SEVERANCE AGREEMENT

This Severance  Agreement is entered into as of the 12th day of February,  1997,
by and among Chaparral Resources,  Inc.  ("Chaparral"),  a Colorado corporation,
and Paul V. Hoovler  ("Hoovler").  Chaparral and Hoovler are hereinafter jointly
referred to as the Parties.

For good and valuable  consideration,  including the promises and mutual general
releases contained herein, the Parties hereby agree as follows:

1. Approval and Effective Date This Agreement  shall be effective as of February
12,  1997  ("Effective  Date") and will become  binding on the Parties  upon its
ratification and approval by the Chaparral Board of Directors.

2. Salary and Benefits This agreement will be effective as of February 12, 1997.
Hoovler will receive his salary and unpaid vacation pay accrued through February
12, 1997. Hoovler may request that Chaparral transfer to him, in accordance with
the plan's terms, the vested portion of his 401K plan account.

3.       Warrants
3.1      On August 19, 1996, the Chaparral Board of Directors  awarded Hoovler a
         cash bonus of $140,000 as recognition  of past and present  services to
         the  company;  said  bonus to be used by Hoovler  to  exercise  certain
         Warrants,  granted  to Hoovler  pursuant  to the  company's  1989 Stock
         Warrant  Plan (the  "Plan"),  to purchase  500,000  shares of Chaparral
         common stock at an exercise  price of $0.28 per share.  This bonus will
         not become  payable until receipt of notice from Hoovler,  which notice
         may not be given and shall not be  effective  until the  earlier  of a)
         completion of a sale or farmout by Chaparral of all or a portion of its
         interest  in  the   Karakuduk  Oil  Field   Development   Project  (the
         "Project"),  or b) the date when Chaparral makes a public disclosure of
         a sale or farmout of the  Project.  At its sole option and  discretion,
         Chaparral may, in lieu of making payment of such bonus to Hoovler,  use
         all or a  portion  of  such  bonus  as a  direct  offset  to  Hoovler's
         obligation  to make any payment due to Chaparral  upon  exercise of the
         Warrant.  Anything  contained  in  the  foregoing  provisions  of  this
         paragraph to the  contrary  notwithstanding,  in the event  Hoovler has
         exercised  and paid for the Warrant prior to the date the bonus becomes
         payable,  Chaparral shall pay such bonus directly to Hoovler,  but only
         upon  completion  of a sale  or  farmout  of all  or a  portion  of its
         interest in the Project,

         Chaparral  shall use its reasonable  best efforts,  consistent with its
         past policy and  practice,  to continue  to maintain  the  registration
         statement  registering the shares underlying the Warrant until the date
         that the Warrant is either exercised or expires,  whichever shall first
         occur; provided,  however, that Chaparral shall not be required to take
         any  action  or make  any  filing  with  the  Securities  and  Exchange
         Commission  that,  in the sole  discretion of the Board of Directors of
         Chaparral, is not in the best interest of the company.


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         Chaparral  shall  amend  the Plan to permit  Hoovler  to  transfer  the
         Warrant to a member of his family or to a trust created by Hoovler. For
         purposes of this Agreement, the term family shall mean a parent, child,
         grandchild or spouse.

3.2      On or before March 15, 1997,  Chaparral  will cause a certificate to be
         delivered  to Hoovler  representing  the  warrants to purchase  100,000
         shares of  Chaparral  common  stock at an  exercise  price of $0.85 per
         share,  for a period of four (4) years from the date of such grant that
         were granted to Hoovler on February 12, 1997.  The warrant  shall be in
         form and  substance  similar in all  material  respects  to the Warrant
         issued to Hoovler  under the Plan,  and shall permit  Hoovler to assign
         the warrant on terms and conditions  similar to those stated in Section
         3.1 above.  The shares  underlying these warrants will be registered by
         Chaparral when it next amends its current registration statement.

3.3      On or before March 15, 1997,  Chaparral  will cause a certificate to be
         delivered  to Hoovler  representing  the  warrants to purchase  100,000
         shares of  Chaparral  common  stock at an  exercise  price of $1.25 per
         share that were granted to Hoovler on February 12, 1997.  Such warrants
         shall not be  exercisable  prior to January 1, 1998,  and shall  remain
         exercisable  for a period of four (4) years from such date. The warrant
         shall be in form and substance  similar in all material respects to the
         Warrant  issued to Hoovler under the Plan,  and shall permit Hoovler to
         assign the warrant on terms and  conditions  similar to those stated in
         Section 3.1 above.

4. ORRI Chaparral will assign to Hoovler, or to an entity controlled by Hoovler,
the  existing  ORRI  that  Chaparral  holds  in  approximately  89  wells.  Such
assignment  shall be for a three (3) year  period,  at the end of which  Hoovler
will reassign the ORRI to Chaparral.  Hoovler agrees to pay ten percent (10%) of
the net  revenues  received  from such ORRI during this three (3) year period to
Jan Podoll,  and  acknowledges  that Chaparral has agreed to such  assignment in
reliance upon Hoovler's promise to make such payment.

Hoovler  also  agrees  to  execute  the  reassignment  at the same time that the
assignment is entered into, with the  understanding  that such reassignment will
be held in escrow by Alan D.  Berlin,  Esq.  during  the three  year term of the
assignment.

5. Road Runner At Hoovler's request,  Chaparral will assign its interest in Road
Runner, Ltd .to Hoovler, or to an entity controlled by Hoovler.

6. Insurance Chaparral will assign to Hoovler its ownership interest in two life
insurance  policies  that it  currently  holds on  Hoovler's  life.  The Parties
acknowledge that such policies currently have a combined cash surrender value of
approximately $32,000.


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7. Office Equipment  Hoovler  understands that Chaparral intends to sell certain
office  furniture,  equipment  and  supplies,  and that if Hoovler  so  desires,
Hoovler may bid for these items.  Hoovler also understand that the furniture and
equipment presently located in his office will be given to him by Chaparral.

8. Resignation  Hoovler will resign,  as of the Effective Date, as an officer of
Chaparral and as an officer and director of its subsidiaries  and affiliates.  A
copy of Hoovler's  resignation  is attached  hereto.  Hoovler will continue as a
director of Chaparral until the next annual shareholders meeting.

9. General Release by Hoovler  Hoovler,  his successors,  heirs and assigns (the
"Releasors") fully and forever release and discharge Chaparral, its subsidiaries
and related  companies,  their  officers,  directors,  employees,  shareholders,
agents, representatives,  attorneys, accountants,  predecessors,  successors and
assigns (the  "Releasees")  from any and all actions,  causes of action,  suits,
debts,  claims,  promises and demands,  other than those specifically  stated in
this Severance  Agreement,  or any claim by Hoovler for indemnification  against
claims of others for  actions or matters  which  occurred  while  Hoovler was an
officer,  director  or employee  of  Chaparral  and for which he would have been
entitled to  indemnification  by  Chaparral  under  Chaparral's  Certificate  of
Incorporation, By-laws or policies as in effect on February 12, 1997, whether in
law or equity which the Releasors  ever had now have or hereafter  can, shall or
may have  against  Releasees,  which  are based  upon or arise out of  Hoovler's
employment with Chaparral, including without limitation, his service as a member
of the Board of Directors of Chaparral,  as a shareholder  of Chaparral,  or his
execution  of  this  Severance  Agreement,  other  than  any  action,  claim  or
proceeding to enforce his rights under this Severance Agreement.

10.  General  Release by  Chaparral  Chaparral,  its  subsidiaries  and  related
companies,  their  officers,   directors,   employees,   shareholders,   agents,
representatives,  attorneys, accountants,  predecessors,  successors and assigns
(the  "Releasors")  fully  and  forever  release  and  discharge  Hoovler,   his
successors,  heirs or assigns (the "Releasees") from any and all actions, causes
of  action,  suits,  debts,  claims,  promises  and  demands,  other  than those
specifically stated in this Severance Agreement,  whether in law or equity which
the  Releasors  ever had now have or  hereafter  can,  shall or may have against
Releasees,  which  are  based  upon or arise out of  Hoovler's  employment  with
Chaparral, including without limitation, his service as a member of the Board of
Directors of Chaparral or as a shareholder of Chaparral.

11.  Covenant  Not  to Sue  The  Parties  agree  not to  commence,  directly  or
indirectly  cause the  commencement  of, or cause or  attempt to cause any third
party to commence,  any suit,  arbitration or proceeding to enforce any claim or
other matter released under this Severance Agreement.

12.  Severability If any provision of this Agreement or the application  thereof
to any Party or  circumstance  shall be  determined  by any  court of  competent


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jurisdiction  to be invalid and  unenforceable  to any extent,  the remainder of
this  Agreement  or  the   application  of  such  provision  to  such  Party  or
circumstance, other than those as to which it was so determined to be invalid or
unenforceable,  shall not be affected thereby,  and each provision thereof shall
be valid and shall be enforced to the fullest extent permitted by law.

13 Applicable Law This  Agreement  shall be construed and enforced in accordance
with the laws of the State of Colorado,  without giving effect to the provisions
or principals thereof relating to choice or conflict of laws.

14. Section  Headings  Section titles and headings are for descriptive  purposes
only and shall not control or alter the meaning of this  Agreement  as set forth
in the text.  Reference to the  singular  includes a reference to the plural and
vice versa. Reference to any gender includes a reference to all other genders.

15. Counterparts This Agreement may be executed in several counterparts,  all of
which  together  shall  constitute  one agreement  binding on all parties hereto
notwithstanding that all the parties have not signed the same counterpart.


IN WITNESS WHEREOF, the Parties have executed this Severance Agreement as of the
date first written above.



CHAPARRAL RESOURCES, INC.                                PAUL V. HOOVLER


By:/s/Arlo G. Sorensen                                   /s/Paul V. Hoovler
   -----------------------------------                   -----------------------
Arlo G. Sorensen, Chairman
Board of Directors Severance Committee


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