<PAGE>

                                                                   EXHIBIT 10.18


                            EAST TEXAS BOSSIER TREND
                              EXPLORATION AGREEMENT

         This East Texas Bossier Trend Exploration Agreement ("Agreement") is
made and entered unto this 5th day of September, 2000, by and between Union
Oil Company of California, a California corporation with offices at 14141
Southwest Freeway, Sugar Land, Texas 77478, (hereinafter referred to as
"Unocal") and Matador E & P Company, a Texas corporation, with offices at 8340
Meadow Road, Suite 158, Dallas, Texas 75231-3751, (hereinafter referred to as
"Matador".)

                                    RECITALS

         WHEREAS, Matador is the owner of certain oil and gas leases and other
mineral interests identified on Exhibit "A" attached hereto, and included herein
for all purposes, comprising 40,872.59 net acres, more or less (the "Leases");

         WHEREAS, the Leases exist in four prospect areas being 1) the "Goode
Ranch Area"; 2) the "Hill Ranch/Bonnerville/Ward Prairie Area"; 3) the "Red Oak
Area"; and, 4) the "Simsboro Area". Such areas are depicted on the plats
attached hereto as Exhibit "A-1", Exhibit "A-2", and Exhibit "A-3" (being
individually referred to as "Prospect Area" and collectively referred to as
"Prospect Areas");

         WHEREAS, Unocal has agreed to purchase from Matador and Matador has
agreed to sell to Unocal an undivided interest in the Leases and an undivided
interest in any additional oil and gas leases or other mineral interests
acquired or under contract for acquisition by Matador within the Prospect Areas
on or before June 14, 2000 ("Additional Leases"); and,

         WHEREAS, Unocal and Matador desire to enter into an agreement for the
joint acquisition and development of the Leases, Additional Leases and Prospect
Areas and for the establishment of an Area Mutual Interest.

         NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

         1.   ACQUISITION OF INTERESTS. Unocal agrees to purchase from Matador,
and Matador agrees to sell and convey to Unocal, an undivided 25% of 8/8ths of
the Leases and the Additional Leases on the form of assignment attached hereto
as Exhibit "B" (the "Assignment"). Unocal shall assume its proportionate part of
all burdens of record as of the date of the Assignment, and such further burdens
as may be contained in the agreements set forth in Paragraph 17a. (the "Hammack
Agreement"), Paragraph 17b., 17c., 17d., 17e., and 17f. (the "BK Agreements")
and Exhibit "O" (the "Neely Agreement"), to the extent of Unocal's proportionate
interest in the properties to be assigned. In the event that there exists, or
may later exist, Additional Leases not included on the Assignment, to which
Matador receives title or a vested interest in or to after the execution and
closing of this Agreement, Matador shall, within 30 days of such receipt of
title or such vesting of interest, convey an undivided 25% of such Additional
Lease(s) to Unocal by an additional assignment(s) in the form of Exhibit "B".
All interests conveyed to Unocal hereunder shall be subject to proportionate
reduction; however, such interests shall not be proportionately reduced as to
any interest owned or subsequently acquired or owned by BK Partners, L.P., or
its


<PAGE>


affiliates ("BK") pursuant to the BK Agreements, or the signatory parties to
the Hammack Agreement ("Hammack Parties"), pursuant to the Hammack Agreement.
It is the intent of the parties that within the Prospect Areas in which BK owns
an interest, the ownership shall be Matador 50%, Unocal 25% and BK 25%, and in
which the Hammack Parties own an interest, Matador 65%, Unocal 25%, and the
Hammack Parties 10%, and in which neither BK nor the Hammack Parties own any
interest, Matador 75% and Unocal 25%, proportionately reduced in all instances.
Nothing in this Agreement shall be construed as obligating Matador to acquire
any interest, nor shall Matador ever be obligated to sell and convey to Unocal
any interest greater than the interest Matador owns.

         2.   AREA OF MUTUAL INTEREST.

              a.       OUTLINE OF AREA AND OWNERSHIP. Matador and Unocal
                       hereby agree to an Area of Mutual Interest ("AMI"),
                       which shall consist of the lands outlined in red on
                       Exhibit "C" and Exhibit "C-1" attached hereto. It is
                       the intention of the parties that the AMI covers all
                       existing oil and/or gas leasehold interests, mineral
                       interests, farm-ins or other contractual term mineral
                       interests ("Mineral Interests") or the right to
                       acquire any of the same within the AMI currently held
                       by either party, and all Mineral Interests, as well
                       as any oil and/or gas wells, production, or rights to
                       production ("Producing Interests") acquired on or
                       after the date hereof. Matador and Unocal agree to
                       execute assignments substantially in the form of
                       Exhibit "B" of undivided Mineral Interests within the
                       AMI such that the ownership within the AMI will be
                       Matador 75% and Unocal 25%; or to the extent that
                       such Mineral Interests overlap with the areas of
                       mutual interest contained in the BK Agreements,
                       Matador 50%, Unocal 25% and BK 25%; or further to the
                       extent that such mineral interests overlap the Area
                       of Mutual Interest contained in the Hammack
                       Agreement, Matador 65%, Unocal 25%, and the Hammack
                       Parties 10% ("Ownership Percentage"). This AMI does
                       not cover Mineral Interests or Producing Interests as
                       to currently producing interval(s) owned by a party
                       hereto in acreage within existing producing proration
                       units as designated with the Texas Railroad
                       Commission. Should production cease, then those
                       Mineral Interests shall be automatically committed to
                       this AMI for the term hereof. This Agreement covers
                       oil and gas, but not other minerals.

              b.       ACQUISITIONS WITHIN AMI. Should either party acquire
                       or propose to acquire at any time after the date
                       hereof, but prior to the date this AMI terminates,
                       Mineral Interest or Producing Interests covering
                       lands all, or a portion of which, are located within
                       the AMI, such party ("Acquiring Party") shall notify
                       the other party ("Non-Acquiring Party") in writing
                       within thirty (30) days of such acquisition or
                       proposed acquisition, to the extent same lies within
                       the confines of the AMI, and the consideration paid
                       or to be paid for the acquired interest.
                       Notwithstanding anything to the contrary herein, in
                       the event that a Mineral Interest or Producing
                       Interest lies partially within and partially outside
                       of the confines of the AMI, such interest shall be
                       deemed to lie within the confines of the AMI if
                       either 1) at least 25% of the surface acreage of such
                       acreage of such


                                                                         PAGE 2
<PAGE>


                       interest falls within the AMI; or 2) any portion of the
                       Mineral Interest or Producing Interest is immediately
                       adjacent to a producing unit within the AMI. Otherwise,
                       the Acquiring Party shall only be required to offer, and
                       the Non-Acquiring Party shall only be obligated to
                       acquire that portion of any such Mineral Interest or
                       Producing Interest that lies within the confines of the
                       AMI. The Non-Acquiring shall, within 15 days after
                       receipt of notice from the Acquiring Party, notify the
                       Acquiring Party in writing whether it wishes to
                       participate in such acquisition, provided that failure
                       to respond within the time and in the manner set forth
                       above shall be deemed to be an election to not
                       participate in such acquisition. Should a Non-Acquiring
                       Party elect to not participate in an acquisition and
                       that acquisition, or acquisition right is consummated
                       within 90 days of the receipt, then the interest
                       acquired will not be subject to this Agreement, the AMI
                       JOA, or the AMI; however, such interest shall be subject
                       to the terms and conditions of an Operating Agreement
                       substantially in the form as the AMI JOA. In the event
                       that the said acquisition is not consummated within the
                       90 day period, then the effect shall be that proper
                       notice of the acquisition was not made to the
                       Non-Acquiring Party. All parties electing to participate
                       shall pay their proportionate share of all costs
                       incurred in acquiring the Mineral Interest and Producing
                       Interest within 15 days after the receipt of an invoice
                       with supporting documentation, including recorded
                       instruments or other executed agreements reflecting the
                       Mineral Interests or Producing Interests acquired and
                       the amount due. All costs incurred in acquiring Mineral
                       Interests or Producing Interests shall be paid by the
                       participating parties in accordance with their
                       respective Ownership Percentage. Assignment(s)
                       associated with an affirmative election shall be
                       delivered substantially in the form of Exhibit "B"
                       within 15 days after receipt of payment for the
                       participating party's respective share of the
                       acquisition costs.

              c.       TERMINATION OF THE AMI. The term of the AMI shall be
                       for a period of three (3) years from the date hereof,
                       unless extended by mutual consent of both parties in
                       writing making express reference to this Agreement
                       and the AMI ("AMI Term").

         3.   TERMINATION OF THIS AGREEMENT. It is agreed that at such time as
production is established and acreage is placed in a proration unit or a pooled
unit (whichever is larger), said unit and operations will be subject to the
appropriate Joint Operating Agreement attached hereto (the "JOA's") which
contains the unit within its contract area ("Producing Units"). After the
expiration of the AMI Term, this Agreement shall terminate as to all of the
acreage contained within the contract areas designated by the JOA's, except as
to the Leases, Additional Leases, or any other leases acquired during the AMI
Term, which are either wholly or partially contained within a Producing Unit.
Notwithstanding the termination of this Agreement, any operating agreements,
assignments, reassignments, rights to assignments and reassignments, and the
rights and obligations of the parties thereunder, shall continue in full force
and effect in accordance with their terms, as will the obligations of either
party to deliver data or other information not previously delivered. The parties
agree to grant such rights of ingress and egress to acreage developed during the
term of this Agreement to the extent that such acreage is inaccessible but


                                                                         PAGE 3
<PAGE>

over or through land held or controlled by the other party. Upon termination
hereof, both parties shall be entitled to retain all data obtained during the
course of this Agreement, and in the event that such data is held by one party,
such party shall have the continuing obligation to deliver copies of such data
to the non-holding party. Further, upon termination, the parties shall remain
obligated to supply such other and further documents and other instruments as
may be reasonable necessary to evidence the termination of this Agreement, to
fulfill any necessary filing requirements under the Internal Revenue Code, to
comply with any audit requests or other accounting matters, or to undertake any
other obligation that either party may have regarding matters arising during
the term hereof.

         4.   CONSIDERATION. Leases, Additional Leases, and Mineral Interests
acquired or contracted to be acquired by Matador within the AMI through June 14,
2000, being approximately 10,218.15 net acres, more or less, shall be purchased
by Unocal for $350.00 per net mineral acre sold and conveyed to Unocal, for an
estimated total purchase price of $3,576,352.50. All payments under this
Agreement shall be due and payable within fifteen (15) days after receipt of the
Assignment(s) in cash or other immediately available funds at the address or to
the account designated by assignor. Said acreage cost shall be inclusive of all
broker, land, transactional, filing, title and other direct acquisition costs.
All Mineral Interests or Producing Interests acquired after June 14, 2000, and
shall be on a "heads up" basis, subject to the BK Agreements and the Hammack
Agreement, and at actual cost to the Acquiring Party, including, without
limitation, broker, land, transactional, filing, title and other direct
acquisition costs, but excluding any internal or general administrative costs.

         5.   JOINT OPERATING AGREEMENT.

              a.       APPLICABLE JOINT OPERATING AGREEMENTS. Matador agrees
                       to execute, as operator, and Unocal agrees to execute
                       or otherwise ratify, as a non-operator, the following
                       Joint Operating Agreements:

                       i.       Exhibit "D", covering the Goode Ranch Area;

                       ii.      Exhibit "E" covering the Hill
                                Ranch/Bonnerville/Ward Prairie Area;

                       iii.     Exhibit "F" covering the Simsboro Area;

                       iv.      Exhibit "G" covering the Red Oak Area; and

                       v.       Exhibit "H" ("AMI JOA"), which covers the
                                balance of the acreage within the AMI not
                                included within the contract areas of the
                                Goode Ranch JOA, the Hill Ranch JOA, the
                                Simsboro JOA or the Red Oak JOA.

              b.       NON-CONSENT ELECTIONS. Notwithstanding any provisions
                       in any of the above JOA's to the contrary, Article VI
                       B.2 of the Goode Ranch JOA, the Hill
                       Ranch/Bonnerville/Ward Prairie JOA, the Simsboro JOA
                       and the AMI JOA shall be amended to provide that in
                       the event a party receiving a proposal to drill
                       should elect not to participate in the proposal, the


                                                                         PAGE 4
<PAGE>


                       receiving party agrees to grant a farmout unto the
                       consenting party(s) delivering a proportionately
                       reduced 75% net revenue interest in and to 704 acres
                       surrounding the proposed location, as designated by
                       the proposing party, that has not previously been
                       placed in a pooled producing unit. The Red Oak JOA
                       shall be amended to provide that in the event a party
                       receiving a proposal to drill should elect not to
                       participate in the proposal, the receiving party
                       agrees to grant a farmout unto the consenting
                       party(s) delivering a proportionately reduced 75% net
                       revenue interest, up to a maximum retained overriding
                       royalty interest of 5% of 8/8ths, proportionately
                       reduced, in and to 2000 acres surrounding the
                       proposed location, as designated by the proposing
                       party, that has not previously been placed in a
                       pooled producing unit.

              c.       INITIAL WELLS. There shall be no non-consent election
                       applicable as to the first well drilled in each
                       Prospect Area. In the event that the parties disagree
                       as to the proposed location of such initial well, the
                       parties agree to negotiate in good faith to determine
                       a mutually acceptable location.

              d.       COPAS OVERHEAD CHARGES. Notwithstanding anything
                       contained in the JOA's listed in 5 a.i-v. above, the
                       following overhead rates shall apply to each
                       individual JOA:

<TABLE>
<CAPTION>

                  Well Depth                     Drilling Rate     Producing Rate   Producing Rate
                                                 (Per Month)       (Per Month)      (Per Month)
                                                                   Wells 1 - 10     Wells 11 and above
                  <S>                            <C>               <C>              <C>

                  0 to 10,000 feet               $ 5000            $ 500            $ 400

                  10,000 to 15,000 feet          $ 6000            $ 600            $ 500

                  15,000 and deeper              $ 8000            $ 800            $ 700
</TABLE>

         6.   WELL PROPOSALS. Except as otherwise provided for herein, on a
Prospect Area by Prospect Area basis, no well may be proposed, except by the
operator: a) during the pendency of another well proposal on that Prospect Area;
or b) until at least 30 days after the previous well in the Prospect Area has
been completed as either a producer of oil and/or gas or as a dry hole. Such
restrictions shall not apply to the extent that the proposed operations are
necessary, in good faith, to acquire, maintain or hold a lease, farmin or other
Mineral Interest located within the AMI. Notwithstanding anything herein to the
contrary, a non-operator shall have the right to make a well proposal during the
periods outlined in a) or b) above, and said proposal shall be deemed submitted
for purposes of response on the first day after the expiration of such period.
In the event of competing well proposals, the parties agree to meet for a
technical review of each proposal and determine, in good faith, which proposal
to proceed under. For purposes of this paragraph, all acreage within the AMI
that is not within one of the designated Prospect Areas, shall constitute one
Prospect Area, the result being that for purposes of well proposals hereunder,
without the consent of all parties, one well, and no more than one well may be
proposed at a time in each of: a) the Goode Ranch Area; b) the Hill
Ranch/Bonnerville/Ward Prairie Area; c) the Simsboro Area; d) the Red Oak Area;
and e) the balance of the area within the AMI. Notwithstanding the above, in no
event shall a party, other than the designated operator under the


                                                                         PAGE 5
<PAGE>


applicable JOA, propose more than three wells on three Prospect Areas at any
given time. Furthermore, no wells may be proposed within 1200 feet of any
currently existing producing well(s) in which either party has an interest
without the prior consent of such party.

         7.   EXCHANGE OF DATA AND OTHER INFORMATION.

              a.       PROPOSED PROJECTS. With respect to the drilling of
                       any well, or the undertaking of any workover or
                       recompletion on any existing well proposed under any
                       operating agreement or any proposal to acquire
                       additional seismic data over all or any portion of
                       the AMI ("Proposed Project"), upon request, the
                       non-proposing party may request such additional
                       information regarding the Proposed Project from the
                       proposing party as is reasonably necessary to
                       evaluate same. The proposing party will endeavor to
                       accommodate the non-proposing party by answering
                       questions and presenting relevant data regarding the
                       Proposed Project prior to the expiration of the
                       election period in the applicable operating
                       agreement, and the non-proposing party has a
                       reciprocal good faith obligation to share its data,
                       evaluations and interpretations to assist all parties
                       and evaluate the reasonableness and advisability of
                       the proposal. Nothing herein shall be construed as
                       extending any notice or election period under any
                       agreement.

              b.       GEOLOGICAL INFORMATION. The operating party agrees to
                       provide the non-operating party the geological data
                       as set forth in Exhibits "I" (Matador) and "J"
                       (Unocal), attached hereto. Should a party elect not
                       to participate in the drilling of a well, said party
                       shall remain entitled to receive such geological
                       data.

              c.       ACCESS TO DATA. During the term of this Agreement,
                       Matador and Unocal shall have mutual access to all
                       geological, seismic and geophysical, engineering
                       (excluding proprietary reserve estimates),
                       accounting, land and exploration data owned by or in
                       possession of either Matador or Unocal pertaining to
                       interests included within the AMI. Such access shall
                       be subject to the terms of any existing license
                       agreements or other contractual restrictions covering
                       such data. All such data shall be made available at
                       the respective party's office during normal business
                       hours, upon reasonable notice of the party requesting
                       to review same. Matador and Unocal shall have the
                       right to reprocess any available seismic data owned
                       or in the possession of the other party within the
                       AMI, provided that such reprocessing is permitted
                       under the governing license agreement covering such
                       data. Copies of the respective party's licensing
                       agreements shall be made available to the other party
                       upon request.

              d.       LIMITATION OF ACCESS TO DATA. Notwithstanding the
                       above, any party not participating in, or
                       contributing their proportionate share of the costs
                       of the acquisition of seismic or other data acquired
                       on or after the effective date of this Agreement
                       shall not be entitled to review or otherwise access
                       such data.


                                                                         PAGE 6
<PAGE>


         8.   CONFIDENTIAL DATA. "Confidential Data" shall be defined as any
proprietary seismic, geological, engineering, land, accounting or other data
that is not generally available to the public, or does not during the term of
this Agreement become generally available to the public through actions not in
violation of this Agreement, that is owned or obtained by either party to this
Agreement pertaining to any interests within the AMI. The provisions of this
paragraph shall remain in full force and effect for the term of this Agreement
plus an additional three (3) years and may be extended by mutual consent of both
parties.

              a.       PERMITTED DISCLOSURES. Confidential Data exchanged or
                       obtained by either party shall not be disclosed to
                       any third party except as expressly provided below.
                       As to any permitted disclosures, the third party to
                       whom Confidential Data is disclosed shall agree in
                       writing not to further disseminate or to disclose
                       such data.

                       i)       A party may disclose Confidential Data to
                                any third party with whom purchase
                                negotiations are being conducted as to a
                                property(s) to which the Confidential Data
                                is applicable, any third party which becomes
                                subject to an operating agreement covering
                                interests in the AMI, or any affiliated
                                company.

                       ii)      A party may disclose Confidential Data to
                                consultants, engineers or other parties who
                                are engaged by such party for the purpose of
                                evaluating such party's interest within the
                                AMI or to accountants, attorneys or other
                                professionals employed by such party and
                                whose duties require review of Confidential
                                Data.

                       iii)     A party may disclose Confidential Data to
                                any bona fide potential mortgagee, bank or
                                lending institution of the party.

                       iv)      A party may disclose Confidential Data to
                                gas purchasers or oil purchasers for
                                technical evaluations during negotiations
                                for the sale of the party's share of the gas
                                or oil produced from the AMI.

                       v)       A party may disclose Confidential Data
                                required to be disclosed by any Federal,
                                State or local government or agency thereof
                                or any stock exchange upon which a party's
                                shares are traded.

              b.       SALE OF CONFIDENTIAL DATA. Notwithstanding
                       termination of this Agreement, any jointly owned
                       Confidential Data obtained or created under the terms
                       hereof shall not be sold or traded to any third-party
                       without the prior written consent of all parties. The
                       data shall be owned and the proceeds from any sale of
                       such data shall be shared based on each party's
                       interest in the land to which the data pertains.

         8.   NO WARRANTIES. Neither party covenants, warrants or represents to
the other, either expressly or impliedly, the present or continuing validity or
status of any lease or other instruments described or mentioned in this
Agreement, the number of acres or net mineral acres included in any tract, or
the extent of the party's ownership thereof, if any. Both parties agree,


                                                                         PAGE 7
<PAGE>


upon request and at the requesting party's expense, to furnish the requesting
party with copies of leases, instruments, title opinions and other related data
contained in its files. Neither party makes any representation as to the
accuracy or reliability of any information or data furnished to the other and
neither party assumes any responsibility with respect thereto.

         10.  NO PARTNERSHIP. The rights, duties, obligations and liabilities of
the parties hereunder shall be several, not joint or collective. It is not the
purpose or intention of this Agreement to create any mining partnership,
commercial partnership or other partnership relation and none shall be inferred
from the agreement to file an election to be excluded from the application of
certain United States tax laws. Each party agrees to elect to be excluded from
the application of Subchapter K of Chapter 1 of Subtitle A of the Internal
Revenue Code of 1986, and all amendments thereto.

         11.  TRANSFER OF INTEREST. Notwithstanding the terms of any JOA, should
any party desire to sell all or any part of its interests hereunder, such party
shall promptly give written notice to the other party with full information
concerning its proposed sale, which shall include the name and address of the
prospective purchaser, the purchase price and all other terms of the offer. If
the offer is: a) for non-cash consideration; b) is part of a larger acquisition
of properties; or c) is part of a corporate merger or takeover wherein the
selling party is not the surviving entity, a cash value shall be allocated, in
good faith, in affidavit form, to apply to the interests subject to this
Agreement. The non-selling party shall then have an optional prior right, for a
period of 10 days after receipt of the notice, to purchase on the same terms and
conditions, the interest which the selling party proposes to sell, and to
allocate such purchase, in its sole discretion, to affiliates and other parties
owning an interest in such properties.

         12.  SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, nothing herein contained shall be construed as
permitting an assignment contrary to the terms, conditions and provisions of
this Agreement.

         13.  FURTHER DOCUMENTS. The parties agree to execute such other and
further instruments and other documents as are reasonably necessary to carry out
the commercial purposes of this Agreement.

         14.  NOTICES. All notices hereunder shall be deemed to be properly
given, if in writing, and sent addressed as set forth below:

         As to Matador:    Matador E & P Company
                           8340 Meadow Road, Suite 158
                           Dallas, TX  75231
                           Attn:  Jeff Ventura
                           Telephone:  (214) 987-7121
                           Facsimile:  (214) 987-7105





                                                                         PAGE 8
<PAGE>



         As to Unocal:     Union Oil Company of California
                           4021-4023 Ambassador Caffery Pkwy.
                           Lafayette, Louisiana 70503
                           Attn:  Dalton Smith
                           Telephone:  (337) 295-6680
                           Facsimile:  (337) 295-6407

         15.  BINDING ARBITRATION. Any controversy or claim arising out of, or
relating to this Agreement, or its breach, shall be settled by binding
arbitration in the county of the party against whom the breach is alleged in
accordance with the then governing rules of the American Arbitration
Association. Judgment upon the award rendered may be entered and enforced in any
court of competent jurisdiction.

         16.  ENTIRE AGREEMENT. This Agreement including the Exhibits attached
hereto constitutes the entire Agreement between the parties with respect to the
subject matter hereof, superseding all prior discussions, agreements and
understandings relating to the subject matter and cannot be modified or
otherwise amended except by the written consent of both parties.

         17.  EXISTING AGREEMENTS. This Agreement shall be subject to the terms
of the following agreements:

              a.       Exploration Agreement, dated February 28, 2000, by
                       and between Matador E & P Company, John A. Hammack,
                       John M. Little, Jr., John M. Little, Jr. Trust, Paul
                       A. Lockhart, Jr., John A. Gardere, Steve R.
                       Singleton, Estate of Stanley E. Neely, and Dimple L.
                       Zeigler. (Red Oak Area) (Exhibit "K")

              b.       Letter Agreement, dated March 13, 2000, by and
                       between Matador Petroleum Corporation and BK
                       Partners, L.P. (Goode Ranch Area) (Exhibit "L")

              c.       Letter Agreement, dated April 17, 2000, by and
                       between Matador Petroleum Corporation and BK
                       Partners, L.P. (Goode Ranch Area) (Exhibit "M")

              d.       Joint Operating Agreement, dated April 17, 2000, by
                       and between Matador Operating Company, as Operator,
                       and Matador E & P Company and BK Partners, L.P., as
                       Non-Operators. (Goode Ranch Area) (Exhibit "D")

              e.       Letter Agreement, dated May 18, 2000, by and between
                       Matador Petroleum Corporation and BK Partners, L.P.
                       (Hill Ranch/Bonnerville/Ward Prairie Area) (Exhibit
                       "N")

              f.       Joint Operating Agreement, dated June 1, 2000, by and
                       between Matador E & P Company, as Operator, and BK
                       Partners, as Non-Operator. (Hill
                       Ranch/Bonnerville/Ward Prairie Area) (Exhibit "E")


                                                                         PAGE 9
<PAGE>


              g.       Letter Agreement, dated June 14, 2000, by and between
                       the Estate of Stanley E. Neely and Matador Petroleum
                       Corporation (Red Oak Area) (Exhibit "O")

         Unocal shall assume its proportionate share of the rights and
obligations of Matador set forth in the existing agreements listed in this
Paragraph 17 as they relate to the interests acquired in this Agreement. Matador
and Unocal are parties to that certain East Texas Seismic Agreement, dated
October 1, 1998 ("East Texas Seismic Agreement"). To the extent that the AMI
provided for in this Agreement overlaps with any AMI set forth in the East Texas
Seismic Agreement, the terms and provisions of this Agreement shall govern and
prevail.

         18.  FORCE MAJEURE. If any party fails to comply with any provision of
this Agreement, or under any JOA executed pursuant hereto, due to Force Majeure,
other than an obligation to pay money, such delay or failure to act shall not
constitute a breach of this Agreement, provided the affected party immediately
communicates the existence of such Force Majeure to the other party, uses
reasonable diligence to remedy the cause of delay or failure to perform, and
resumes or completes performance within a reasonable time after the cause of
Force Majeure is removed. "Force Majeure" shall mean any act of God, strike,
lockout, or other industrial disturbances, act of the public enemy, war,
blockade, public riot, lightning, fire, storm, flood, explosion, governmental
action, governmental delay, restraint or inaction, unavailability of equipment,
and any other inability to perform for any other cause, whether of the kind
specifically enumerated above or otherwise which is not reasonably within the
control of the party claiming suspension, including rig availability or the
availability of equipment or services necessary to perform a given obligation.

         19.  CONFLICT OF AGREEMENTS. In the event of a conflict between this
Agreement and the Hammack Agreement or the BK Agreements, the Hammack Agreement
and/or the BK Agreements shall govern and prevail. If there is a conflict
between this Agreement and the form of the Assignment attached hereto as Exhibit
"B", it is agreed that this Agreement shall govern and prevail. If there is a
conflict between this Agreement and the Joint Operating Agreements attached
hereto as Exhibit "F" (Simsboro Area), Exhibit "G" (Red Oak Area), or Exhibit
"H" ("AMI JOA"), it is agreed that this Agreement shall govern and prevail.

         20.  RELATED PARTY TRANSACTION. Due to the fact that Unocal is a
significant shareholder of Matador, this Agreement is expressly subject to the
final approval of the Board of Directors of Matador. Each party represents and
warrants that: a) each has acted in good faith in the negotiation of this
Agreement and for the commercial purposes set forth in this Agreement; b) this
Agreement was the result of an arms-length negotiation; c) the terms contained
in this Agreement reflect reasonable and customary terms for transactions of
this type within the oil and gas industry; and, d) each party has had an
opportunity to withdraw from this Agreement after conducting due diligence and
has affirmatively elected to proceed with the transaction as provided for
herein. Each party agrees to indemnify and hold harmless the other party from
any action or loss that may occur as a result of any breach of these
representations and warranties by a party hereto.




                                                                         PAGE 10
<PAGE>


                                       MATADOR E & P COMPANY


                                       By: /s/ Roger S. Manny
                                          --------------------------------------
                                          Roger S. Manny, Vice-President


                                       UNION OIL COMPANY OF CALIFORNIA


                                       By: /s/ Dacton Smith III
                                          --------------------------------------

                                       Title: Attorney-in-Fact
                                             -----------------------------------
























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