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                                                                    EXHIBIT 10.3

                    EMPLOYMENT AND STOCK OWNERSHIP AGREEMENT

                                 BY AND BETWEEN

                              ENERGY PARTNERS, LTD.

                                       AND

                                  JOHN H. PEPER

                  THIS EMPLOYMENT AND STOCK OWNERSHIP AGREEMENT (the
"Agreement"), entered into in Houston, Texas on this 15th day of January , 2002,
by and between an individual of the full age of majority domiciled in Harris
County, State of Texas (hereinafter called "Employee") and Energy Partners,
Ltd., a corporation organized and existing under the laws of the State of
Delaware (hereinafter called "Company"), represented herein by its duly
authorized President, Richard A. Bachmann.

1.       TERMS AND CONDITIONS OF EMPLOYMENT.

         1.1      Length Of Employment. In consideration for the compensation
                  and other benefits set forth in Section 1.2 and other
                  provisions of this Agreement, the Company agrees to employ and
                  Employee agrees to be employed by the Company for a period of
                  three (3) years from the date of execution of this Agreement
                  (the "Term"), unless Employee's employment hereunder sooner
                  terminates pursuant to Section 1.4, 1.5, 1.6 or 1.7.

                  Employee's employment shall be subject to the other terms and
                  conditions of this Agreement. Employee agrees to devote his
                  full time, attention and energies to, and use his best ability
                  and fidelity in the performance of, the duties attaching to
                  his employment.

         1.2      Consideration. As compensation, Employee will receive an
                  annual salary of $174,000 payable in accordance with the
                  normal payroll practices of Company. Such salary will be
                  reviewed annually by the Compensation Committee of the Board
                  of Directors of Company, at the same time that salary is
                  reviewed by the Compensation Committee for other officers of
                  Company, for the purpose of considering increases in such
                  salary. In no event will such salary be reduced below the
                  amount set forth above. Company will reimburse Employee for
                  reasonable moving expenses should Employee elect or be asked
                  and agree to relocate to New Orleans, provided that nothing
                  contained herein shall require Employee to relocate his
                  principal residence from Houston, Texas as a condition of
                  continuing employment hereunder, except for reasonable travel.
                  In addition, Employee will participate with other senior
                  executives of Company in compensation and benefit plans in
                  effect from time to time, including the 401(k) plan and bonus
                  program, and health and dental benefits. Employee will be
                  entitled to vacation time in accordance with Company policy.


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         1.3      Indemnity. The Company will indemnify and hold harmless
                  Employee from and against any and all claims and liabilities
                  to which Employee may be or become subject by reason of
                  Employee now or hereafter being an employee, officer and/or
                  director of the Company or any of its subsidiaries and/or by
                  reason of Employee's alleged acts or omissions, whether or not
                  Employee continues to be such employee, officer and/or
                  director at the time any such claim or liability is asserted,
                  to the fullest extent permitted by Delaware or other
                  applicable law and the Company's or applicable subsidiary's
                  charter documents and bylaws as in effect from time to time,
                  and will reimburse Employee for all legal and other expenses
                  reasonably incurred by Employee in connection therewith to the
                  extent permitted.

         1.4      Termination For Cause. Employee's employment and the Company's
                  obligations under this Agreement may be terminated by the
                  Company for "Cause" immediately and without notice although
                  the term of this Agreement has not expired. "Cause" is defined
                  as (i) Employee's conviction of a felony, (ii) dishonesty,
                  (iii) failure to perform his duties, (iv) insubordination, (v)
                  theft, (vi) wrongful disclosure of confidential information,
                  (vii) conflict of interest that is undisclosed and not Board
                  approved, (viii) violation of written Company policies
                  applicable to all employees, or (ix) engaging in any manner,
                  directly or indirectly, in a business that competes with the
                  business of the Company in any capacity that is undisclosed
                  and not Board approved. The determination whether the
                  Agreement may be terminated as set forth in this Section 1.4
                  will be in the Company's sole discretion, provided that in
                  case of termination as provided in clauses (iii), (vii) or
                  (ix) above, Employee shall be given written notice of the
                  events deemed to be "Cause" and shall be given thirty (30)
                  days to cure such events. Within thirty (30) days of execution
                  of this Agreement, Employee will prepare and deliver to the
                  Company's President a written disclosure statement of all
                  business relationships in which he may be engaged in any
                  manner. If employee is terminated for Cause, (i) all
                  compensation payable under this Agreement shall cease as of
                  the date of termination of employment and (ii) all options
                  described in Section 2.1 which have vested as set forth in
                  Section 1.6 or 2.1 prior to termination for Cause will be the
                  property of and exercisable by Employee for a thirty (30) day
                  period following termination (but in no event beyond the end
                  of the term of the option), but any option rights that have
                  not vested prior to termination for Cause will be forfeited.

         1.5      Employee's Termination Upon Death Or Disability. Employee's
                  employment and Company's obligations under this Agreement will
                  terminate automatically, effective immediately and without any
                  notice, upon Employee's death or a "determination of
                  disability." For purposes of this Agreement disability shall
                  mean Employee's inability because of illness or other physical
                  or mental disability to perform his duties, with or without
                  reasonable accommodation, for a period of ninety (90) calendar
                  days (whether consecutive or not) during any period of 360
                  calendar days . A "determination of disability" will be made
                  by the Company, in its sole reasonable discretion, in
                  consultation with a physician satisfactory to Company,


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                  and Employee will cooperate with the efforts to make such
                  determination. Any such determination will be conclusive and
                  binding on the parties. Any determination of disability under
                  this Section 1.5 is not intended to alter any benefits any
                  party may be entitled to receive under any long-term
                  disability insurance policy maintained by either Company or
                  Employee with respect to Employee, which benefits will be
                  governed solely by the terms of any such insurance policy. If
                  Employee is terminated due to death or a determination of
                  disability, (i) all compensation payable under this Agreement
                  shall cease as of the date of the death of Employee or the
                  date of the determination of disability and (ii) options
                  described in Section 2.1 which have vested as set forth in
                  Section 1.6 or 2.1 prior to termination will be the property
                  of Employee and will remain exercisable by Employee for
                  thirty-six (36) months following the date of death or
                  determination of disability (but in no event beyond the end of
                  the term of the option), but any option rights that have not
                  vested prior to termination will be forfeited.

         1.6      Change Of Control. If a Change of Control (as defined in
                  Company's 2000 Long Term Stock Incentive Plan ("Stock
                  Incentive Plan")) occurs, all options, bonuses and other
                  incentive awards granted to Employee pursuant to this
                  Agreement or otherwise (i) which have not vested prior to such
                  Change of Control and (ii) as to which there are no conditions
                  for vesting other than continued employment with Company, will
                  upon such Change of Control become fully vested, will (in the
                  case of options) become fully exercisable and (in the case of
                  all such stock options, bonuses and other incentive awards)
                  all restrictions relating to vesting will lapse. If employee
                  is terminated without Cause in connection with the Change of
                  Control, Company's obligation to provide compensation under
                  this Agreement shall cease after a 90 day notice period and
                  the provisions of Section 1.8 and 1.9 shall not apply.

         1.7      Voluntary Termination by Employee. If Employee voluntarily
                  terminates employment with Company during the term of this
                  Agreement, (i) all compensation payable under this Agreement
                  shall cease as of the date of termination of employment and
                  (ii) all options described in Section 2.1 which have vested as
                  set forth in Section 1.6 or 2.1 prior to termination will be
                  the property of and exercisable by Employee for a thirty (30)
                  day period following termination (but in no event beyond the
                  end of the term of the option), but any option rights that
                  have not vested prior to termination will be forfeited.

         1.8      Non-Competition. Employee and Company acknowledge that the
                  Company is and has been engaged in the business of exploration
                  and production of oil and gas related activities in the Gulf
                  of Mexico and that the Company will provide Employee with
                  confidential information regarding the Company and the
                  Company's business. In return for this and other consideration
                  provided under this Agreement, for a period of two (2) years
                  following Employee's termination of employment with the
                  Company, Employee agrees that he will not compete, directly or


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                  through any instrumentality, with the Company by engaging in
                  any activity whatsoever as to any of the lease blocks and
                  leases in which the Company owns an interest, and prospects of
                  the Company which are subject to confidentiality agreements,
                  on the date of termination. The Company will furnish Employee
                  a list of such blocks, leases and prospects promptly upon
                  termination of employment.

         1.9      Non-Solicitation. Employee agrees that, for a period of two
                  (2) years following Employee's termination of employment with
                  the Company, he shall not, directly or indirectly, (a) solicit
                  or otherwise attempt to induce any person who is on the date
                  of termination an employee of the Company or any of its
                  subsidiaries or affiliates to discontinue his or her
                  relationship with the Company or any of its subsidiaries or
                  affiliates or to solicit any such employee of the Company to
                  enter into an employment relationship with any person or
                  entity or to solicit any such employee of the Company to
                  accept employment by or to enter into any form of business
                  relationship with Employee or any person or entity affiliated
                  or controlled by Employee or (b) cause or attempt to cause any
                  third party then under contract with the Company to modify its
                  business relationship with the Company in any manner adverse
                  to the Company.

2.       COMPANY SECURITIES.

                  All shares of Company common stock, preferred stock, warrants
         and earnout shares received or to be received by Employee in connection
         with the Agreement and Plan of Merger dated as of December 16, 2001, as
         it may be amended from time to time, between the Company and
         Hall-Houston Oil Company and all stock options granted by Employee in
         accordance with the first sentence of Section 2.1, shall be securities
         subject to this Section.

         2.1      Receipt Of Options. Subject to the terms and conditions of
                  this Agreement and the terms and conditions of Company's Stock
                  Incentive Plan, the Company's President will recommend to
                  Company's Compensation Committee that Employee receive an
                  option to purchase 75,000 shares of common stock of Company at
                  a per share exercise price equal to the closing price on the
                  date of grant. Such option will vest and become exercisable in
                  three installments as follows: one-third on the first
                  anniversary of the date of this Agreement, one-third on the
                  second anniversary of the date of this Agreement, and the
                  remaining one-third on the third anniversary of the date of
                  this Agreement. Employee must be employed by Company to vest
                  in accordance with this Section. Employee must exercise each
                  option within 10 years from the date of this Agreement or the
                  option will lapse, unless it shall sooner lapse pursuant to
                  Section 1.4, 1.5 or 1.7 or the terms of the applicable option
                  agreement. Employee will be eligible for additional options as
                  determined under the Stock Incentive Plan beginning in 2002.


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         2.2      Transfer Of Shares. Subject to compliance with Section 3.2,
                  Employee may sell, assign, pledge, transfer or otherwise
                  dispose of ("dispose") securities subject to this Agreement
                  (other than earnout rights, which may not be disposed of) as
                  follows: without prior approval of the Compensation Committee
                  of the Company, (i) Employee may not dispose of any securities
                  prior to November 7, 2002; (ii) Employee may dispose of
                  one-half of each class of securities on or after November 7,
                  2002 and prior to November 7, 2003; and (iii) Employee may
                  dispose of all of such securities on or after November 7,
                  2003. For purposes of clause (ii) of the preceding sentence,
                  shares of Company common stock issuable upon exercise of
                  vested stock options shall and, at Employee's option in lieu
                  of disposing of preferred stock or warrants, and so long as
                  such securities are at the time "in the money," shares of
                  Company common stock issuable upon conversion or exercise
                  thereof may, be included in determining the number of shares
                  of Company common stock Employee may dispose of. This Section
                  2.2 shall not apply to transfers by Employee to his immediate
                  family members, to a trust, family partnership or similar
                  family-related or family-controlled entity for the benefit of
                  his family members, or to a distributee under the will or
                  transferee under the laws of intestate succession of Employee.

         2.3      Restrictions On Transfer. Any transfer of securities made in
                  violation of Section 2.2 of this Agreement ("transfer") or
                  attempted transfer will be null and void and of no force or
                  effect whatever. Any purported transferee will not be deemed
                  to be a shareholder of Company and will not be entitled to
                  receive a new certificate or any distributions on or with
                  respect to the securities owned by Employee. Employee hereby
                  acknowledges the reasonableness of the restrictions on
                  transfer imposed by this Agreement in view of Company's
                  purposes and the relationship of Employee with Company.
                  Accordingly, the restrictions on transfer of securities
                  contained herein will be specifically enforceable. Employee
                  hereby further agrees to hold Company, each shareholder and
                  each shareholder's successors and assigns wholly and
                  completely harmless from any cost, liability or damage
                  (including, without limitation, liabilities for income taxes
                  and costs of enforcing this indemnity) incurred by any of such
                  indemnified persons as a result of a transfer or attempted
                  transfer.

         2.4      Legend. In addition to other legends required under applicable
                  securities laws, the securities that are subject to this
                  Agreement shall contain the following legend:

                           "This Security is also subject to restrictions on
                           transfer contained in an agreement between the issuer
                           and such holder."

                           All securities hereafter issued to Employee or to
                  Employee's beneficiaries, heirs, successors in interest,
                  representatives or assigns with respect to any securities
                  subject to this Agreement, whether by stock split, stock
                  dividend or otherwise, will bear the same legend and be
                  subject to all the terms and conditions hereof.


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3.       MISCELLANEOUS.

         3.1      Entire Agreement. Employee acknowledges that he has
                  concurrently executed the Registration Rights Agreement (as
                  set forth in Exhibit A attached hereto). Without limiting the
                  generality of the foregoing, this Agreement embodies the
                  entire agreement between the parties hereto regarding the
                  subject matter hereof, and will supersede any and all prior
                  agreements whether written or oral relating to employment
                  and/or securities of Company owned by Employee, and will be
                  binding upon Employee and Employee's heirs, legatees, legal
                  representatives, successors, donees, transferees and assigns,
                  and Employee does hereby authorize and obligate Employee's
                  executors, heirs and legatees to comply with the terms of this
                  Agreement. The parties will not be bound by or be liable for
                  any statement, representation, promise, inducement or
                  understanding of any kind or nature regarding the subject
                  matter hereof which is not set forth herein. No changes,
                  amendments or modifications of any of the terms or conditions
                  of this document will be valid unless reduced to writing and
                  signed by all parties hereto, Company being represented by its
                  President or his designee.

         3.2      Compliance With Applicable Law. Notwithstanding any provision
                  of this Agreement to the contrary, the completion of any
                  transfer or sale of any security of Company (or any rights to
                  acquire such shares or securities convertible into, or
                  exchangeable for, such shares) by Employee will be subject to
                  compliance with any applicable statute, law, regulation,
                  ordinance, rule, judgment, rule of common law, order, decree,
                  award, governmental approval, concession, grant, franchise,
                  license. agreements, directive, guideline, policy,
                  requirement, or other governmental restriction or any similar
                  form of decision of, or determination by, or any
                  interpretation or administration of any of the foregoing by,
                  any applicable governmental authority (collectively,
                  "Applicable Law"). Company and Employee will cooperate with
                  each other and will take all such action, including without
                  limitation obtaining all governmental approvals required to
                  comply with Applicable Law in connection with the sale or
                  transfer of any security of Company (or any rights to acquire
                  such shares or securities convertible into, or exchangeable
                  for, such shares). Company, Employee and each of the other
                  shareholders of Company will bear their own costs and expenses
                  in connection with obtaining any such governmental approvals.

         3.3      Severability. Each provision of this Agreement is intended to
                  be severable. In the event that any one or more of the
                  provisions contained in this Agreement will for any reason be
                  held to be invalid, illegal, or unenforceable, such holding
                  will not affect the validity or enforceability of any other
                  provision of this Agreement, and this Agreement will be
                  construed as if such invalid, illegal, or unenforceable
                  provision had never been contained herein; provided, however,
                  that no provision will be severed if it is clearly apparent
                  under the circumstances that the parties would not have
                  entered into this Agreement without such provision.


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         3.4      APPLICABLE LAW. THIS DOCUMENT WILL BE CONSTRUED FOR ALL
                  PURPOSES AS A TEXAS DOCUMENT AND WILL BE INTERPRETED AND
                  ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
                  WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.

         3.5      Number and Gender. As used herein, the singular will include
                  the plural and vice versa and words used in one gender will
                  include all others as appropriate.

         3.6      Additional Documents. The parties hereto agree to execute
                  whatever documents or instruments and to perform whatever acts
                  may be reasonably required to fulfill the requirements and/or
                  intents hereof.

         3.7      Legal Assistance. The parties hereto have each consulted with
                  legal counsel or have had the opportunity to consult with
                  legal counsel regarding the terms and conditions of this
                  Agreement.

         3.8      Headings. Section headings and other headings contained in
                  this Agreement are for reference purposes only and will not
                  affect in any way the meaning or interpretation of this
                  Agreement.

         3.9      Arbitration. Any dispute, controversy or claim arising out of
                  or in relation to or in connection with this Agreement,
                  including without limitation any dispute as to the
                  construction, validity, interpretation, enforceability or
                  breach of this Agreement, shall be exclusively and finally
                  settled by arbitration in accordance with this Section 3.9.
                  Either party may submit such a dispute, controversy or claim
                  to arbitration by notice to the other party and the
                  administrator for the American Arbitration Association
                  ("AAA"). The arbitration proceedings shall be conducted in New
                  Orleans, Louisiana, in accordance with the Commercial
                  Arbitration Rules of the American Arbitration Association as
                  in effect on the date hereof. The arbitration shall be heard
                  and determined by three arbitrators. Each side shall appoint
                  an arbitrator of its or his choice within twenty (20) days of
                  the submission of the notice of arbitration. The
                  party-appointed arbitrators shall in turn appoint a presiding
                  arbitrator for the tribunal within twenty (20) days following
                  the appointment of the second party-appointed arbitrator. If
                  the party-appointed arbitrators cannot reach agreement on a
                  presiding arbitrator for the tribunal and/or one party fails
                  to appoint its party-appointed arbitrator within the
                  applicable period, the AAA shall act as appointing authority
                  to appoint an independent arbitrator with at least ten (10)
                  years experience in the legal and/or commercial aspects of the
                  petroleum exploration and production industry. None of the
                  arbitrators shall have been an employee or consultant to
                  either party to this Agreement or any of their respective
                  affiliates, or have any financial interest in the dispute,
                  controversy or claim. All decisions of the arbitral tribunal
                  shall be by majority vote. The arbitrators may not award
                  consequential, punitive or similar damages. Expenses in
                  connection with


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                  the arbitration and the compensation and expenses of the
                  arbitrators shall be borne in such manner as may be specified
                  in the arbitral award. Privileges protecting attorney-client
                  communications and attorney work product from compelled
                  disclosure or use in evidence, as recognized by and under the
                  Federal Rules of Civil Procedure, shall apply to and be
                  binding in any arbitration proceeding conducted under this
                  Section 3.9. This Section 3.9 does not apply to any dispute,
                  controversy or claim in which the claimant seeks injunctive,
                  declaratory or other equitable relief, and each of Company and
                  Employee reserves the right to bring such action in court,
                  which Company and Employee agree shall be exclusively the U.S.
                  Federal Courts sitting in the Eastern District of Louisiana
                  and each party irrevocably consents to personal jurisdiction
                  in any and all such tribunals.

         3.10     Amendments. This Agreement may be amended or modified in all
                  respects at any time but only by an instrument in writing
                  executed by the parties hereto.

         3.11     Waiver. The failure by any party to enforce any of its rights
                  hereunder will not be deemed to be a waiver of such rights,
                  unless such waiver is an express written waiver which has been
                  signed by the waiving party, and in the case of the Company,
                  expressly approved by its Board of Directors. Waiver of any
                  one breach will not be deemed to be a waiver of any other
                  breach.

         3.12     Counterpart Execution. This Agreement may be executed in
                  separate counterparts, with the same effect as if the parties
                  hereto had signed the same document. Counterparts so executed
                  and delivered shall be deemed to be an original, shall be
                  construed together and shall constitute one Agreement.

                               [SIGNATURES FOLLOW]


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                  IN WITNESS WHEREOF, the parties hereto have set forth their
hands on the day, month and year first above written in multiple originals, each
of which shall have the same force and effect as if it were the sole original.

                  WITNESSES:                 ENERGY PARTNERS, LTD.


                                             By:
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                                                Richard A. Bachmann

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                                             Employee:

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