand Resources, Inc., a Nevada
corporation (the "Borrower"), the lenders signatory to the Credit Agreement (as
hereinafter defined) (together with any lenders that become a party under the
terms of the Credit Agreement collectively, the "Lenders"), and the Agent have
entered into that certain Credit Agreement (as the same may be amended,
modified, supplemented or restated from time to time, the "Credit Agreement")
pursuant to which the Lenders have made or agreed to make certain advances to
and on behalf of the Borrower.

         B. The Lenders have conditioned their obligations under the Credit
Agreement upon the execution and delivery by Mortgagor of this Mortgage, and
Mortgagor has agreed to enter into this Mortgage.

         C. Therefore, in order to comply with the terms and conditions of the
Credit Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor hereby agrees as
follows:

                                    ARTICLE I

                     Grant of Lien and Indebtedness Secured

         Section 1.01 Grant of Liens. To secure payment of the Indebtedness (as
hereinafter defined) and the performance of the covenants and obligations of
Mortgagor under the Loan Documents, Mortgagor does by these presents hereby (i)
GRANT, BARGAIN, SELL, ASSIGN, SET OVER, TRANSFER and CONVEY unto JAMES A.
WHITMORE, as Trustee, whose address for notice hereunder is 700 Louisiana, Suite
4400, Houston, Texas 77002 ("Trustee") and the Trustee's successors and
substitutes in trust hereunder with power of sale, for the use and benefit of
Agent and the Lenders, all of the following described real and personal
property, rights, titles, interests and estates which are located in (or cover
properties located in) the State of Texas or which are located within (or cover
properties located within) the offshore area over which the United States of
America asserts jurisdiction and to which the laws of any such state are
applicable with respect to this Mortgage and/or the liens or security interests
created hereby (the "Deed of Trust Mortgaged Property") and (ii) GRANT,
MORTGAGE, PLEDGE, HYPOTHECATE AND A GRANT A POWER OF SALE to Agent, for its
benefit and the benefit of the Lenders, with respect to, all of the following
described real and personal property, rights, titles, interests and estates
which were not granted to Trustee in clause (i) above (the "Other Mortgaged
Property"):

         (a) All rights, titles, interests and estates now owned or hereafter
acquired by Mortgagor in and to the oil and gas leases and/or oil, gas and other
mineral leases, operating
<PAGE>   6
rights, and other interests and estates and the lands and premises covered or
affected thereby which are described on Exhibit A hereto (collectively, the
"Hydrocarbon Property"), and specifically, but without limitation, the undivided
interests of Mortgagor which are more particularly described on attached Exhibit
A, even though the interest of the Mortgagor in such Hydrocarbon Property may be
incorrectly described in Exhibit A hereto.

         (b) All rights, titles, interests and estates now owned or hereafter
acquired by Mortgagor in and to (i) the properties now or hereafter pooled or
unitized with the Hydrocarbon Property; (ii) all presently existing or future
unitization, communitization, pooling agreements and declarations of pooled
units and the units created thereby (including, without limitation, all units
created under orders, regulations, rules or other official acts of any Federal,
State or other governmental body or agency having jurisdiction and any units
created solely among working interest owners pursuant to operating agreements or
otherwise) which may affect all or any portion of the Hydrocarbon Property
including, without limitation, those units which may be described or referred to
on attached Exhibit A; (iii) all operating agreements, production sales or other
contracts, farmout agreements, farm-in agreements, area of mutual interest
agreements, equipment leases and other agreements described or referred to in
this Mortgage or which relate to any of the Hydrocarbon Property or interests in
the Hydrocarbon Property described or referred to herein or on attached Exhibit
A or to the production, sale, purchase, exchange, processing, handling, storage,
transporting or marketing of the Hydrocarbons (as hereinafter defined) from or
attributable to such Hydrocarbon Property or interests; (iv) all geological,
geophysical, engineering, accounting, title, legal, and other technical or
business data concerning the Mortgaged Property (as hereinafter defined), the
Hydrocarbons, or any other item of Property which are in the possession of
Mortgagor or in which Mortgagor can otherwise grant a security interest, and all
books, files, records, magnetic media, computer records, and other forms of
recording or obtaining access to such data; and (v) the Hydrocarbon Property
described on attached Exhibit A and covered by this Mortgage even though
Mortgagor's interests therein be incorrectly described or a description of a
part or all of such Hydrocarbon Property or Mortgagor's interests therein be
omitted; it being intended by Mortgagor and Agent herein to cover and affect
hereby all interests which Mortgagor may now own or may hereafter acquire in and
to the Hydrocarbon Property notwithstanding that the interests as specified on
Exhibit A may be limited to particular lands, specified depths or particular
types of property interests.

         (c) All rights, titles, interests and estates now owned or hereafter
acquired by Mortgagor in and to all oil, gas, casinghead gas, condensate,
distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined
therefrom and all other minerals (collectively, the "Hydrocarbons") in and under
and which may be produced and saved from or attributable to the Hydrocarbon
Property, the lands pooled or unitized therewith and Mortgagor's interests
therein, including all oil in tanks and all rents, issues, profits, proceeds,
products, revenues and other income from or attributable to the Hydrocarbon
Property, the lands pooled or unitized therewith and Mortgagor's interests
therein which are subjected or required to be subjected to the Liens and
security interests of this Mortgage.

         (d) All tenements, hereditaments, appurtenances and properties in
anywise appertaining, belonging, affixed or incidental to the Hydrocarbon
Property, rights, titles, interests and estates described or referred to in
paragraphs (a) and (b) above, which are now owned or which may hereafter be
acquired by Mortgagor, including, without limitation, any and all property, real
or personal, now owned or hereafter acquired and situated upon, used, held for
use, or useful in connection with the operating, working or development of any
of


                                       -2-
<PAGE>   7
such Hydrocarbon Property or the lands pooled or unitized therewith (excluding
drilling rigs, trucks, automotive equipment or other personal property which may
be taken to the premises for the purpose of drilling a well or for other similar
temporary uses) and including any and all oil wells, gas wells, injection wells
or other wells, buildings, structures, platforms, risers, templates, pipelines,
field separators, liquid extraction plants, plant compressors, pumps, pumping
units, pipelines, sales and flow lines, gathering systems, field gathering
systems, salt water disposal facilities, tanks and tank batteries, yard
inventory, fixtures, valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements, cables, wires,
towers, casing, tubing and rods, surface leases, rights-of-way, easements,
servitudes, licenses and other surface and subsurface rights together with all
additions, substitutions, replacements, accessions and attachments to any and
all of the foregoing properties.

         (e) Any property that may from time to time hereafter, by delivery or
by writing of any kind, be subjected to the Lien and security interest hereof by
Mortgagor or by anyone on Mortgagor's behalf; and the Trustee is hereby
authorized to receive the same at any time as additional security hereunder.

         (f) All of the rights, titles and interests of every nature whatsoever
now owned or hereafter acquired by Mortgagor in and to the Hydrocarbon Property
rights, titles, interests and estates and every part and parcel thereof,
including, without limitation, the Hydrocarbon Property rights, titles,
interests and estates as the same may be enlarged by the discharge of any
payments out of production or by the removal of any charges or Permitted
Encumbrances (as hereinafter defined in Section 3.01) to which any of the
Hydrocarbon Property rights, titles, interests or estates are subject, or
otherwise; all rights of Mortgagor to Liens and security interests securing
payment of proceeds from the sale of production from the Mortgaged Property,
including, but not limited to, those Liens and security interests provided in
Tex. Bus. & Com. Code Ann. Section 9.319 (Tex. UCC) (Vernon Supp. 1989), as
amended from time to time, or similar statute of any states in which the
Mortgaged Property is located; together with any and all renewals and extensions
of any of the Hydrocarbon Property rights, titles, interests or estates; all
contracts and agreements supplemental to or amendatory of or in substitution for
the contracts and agreements described or mentioned above; and any and all
additional interests of any kind hereafter acquired by Mortgagor in and to the
Hydrocarbon Property rights, titles, interests or estates.

         (g) All accounts, contract rights, inventory, general intangibles,
insurance contracts and insurance proceeds constituting a part of, relating to
or arising out of those portions of the Mortgaged Property which are described
in paragraphs (a) through (f) above and all proceeds and products of all such
portions of the Mortgaged Property and payments in lieu of production (such as
"take or pay" payments), whether such proceeds or payments are goods, money,
documents, instruments, chattel paper, securities, accounts, general
intangibles, fixtures, real property, or other assets.

         Any fractions or percentages specified on attached Exhibit A in
referring to Mortgagor's interests are solely for purposes of the warranties
made by Mortgagor pursuant to Sections 3.01 and 3.05 hereof and shall in no
manner limit the quantum of interest affected by this Section 1.01 with respect
to any Hydrocarbon Property or with respect to any unit or well identified on
said Exhibit A.

         TO HAVE AND TO HOLD (i) the Deed of Trust Mortgaged Property unto the
Trustee and to his successors and assigns forever and (ii) the Other Mortgaged
Property unto Agent,


                                       -3-
<PAGE>   8
and Agent's successors and assigns to secure the payment of the Indebtedness
(hereinafter defined) and to secure the performance of the covenants,
agreements, and obligations of the Mortgagor contained herein and in the other
Security Instruments, subject only to Permitted Encumbrances as hereinafter
defined. The Deed of Trust Mortgaged Property and the Other Mortgaged Property
being herein sometimes collectively called the "Mortgaged Property."

         Section 1.02 Grant of Security Interest. To further secure the
Indebtedness, Mortgagor hereby grants to Agent, for its benefit and the benefit
of the Lenders, a security interest in and to the Mortgaged Property (whether
now or hereafter acquired by operation of law or otherwise) insofar as the
Mortgaged Property consists of equipment, accounts, contract rights, general
intangibles, insurance contracts, insurance proceeds, inventory, Hydrocarbons,
fixtures and any and all other personal or movable property of any kind or
character defined in and subject to the Uniform Commercial Code presently in
effect in the jurisdiction in which the Mortgaged Property is situated
("Applicable UCC"), including all replacements and substitutions for the
Mortgaged Property and all accessions thereto and the proceeds and products from
any and all of such personal property (the "Collateral"). Upon the occurrence
and continuation of any Event of Default, Agent is and shall be entitled to all
of the rights, powers and remedies afforded a secured party by the Applicable
UCC with reference to the personal property and fixtures in which Agent has been
granted a security interest herein, or the Trustee or Agent may proceed as to
both the real and personal property covered hereby in accordance with the rights
and remedies granted under this Mortgage in respect of the real property covered
hereby. Such rights, powers and remedies shall be cumulative and in addition to
those granted to the Trustee or Agent under any other provision of this Mortgage
or under any other Security Instrument. Written notice mailed to Mortgagor as
provided herein at least ten (10) days prior to the date of public sale of any
part of the Mortgaged Property which is personal property subject to the
provisions of the Applicable UCC, or prior to the date after which private sale
of any such part of the Mortgaged Property will be made, shall constitute
reasonable notice.

         Section 1.03 Indebtedness Secured. This Mortgage is executed and
delivered by Mortgagor to secure and enforce the following (the "Indebtedness"):

         (a) (i) Payment of and performance of any and all indebtedness,
obligations and liabilities of the Borrower pursuant to the Credit Agreement,
whether now existing or hereafter arising, including without limitation, the
promissory notes executed by the Borrower payable to the order of the Lenders
and being in the aggregate principal amount of $75,000,000 with final maturity
on or before August 1, 2003, and all other notes given in substitution therefor
or in modification, renewal or extension thereof, in whole or in part, (ii) all
reimbursement obligations under any Letters of Credit issued under the Credit
Agreement, and (iii) the obligations of the Mortgagor under that certain
Guaranty Agreement dated as of even date herewith by Mortgagor in favor of the
Agent and the Lenders.

         (b) Any sums which may be advanced or paid by Agent and/or the Lenders
under the terms hereof or of the Credit Agreement on account of the failure of
the Mortgagor to comply with the covenants contained herein or in the Credit
Agreement; and all other indebtedness of Mortgagor arising pursuant to the
provisions of this Mortgage.

         (c) Any additional loans made by Agent and/or the Lenders to the
Borrower or the Mortgagor. It is contemplated that Agent and/or the Lenders may
lend additional sums to


                                       -4-
<PAGE>   9
the Borrower and/or the Mortgagor from time to time, but shall not be obligated
to do so, and Mortgagor agrees that any such additional loans shall be secured
by this Mortgage.

         (d) Payment of and performance of any and all present or future
obligations of the Borrower according to the terms of any present or future
interest rate or currency swap, rate cap, rate floor, rate collar, forward rate
agreement or other exchange or rate protection agreements or any option with
respect to any such transaction now existing or hereafter entered into between
the Borrower and any Lender or an Affiliate of such Lender.

         (e) Payment of and performance of any and all present or future
obligations of the Borrower according to the terms of any present or future swap
agreements, cap, floor, collar, forward agreement or other exchange or
protection agreements relating to crude oil, natural gas or other hydrocarbons
or any option with respect to any such transaction now existing or hereafter
entered into between the Borrower and any Lender or an Affiliate of such Lender.

         (f) Payment of and performance of any and all other indebtedness,
obligations and liabilities of any kind of Borrower to the Agent and/or the
Lenders, now or hereafter existing, arising directly between the Borrower, the
Agent and/or the Lenders or acquired outright, as a participation, conditionally
or as collateral security from another by the Lenders, absolute or contingent,
joint and/or several, secured or unsecured, due or not due, arising by operation
of law or otherwise, or direct or indirect, including indebtedness, obligations
and liabilities to the Lenders of the Borrower as a member of any partnership,
syndicate, association or other group, and whether incurred by the Borrower as
principal, surety, endorser, guarantor, accommodation party or otherwise.

         (g) Payment and performance of any and all judgements, decrees, awards
and orders arising from or relating to any of the foregoing Sections 1.03(a)
through (f).

         (h) Indebtedness shall not exceed at any one time the sum of
$75,000,000, which shall constitute the maximum amount at any time secured
hereby.

         Section 1.04 Fixture Filing, Etc. Without in any manner limiting the
generality of any of the other provisions of this Mortgage: (i) some portions of
the goods described or to which reference is made herein are or are to become
fixtures on the land described or to which reference is made herein or on
attached Exhibit A; (ii) the security interests created hereby under applicable
provisions of the Applicable UCC will attach to Hydrocarbons (minerals including
oil and gas) or the accounts resulting from the sale thereof at the wellhead or
minehead located on the land described or to which reference is made herein;
(iii) this Mortgage is to be filed or filed of record in the real estate records
as a financing statement, and (iv) Mortgagor is the record owner of the real
estate or interests in the real estate comprised of the Mortgaged Property.

         Section 1.05 Pro Rata Benefit. This Mortgage is executed and granted
for the pro rata benefit and security of the Agent, and the Lenders, and any and
all future holders of an interest in the Indebtedness and the interest thereon
for whatever period; it being understood and agreed that possession of any Note
(or any replacements of said Note) at any time by Mortgagor shall not in any
manner extinguish the Indebtedness, such Note or this Mortgage securing payment
thereof, and the Mortgagor shall have the right to issue and reissue any of the
Notes from time to time as its interest or as convenience may require, without
in any


                                       -5-
<PAGE>   10
manner extinguishing or affecting the Indebtedness, the obligations under any of
the Notes, or the security of this Mortgage.

         Section 1.06 Defined Terms. Any capitalized term used in this Mortgage
and not defined in this Mortgage shall have the meaning assigned to such term in
the Credit Agreement.

                                   ARTICLE II

                            Assignment of Production

         Section 2.01 Assignment. Mortgagor has absolutely and unconditionally
assigned, transferred, and conveyed, and does hereby absolutely and
unconditionally assign, transfer and convey unto Agent, for its benefit and the
benefit of the Lenders and their successors and assigns, all of the Hydrocarbons
and all products obtained or processed therefrom, and the revenues and proceeds
now and hereafter attributable to the Hydrocarbons and said products and all
payments in lieu of the Hydrocarbons such as "take or pay" payments or
settlements. The Hydrocarbons and products are to be delivered into pipe lines
connected with the Mortgaged Property, or to the purchaser thereof, to the
credit of Agent, free and clear of all taxes, charges, costs, and expenses; and
all such revenues and proceeds shall be paid directly to Agent, for its benefit
and the benefit of the Lenders, with no duty or obligation of any party paying
the same to inquire into the rights of Agent, for its benefit and the benefit of
the Lenders, to receive the same, what application is made thereof, or as to any
other matter. Mortgagor agrees to perform all such acts, and to execute all such
further assignments, transfers and division orders, and other instruments as may
be required or desired by Agent or any party in order to have said proceeds and
revenues so paid to Agent. Agent is fully authorized to receive and receipt for
said revenues and proceeds; to endorse and cash any and all checks and drafts
payable to the order of Mortgagor received from or in connection with said
revenues or proceeds and to hold the proceeds thereof in a bank account as
additional collateral securing the Indebtedness; and to execute transfer and
division orders in the name of Mortgagor, or otherwise, with warranties binding
Mortgagor. All proceeds received by the Agent pursuant to this assignment shall
be applied as provided in the other Loan Documents. The Agent shall not be
liable for any delay, neglect, or failure to effect collection of any proceeds
or to take any other action in connection therewith or hereunder; but the Agent
shall have the right, at its election, in the name of Mortgagor or otherwise, to
prosecute and defend any and all actions or legal proceedings deemed advisable
by Agent in order to collect such funds and to protect the interests of Agent,
the Lenders and/or Mortgagor, with all costs, expenses and attorneys' fees
incurred in connection therewith being paid by Mortgagor. Mortgagor hereby
appoints Agent as its attorney-in-fact to pursue any and all rights of Mortgagor
to Liens on and security interests in the Hydrocarbons securing payment of
proceeds of runs attributable to the Hydrocarbons. In addition to the rights
granted to Trustee and/or Agent in Section 1.01 (f) of this Mortgage, Mortgagor
hereby further transfers and assigns to Agent, for its benefit and the benefit
of the Lenders, any and all such Liens, security interests, financing statements
or similar interests of Mortgagor attributable to its interest in the
Hydrocarbons and proceeds of runs therefrom arising under or created by said
statutory provision, judicial decision or otherwise. The power of attorney
granted to Agent in this Section 2.01, being coupled with an interest, shall be
irrevocable so long as the Indebtedness or any part thereof remains unpaid.

         Section 2.02 Rights Under Certain Lien Statutes. Mortgagor hereby
grants, sells, assigns, sets over and mortgages unto Agent, for its benefit and
the benefit of the Lenders,


                                       -6-
<PAGE>   11
during the term hereof, all of Mortgagor's rights and interests pursuant to the
provisions of Section 9.319 of the Texas UCC, and of the Oil and Gas Owners Lien
Act, 52 O.S. Section 548.2 hereby vesting in Agent all of Mortgagor's rights as
an interest owner to the continuing security interest in and Lien upon the
Mortgaged Property.

         Section 2.03 No Modification of Payment Indebtedness. Nothing herein
contained shall modify or otherwise alter the obligation of Mortgagor to make
prompt payment of all principal and interest owing on the Indebtedness when and
as the same become due regardless of whether the proceeds of the Hydrocarbons
are sufficient to pay the same; and the rights provided in accordance with the
foregoing assignment provision shall be cumulative of all other security of any
and every character now or hereafter existing to secure payment of the
Indebtedness.

         Section 2.04 Payments to Mortgagor. Until such time as written demand
has been made upon them by the Trustee or Agent that payment of the proceeds of
runs be made directly to the Trustee or Agent, the purchasers or other persons
obligated to make such payment shall continue to make payment to Mortgagor.
Failure to notify shall not in any way waive the right of the Trustee or Agent
to receive any payments not theretofore paid over to Mortgagor before the giving
of written notice. In this regard, in the event payments are made directly to
the Trustee, and then, at the request of the Trustee or Agent payments are, for
a period or periods of time, paid to Mortgagor, the Trustee shall nevertheless
have the right, effective upon written notice, to require that future payments
be again made to it.

                                   ARTICLE III

                    Representations, Warranties and Covenants

         Mortgagor hereby represents, warrants and covenants as follows:

         Section 3.01 Title. To the extent of the undivided interests specified
on attached Exhibit A, Mortgagor has good and marketable title to and is
possessed of the Mortgaged Property. The Mortgaged Property is free of any and
all Liens except Liens allowed by Section 9.02 of the Credit Agreement (the
"Permitted Encumbrances").

         Section 3.02 Defend Title. This Mortgage is, and always will be kept, a
direct first Lien and security interest upon the Mortgaged Property subject only
to the Permitted Encumbrances. Mortgagor will not create or suffer to be created
or permit to exist any Lien, security interest or charge prior or junior to or
on a parity with the Lien and security interest of this Mortgage upon the
Mortgaged Property or any part thereof or upon the rents, issues, revenues,
profits and other income therefrom other than Permitted Encumbrances. Mortgagor
will warrant and defend the title to the Mortgaged Property against the claims
and demands of all other Persons whomsoever and will maintain and preserve the
Lien created hereby so long as any of the Indebtedness hereby remains unpaid.
Should an adverse claim be made against or a cloud develop upon the title to any
part of the Mortgaged Property which could reasonably be expected to have a
Material Adverse Effect, Mortgagor agrees it will promptly defend against such
adverse claim or take appropriate action to remove such cloud at Mortgagor's
cost and expense, and Mortgagor further agrees that the Trustee and/or Agent may
take such other action as they deem advisable to protect and preserve their
interests and the interests of the Lenders in such Mortgaged Property, AND IN
SUCH EVENT MORTGAGOR WILL INDEMNIFY THE TRUSTEE AND AGENT AGAINST ANY AND


                                       -7-
<PAGE>   12
ALL COST, ATTORNEY'S FEES AND OTHER EXPENSES WHICH THEY MAY INCUR IN DEFENDING
AGAINST ANY SUCH ADVERSE CLAIM OR TAKING ACTION TO REMOVE ANY SUCH CLOUD.

         Section 3.03 Not a Foreign Person. Mortgagor is not a "foreign person"
within the meaning of the Internal Revenue Code of 1986, as amended (hereinafter
called the "Code"), Sections 1445 and 7701 (i.e. Mortgagor is not a non-resident
alien, foreign corporation, foreign partnership, foreign trust or foreign estate
as those terms are defined in the Code and any regulations promulgated
thereunder).

         Section 3.04 Power to Create Lien and Security. The Mortgagor has full
power and lawful authority to grant, bargain, sell, assign, transfer, mortgage,
and convey a security interest in all of the Mortgaged Property in the manner
and form herein provided. No authorization, approval, consent or waiver of any
lessor, sublessor, Governmental Authority or other party or parties whomsoever
is required in connection with the execution and delivery by Mortgagor of this
Mortgage except to the extent the approval or consent of the Louisiana State
Mineral Board or the Department of the Interior, United States of America or
similar Governmental Authority, as the case may be, is required by applicable
law or regulation to the transfer or assignment of an interest in any of the
Mortgaged Property.

         Section 3.05 Revenue and Cost Bearing Interest. Mortgagor's ownership
of the Hydrocarbon Property and the undivided interests therein as specified on
attached Exhibit A will, after giving full effect to all Permitted Encumbrances,
afford Mortgagor not less than those net interests (expressed as a fraction,
percentage or decimal) in the production from or which is allocated to such
Hydrocarbon Property specified on attached Exhibit A and will cause Mortgagor to
bear not more than that portion (expressed as a fraction, percentage or
decimal), specified on attached Exhibit A, of the costs of drilling, developing
and operating the wells identified on Exhibit A.

         Section 3.06 Rentals Paid; Leases in Effect. Except as otherwise
permitted by the Credit Agreement, all rentals and royalties due and payable in
accordance with the terms of any leases or subleases comprising a part of the
Hydrocarbon Property have been duly paid or provided for and all leases or
subleases comprising a part of the Hydrocarbon Property are in full force and
effect.

         Section 3.07 Operation By Third Parties. In the event that all or any
portions of the Mortgaged Property is comprised of interests in the Hydrocarbon
Property which are not working interests or which are operated by a party or
parties other than Mortgagor, then, with respect to such interests and
properties, Mortgagor's covenants as expressed in this Article III are modified
to require that Mortgagor use reasonable efforts consistent with usual and
customary industry practice to obtain compliance with such covenants by the
working interest owners or the operator or operators of such leases or
properties.

         Section 3.08 Abandon, Sales. The Mortgagor will not sell, lease,
assign, transfer or otherwise dispose or abandon any of the Mortgaged Property
except as permitted by the Credit Agreement.

         Section 3.09 Failure to Perform. The Mortgagor agrees that if the
Mortgagor fails to perform any act or to take any action which the Mortgagor is
required to perform or take hereunder or pay any money which the Mortgagor is
required to pay hereunder, each of the Agent and the Trustee in the Mortgagor's
name or its or their own name may, but shall not be obligated to, perform or
cause to perform such act or take such action or pay such money,


                                       -8-
<PAGE>   13
and any expenses so incurred by either of them and any money so paid by either
of them shall be a demand obligation owing by the Mortgagor to the Agent or the
Trustee, as the case may be, and each of the Agent and the Trustee, upon making
such payment, shall be subrogated to all of the rights of the Person receiving
such payment. Each amount due and owing by Mortgagor to each of the Agent and
the Trustee pursuant to this Mortgage shall bear interest from the date of such
expenditure or payment or other occurrence which gives rise to such amount being
owed to such Person until paid at a rate per annum equal to the lesser of (x)
the Highest Lawful Rate applicable to the Lender making such Loan and (y) the
Post-Default Rate, and all such amounts together with such interest thereon
shall be a part of the Indebtedness described in Section 1.03 hereof.

         Section 3.10 Operation of Mortgaged Property, Etc. Except as otherwise
permitted by the Credit Agreement, Mortgagor will promptly pay and discharge all
rentals, delay rentals, royalties and indebtedness accruing under, and perform
or cause to be performed each and every act, matter or thing required by, each
and all of the assignments, deeds, leases, sub-leases, contracts and agreements
described or referred to herein or affecting Mortgagor's interests in the
Mortgaged Property, and will do all other things necessary to keep unimpaired
Mortgagor's rights with respect thereto and prevent any forfeiture thereof or
default thereunder. Except as otherwise permitted by the Credit Agreement, the
Mortgaged Property (and properties unitized therewith) has been maintained,
operated and developed in a good and workmanlike manner and in conformity with
all applicable laws and all rules, regulations and orders of all duly
constituted authorities having jurisdiction and in conformity with the
provisions of all leases, subleases or other contracts comprising a part of the
Hydrocarbon Property and other contracts and agreements forming a part of the
Mortgaged Property; specifically in this connection, (i) after the Effective
Date no Mortgaged Property is subject to having allowable production reduced
below the full and regular allowable (including the maximum permissible
tolerance) because of any overproduction (whether or not the same was
permissible at the time) prior to the Effective Date and (ii) none of the wells
comprising a part of the Mortgaged Property (or properties unitized therewith)
are deviated from the vertical more than the maximum permitted by applicable
laws, regulations, rules and orders, and such wells are, in fact, bottomed under
and are producing from, and the well bores are wholly within, the Mortgaged
Property (or, in the case of wells located on properties unitized therewith,
such unitized properties). Except as otherwise permitted by the Credit
Agreement, Mortgagor will operate the Mortgaged Property in a careful and
efficient manner in accordance with the practices of the industry and in
material compliance with all applicable contracts and agreements and in
compliance with all applicable proration and conservation laws of the
jurisdiction in which the Mortgaged Property is situated, and all applicable
laws, rules and regulations of every other agency and authority from time to
time constituted to regulate the development and operation of the Mortgaged
Property and the production and sale of Hydrocarbons and other minerals there
from. Except as otherwise permitted by the Credit Agreement, Mortgagor will do
or cause to be done such development work as may be reasonably necessary to the
prudent and economical operation of the Mortgaged Property in accordance with
the usual and customary practices of operators in the industry, including all to
be done that may be appropriate to protect from diminution the productive
capacity of the Mortgaged Property and each producing well thereon including,
without limitation, cleaning out and reconditioning each well from time to time,
plugging and completing at a different level each such well, drilling a
substitute well to conform to changed spacing regulations and to protect the
Mortgaged Property against drainage whenever and as often as is necessary.


                                       -9-
<PAGE>   14
                                   ARTICLE IV

                               Rights and Remedies

         Section 4.01 Event of Default. An "Event of Default" under the Credit
Agreement shall be an Event of Default under this Mortgage.

         Section 4.02 Foreclosure and Sale. (a) If an Event of Default shall
occur and be continuing, Agent shall have the right and option to proceed with
foreclosure by directing the Trustee, or his successors or substitutes in trust,
to proceed with foreclosure and to sell, to the extent permitted by law, all or
any portion of the Deed of Trust Mortgaged Property at one or more sales, as an
entirety or in parcels, at such place or places in otherwise such manner and
upon such notice as may be required by law, or, in the absence of any such
requirement, as the Agent may deem appropriate, and to make conveyance to the
purchaser or purchasers. Where the Deed of Trust Mortgaged Property is situated
in more than one county, notice as above provided shall be posted and filed in
all such jurisdictions (if such notices are required by law), and all such Deed
of Trust Mortgaged Property may be sold in any such jurisdiction and any such
notice shall designate the jurisdiction where such Deed of Trust Mortgaged
Property is to be sold. Nothing contained in this Section 4.02 shall be
construed so as to limit in any way the Trustee's rights to sell the Deed of
Trust Mortgaged Property, or any portion thereof, by private sale if, and to the
extent that, such private sale is permitted under the laws of the applicable
jurisdiction or by public or private sale after entry of a judgment by any court
of competent jurisdiction so ordering. After the occurrence and continuation of
an Event of Default, Mortgagor hereby irrevocably appoints the Trustee to be the
attorney of Mortgagor and in the name and on behalf of Mortgagor to execute and
deliver any deeds, transfers, conveyances, assignments, assurances and notices
which Mortgagor ought to execute and deliver and do and perform any and all such
acts and things which Mortgagor ought to do and perform under the covenants
herein contained and generally, to use the name of Mortgagor in the exercise of
all or any of the powers hereby conferred on the Trustee. At any such sale: (i)
whether made under the power herein contained or any other legal enactment, or
by virtue of any judicial proceedings or any other legal right, remedy or
recourse, it shall not be necessary for Trustee to have physically present, or
to have constructive possession of, the Deed of Trust Mortgaged Property
(Mortgagor hereby covenanting and agreeing to deliver to Trustee any portion of
the Deed of Trust Mortgaged Property not actually or constructively possessed by
Trustee immediately upon demand by Trustee) and the title to and right of
possession of any such property shall pass to the purchaser thereof as
completely as if the same had been actually present and delivered to purchaser
at such sale, (ii) each instrument of conveyance executed by Trustee may, at the
election of the Trustee, contain a general warranty of title, binding upon
Mortgagor and its successors and assigns, (iii) each and every recital contained
in any instrument of conveyance made by Trustee shall conclusively establish the
truth and accuracy of the matters recited therein, including, without
limitation, nonpayment of the Indebtedness, advertisement and conduct of such
sale in the manner provided herein and otherwise by law and appointment of any
successor Trustee hereunder, (iv) any and all prerequisites to the validity
thereof shall be conclusively presumed to have been performed, (v) the receipt
of Trustee or of such other party or officer making the sale shall be a
sufficient discharge to the purchaser or purchasers for its purchase money and
no such purchaser or purchasers, or its assigns or personal representatives,
shall thereafter be obligated to see to the application of such purchase money,
or be in any way answerable for any loss, misapplication or nonapplication
thereof, (vi) to the fullest extent permitted by law, Mortgagor shall be
completely and irrevocably divested of all of its right, title, interest, claim
and demand whatsoever, either


                                      -10-
<PAGE>   15
at law or in equity, in and to the property sold and such sale shall be a
perpetual bar both at law and in equity against Mortgagor, and against any and
all other Persons claiming or to claim the property sold or any part thereof,
by, through or under Mortgagor, and (vii) to the extent and under such
circumstances as are permitted by law, Agent may be a purchaser at any such
sale, and shall have the right, after paying or accounting for all costs of said
sale or sales, to credit the amount of the bid upon the amount of the
Indebtedness (in the order of priority set forth in Section 4.14 hereof) in lieu
of cash payment.

         (b) If an Event of Default shall occur and be continuing, this Mortgage
may be foreclosed as to the Other Mortgaged Properties, or any part thereof, in
any manner permitted by applicable law. Cumulative of the foregoing and the
other provisions of this Section 4.02, as to any portion of the Other Mortgaged
Properties located in the State of Louisiana (or within the offshore area over
which the United States of America asserts jurisdiction and to which the laws of
such state are applicable with respect to this Mortgage and/or the liens or
security interests created hereby), Agent may foreclose this Mortgage by
executory process subject to, and on the terms and conditions required or
permitted by, applicable law, and shall have the right to appoint a keeper of
such Other Mortgaged Properties.

         Section 4.03 Substitute Trustees and Agents. The Trustee or his
successor or substitute may appoint or delegate any one or more Persons as agent
to perform any act or acts necessary or incident to any sale held by Trustee,
including the posting of notices and the conduct of sale, but in the name and on
behalf of Trustee, his successor or substitute. If Trustee or his successor or
substitute shall have given notice of sale hereunder, any successor or
substitute trustee thereafter appointed may complete the sale and the conveyance
of the property pursuant thereto as if such notice had been given by the
successor or substitute trustee conducting the sale.

         Section 4.04 Judicial Foreclosure; Receivership. If the Indebtedness
shall become due and payable and shall not be promptly paid, the Trustee or
Agent shall have the right and power to proceed by a suit or suits in equity or
at law, whether for the specific performance of any covenant or agreement herein
contained or in aid of the execution of any power herein granted, or for any
foreclosure hereunder or for the sale of the Mortgaged Property under the
judgment or decree of any court or courts of competent jurisdiction, or for the
appointment of a receiver pending any foreclosure hereunder or the sale of the
Mortgaged Property under the order of a court or courts of competent
jurisdiction or under executory or other legal process, or for the enforcement
of any other appropriate legal or equitable remedy. Any money advanced by the
Trustee and/or Agent in connection with any such receivership shall be a demand
obligation (which obligation Mortgagor hereby expressly promises to pay) owing
by Mortgagor to the Trustee and/or Agent and shall bear interest from the date
of making such advance by the Trustee and/or Agent until paid at the
Post-Default Rate.

         Section 4.05 Foreclosure for Installments. The Agent shall also have
the option to proceed with foreclosure in satisfaction of any installments of
the Indebtedness which have not been paid when due either through the courts or
by directing the Trustee or his successors in trust to proceed with foreclosure
in satisfaction of the matured but unpaid portion of the Indebtedness as if
under a full foreclosure, conducting the sale as herein provided and without
declaring the entire principal balance and accrued interest due; such sale may
be made subject to the unmatured portion of the Indebtedness, and any such sale
shall not in any manner affect the unmatured portion of the Indebtedness, but as
to such unmatured portion of the Indebtedness this Mortgage shall remain in full
force and effect just


                                      -11-
<PAGE>   16
as though no sale had been made hereunder. It is further agreed that several
sales may be made hereunder without exhausting the right of sale for any
unmatured part of the Indebtedness, it being the purpose hereof to provide for a
foreclosure and sale of the security for any matured portion of the Indebtedness
without exhausting the power to foreclose and sell the Mortgaged Property for
any subsequently maturing portion of the Indebtedness.

         Section 4.06 Separate Sales The Mortgaged Property may be sold in one
or more parcels and in such manner and order as Agent and the Lenders, in their
sole discretion, may elect, it being expressly understood and agreed that the
right of sale arising out of any Event of Default shall not be exhausted by any
one or more sales.

         Section 4.07 Possession of Mortgaged Property. Mortgagor agrees to the
full extent that it lawfully may, that, upon the occurrence and continuation of
any Event of Default, then, the Trustee or Agent shall have the right and power
to enter into and upon and take possession of all or any part of the Mortgaged
Property in the possession of Mortgagor, its successors or assigns, or its or
their agents or servants, and may exclude Mortgagor, its successors or assigns,
and all Persons claiming under Mortgagor, and its or their agents or servants
wholly or partly therefrom; and, holding the same, the Trustee may use,
administer, manage, operate and control the Mortgaged Property and conduct the
business thereof to the same extent as Mortgagor, its successors or assigns,
might at the time do and may exercise all rights and powers of Mortgagor, in the
name, place and stead of Mortgagor, or otherwise as the Trustee shall deem best.
All costs, expenses and liabilities of every character incurred by the Trustee
and/or Agent in administering, managing, operating, and controlling the
Mortgaged Property shall constitute a demand obligation (which obligation
Mortgagor hereby expressly promises to pay) owing by Mortgagor to the Trustee
and/or Agent and shall bear interest from date of expenditure until paid at the
Post-Default Rate, all of which shall constitute a portion of the Indebtedness
and shall be secured by this Mortgage and all other Security Instruments.

         Section 4.08 Occupancy After Foreclosure. In the event there is a
foreclosure sale hereunder and at the time of such sale Mortgagor or Mortgagor's
heirs, devisees, representatives, successors or assigns or any other Person
claiming any interest in the Mortgaged Property by, through or under Mortgagor,
are occupying or using the Mortgaged Property or any part thereof, each and all
shall immediately become the tenant of the purchaser at such sale, which tenancy
shall be a tenancy from day to day, terminable at the will of either the
landlord or tenant, at a reasonable rental per day based upon the value of the
property occupied, such rental to be due daily to the purchaser; to the extent
permitted by applicable law, the purchaser at such sale shall, notwithstanding
any language herein apparently to the contrary, have the sole option to demand
immediate possession following the sale or to permit the occupants to remain as
tenants at will. In the event the tenant fails to surrender possession of said
property upon demand, the purchaser shall be entitled to institute and maintain
a summary action for possession of the Mortgaged Property (such as an action for
forcible entry and detainer) in any court having jurisdiction.

         Section 4.09 Remedies Cumulative, Concurrent and Nonexclusive. Every
right, power and remedy herein given to the Trustee or Agent shall be cumulative
and in addition to every other right, power and remedy herein specifically given
or now or hereafter existing in equity, at law or by statute (including
specifically those granted by the Applicable UCC and applicable to the Mortgaged
Property or any portion thereof) each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time and so often and in such order as may be deemed expedient by the Trustee,
the Agent


                                      -12-
<PAGE>   17
and/or the Lenders, and the exercise, or the beginning of the exercise, of any
such right, power or remedy shall not be deemed a waiver of the right to
exercise, at the same time or thereafter any other right, power or remedy. No
delay or omission by the Trustee, the Agent and/or the Lenders in the exercise
of any right, power or remedy shall impair any such right, power or remedy or
operate as a waiver thereof or of any other right, power or remedy then or
thereafter existing.

         Section 4.10 No Release of Indebtedness. Neither Mortgagor, any
guarantor nor any other Person hereafter obligated for payment of all or any
part of the Indebtedness shall be relieved of such obligation by reason of (a)
the failure of Trustee to comply with any request of Mortgagor, or any guarantor
or any other Person so obligated to foreclose the Lien of this Mortgage or to
enforce any provision hereunder or under the Credit Agreement; (b) the release,
regardless of consideration, of the Mortgaged Property or any portion thereof or
interest therein or the addition of any other property to the Mortgaged Property
or the release of any other property given by any Person to secure the
Indebtedness; (c) any agreement or stipulation between any subsequent owner of
the Mortgaged Property and Agent extending, renewing, rearranging or in any
other way modifying the terms of this Mortgage without first having obtained the
consent of, given notice to or paid any consideration to Mortgagor, any
guarantor or such other Person, and in such event Mortgagor, guarantor and all
such other Persons shall continue to be liable to make payment according to the
terms of any such extension or modification agreement unless expressly re leased
and discharged in writing by Agent; or (d) by any other act or occurrence save
and except the complete payment of the Indebtedness and the complete fulfillment
of all obligations hereunder or under the Credit Agreement.

         Section 4.11 Release of and Resort to Mortgaged Property. Agent may
release, regardless of consideration, any part of the Mortgaged Property
without, as to the remainder, in any way impairing, affecting, subordinating or
releasing the Lien or security interest created in or evidenced by this Mortgage
or its stature as a first and prior Lien and security interest in and to the
Mortgaged Property, and without in any way releasing or diminishing the
liability of any Person liable for the repayment of the Indebtedness. For
payment of the Indebtedness, Agent and the Lenders may resort to any other
security therefor held by Agent or Trustee in such order and manner as they may
elect.

         Section 4.12 Waiver of Redemption, Notice and Marshalling of Assets,
Etc. To the fullest extent permitted by applicable law, Mortgagor hereby
irrevocably and unconditionally waives and releases: (a) all benefits that might
accrue to Mortgagor by virtue of any present or future moratorium law or other
law exempting the Mortgaged Property from attachment, levy or sale on execution
or providing for any appraisement, valuation, stay of execution, exemption from
civil process, redemption or extension of time for payment; (b) presentment,
demand, notice of non-payment, protest and notice of protest and dishonor,
notice of Event of Default, notice of intent to accelerate the maturity and
notice of acceleration of the maturity and any other notice in connection with
the Indebtedness or of Trustee's election to exercise or his actual exercise of
any right, remedy or recourse provided for hereunder or under the Credit
Agreement except as otherwise required by the Security Instruments; and (c) any
right to a marshalling of assets or a sale in inverse order of alienation. If
any law referred to in this Mortgage and now in force, of which Mortgagor or its
successor or successors might take advantage despite the provisions hereof,
shall hereafter be repealed or cease to be in force, such law shall thereafter
be deemed not to constitute any part of the contract herein contained or to
preclude the operation or application of the provisions hereof. Provided,
however, that if the laws of any state do not permit the redemption period to be


                                      -13-
<PAGE>   18
waived, the redemption period is specifically reduced to the minimum amount of
time allowable by statute, and specifically for any property located in the
State of New Mexico, the redemption period hereunder shall be reduced to one
month.

         Section 4.13 Discontinuance of Proceedings In case Agent and the
Lenders shall have proceeded to invoke any right, remedy or recourse permitted
hereunder or under the Credit Agreement and shall thereafter elect to
discontinue or abandon same for any reason, the Agent and the Lenders shall have
the unqualified right so to do and, in such an event, Mortgagor, the Agent and
the Lenders shall be restored to their former positions with respect to the
Indebtedness, this Mortgage, the Credit Agreement, the Mortgaged Property and
otherwise, and the rights, remedies, recourses and powers of Agent and the
Lenders shall continue as if same had never been invoked.

         Section 4.14 Application of Proceeds. The proceeds of any sale of the
Mortgaged Property or any part thereof and all other monies received by the
Trustee or Agent in any proceedings for the enforcement hereof or otherwise,
whose application has not elsewhere herein been specifically provided for, shall
be applied as specified in the Credit Agreement.

         Section 4.15 Resignation of Operator. In addition to all rights and
remedies under this Mortgage, at law and in equity, if the Trustee or the Agent
shall exercise any remedies under this Mortgage with respect to any portion of
the Mortgaged Property (or Mortgagor shall transfer any Mortgaged Property "in
lieu of" foreclosure), the Agent or the Trustee shall have the right to request
that any operator of any Mortgaged Property which is either Mortgagor or any
Affiliate of Mortgagor resign as operator under the joint operating agreement
applicable thereto, and no later than 60 days after receipt by Mortgagor of any
such request (or the first day that resignation is permitted under the
applicable operating agreement, if longer), Mortgagor shall resign (or cause
such other party to resign) as operator of such Mortgaged Property.

         Section 4.16 INDEMNITY. IN CONNECTION WITH ANY ACTION TAKEN BY THE
TRUSTEE, THE AGENT AND/OR THE LENDERS PURSUANT TO THIS MORTGAGE, THE TRUSTEE,
THE AGENT, THE LENDERS AND THEIR OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, AGENTS, ATTORNEYS, ACCOUNTANTS AND EXPERTS ("INDEMNIFIED
PARTIES") SHALL NOT BE LIABLE FOR ANY DAMAGE SUSTAINED BY MORTGAGOR RESULTING
FROM AN ASSERTION THAT ANY SUCH INDEMNIFIED PARTY HAS RECEIVED FUNDS FROM THE
PRODUCTION OF HYDROCARBONS CLAIMED BY THIRD PERSONS OR ANY ACT OR OMISSION OF
ANY INDEMNIFIED PARTY IN ADMINISTERING, MANAGING, OPERATING OR CONTROLLING THE
MORTGAGED PROPERTY INCLUDING SUCH DAMAGE WHICH MAY RESULT FROM THE ORDINARY
NEGLIGENCE OF AN INDEMNIFIED PARTY UNLESS SUCH DAMAGE IS CAUSED BY THE GROSS
NEGLIGENCE, WILLFUL MISCONDUCT OR BAD FAITH OF AN INDEMNIFIED PARTY, NOR SHALL
THE TRUSTEE, THE AGENT OR ANY LENDER BE OBLIGATED TO PERFORM OR DISCHARGE ANY
OBLIGATION, DUTY OR LIABILITY OF MORTGAGOR. MORTGAGOR SHALL AND DOES HEREBY
AGREE TO INDEMNIFY EACH INDEMNIFIED PARTY FOR, AND TO HOLD EACH INDEMNIFIED
PARTY HARMLESS FROM, ANY AND ALL LIABILITY OR DAMAGE WHICH MAY OR MIGHT BE
INCURRED BY ANY INDEMNIFIED PARTY BY REASON OF THIS MORTGAGE OR THE EXERCISE OF
RIGHTS OR REMEDIES HEREUNDER UNLESS SUCH DAMAGE IS CAUSED BY THE GROSS
NEGLIGENCE, WILLFUL MISCONDUCT OR BAD FAITH OF AN INDEMNIFIED PARTY; PROVIDED,
HOWEVER, NO INDEMNITY SHALL BE AFFORDED UNDER THIS SECTION 4.16 IN RESPECT OF
ANY PROPERTY FOR ANY OCCURRENCE ARISING FROM THE ACTS OR OMISSIONS OF ANY
INDEMNIFIED PARTY DURING THE PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR
ASSIGNS SHALL HAVE OBTAINED POSSESSION OF SUCH PROPERTY (WHETHER BY FORECLOSURE
OR DEED IN LIEU


                                      -14-
<PAGE>   19
OF FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR OTHERWISE). Should the Trustee,
the Agent and/or the Lenders make any expenditure on account of any such
liability or damage, the amount thereof, including costs, expenses and
reasonable attorneys' fees, shall be a demand obligation (which obligation
Mortgagor hereby expressly promises to pay) owing by Mortgagor to such Person
and shall bear interest from the date expended until paid at the Post-Default
Rate, shall be a part of the Indebtedness and shall be secured by this Mortgage
and any other Security Instrument. Mortgagor hereby assents to, ratifies and
confirms any and all actions of the Trustee, the Agent and/or the Lenders with
respect to the Mortgaged Property taken under this Mortgage. The liabilities of
the Mortgagor as set forth in this Section 4.16 shall survive the termination of
this Mortgage.

         Section 4.17 Power of Sale in Oklahoma. Any sale of any part of the
Mortgaged Property located in the State of Oklahoma shall be made in conformity
to the laws thereof, and it is agreed that the appraisement of any such
properties is expressly waived or not waived at the option of the Agent, and any
such option may be exercised prior to the time judgment is rendered in any
foreclosure hereon. A POWER OF SALE HAS BEEN GRANTED IN THIS MORTGAGE. A POWER
OF SALE MAY ALLOW THE AGENT TO TAKE THE MORTGAGED PROPERTY AND SELL IT WITHOUT
GOING TO COURT IN A FORECLOSURE ACTION UPON DEFAULT BY MORTGAGOR UNDER THIS
MORTGAGE. The parties hereto are cognizant of and acknowledge the Oklahoma Power
of Sale Mortgage Foreclosure Act which went into effect November 1, 1986.
Notwithstanding any provision Article IV to the contrary, it is the intent of
the parties that the provisions herein relating to the power of sale which are
applicable to the Mortgaged Property located in the State of Oklahoma are
subject to the provisions of the Oklahoma Power of Sale Mortgage Foreclosure
Act. In addition, it is the intent of the parties that the power of sale granted
herein may be exercised by the Agent pursuant to the terms and provisions of the
Oklahoma Power of Sale Mortgage Foreclosure Act.

                                    ARTICLE V

                                   The Trustee

         Section 5.01 Duties, Rights, and Powers of Trustee. It shall be no part
of the duty of the Trustee to see to any recording, filing or registration of
this Mortgage or any other instrument in addition or supplemental thereto, or to
give any notice thereof, or to see to the payment of or be under any duty in
respect of any tax or assessment or other governmental charge which may be
levied or assessed on the Mortgaged Property, or any part thereof, or against
Mortgagor, or to see to the performance or observance by Mortgagor of any of the
covenants and agreements contained herein. The Trustee shall not be responsible
for the execution, acknowledgment or validity of this Mortgage or of any
instrument in addition or supplemental hereto or for the sufficiency of the
security purported to be created hereby, and makes no representation in respect
thereof or in respect of the rights of Agent and/or the Lenders. The Trustee
shall have the right to advise with counsel upon any matters arising hereunder
and shall be fully protected in relying as to legal matters on the advice of
counsel. The Trustee shall not incur any personal liability hereunder except for
Trustee's own willful misconduct or bad faith; and the Trustee shall have the
right to rely on any instrument, document or signature authorizing or supporting
any action taken or proposed to be taken by him hereunder, believed by him in
good faith to be genuine.

         Section 5.02 Successor Trustee. The Trustee may resign by written
notice addressed to Agent or be removed at any time with or without cause by an
instrument in writing duly


                                      -15-
<PAGE>   20
executed on behalf of Agent. In case of the death, resignation or removal of the
Trustee, a successor trustee may be appointed by Agent by instrument of
substitution complying with any applicable requirements of law, or, in the
absence of any such requirement, without other formality than appointment and
designation in writing. Written notice of such appointment and designation shall
be given by Agent to Mortgagor, but the validity of any such appointment shall
not be impaired or affected by failure to give such notice or by any defect
therein. Such appointment and designation shall be full evidence of the right
and authority to make the same and of all the facts therein recited, and, upon
the making of any such appointment and designation, this Mortgage shall vest in
the successor trustee all the estate and title in and to all of the Mortgaged
Property, and the successor trustee shall thereupon succeed to all of the
rights, powers, privileges, immunities and duties hereby conferred upon the
Trustee named herein, and one such appointment and designation shall not exhaust
the right to appoint and designate a successor trustee hereunder but such right
may be exercised repeatedly as long as any Indebtedness remains unpaid
hereunder. To facilitate the administration of the duties hereunder, Agent may
appoint multiple trustees to serve in such capacity or in such jurisdictions as
Agent may designate.

         Section 5.03 Retention of Moneys. All moneys received by Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated in any manner from any
other moneys (except to the extent required by law), and Trustee shall be under
no liability for interest on any moneys received by him hereunder.

                                   ARTICLE VI

                                  Miscellaneous

         Section 6.01 Instrument Construed as Mortgage, Etc. With respect to any
portions of the Mortgaged Property located in any state or other jurisdiction
the laws of which do not provide for the use or enforcement of a deed of trust
or the office, rights and authority of the Trustee as herein provided, the
general language of conveyance hereof to the Trustee is intended and the same
shall be construed as words of mortgage unto and in favor of Agent and the
rights and authority granted to the Trustee herein may be enforced and asserted
by Agent in accordance with the laws of the jurisdiction in which such portion
of the Mortgaged Property is located and the same may be foreclosed at the
option of Agent as to any or all such portions of the Mortgaged Property in any
manner permitted by the laws of the jurisdiction in which such portions of the
Mortgaged Property is situated. This Mortgage may be construed as a mortgage,
deed of trust, chattel mortgage, conveyance, assignment, security agreement,
pledge, financing statement, hypothecation or contract, or any one or more of
them, in order fully to effectuate the Lien hereof and the purposes and
agreements herein set forth.

         Section 6.02 Release of Lien. If all Indebtedness secured hereby shall
be paid and the Credit Agreement terminated, Agent shall forthwith cause
satisfaction and discharge of this Mortgage to be entered upon the record at the
expense of Mortgagor and shall execute and deliver or cause to be executed and
delivered such instruments of satisfaction and reassignment as may be
appropriate. Otherwise, this Mortgage shall remain and continue in full force
and effect.

         Section 6.03 Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, the other provisions hereof shall remain in
full force and effect in such


                                      -16-
<PAGE>   21
jurisdiction and the remaining provisions hereof shall be liberally construed in
favor of the Trustee, the Agent and the Lenders in order to effectuate the
provisions hereof, and the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
any such provision in any other jurisdiction.

         Section 6.04 Successors and Assigns of Parties. The term "Lender" as
used herein shall mean and include any legal owner, holder, assignee or pledgee
of any of the Indebtedness secured hereby. The terms used to designate Trustee,
Agent and Mortgagor shall be deemed to include the respective heirs, legal
representatives, successors and assigns of such parties.

         Section 6.05 Satisfaction of Prior Encumbrance. To the extent that
proceeds of the Credit Agreement are used to pay indebtedness secured by any
outstanding Lien, security interest, charge or prior encumbrance against the
Mortgaged Property, such proceeds have been advanced at Mortgagor's request, and
the Lenders shall be subrogated to any and all rights, security interests and
Liens owned by any owner or holder of such outstanding Liens, security
interests, charges or encumbrances, irrespective of whether said Liens, security
interests, charges or encumbrances are released, and it is expressly understood
that, in consideration of the payment of such other indebtedness by the Lenders,
Mortgagor hereby waives and releases all demands and causes of action for
offsets and payments to, upon and in connection with the said indebtedness.

         Section 6.06 Subrogation of Trustee. This Mortgage is made with full
substitution and subrogation of the Trustee and his successors in this trust and
his and their assigns in and to all covenants and warranties by others
heretofore given or made in respect of the Mortgaged Property or any part
thereof.

         Section 6.07 Nature of Covenants. The covenants and agreements herein
contained shall constitute covenants running with the land and interests covered
or affected hereby and shall be binding upon the heirs, legal representatives,
successors and assigns of the parties hereto.

         Section 6.08 Notices. All notices, requests, consents, demands and
other communications required or permitted hereunder shall be given in
accordance with the terms of the Credit Agreement or as required by applicable
Governmental Requirement. Mortgagor hereby requests a copy of any notice of
default or notice of sale under this Mortgage be provided to it in the manner
provided by this Section 6.08.

         Section 6.09 Counterparts. This Mortgage is being executed in several
counterparts, all of which are identical, except that to facilitate recordation,
if the Mortgaged Property is situated in more than one jurisdiction,
descriptions of only those portions of the Mortgaged Property located in the
jurisdiction in which a particular counterpart is recorded shall be attached as
Exhibit A thereto. An Exhibit A containing a description of all Mortgaged
Property wheresoever situated will be attached to that certain counterpart to be
attached to a Financing Statement and filed with the Secretary of State of Texas
in the Uniform Commercial Code Records. Each of such counterparts shall for all
purposes be deemed to be an original and all such counterparts shall together
constitute but one and the same instrument.

         SECTION 6.10 GOVERNING LAW. INSOFAR AS PERMITTED BY OTHERWISE
APPLICABLE LAW, THIS MORTGAGE AND THE INDEBTEDNESS SHALL BE CONSTRUED UNDER AND
GOVERNED


                                      -17-
<PAGE>   22
BY THE LAWS OF THE STATE OF TEXAS (EXCLUDING CHOICE OF LAW AND CONFLICT OF LAW
RULES); PROVIDED, HOWEVER, THAT, WITH RESPECT TO ANY PORTION OF THE MORTGAGED
PROPERTY LOCATED OUTSIDE OF THE STATE OF TEXAS, THE LAWS OF THE PLACE IN WHICH
SUCH PROPERTY IS LOCATED IN, OR OFFSHORE ADJACENT TO (AND STATE LAW MADE
APPLICABLE AS A MATTER OF FEDERAL LAW), SHALL APPLY TO THE EXTENT OF PROCEDURAL
AND SUBSTANTIVE MATTERS RELATING ONLY TO THE CREATION, PERFECTION, FORECLOSURE
OF LIENS AND ENFORCEMENT OF RIGHTS AND REMEDIES AGAINST THE MORTGAGED PROPERTY.
THE MORTGAGOR HEREBY IRREVOCABLY SUBMITS ITSELF TO THE NONEXCLUSIVE JURISDICTION
OF THE STATE AND FEDERAL COURTS OF THE STATE OF TEXAS AND EACH OTHER STATE WHERE
THE MORTGAGED PROPERTY IS LOCATED AND AGREES AND CONSENTS THAT SERVICE OF
PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDING RELATING TO THIS MORTGAGE,
THE LOAN DOCUMENTS OR THE INDEBTEDNESS IN THE CASE OF A PROCEEDING IN ANY OF
SUCH STATES, BY SERVING THE SECRETARY OF STATE OF SUCH STATE IN ACCORDANCE WITH
ANY APPLICABLE PROVISIONS OF SUCH STATE'S LAW GOVERNING SERVICE OR PROCESS UPON
FOREIGN CORPORATIONS OR ENTITIES.

         Section 6.11 Financing Statement; Fixture Filing. This Mortgage shall
be effective as a financing statement filed as a fixture filing with respect to
all fixtures included within the Mortgaged Property and is to be filed or filed
for record in the real estate records of each jurisdiction where any part of the
Mortgaged Property (including said fixtures) are situated. This Mortgage shall
also be effective as a financing statement covering minerals or the like
(including oil and gas and all other substances of value which may be extracted
from the ground) and accounts financed at the wellhead or minehead of wells or
mines located on the properties subject to the Applicable UCC and is to be filed
for record in the real estate records of each jurisdiction where any part of the
Mortgaged Property is situated. In addition, the Mortgagor shall execute and
deliver to the Agent, upon the Agent's request, any financing statements or
amendments thereof or continuation statements thereto that the Agent may require
to perfect a security interest in said items or types of property. The Mortgagor
shall pay all costs of filing such instruments. In that regard, the following
information is provided:

         Name of Debtor:            Corrida Resources, Inc.
         Address of Debtor and      3500 Oak Lawn Drive, Suite 380
         County of Residence        Dallas, Texas 75219
         (chief executive           Attention: Robert P. Lindsay
         offices):                  Facsimile:  (214) 521-9960
                                    Telephone: (214) 521-9959


         Principal Place of
         Business of Debtor:        Same as above.
         Tax I.D. Number of
         Debtor:                    75-269-1594


         Name of Secured Party:     Bank of Montreal, as Agent
         Address of Secured         700 Louisiana, Suite 4400
         Party:                     Houston, Texas  77002

         Tax I.D. Number of
         Secured Party:             13-494-1092


                                      -18-
<PAGE>   23
         Owner of Record of
         Real Property:             Debtor

         SECTION 6.12 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS MORTGAGE; AND AGREES THAT IT
IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS MORTGAGE; THAT IT HAS
IN FACT READ THIS MORTGAGE AND IS FULLY INFORMED AND HAS FULL NOTICE AND
KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS MORTGAGE; THAT IT HAS
BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS MORTGAGE AND HAS RECEIVED THE
ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS MORTGAGE; AND THAT IT RECOGNIZES
THAT CERTAIN OF THE TERMS OF THIS MORTGAGE RESULT IN ONE PARTY ASSUMING THE
LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER
PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND
COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY
EXCULPATORY PROVISION OF THIS MORTGAGE ON THE BASIS THAT THE PARTY HAD NO NOTICE
OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT "CONSPICUOUS."

         Section 6.13 No Paraph. Mortgagor acknowledges that no promissory note
or other instrument has been presented to the undersigned Notary Public(s) to be
paraphed for identification herewith.

                                   ARTICLE VII

                          Special Louisiana Provisions

         Section 7.01 Maximum Amount. Insofar as any portion of the Mortgaged
Property situated in or offshore the State of Louisiana is concerned, or as to
which the laws of the State of Louisiana would be applicable, the maximum amount
of the Indebtedness that may be outstanding at any time and from time to time
that this Mortgage secures is fixed at $75,000,000.00.

         Section 7.02 Keeper. The Agent shall have the right to appoint a keeper
of the Mortgaged Property pursuant to the terms and provisions of La. R.S.
9:5131 et seq. and 9:5136 et seq.

         Section 7.03 Confession of Judgment. For purposes of executory process
the Mortgagor acknowledges the Indebtedness secured hereby, whether now existing
or to arise hereafter, and confesses judgment thereon if not paid when due. Upon
the occurrence of an Event of Default and any time thereafter so long as the
same shall be continuing, and in addition to all other rights and remedies
granted the Agent hereunder, it shall be lawful for and the Mortgagor hereby
authorizes the Agent without making a demand or putting the Mortgagor in
default, a putting in default being expressly waived, to cause all and singular
the Mortgaged Property to be seized and sold after due process of law, the
Mortgagor waiving the benefit of any and all laws or parts of laws relative to
appraisement of Mortgaged Property seized and sold under executory process or
other legal process, and consenting that the Mortgaged Property be sold without
appraisement, either in its entirety or in lots or parcels, as the Agent may
determine, to the highest bidder for cash or on such other terms as the
plaintiff in such proceedings may direct. The Agent shall be granted all rights
and


                                      -19-
<PAGE>   24
remedies granted it hereunder as well as all rights and remedies granted to
Agent under Louisiana law including the Uniform Commercial Code then in effect
in Louisiana.

         Section 7.04      Waivers.  The Mortgagor hereby waives:

                           (a)      The benefit of appraisement provided for in
                                    articles 2332, 2336, 2723 and 2724 of the
                                    Louisiana Code of Civil Procedure and all
                                    other laws conferring the same;

                           (b)      The demand and three (3) days notice of
                                    demand as provided in articles 2629 and 2721
                                    of the Louisiana Code of Civil Procedure;

                           (c)      The notice of seizure provided by articles
                                    2293 and 2721 of the Louisiana Code of Civil
                                    Procedure; and

                           (d)      The three (3) days delay provided for in
                                    articles 2331 and 2722 of the Louisiana Code
                                    of Civil Procedure.

                                  ARTICLE VIII

                         Special Mississippi Provisions

         Section 8.01 Mortgaged Property. Any sale of any part of the Mortgaged
Property located in the State of Mississippi shall be made after having
published notice of the day, time, place and terms of sale in a newspaper
published in the county in which the Mortgaged Property is situated for three
consecutive weeks preceding the date of sale; and by posting one notice of such
sale at the courthouse of the county in which the Mortgaged property is situated
for said period of time. The Trustee shall have the power to select the county
or judicial district in which the sale shall be made, newspaper advertisement
published, and notice of sale posted in the event the Mortgaged Property is
located in more than one county or in two judicial districts in the same county.
The Trustee in said trust shall have the full power to fix the day, time, place
and terms of sale and may appoint or delegate any one or more persons as agent
to perform any act or acts necessary or incident to any sale held by the
Trustee, including the posting of notices in the conduct of the sale but in the
name of and on behalf of the Trustee, his substitute or successor. In connection
with the foregoing, Mortgagor waives the provisions of Section 89-1-55 of the
Mississippi Code of 1972, recompiled and laws amendatory thereto, if any, as far
as said section restricts the right of the Trustee to offer at sale more than
160 acres at one time and the Trustee may, in his discretion, offer the
Mortgaged Property as a whole or in such part or parts as he may deem desirable
regardless of the manner in which it may be described. Any sale made by the
Trustee hereunder may be adjourned by announcement at the time and place
appointed for such sale without further notice except as may be required by law.
Mortgagor also waives the provisions of Section 89-1-59 of the Mississippi Code
of 1972, recompiled and laws amendatory thereto, insofar as said section allows
the Mortgagor to reinstate an accelerated debt.


                                      -20-
<PAGE>   25
         THUS DONE AND PASSED, this 31st day of July, 1997, to be effective as
of the 1st day of August, 1997 (the "Effective Date") before the undersigned
Notary Public and witnesses.

Mortgagor:                                        CORRIDA RESOURCES, INC.


                                                  By:   /s/ Robert P. Lindsay
                                                        ------------------------
                                                           Robert P. Lindsay
                                                           Vice President



                                                  By:   /s/ Ronald Benn
                                                        ------------------------
                                                           Ronald Benn
                                                           Treasurer

WITNESSES:


------------------------------
Name:



------------------------------
Name:


                                         --------------------------------
                                                  Notary Public



                                      -21-
<PAGE>   26
THE STATE OF TEXAS                    Section
                                      Section
COUNTY  OF  HARRIS                    Section


                                   MISSISSIPPI

         Personally appeared before me, the undersigned authority in and for
said county and state, on this 31st day of July, 1997, within my jurisdiction,
the within named Robert P. Lindsay and Ronald Benn who acknowledged that they
are the Vice President and Treasurer of CORRIDA RESOURCES, INC., a Nevada
corporation, and that for and on behalf of said corporation, and as its act and
deed, he executed the above and foregoing instrument, after first having been
duly authorized by said corporation so to do.

                                   NEW MEXICO

         The foregoing instrument was acknowledged before me on July 31, 1997 by
Robert P. Lindsay, Vice President, and Ronald Benn, Treasurer, of CORRIDA
RESOURCES, INC., a Nevada corporation, on behalf of such corporation.

                                    OKLAHOMA

         This instrument was acknowledged before me on July 31, 1997 by Robert
P. Lindsay, Vice President, and Ronald Benn, Treasurer, of CORRIDA RESOURCES,
INC., a Nevada corporation.

                                      TEXAS

         This instrument was acknowledged before me on July 31, 1997 by Robert
P. Lindsay, Vice President, and Ronald Benn, Treasurer, of CORRIDA RESOURCES,
INC., a Nevada corporation, on behalf of such corporation.



                                             _________________________________
                                             Notary Public in and for the
                                             State of Texas

[SEAL]                                       My commission expires:___________
                                                                   


                                      -22-