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                                                                   Exhibit 10.9

















                             CONTRIBUTION AGREEMENT

                                     BETWEEN

                         UNION OIL COMPANY OF CALIFORNIA

                                       AND

                          MATADOR PETROLEUM CORPORATION



















                               January 20, 1998

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                            CONTRIBUTION AGREEMENT


This Contribution Agreement (this "Agreement") is entered into as of the 20th
day of January, 1998, between UNION OIL COMPANY OF CALIFORNIA, a California
corporation whose address is 14141 Southwest Freeway, Sugar Land, TX 77478
(herein referred to as "Unocal") and MATADOR PETROLEUM CORPORATION (formerly
named Matador Hold Co.), a Texas corporation, whose address is 8340 Meadow
Road, Suite 158, Dallas, TX 75231-3751 (herein referred to as "Matador").

1.    TRANSFER: For and in consideration of the mutual benefits to be derived
      herefrom, and subject to the terms and conditions hereinafter set forth,
      Unocal hereby transfers, assigns, conveys and delivers to Matador the
      following:

      (a)   Unocal's leasehold interest in the oil, gas and other mineral leases
            described in Exhibit "A" insofar as same cover and affect the lands
            described in Exhibit "A";

      (b)   the wells, equipment and facilities permanently located on the lands
            described in Exhibit "A", including, but not limited to, pumps,
            surface and subsurface well equipment, gas plants, saltwater
            disposal wells, lines and facilities, sulfur recovery facilities,
            compressors, compressor stations, dehydration facilities, treating
            facilities, gathering lines, flow lines, valves, meters, separators,
            tanks, tank batteries and other fixtures;

      (c)   the oil, condensate and natural gas liquids produced after the
            Effective Date (as defined in Section 2 of this Agreement),
            including line fill below the pipeline connections as of the
            Effective Date, attributable to the leasehold interests described in
            Exhibit "A";

      (d)   all personal property, warehouse stock and idle equipment pertaining
            to the properties described on Exhibit "A";

      (e)   all contracts and agreements concerning the properties described in
            Exhibit "A", including, but not limited to, unit agreements, pooling
            agreements, areas of mutual interest agreements, farmout agreements,
            farm-in agreements, saltwater disposal agreements, water injection
            agreements, water rights agreements, surface use agreements, line
            well injection agreements, road use agreements, drilling contracts,
            seismic agreements, operating agreements, well service contracts,
            production sales contracts, gas contracts, gas balancing agreements,
            storage or warehouse agreements, supplier contracts, service
            contracts, construction agreements, division orders and transfer
            orders, insofar as and only insofar as they relate to the interests
            and properties described in Exhibit "A" ("Existing Contracts");

      (f)   authorizations, permits, and similar rights and interests applicable
            to, or used in connection with, any or all of the interests and
            properties described in Exhibits "A"; and

      (g)   all files, compilations, reports, seismic data, logs, records,
            information and data relating to the properties described in Exhibit
            "A", including, without limitation: (i) land and title records
            (including abstracts of title, title opinions, and title curative
            documents), (ii)


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            contract files, (iii) correspondence, (iv) operations,
            environmental, production and accounting records, (v) facility and
            well records and (vi) geological, geophysical, engineering and other
            scientific and technical data and information, including seismic
            lines, maps and interpretations, relating to the properties
            described on Exhibit "A", provided, however, that Unocal shall not
            be required to assign to Matador any interest in items (i) through
            (vi) above, if such an assignment, in Unocal's sole determination,
            is precluded by existing contractual obligations, such as
            confidentiality agreements, which restrict such assignment. To the
            extent that any such items are precluded from assignment, Unocal
            shall provide reasonable access to such items to Matador or its
            agents, to the full extent such access is available under the terms
            of any contracts or other agreements restricting an assignment to
            Matador hereunder.

      (h)   all other real and personal property interests of Unocal regarding
            property located in Lea, Eddy or Chaves Counties, New Mexico.

      All of the property and contract rights, titles and interests described
      above are hereinafter collectively called the "SENM Properties." It is the
      intention of the parties that Unocal convey to Matador all of its property
      interests, both real and personal, in Lea, Eddy and Chaves Counties, New
      Mexico, whether or not specifically set forth on Exhibit "A" or delineated
      above; provided that the interests described in this Section 1, the
      interests transferred under this Agreement and the term "SENM Properties"
      only includes interests owned by Unocal or an affiliate of Unocal as of
      the Effective Date before the consummation of this Agreement.

2.    CLOSING AND EFFECTIVE DATE. The Effective Date of the Transfer will be
      7:00 a.m. on October 1, 1997, (the "Effective Date") with closing to occur
      contemporaneously with the execution of this Agreement (the "Closing
      Date"). Unocal shall be entitled to all amounts realized from, and
      accruing to, the SENM Properties prior to the Effective Date, including
      the right to all production in storage, processing and inventory, and
      shall be responsible for all expenses for the development and operation of
      the SENM Properties prior to the Effective Date, and Matador shall be
      entitled to all amounts realized from, and accruing to, the SENM
      Properties subsequent to the Effective Date, and shall be responsible for
      all expenses for the development and operation of the SENM Properties
      subsequent to the Effective Date. It is understood and agreed, however,
      that any amounts attributable to suspense accounts or other revenues not
      properly credited to the account of Unocal due to accounting errors, title
      discrepancies, improperly calculated royalties, oil or gas marketing and
      sales adjustments, refunds, improperly calculated interests or other
      discrepancies attributable to periods prior to the Effective Date that are
      disclosed and collected by or through the efforts of Matador, shall belong
      to, and are hereby assigned to, Matador. At Unocal's request, Matador
      shall provide documentation to demonstrate the efforts made to collect any
      amount that Matador claims an entitlement to pursuant to this paragraph.
      The parties agree that Matador shall have the burden to demonstrate that
      monies attributable to the period prior to the Effective Date are
      collected by and through its own efforts.

3.    EXISTING OBLIGATIONS

      The SENM Properties will be conveyed subject to any and all Existing
      Contracts and all other agreements contained in Unocal's files and
      disclosed to Matador ("Other Agreements"), or filed for record in the
      records of the Lea, Eddy or Chaves County Clerk's office, the New Mexico
      Oil Conservation Division or the Bureau of Land Management for the SENM
      Properties, or otherwise


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      actually known to Matador prior to Closing. To the extent of the interest
      acquired by Matador hereunder, Matador agrees to and shall assume and be
      responsible for all obligations of Unocal under such Existing Contracts
      and Other Agreements as of the Effective Date.

4.    ADJUSTMENTS

      (a)   Oil, gas and other production from or attributable to the SENM
            Properties which was produced prior to the Effective Date and
            proceeds from the sale thereof shall belong to Unocal.

      (b)   Matador will assume all responsibility for notifying the buyer(s) of
            production of the change of ownership. The parties shall execute
            such letters in-lieu of transfer orders or such other documents as
            may be reasonably required by any purchaser of production. Within
            one hundred twenty (120) days after closing, Matador and Unocal will
            effect a cash adjustment to account for (1) any production prior to
            the Effective Date the proceeds from which are reserved to Unocal;
            (2) any payments received by Unocal for production which was
            produced after the Effective Date the proceeds from which are due to
            Matador; (3) costs, expenses, charges, and credits relating to
            operations of the SENM Properties incurred and paid by Unocal
            between the Effective Date and the Closing for which Matador should
            reimburse Unocal; (4) any costs and expenses for operations incurred
            prior to the Effective Date attributable to the SENM Properties
            which have not been paid by Unocal as of the Closing Date for which
            Unocal should be responsible; and (5) such other adjustments
            (including prepayments) as may be agreed upon by the parties hereto.

5.    WARRANTY: Unocal agrees to convey the SENM Properties without any warranty
      whatsoever, express or implied, as to description, contractual
      obligations, title, condition, fitness for purpose, merchantability,
      completeness or otherwise, but with full substitution and subrogation of
      Unocal, and all persons claiming by, through and under Unocal, to the
      extent assignable, in and to all covenants and warranties of Unocal's
      predecessors in title and with full subrogation of all rights accruing
      under the applicable statutes of limitation or prescription under the laws
      of the state where the assets are located and all rights of actions of
      warranty against all former owners of the SENM Properties.

6.    INDEMNIFICATION:

      (a)   Matador agrees to assume any and all responsibility which Unocal may
            have under applicable governmental laws, rules and regulations
            concerning the plugging and abandonment of wells which are part of,
            or located on, the SENM Properties, and agrees to defend, indemnify
            and hold Unocal harmless from any and all liabilities arising from
            Matador's failure, or alleged failure, to properly plug and abandon
            such wells from and after the Closing Date.

      (b)   From and after the Closing Date, Matador agrees to assume all
            responsibility and liability related to the environmental condition
            of the SENM Properties arising from events or occurrences occurring
            after the Closing Date and agrees to defend, indemnify and hold
            Unocal harmless from any and all claims arising from the presence of
            NORM, asbestos and any other environmental contaminants which may be
            deposited or released on the SENM Properties after the Closing Date.


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      (c)   In addition to provisions (a) and (b) above, Matador agrees to
            indemnify and hold harmless Unocal from and against all losses,
            costs, claims, demands, suits, fees, liability and expense with
            respect to the SENM Properties which arise out of or relate to
            Matador's ownership and/or operation of such properties, or which in
            any manner relates to the condition of the premises and equipment
            with regard to any event or occurrence occurring after the Closing
            Date.

      (d)   For a period of three years after the Closing Date, Unocal agrees to
            retain all responsibility and liability related to any material
            adverse environmental condition on or arising from, or any violation
            of environmental laws related to, the SENM Properties that existed
            or occurred on or prior to the Closing Date, and agrees to defend,
            indemnify and hold Matador, its officers, directors, agents,
            employees and affiliated companies, harmless from any and all
            claims, losses, damages, fines, penalties, expenses (including, but
            not limited to, reasonable attorneys' fees) and costs (collectively,
            "Damages") arising therefrom or related thereto. For purposes of
            this paragraph, "material adverse environmental condition" shall
            mean only those environmental conditions for which (i) remediation
            is required, or a fine, penalty, claim, damage, loss, cost or
            expense is payable, under applicable law, rules, regulations or
            governmental agency action or third- party actions or claims, (ii)
            Damages from such condition exceed $10,000 and (iii) the aggregate
            of all Damages (including, but not limited to, costs to remediate)
            for which indemnity claimed during the three-year period immediately
            following the Closing Date exceeds $100,000. For purposes of this
            paragraph, "environmental laws" means all laws, rules, regulations,
            pronouncements, policies and similar items of any governmental body,
            agency or subdivision that deal with the protection of the
            environment or the release of contaminants or regulated substances
            into the environment. Matador shall notify Unocal, in writing,of any
            remedial efforts for which Matador seeks indemnification from Unocal
            under this Section and the parties shall mutually agree upon a plan
            for remediation; provided, however, that no failure by Matador to
            give notice pursuant to this Section will relieve Unocal of any
            liability under this Section, except to the extent that such failure
            has a material adverse effect on Unocal's liability under this
            Section.

      (e)   In addition to provision (d) above, Unocal agrees to defend,
            indemnify and hold harmless Matador and its affiliated companies,
            and its and their officers, directors, agents, and employees, from
            and against all losses, costs, claims, demands, suits, fees,
            liability and expense with respect to the SENM Properties which
            arise out of or relate to (i) Unocal's ownership and/or operation of
            such SENM Properties, or which in any manner relates to the
            condition of the SENM Properties and equipment with regard to any
            event or occurrence occurring or arising prior to the Closing Date,
            (ii) any instrument, contract or other agreement not disclosed to
            Matador or filed of record or (iii) any lien, claim or encumbrance
            other than those usual and customary permitted encumbrances in
            transactions of this type, the net cumulative effect of which do not
            operate to reduce the net revenue interest with respect to any
            property set forth in Exhibit "A" by more than a proportionately
            reduced 5% or to increase the costs and expenses relating to the
            operations and development of any Property by more than a
            proportionately reduced 5% of the working interest indicated on
            Exhibit "A".

      (f)   Matador further covenants and agrees to defend any suits brought
            against Unocal based upon any claim for which Matador has agreed to
            provide indemnification under this Section 6, and to pay any
            demands, assessments, judgments, costs, and expenses


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            incident to its indemnity obligations hereunder; provided, that
            Unocal shall, nevertheless, have the right to participate (at
            Unocal's expense if Matador is defending the suit or claim) in the
            defense of any such suit or suits without relieving Matador of its
            obligation to defend the same.

      (g)   Unocal further covenants and agrees to defend any suits brought
            against Matador based upon any claim for which Unocal has agreed to
            provide indemnification under this Section 6, and to pay any
            demands, assessments, judgments, costs, and expenses incident to its
            indemnity obligations hereunder; provided, that Matador shall,
            nevertheless, have the right to participate (at Matador's expense if
            Unocal is defending the suit or claim) in the defense of any such
            suit or suits without relieving Unocal of its obligation to defend
            the same.

7.    RECORDS:  At or promptly after the Closing, Unocal shall deliver to
      Matador either originals or copies of all of Unocal's records relating
      to the SENM Properties.

8.    TAXES: Ad valorem taxes for 1997 personal property, severance taxes and
      similar obligations shall be prorated as of the Effective Date hereof.
      Matador will be responsible for payment of the taxes assessed for the tax
      year 1997 and will bill Unocal, and provide supporting data, for its pro
      rata share. Matador will bear all applicable sales taxes or similar taxes
      imposed by any state, county, municipal or other governmental entity as a
      result of the sale of SENM Properties.

9.    GAS OVER AND UNDER PRODUCTION: Notwithstanding anything to the contrary
      contained in this Agreement, Matador acknowledges and agrees to the
      following regarding possible gas imbalance on the SENM Properties.

      (a)   GAS UNDERPRODUCTION: In the event Unocal is underproduced as to any
            well(s) appurtenant to the SENM Properties, Matador agrees not to
            hold Unocal liable for such underproduction. Unocal, however, agrees
            that if Closing occurs, Matador is hereby assigned all of its
            contractual rights to make up such underproduction.

      (b)   GAS OVERPRODUCTION: In the event Unocal is overproduced as to any
            wells(s) appurtenant to the SENM Properties, Matador acknowledges
            and agrees that its share of gas from any such overproduced well(s)
            may at some point be curtailed by underproduced working interest
            owner(s) or in the event production should cease prior to achieving
            volumetric balancing Matador may be subject to cash balancing. The
            parties to this Agreement agree that Unocal shall not be liable to
            Matador in the event such curtailment or cash balancing occurs, and
            Matador shall accept the SENM Properties subject to and assume any
            obligations created by such overproduction.

10.   OTHER ACTIONS: The parties agree to execute such further documents or take
      such further actions after the Closing Date, which may be necessary in
      order to effectuate the transactions contemplated hereunder.

11.   WAIVER: No waiver of any of the provisions of this Agreement shall be
      deemed or shall constitute a waiver of any other provision hereof
      (regardless of whether such provision is similar), nor shall any such
      waiver constitute a continuing waiver unless otherwise expressly provided.


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12.   SEVERABILITY: If any term or other provision of this Agreement is invalid,
      illegal or incapable of being enforced by any rule of law or public
      policy, all other conditions and provisions of this Agreement shall
      nevertheless remain in full force and effect so long as the economic or
      legal substance of the transactions contemplated hereby is not affected in
      any manner adverse to any party. Upon such determination that any term or
      other provision is invalid, illegal or incapable of being enforced, the
      parties hereto shall negotiate in good faith to modify this Agreement so
      as to effect the original intent of the parties as closely as possible in
      an acceptable manner to the end that transactions contemplated hereby are
      fulfilled to the extent possible.

13.   BULK TRANSFER: Buyer hereby waives compliance by Unocal with the
      provisions of any applicable Bulk Transfer Act under the Uniform
      Commercial Code, and Unocal warrants and agrees to pay and discharge when
      due all claims of creditors which could be asserted by reason of such
      noncompliance.

14.   WARRANTY DISCLAIMERS: ALL PERSONAL PROPERTY, MACHINERY, FIXTURES,
      EQUIPMENT AND MATERIALS CONVEYED HEREBY ARE SOLD AND ASSIGNED AND ACCEPTED
      BY MATADOR, IN THEIR "WHERE IS, AS IS" CONDITION, WITHOUT ANY WARRANTIES
      WHATSOEVER, EXPRESS OR IMPLIED OR STATUTORY, OF MARKETABILITY, QUALITY,
      CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, ALL
      OF WHICH ARE EXPRESSLY DISCLAIMED. THE PARTIES AGREE THAT TO THE EXTENT
      REQUIRED TO BE OPERATIVE, THE DISCLAIMERS OF CERTAIN WARRANTIES CONTAINED
      IN THIS SECTION ARE "CONSPICUOUS" DISCLAIMERS FOR THE PURCHASE OF ANY
      APPLICABLE LAW.

15.   COMMUNICATIONS: Unless otherwise provided in this Agreement,
      communications (including notices) under this Agreement that must be in
      writing and delivered by a specified date will be deemed to have been made
      when received at the following addresses by registered or certified mail,
      postage prepaid, or by messenger (or at such other address as a party may
      specify by notice to the other party):

            Union Oil Company of California     Matador Petroleum Corporation
            14141 Southwest Freeway             8340 Meadow Road, Suite 158
            Sugar Land, TX  77478               Dallas, TX  75231-3751
            Attn: Mike Buswell                  Attn: Joseph Wm. Foran

            Office: 281-491-7600                Office: 214-987-3650
            Fax:    281-287-7340                Fax:    214-691-1415


16.   HART-SCOTT RODINO ANTITRUST: The parties have determined that the
      Hart-Scott-Rodino Antitrust Improvements Act of 1976 does not apply to
      this transaction.

17.   COUNTERPARTS: This Agreement may be executed in multiple counterparts,
      each of which shall be deemed an original, but all of which together shall
      constitute one and the same instrument.

18.   ENTIRE AGREEMENT: This Agreement and the Stock Purchase Agreement and
      Shareholders Agreement of even date herewith among Unocal, Matador and
      others and the other agreements


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      contemplated hereby and thereby constitute the entire agreement among the
      parties pertaining to the subject matter hereof and supersede all prior
      agreements, understandings, negotiations and discussions, whether oral,
      written or inferred, of the parties, and there are no other warranties,
      representations or agreements between the parties in connection with the
      subject matter hereof.

19.   GOVERNING LAW: This Agreement shall be governed by, and construed and
      enforced in accordance with, the laws of the State of Texas.

20.   BINDING EFFECT AND ASSIGNMENT: This Agreement shall be binding upon and
      inure to the benefit of the parties hereto and their respective heirs,
      successors and assigns. Nothing in this Agreement, express or implied, is
      intended to confer upon any person other than the parties hereto and their
      respective heirs, successors and assigns, any rights, benefits or
      obligations hereunder.

21.   HEADINGS: The headings contained herein are inserted for convenience of
      reference only and are not intended to be a part of or affect the meaning
      or interpretation of this Agreement.

22.   SURVIVAL. The provisions of this Agreement shall survive the closing of
      the transactions contemplated hereby.

      IN WITNESS WHEREOF, Matador and Unocal have caused their names to be
affixed to this Contribution Agreement as of the date first above written.

                                          UNION OIL COMPANY OF CALIFORNIA



                                          BY:   /s/ Robert C. Gnagy
                                                --------------------------------


                                          MATADOR PETROLEUM CORPORATION



                                          BY:   /s/ Joseph Wm. Foran
                                                --------------------------------
                                                Joseph Wm. Foran
                                                Chairman and CEO






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