PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement (the "Agreement"), effective 7:00 a.m., M.S.T.,
January 1, 1997 (the "Effective Date"), is between CHAPARRAL  RESOURCES,  INC. a
Colorado corporation,  (hereinafter  collectively referred to as "SELLER"),  and
CONOCO INC., a Delaware corporation ("BUYER").

                                    RECITALS:

SELLER  owns  certain  oil and gas  properties  located  in Rio  Blanco  County,
Colorado,  and related  contractual  rights and desires to sell these properties
and transfer these contractual rights.

BUYER  desires to  purchase  these  properties  from  SELLER and  acquire  these
contractual rights.

Accordingly,   in  consideration  of  the  mutual  promises  contained  in  this
Agreement, BUYER and SELLER agree as follows:

                          ARTICLE 1. PURCHASE AND SALE

1.1 The Property. Subject to the terms of this Agreement,  SELLER agrees to sell
and assign to BUYER and BUYER  agrees to purchase and acquire from SELLER all of
SELLER's  right and title to, and interest in, the following  (collectively  the
"Property"):

         1.1.1 The oil, gas and mineral  lease(s) and other interests in oil and
         gas described in Exhibit A and all rights,  privileges and  obligations
         appurtenant  to the leases INSOFAR AND ONLY INSOFAR AS the leases cover
         and  include  the  lands,  depths  and  rights  described  in Exhibit A
         ("Leases");

         1.1.2 All rights in any unit in which the Leases are  included,  to the
         extent that these rights arise from and are associated with the Leases,
         including  without  limitation all rights derived from any unitization,
         pooling,  operating,  communitization  or other  agreement  or from any
         declaration or order of any governmental authority;

         1.1.3  All of  SELLER'S  rights  and  interests  in  and to  producing,
         non-producing,  shut-in,  and abandoned oil, gas and condensate  wells,
         water source, water injection and other injection or disposal wells and
         associated facilities located on the Leases or lands unitized or pooled
         with the Leases;

         1.1.4 All  equipment,  facilities  and other  personal  property on the
         Leases  used in  developing  or  operating  the  Leases  or  producing,
         treating, storing, gathering,  compressing,  processing or transporting
         hydrocarbons on or from the Leases.;

         1.1.5 All easements,  rights-of-way,  licenses, permits, servitudes and
         similar interests  applicable to or used in operating the Leases or the
         personal property described above;

         1.1.6 All contracts and contractual  rights,  obligations and interests
         relating to the Leases,  including without  limitation unit agreements,
         farmout  agreements,  farmin  agreements,   operating  agreements,  and
         hydrocarbon  sales,  purchase,  gathering,  transportation,   treating,
         marketing,  exchange, processing and fractionating agreements ("Related
         Contracts"),  including  without  limitation  those  Related  Contracts
         described in Exhibit A; and

1.2  Exclusions.  The Property sold and assigned  under this  Agreement does not
include:

         1.2.1  SELLER's  intellectual  property used in developing or operating
         the  Property,   including  without  limitation   proprietary  computer
         software, patents, trade secrets,  copyrights,  names, marks and logos,
         all of which  SELLER  will remove  before or as soon as possible  after
         Closing;

         1.2.2 Trade credits, accounts and notes receivable,  and adjustments or
         refunds (including without  limitation  transportation  tariff refunds,
         take-or-pay claims, and audit adjustments) attributable to the Property
         with respect to any period before the Effective Date;


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1.3      Ownership of Production from the Property.

         1.3.1   Production   Before  the  Effective   Date.   SELLER  owns  all
         merchantable  oil,  gas,  condensate  and  distillate  ("Hydrocarbons")
         produced from the Property  before the Effective  Date. If Hydrocarbons
         produced from the Property  before the Effective Date are stored in the
         Lease stock tanks on the Effective Date ("Stock Tank Oil"), BUYER shall
         purchase  the Stock Tank Oil above  pipeline  connections  in the stock
         tanks from SELLER at the prevailing market value in the area,  adjusted
         for grade and  gravity  and less  taxes.  BUYER will pay SELLER for the
         Stock Tank Oil by upward  adjustment to the Purchase Price, as provided
         in Section 6.5.3.1.  SELLER and BUYER shall accept the Lease operator's
         tank gauge readings or other inventory records of the Stock Tank Oil.

         1.3.2  Production After the Effective Date. BUYER owns all Hydrocarbons
         produced from the Property on and after the Effective Date. SELLER will
         sell on BUYER's  behalf all  Hydrocarbons  produced  from the  Property
         between the  Effective  Date and the Closing  Date.  SELLER will credit
         BUYER for the proceeds of these sales as a downward  adjustment  to the
         Purchase  Price,  as  provided  in  Section  6.5.3.2.  Subject  to  any
         continuing sale obligations under the Related Contracts, BUYER may sell
         Hydrocarbons  produced  from the Property on and after the Closing Date
         as it deems appropriate.

                            ARTICLE 2. PURCHASE PRICE

2.1 Purchase Price.  BUYER shall pay SELLER a purchase price for the Property of
$270,000  ("Purchase  Price"),  allocated  $27,000  to  depreciable  assets  and
$243,000 to  nondepreciable  assets,  subject to any adjustments to the Purchase
Price made at Closing or in the post-closing final settlement.

                    ARTICLE 3. REPRESENTATIONS AND WARRANTIES

3.1 Reciprocal  Representations and Warranties.  SELLER and BUYER each represent
and warrant to the other that as of the Effective Date and the Closing Date:

         3.1.1 Corporate  Authority.  It is a corporation  duly organized and in
         good  standing  under the laws of its state of  incorporation,  is duly
         qualified  to carry on its  business in the state where the Property is
         located,  and has all the  requisite  power and authority to enter into
         and perform this Agreement.

         3.1.2 Requisite Approvals.  It has taken all necessary actions pursuant
         to its Articles of Incorporation, By-laws and other governing documents
         to fully  authorize it to consummate the  transaction  contemplated  by
         this Agreement.

         3.1.3 Validity of Obligation. This Agreement and all documents it is to
         execute  and  deliver  on or  before  the  Closing  Date have been duly
         executed by its appropriate  officials and constitute valid and legally
         binding  obligations,  enforceable  against it in  accordance  with the
         terms of this Agreement and such documents.

         3.1.4   Impediments  to  Consummation  of  Agreement.   Its  executing,
         delivering  and  performing  this  Agreement  does not conflict with or
         violate any agreement or instrument to which it is a party, or any law,
         rule, regulation,  ordinance,  judgment, decree or order to which it is
         subject.

         3.1.5   Bankruptcy.   There  are  no  bankruptcy,   reorganization   or
         receivership  proceedings  pending,  being  contemplated  by, or to its
         actual knowledge, threatened against it.

3.2 BUYER's  Representations  and Warranties.  BUYER  represents and warrants to
SELLER that as of the Effective Date and the Closing Date:

         3.2.1 Independent Evaluation. BUYER is an experienced and knowledgeable
         investor in  the oil and gas  business.  BUYER has been  advised by and
         has  relied  solely  on its own  expertise  and legal,  tax,  reservoir
         engineering   and   other    professional   counsel   concerning   this
         transaction.

         3.2.2 Qualification. BUYER is now or at Closing will be, and thereafter
         will continue to be,  qualified to own and operate federal and State of
         Colorado  oil, gas and mineral  leases,  including  meeting all bonding
         requirements.


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         Consummating  the  transaction  contemplated in this Agreement will not
         cause  BUYER to be  disqualified  or to exceed any  acreage  limitation
         imposed by law, statute or regulation.

         3.2.3  Securities  Laws.  BUYER has complied with all federal and state
         securities  laws applicable to the sale of the Property and will comply
         with such laws if it  subsequently  disposes  of all or any part of the
         Property.

3.3 SELLER's  Representations and Warranties.  SELLER represents and warrants to
BUYER that as of the Effective Date and the Closing Date:

         3.3.1 Lawsuits and Claims.  SELLER has not been notified of any action,
         suit,  proceeding,  claim  or  investigation  by  any  person,  entity,
         administrative  agency or  governmental  body pending or  threatened in
         writing  against  SELLER that may adversely  affect title to any of the
         Property or the value  thereof or otherwise  hinder  operations  on the
         Property and, to the best of SELLER's knowledge, there is no reasonable
         basis for any such action, suit, proceeding, claim or investigation.

         3.3.2 Environmental Proceedings.  SELLER has not been notified that the
         Property  is the  subject  of  any  pending  environmental  enforcement
         proceeding,  investigation,  inquiry or claim of  noncompliance  by any
         governmental  agency or private party and, except as disclosed to BUYER
         in  writing,  there is no  reasonable  basis  to the  best of  SELLER's
         knowledge, for any such proceeding, investigation, inquiry or claim.

         3.3.3 Leases and  Contracts.  The Leases and Related  Contracts  are in
         full force and  effect,  and SELLER  has made all  payments  (including
         royalties,  minimum royalties,  delay rentals and shut-in payments) due
         thereunder  or  required  to be made to  maintain  the leases and other
         agreements in effect. To the best of SELLER's knowledge, all unrecorded
         agreements to which the Property is subject are described in Exhibit A.

         3.3.4 Sales  Agreements.  Crude oil ,  condensate,  and/or  natural gas
         production  from the  Property  is not  subject to any sale or exchange
         contracts  or  arrangements,  a "take or pay"  arrangement,  production
         payment or any other arrangement to deliver hydrocarbons that cannot be
         terminated  at any time after the  Effective  Date,  without  breach or
         penalty,   upon  60  days'  notice.   SELLER  further  represents  that
         production  from the Property is not subject to any call on  production
         or preferential right to purchase the production by any party.

         3.3.5 Adverse  Changes.  To the best of SELLER's  knowledge,  since the
         Effective  Date,  there  has been no  material  adverse  change  in the
         physical  condition  of,  or title to the  Property,  except  depletion
         through  normal  production,  and  depreciation  of  equipment  through
         ordinary wear and tear.

3.4 Notice.  SELLER and BUYER shall each give the other prompt written notice of
any matter materially  affecting any of its  representations or warranties under
this Article 3 or rendering any such warranty or representation untrue.

                              ARTICLE 4. WARRANTIES

4.1 Title and  Encumbrances.  SELLER SELLS AND  TRANSFERS  THE PROPERTY TO BUYER
SUBJECT TO ALL ROYALTIES,  OVERRIDING ROYALTIES,  BURDENS AND ENCUMBRANCES,  AND
WITHOUT WARRANTY OF TITLE, EXPRESS,  STATUTORY, OR IMPLIED,  PROVIDED,  HOWEVER,
SELLER SHALL AGREE TO DEFEND THE TITLE TO THE PROPERTY AGAINST THE LAWFUL CLAIMS
AND DEMANDS OF ALL PERSONS OR ENTITIES CLAIMING THE SAME OR ANY PART THEREOF BY,
THROUGH OR UNDER SELLER, BUT NOT OTHERWISE.

4.2 Information About the Property.  SELLER MAKES NO WARRANTY OR REPRESENTATION,
EXPRESS,  STATUTORY  OR  IMPLIED,  AS TO  (i)  THE  ACCURACY,  COMPLETENESS,  OR
MATERIALITY OF ANY DATA, INFORMATION OR RECORDS FURNISHED TO BUYER IN CONNECTION
WITH THE  PROPERTY;  (ii) THE QUALITY AND QUANTITY OF  HYDROCARBON  RESERVES (IF
ANY) ATTRIBUTABLE TO THE PROPERTY;  (iii) THE ABILITY OF THE PROPERTY TO PRODUCE
HYDROCARBONS,  INCLUDING WITHOUT LIMITATION  PRODUCTION RATES, DECLINE RATES AND
RECOMPLETION OPPORTUNITIES;  (iv) ALLOWABLES OR OTHER REGULATORY MATTERS, OR (v)
THE PRESENT OR FUTURE VALUE OF THE ANTICIPATED INCOME, COSTS OR PROFITS, IF ANY,
TO BE DERIVED FROM THE PROPERTY.  ANY AND ALL DATA, INFORMATION OR OTHER RECORDS
FURNISHED BY SELLER ARE PROVIDED TO BUYER AS A CONVENIENCE AND BUYER'S  RELIANCE
ON OR USE OF THE SAME IS AT BUYER'S SOLE RISK.


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              ARTICLE 5. TITLE EXAMINATION AND PHYSICAL INSPECTION

5.1 Information and Access. Prior to Closing, to allow BUYER to confirm SELLER's
title  to  the  Property,   SELLER  shall  give  BUYER  and  BUYER's  authorized
representatives,  during  normal  business  hours,  the  right  to  examine  all
contract,  land and lease  records,  to the extent  such data and records are in
SELLER's possession and relate to the Property. BUYER may photocopy such records
at its  sole  expense.  BUYER  shall  keep  confidential  all  information  made
available to BUYER until Closing.

5.2      Preferential Rights and Consents to Assign.

         5.2.1  If any of the  Property  is  subject  to  preferential  purchase
rights, rights of first refusal, or similar rights (collectively,  "Preferential
Rights"),   or  consents  to  assign,   lessor's  approvals  or  similar  rights
(collectively,   "Consents"),  SELLER  shall  (i)  notify  the  holders  of  the
Preferential  Rights and Consents that it intends to sell the Property to BUYER,
(ii) provide them with any  information  about the sale of the Property to which
they are  entitled,  and (iii) in the case of  Consents,  ask the holders of the
Consents to consent to the assignment of the affected Property to BUYER.  SELLER
shall promptly notify BUYER whether Preferential Rights are exercised, waived or
deemed waived, or if any Consents are denied. SELLER will not be liable to BUYER
if any Preferential Rights are exercised, or any Consents are denied.

         5.2.2.  If SELLER is  unable  before  Closing  to obtain  the  required
Consents (other than Consents  ordinarily obtained after Closing) and waivers of
all  Preferential  Rights,  at the  option of the  BUYER,  that  portion  of the
Property  affected  by the  unwaived  Preferential  Rights or  Consents  will be
excluded from the transaction under this Agreement,  and the Purchase Price will
be adjusted by the Allocated  Value of the affected  Property  listed in Exhibit
"D" to this Agreement (the "Allocated Value"), and proceed with Closing.

5.3 Title Pending Governmental  Consents.  Until SELLER and BUYER obtain federal
and state approval of the sale and assignment of Leases requiring such approval,
SELLER will  continue to hold record  title to such Leases as nominee for BUYER.
Until the  required  approvals  are  obtained,  SELLER will act only upon and in
accordance  with  BUYER's  specific  written   instructions  and  will  have  no
authority,  responsibility  or  discretion  to perform any tasks with respect to
such Leases  other than  purely  administrative  or  ministerial  tasks,  unless
otherwise  specifically  requested and  authorized  by BUYER in writing.  If any
required approval is finally denied,  SELLER shall refund to BUYER the Allocated
Value of the Leases and other  Property  affected  and BUYER  shall  immediately
reassign such Leases and other Property to SELLER.

5.4      Title Defects
         5.4.1  BUYER will  review  title to the  Property  prior to Closing and
notify  SELLER in writing of any title  defect it discovers as soon a reasonably
practicable  after its discovery,  but in no event less than three business days
prior to the Closing Date. BUYER will be deemed to have conclusively  waived any
title  defect  about  which it fails to notify  SELLER in writing at least three
business days prior to the Closing Date.

         5.4.2 If BUYER  properly  notifies  SELLER of any title  defect,  BUYER
         shall have the  option to either (i) waive the title  defect and close,
         (ii) request  SELLER to cure the title defect,  but SELLER will have no
         obligation  to cure any  title  defects  in the  Property,  or (iii) if
         SELLER declines to cure a material title defect, exclude the portion of
         the Property  affected by the title defect from the  transaction  under
         this Agreement, in which case the Purchase Price will be reduced by the
         Allocated Value of the excluded Property.  If BUYER asks SELLER to cure
         a material title defect, and SELLER agrees to attempt to cure the title
         defect, SELLER will have 180 days after the Closing Date to correct the
         title  defect.  With respect to all material  title defects that SELLER
         fails to cure by 180 days after the Closing Date, BUYER may rescind its
         purchase  of that  portion  of the  Property  affected  by those  title
         defects,  after which SELLER shall  refund the  Allocated  Value of the
         affected  Property to BUYER,  and BUYER (at SELLER's sole option) shall
         immediately reassign the affected Property to SELLER.

5.5  Inspection;  Assumption  of Risk.  Promptly  after  the  execution  of this
Agreement and until Closing,  SELLER,  at times approved by SELLER,  shall allow
BUYER and its  representatives,  at their  sole  risk and  expense,  to  conduct
reasonable inspections of the Property.

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                     ARTICLE 6. CLOSING AND FINAL SETTLEMENT

6.1 Closing Date.  Unless BUYER and SELLER  otherwise agree, the closing of this
purchase  and sale  ("Closing")  will occur on or before  February 28, 1997 (the
actual  date on which  Closing  occurs  being the  "Closing  Date") in  SELLER's
offices in Denver, Colorado. If SELLER and BUYER agree to close the purchase and
sale of the  Property by mail rather  than in person,  the Closing  Date of this
purchase  and sale  will be the date on which  SELLER  receives  payment  of the
Purchase Price.

6.2  Conditions  to  Closing.  BUYER or SELLER  are not  obligated  to close the
transaction that is the subject of this Agreement if:

         6.2.1 Any matter  represented  or  warranted by the other party in this
         Agreement is not true, or is misleading in any material respect,  as of
         the  Closing  Date or any  obligation  of the other  party  before  the
         Closing Date is not satisfied on the Closing Date.

         6.2.2 Any suit or other proceeding is pending or threatened  before any
         court or governmental agency seeking to restrain,  prohibit, or declare
         illegal,  or  seeking  substantial  damages  in  connection  with,  the
         transaction  that  is the  subject  of  this  Agreement,  or  there  is
         reasonable basis for any such suit or other proceeding.

         6.2.3 Any necessary waivers of Preferential  Rights and Consents (other
         than Consents typically obtained after Closing) have not been secured.

6.3  Preliminary  Settlement.  At  Closing,  BUYER and  SELLER  shall  execute a
settlement  statement  (the  "Preliminary  Settlement  Statement")  prepared  by
SELLER,  subject to the approval of BUYER, which shall set forth adjustments (as
set  forth  in this  paragraph)  to the  Purchase  Price  to be paid by BUYER at
Closing.  At least three days prior to Closing,  SELLER  agrees to furnish BUYER
the Preliminary Settlement Statement for BUYER's review.

         6.3.1    Increase to Purchase Price.  The Purchase Price to be paid  by
BUYER to SELLER at Closing shall be increased by:
          (i) The  amount  of lease  operating  expenses  which  accrued  to the
Property from operations,  and under the Joint Operating Agreement subsequent to
the Effective Date and which have been paid by SELLER.
          (ii) An amount  equal to the market  value of the Stock Tank Oil above
the pipeline connection as measured on the Effective Date.
          (iii) An amount  equal to the  estimated  value of  underproduced  oil
and/or gas production from the Property on the Effective Date.

          6.3.2 Decrease  Purchase Price. The Purchase Price to be paid by BUYER
to  SELLER  shall be  decreased  by:
          (i) The amount of capital expenditures  (including without limitation,
drilling costs, completion costs,  equipment,  and construction costs) and lease
operating  expenses  which accrued to the Property  prior to the Effective  Date
which have not been paid by SELLER.
          (ii) An amount equal to all estimated and unpaid ad valorem, property,
production,  severance and similar taxes and assessments  based upon or measured
by the  ownership  of the  Property or the  production  of  hydrocarbons  or the
receipt of proceeds  therefrom  accruing to the Property  prior to the Effective
Date.
          (iii) An amount equal to the  Allocated  Value for that portion of the
Property not conveyed as a result of the  exercising of  Preferential  Rights or
denial of Consents to Assign pursuant to Section 5.2.
          (iv) An amount equal to any title defects as set forth in Section 5.4.
          (v) An amount equal to the estimated value of overproduced  oil and/or
gas production from the Property on the Effective Date;

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6.4      Closing.   SELLER and BUYER have the following obligations at Closing:

         6.4.1  SELLER's Obligations. At Closing, SELLER shall deliver to BUYER:

                  (i)      An  executed and acknowledged  Assignment and Bill of
                           Sale  (in  sufficient counterparts for recording)  in
                           the  form  of Exhibit B  (the "Assignment and Bill of
                           Sale");  and
                  (ii)     Any other appropriate instruments necessary to effect
                           or  support  the  transaction  contemplated  in  this
                           Agreement,  including,  without limitation, any lease
                           assignment  forms or other forms or filings  required
                           by federal or state agencies to transfer ownership of
                           the Property.

         6.4.2    BUYER's Obligations.   At Closing, BUYER shall:
                  (i)      Pay SELLER the  Purchase  Price,  as  adjusted  under
                           Section  6.3,  either  by  cashier's  check  or  wire
                           transfer  of  immediately  available  funds  into  an
                           account  designated  by  SELLER  in  accordance  with
                           SELLER's instructions;
                  (ii)     Furnish fully  executed  change of operator  notices,
                           which   BUYER   shall   file  with  the   appropriate
                           regulatory  authorities,  if BUYER becomes  operator;
                           and
                  (iii)    Any ratification and joinder instruments  required to
                           transfer  the  SELLER's   rights,   obligations   and
                           interests   in  the  Related   Contracts   and  other
                           Property.

6.5 Post-Closing  Obligations.  SELLER and BUYER have the following post-closing
    obligations:

         6.5.1 Property Records. At or as soon as possible after Closing, SELLER
         shall  deliver to BUYER the  originals  of all lease,  contract or well
         records  (excluding  any  internal  valuation or  interpretive  data or
         documentation)  relating to the Property (the "Property Records"), at a
         location designated by BUYER.

         6.5.2  Recording  and Filing.  BUYER,  within a  reasonable  time after
         Closing, shall (i) record the Assignment and Bill of Sale and all other
         instruments  that must be recorded to  effectuate  the  transfer of the
         Property;  and (ii) file for approval  with the  applicable  government
         agencies all state and federal  transfer and  assignment  documents for
         the  Property.  BUYER  shall  provide  SELLER  a  recorded  copy of the
         Assignment  and  Bill of  Sale  and  other  recorded  instruments,  and
         approved  copies of the  state  and  federal  transfer  and  assignment
         documents as soon as they are available.

         6.5.3  Settlement  Statement.  SELLER  shall  use its best  efforts  to
         deliver  to BUYER,  within  90 days  after the  Closing  Date,  a final
         settlement  statement  that will adjust the Purchase  Price as follows;
         however,  SELLER's  failure to deliver the final  settlement  statement
         within  90 days  will  not  constitute  a  waiver  of any  right  to an
         adjustment otherwise due.

              6.5.3.1  The  Purchase Price will be adjusted upward by the amount
                       of:
                           (i)      All actual  production  expenses,  operating
                                    expenses,   overhead  under  the  applicable
                                    operating     agreements,     and    capital
                                    expenditures  (including  without limitation
                                    royalties,  minimum royalties,  rentals, and
                                    prepaid  charges) paid or incurred by SELLER
                                    and   attributable   to   operation  of  the
                                    Property on and after the Effective Date;
                           (ii)     The actual  value of the Stock Tank Oil from
                                    any proceeds  received by BUYER for the sale
                                    of production  from the Property  before the
                                    Effective Date; and
                           (iii)    Any  other   amounts  to  which   SELLER  is
                                    entitled  under this  Agreement that are not
                                    paid  as  part  of  the  Purchase  Price  at
                                    Closing.

              6.5.3.2 The Purchase Price will be adjusted downward by the amount
                      of:
                           (i)      Any   proceeds   received    by  SELLER  for
                                    production  from  the  Property on and after
                                    the  Effective  Date, as provided in Section
                                    1.3.2 of this Agreement;
                           (ii)     Any other amounts to which BUYER is entitled
                                    under  this  Agreement  that are not paid or
                                    reimbursed at Closing.

         6.5.4 Final Settlement.  The parties will attempt to agree to the final
         settlement  statement  within 30 days after its delivery to BUYER,  and
         settlement  will  be  made  (taking  into  account  adjustment  for the
         estimate made under  Section 6.3 and deducted  from the Purchase  Price
         under  Section  6.4.2(i) by company  check,  or wire  transfer,  at the
         receiving party's option,  within 15 days after agreement.  Thereafter,



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         if SELLER  or BUYER  receives  additional  proceeds or pays  additional
         expenses  for  or on behalf of the other  party,  they  shall  promptly
         invoice  the other party for expenses  paid or remit to the other party
         any proceeds received.

         6.5.5 Further Assurances. BUYER and SELLER agree to execute and deliver
         from time to time such  further  instruments  and do such other acts as
         may  be  reasonably  necessary  to  effectuate  the  purposes  of  this
         Agreement.

                      ARTICLE 7. ASSUMPTION OF OBLIGATIONS

7.1 Ownership and Operations. Except as provided in Section 10.1, upon and after
Closing, BUYER shall assume and perform all the rights, duties,  obligations and
liabilities  of ownership  and  operation  of the  Property,  including  without
limitation:  (i) all of SELLER's  express and implied  obligations and covenants
under the terms of the Leases,  the Related  Contracts  and all other orders and
contracts  to  which  the  Property  is  subject;  (ii)  responsibility  for all
royalties,  overriding royalties,  production payments, net profits obligations,
rentals,  shut-in  payments  and  other  burdens  or  encumbrances  to which the
Property is subject accruing after the Effective Date; (iii)  responsibility for
compliance  with  all  applicable  laws,   ordinances,   rules  and  regulations
pertaining to the Property,  and the  procurement and maintenance of all permits
required by public  authorities  in connection  with the Property;  and (iv) all
other obligations assumed by BUYER under this Agreement. With respect to (i) any
part of the Property for which BUYER is not duly elected  operator,  or (ii) any
non-operating  interests in the Property  being  transferred to BUYER under this
Agreement, BUYER shall assume full responsibility and liability for that portion
of  the  foregoing  rights,  duties,   obligations  and  liabilities  for  which
non-operators  are  responsible.  SELLER will remain  responsible for all costs,
expenses and liabilities  incurred by SELLER in connection with the ownership or
operation  of the Property  before the  Effective  Date,  except those for which
BUYER indemnifies SELLER, or which BUYER assumes in the Agreement.

7.2 Plugging and  Abandonment  Obligations.  From and after the Effective  Date,
BUYER assumes full  responsibility  and liability for the following  obligations
related to the Property ("Plugging and Abandonment Obligations"):  (i) plugging,
replugging and abandoning all wells on the Property  plugged after the Effective
Date; (ii) removing and disposing of all structures and equipment  located on or
comprising  part of the Property;  (iii) the  necessary  and proper  capping and
burying of all  associated  flow  lines  located  on or  comprising  part of the
Property;  (iv) restoring the leasehold  premises of the Property,  both surface
and subsurface, to the condition they were in before commencement of oil and gas
operations,  as may be required by applicable laws, regulation or contract;  and
(v) any  necessary  disposal of Property  contaminated  by  naturally  occurring
radioactive  material  ("NORM").  BUYER shall conduct all plugging,  replugging,
abandonment,  removal,  disposal  and  restoration  operations  in  a  good  and
workmanlike  manner and in compliance with all applicable laws and  regulations.
With respect to any non-operating interests in the Property being transferred to
BUYER  under  this  Agreement,   BUYER  shall  assume  full  responsibility  and
liability,  from and after the Effective  Date, for that portion of the Plugging
and Abandonment Obligations for which non-operators are responsible.

7.3 Environmental  Obligations.  BUYER assumes full responsibility and liability
for the  following  occurrences,  events  and  activities  on or  related to the
Property  ("Environmental  Obligations")  whether  arising  before  or after the
Effective  Date:  (i)  environmental   pollution  or  contamination,   including
pollution of the soil, groundwater or air; (ii) underground injection activities
and  waste  disposal  onsite;   (iii)  clean-up  responses,   and  the  cost  of
remediation,  control or  compliance  with  respect to  surface  and  subsurface
pollution caused by spills, pits, ponds or lagoons;  (iv) failure to comply with
applicable   land  use,   surface   disturbance,   licensing   or   notification
requirements; and (v) violation of environmental or land use rules, regulations,
demands or orders of  appropriate  state or federal  regulatory  agencies.  With
respect to any  non-operating  interests in the Property  being  transferred  to
BUYER  under this  Agreement,  BUYER  agrees to assume full  responsibility  and
liability,  from  and  after  the  Effective  Date,  for  that  portion  of  the
Environmental Obligations for which non-operators are responsible.

                             ARTICLE 8. INDEMNITIES

8.1 Definition of Claims. As used in this Agreement, the term "Claims" means any
and all losses, liabilities,  damages, obligations,  expenses, fines, penalties,
costs, claims, causes of action and judgments for (i) breaches of contract; (ii)
loss or damage to property;  and (iii)  violations  of applicable  laws,  rules,
regulations,  orders  or any  other  legal  right or duty  actionable  at law or
equity. The term "Claims" also includes attorneys fees and court costs resulting
from  the  defense  of any  claim or cause of  action  within  the  scope of the
indemnities in this Agreement.


                                        7


<PAGE>


8.2 Application of Indemnities.  Unless this Agreement expressly provides to the
contrary,  the  indemnities  set forth in this  Agreement  apply  regardless  of
whether:  (i) the  indemnified  party (or its  employees,  agents,  contractors,
successors or assigns) causes,  in whole or part, an indemnified  Claim; (ii) an
indemnified Claim arises out of or results from the indemnified  party's (or its
employees',  agents', contractors',  successors' or assigns') sole or concurrent
negligence;  (iii) the indemnified party (or its employees, agents, contractors,
successors or assigns) is deemed to be strictly liable, in whole or part, for an
indemnified Claim; or (iv) any part of an indemnified Claim is the result of the
imposition of punitive  damages.  All  indemnities  set forth in this  Agreement
extend  to the  officers,  directors,  employees  and  affiliates  of the  party
indemnified,  and  cover  the acts and  omissions  of the  officers,  directors,
employees, contractors, successors and assigns of the indemnifying party.

8.3 BUYER's  Indemnity.  BUYER shall indemnify,  defend and hold SELLER harmless
from and against any and all Claims caused by,  resulting from or incidental to:
(i) BUYER's  ownership or operation of the Property  after the  Effective  Date,
including  without  limitation the obligations  assumed by BUYER in Section 7.1;
(ii) all Plugging and Abandonment  Obligations arising after the Effective Date;
(iii)  all  Environmental  Obligations,  whether  arising  before  or after  the
Effective  Date;  (iv) BUYER's  disbursement  of  production  proceeds  from the
Property  accruing  after the Effective  Date,  including  funds in any suspense
accounts received from SELLER; (v) any obligations for broker's fees incurred by
BUYER in  connection  with the  purchase of the  Property;  (vi) BUYER'S acts or
omissions;   (vii)  any  failure  by  BUYER  to  comply  with  applicable  laws,
ordinances,  rules and regulations  pertaining to the Property,  and procure and
maintain permits required by public authorities in connection with the Property;
(viii) any  violation by BUYER of state or federal  securities  laws, or BUYER's
dealings with its partners,  investors,  financial  institutions and other third
parties  with  respect to this  Agreement;  and (ix)  SELLER's  operation of the
Property  under  Article  10,  if  applicable,  except to the  extent  caused by
SELLER's  gross  negligence  or  willful  misconduct.  BUYER  further  agrees to
indemnify,  defend and hold SELLER  harmless from and against any and all claims
for personal  injury,  illness,  disease and  wrongful  death which arise or are
asserted  after the Effective Date and which are  attributable  to the ownership
and  operation  of the  Property by BUYER,  including  without  limitation,  any
interest,  penalty,  reasonable  attorney's  fees and other  costs and  expenses
incurred in connection therewith or the defense thereof.

8.4 SELLER's Indemnity.  SELLER shall indemnify,  defend and hold BUYER harmless
from and against any and all Claims caused by,  resulting from or incidental to:
(i) SELLER's  ownership or operation of the Property  before the Effective Date,
except to the extent such  obligations are assumed by BUYER in Section 8.3; (ii)
SELLER's  disbursement of production  proceeds from the Property accruing before
the Effective Date;  (iii) any failure by SELLER to comply with applicable laws,
ordinances,  rules and regulations pertaining to the Property, or to procure and
maintain permits required by public authorities in connection with the Property;
(iv) any  violation by SELLER of state or federal  securities  laws, or SELLER's
dealings with its partners,  investors,  financial  institutions and other third
parties  with  respect to this  Agreement;  and (v)  SELLER's  operation  of the
Property under Article 10, if applicable, to the extent caused by SELLER's gross
negligence or willful misconduct. SELLER further agrees to indemnify, defend and
hold BUYER  harmless  from and against any and all claims for  personal  injury,
illness,  disease,  and wrongful  death which arise or are asserted prior to the
Effective Date or are asserted after Effective Date and are solely  attributable
to the  ownership and operation of the Property by SELLER prior to the Effective
Date, including without limitation, any interest, penalty, reasonable attorney's
fees,  and other  costs and  expenses  in  connection  therewith  or in  defense
thereof.  It is understood and agreed that SELLER's indemnity under this Section
is  limited  to claims  against  BUYER by third  parties,  including  government
agencies.

8.5  NORM.  BUYER  ACKNOWLEDGES  THAT  IT HAS  BEEN  INFORMED  THAT  OIL AND GAS
PRODUCING FORMATIONS CAN CONTAIN NATURALLY OCCURRING RADIOACTIVE MATERIAL.  SOME
OR ALL OF THE EQUIPMENT,  MATERIALS AND OTHER PROPERTY SUBJECT TO THIS AGREEMENT
MAY HAVE LEVELS OF NORM ABOVE  BACKGROUND  LEVELS.  A HEALTH HAZARD MAY EXIST IN
CONNECTION WITH THIS EQUIPMENT,  MATERIALS AND OTHER PROPERTY.  THEREFORE, BUYER
MAY NEED TO FOLLOW SAFETY  PROCEDURES  WHEN HANDLING THIS  EQUIPMENT,  AND OTHER
PROPERTY.

                         ARTICLE 9. TAXES AND EXPENSES.

9.1  Recording  Expenses.  BUYER shall pay the cost of recording  and filing the
Assignment and Bill of Sale for the Property, all state and federal transfer and
assignment documents, and all other instruments.

9.2 Ad Valorem,  Real Property and Personal Property Taxes. Unless paid pursuant
to Article 6.3, all Ad Valorem Taxes,  Real Property  Taxes,  Personal  Property
Taxes, and similar  obligations  ("Property Taxes") on the Property are SELLER's
obligation  for periods  before the Effective  Date and BUYER's  obligation  for
periods after the Effective Date.


                                        8

<PAGE>

9.3  Severance  Taxes.  SELLER  shall bear and pay all  severance or other taxes
measured by Hydrocarbon production from the Property, or the receipt of proceeds
therefrom, to the extent attributable to production from the Property before the
Effective  Date.  BUYER shall bear and pay all such taxes on production from the
Property on and after the Closing Date.

9.4 Sales  Taxes.  SELLER  shall  remit on behalf of BUYER all state and  county
sales taxes due on the Property, using the Allocated Values listed in Exhibit D.
BUYER will  reimburse  SELLER at Closing  for all sales  taxes paid on behalf of
BUYER.

                  ARTICLE 10. INTERIM OPERATION OF THE PROPERTY

10.1 Operations by SELLER.  If SELLER is operator of the Property,  SELLER shall
continue to operate the Property  during the period  between the Effective  Date
and 7:00 a.m., local time where the Property is located, on the first day of the
month following the month in which Closing  occurs,  or such later date to which
SELLER  and  BUYER  agree in  writing  ("Interim  Period"),  but  SELLER  has no
obligation  to operate the  Property  after the  Interim  Period.  SELLER  shall
operate the Property  during the Interim Period in a prudent  manner  consistent
with generally  accepted industry  practices and standards,  applicable laws and
regulations,  and all  applicable  lease and other  agreement  terms.  SELLER is
entitled to retain any overhead payments received and attributable to operations
during the Interim Period. SELLER makes no representation or warranty that BUYER
will  become  operator  of any  portion  of the  Property,  as  that  matter  is
controlled by the applicable  operating  agreements and governmental  regulatory
requirements.

10.2 Marketing of Production.  If SELLER continues to operate the Property after
the Closing Date under this Article 10, SELLER and BUYER will agree on continued
marketing of production,  disbursement  of proceeds of  production,  billing and
collection of amounts due from the nonoperating  interest owners, and payment of
all delay rentals, minimum royalties, shut-in royalties and other lease payments
until BUYER begins operating the Property.

                            ARTICLE 11. MISCELLANEOUS

11.1  Purchase  and  Sale/Qualified  Intermediary.  Subject  to  the  terms  and
conditions of this  Agreement,  SELLER  agrees to sell and convey to BUYER,  and
BUYER  agrees to  purchase,  pay for and  receive  the  Assets and to assume the
obligations  as provided  herein.  SELLER and BUYER hereby agree that BUYER,  in
lieu of the  purchase  of the  Assets  from  SELLER  for the cash  consideration
provided herein, shall have the right at any time prior to Closing to assign all
or a portion of its rights under this Agreement to a Qualified  Intermediary (as
that  term  is  defined  in  Section  1.1031(k)-   1(g)(4)(v)  of  the  Treasury
Regulations)  in order to  accomplish  the  transaction  in a manner  that  will
comply,  either  in whole  or in part,  with  the  requirements  of a  like-kind
exchange  pursuant to Section  1031 of the  Internal  Revenue  Code of 1986,  as
amended,  ("Code").  Likewise,  SELLER shall have the right at any time prior to
Closing  to assign all or a portion of its  rights  under  this  Agreement  to a
Qualified  Intermediary for the same purpose.  In the event either Party assigns
its rights under this Agreement pursuant to this Section 11.1, such Party agrees
to notify the other Party in writing of such assignment at or before Closing. If
SELLER assigns its rights under this Agreement for this purpose, BUYER agrees to
(i) consent to SELLER's  assignment of its rights in this  Agreement in the form
attached  hereto  as  Exhibit  "E-1",  and (ii) pay the  Purchase  Price  into a
qualified  escrow or qualified  trust account at Closing as directed in writing.
If BUYER assigns its rights under this Agreement for this purpose, SELLER agrees
to (i) consent to BUYER's assignment of its rights in this Agreement in the form
of Exhibit "E-2",  (ii) and accept the Purchase Price from the qualified  escrow
or qualified trust account at Closing,  and (iii) at Closing,  convey and assign
directly  to BUYER the  Assets  which are the  subject  of this  Agreement  upon
satisfaction  of the other  conditions to Closing and other terms and conditions
hereof.  SELLER  and BUYER  acknowledge  and agree that any  assignment  of this
Agreement to a Qualified Intermediary shall not release either Party from any of
their respective liabilities and obligations to each other under this Agreement,
and that neither Party represents to the other that any particular tax treatment
will be given to either Party as a result thereof.

11.2  Broker's  Fees.  Each  party  represents  that  it has  not  incurred  any
obligation for brokers,  finders or similar fees for which the other party would
be liable.

11.3 Press Releases.  After Closing, either BUYER or SELLER may make a statement
to the press concerning this transaction, provided such statement shall not make
reference to the Purchase Price or consideration paid.


                                        9


<PAGE>

11.4 Notices.  All notices under this Agreement  must be in writing.  Any notice
under this Agreement may be given by personal delivery,  facsimile transmission,
U.S. mail (postage prepaid),  or commercial delivery service, and will be deemed
duly given when  received by the party charged with such notice and addressed as
follows:

SELLER:          CHAPARRAL RESOURCES, INC.   BUYER:   CONOCO INC.
------                                       -----
                 3400 Bissonnet, Suite 135            10 Desta Drive, Suite 100W
                 Houston, TX   77005                  Midland, TX   79705-4500

Howard Karren                               Attn: Division Manager
                 FAX:  (713) 669-0994                 FAX:  (915) 686-5422

Any party,  by  written  notice to the  other,  may  change  the  address or the
individual to which or to whom notices are to be sent under this Agreement.

11.5 Assignment.  Neither party may assign its rights or obligations  under this
Agreement without the prior written consent of the other,  unless the assignment
occurs by merger, reorganization or sale of all of a party's assets.

11.6 Entirety of Agreement;  Amendment.  This Agreement  constitutes  the entire
understanding  between the parties  with respect to the subject  matter  hereof,
superseding all  negotiations,  prior  discussions,  representations,  and prior
agreements and  understandings  relating to such subject matter.  This Agreement
may be amended,  modified,  and supplemented  only in a writing duly executed by
BUYER and SELLER.

11.7  Successors and Assigns.  This Agreement binds and inures to the benefit of
the parties  hereto their  respective  permitted  successors  and  assigns,  and
nothing contained in this Agreement,  express or implied,  is intended to confer
upon any other person or entity any benefits, rights, or remedies.

11.8  Governing  Law.  This  Agreement  is governed by and must be  construed in
accordance   with  the   laws  of  the   State  of   Colorado,   excluding   any
conflicts-of-law  rule  or  principle  that  might  apply  the  law  of  another
jurisdiction.

11.9 Survival. All of the representations,  warranties,  and agreements of or by
the  parties  to this  Agreement  survive  the  execution  and  delivery  of the
Assignment and Bill of Sale and the transfer of the Property to BUYER.

11.10 Exhibits.  The Exhibits  attached to this Agreement are incorporated  into
and made a part of this  Agreement.  In the  event  of a  conflict  between  the
provisions of the Exhibits or the executed  Assignment  and Bill of Sale and the
foregoing  provisions of this Agreement,  the provisions of the Exhibits and the
executed  Assignment  and  Bill of  Sale  take  precedence  over  the  foregoing
provisions of this Agreement.  In the event of a conflict between the provisions
of the pro forma  Assignment  and Bill of Sale  attached  to this  Agreement  as
Exhibit B and the executed  Assignment  and Bill of Sale,  the provisions of the
executed Assignment and Bill of Sale take precedence.


This  instrument  may be executed in any number of  counterparts,  each of which
shall be considered an original for all purposes.

The authorized  representatives  of SELLER and BUYER sign below indicating their
agreement to the terms of this Agreement.


SELLER:                                     BUYER:

CHAPARRAL RESOURCES, INC.                   CONOCO INC.



By:                                         By:
   ---------------------------------------     ---------------------------------
Name:  Howard Karren                        Name:
      ------------------------------------       -------------------------------
Title:  Chairman & Chief Executive Officer  Title: 
      ------------------------------------       -------------------------------
Date:                                       Date:
      ------------------------------------       -------------------------------

                                       10

<PAGE>

                                    EXHIBIT B
                                     FORM OF

                           ASSIGNMENT AND BILL OF SALE
      
STATE OF COLORADO                   ss.
                                    ss.
COUNTY OF RIO BLANCO                ss.

          CHAPARRAL  RESOURCES,  INC.,  a Colorado  corporation  ("SELLER"),  in
consideration  of the agreements  set forth herein,  hereby sells and assigns to
CONOCO INC., a Delaware corporation ("BUYER"),  all of SELLER's right, title and
interest in and to the Property  described in this  Assignment  and Bill of Sale
("Assignment"), subject to the terms of this Assignment, effective as of January
1, 1997 (the "Effective Date"). This Assignment relates to the Purchase and Sale
Agreement, effective January 1, 1997 between SELLER and BUYER (the "Agreement").

                          ARTICLE 1. PURCHASE AND SALE

1.1 The Property. Subject to the terms of this Assignment, SELLER agrees to sell
and assign to BUYER and BUYER  agrees to purchase and acquire from SELLER all of
SELLER's  right and title to, and interest in, the following  (collectively  the
"Property"):

         1.1.1 The oil, gas and mineral  lease(s) and other interests in oil and
         gas  described  in  Attachment  1  and  all  rights,   privileges   and
         obligations  appurtenant  to the leases INSOFAR AND ONLY INSOFAR AS the
         leases  cover and include  the lands,  depths and rights  described  in
         Attachment 1 ("Leases");

         1.1.2 All rights in any unit in which the Leases are  included,  to the
         extent that these rights arise from and are associated with the Leases,
         including  without  limitation all rights derived from any unitization,
         pooling,  operating,  communitization  or other  agreement  or from any
         declaration or order of any governmental authority;

         1.1.3  All of  SELLER'S  rights  and  interest  in  and  to  producing,
         non-producing,  shut-in,  and abandoned oil, gas, and condensate wells,
         water source, water injection and other injection or disposal wells and
         associated facilities located on or from the Leases;

         1.1.4 All  equipment,  facilities  and other  personal  property on the
         Leases  used in  developing  or  operating  the  Leases  or  producing,
         treating, storing, gathering,  compressing,  processing or transporting
         hydrocarbons on or from the Leases;

         1.1.5 All easements,  rights-of-way,  licenses, permits, servitudes and
         similar interests  applicable to or used in operating the Leases or the
         personal property described above; and

         1.1.6 All contracts and contractual  rights,  obligations and interests
         relating to the Leases,  including without  limitation unit agreements,
         farmout  agreements,  farmin  agreements,   operating  agreements,  and
         hydrocarbon  sales,  purchase,  gathering,  transportation,   treating,
         marketing,  exchange, processing and fractionating agreements ("Related
         Contracts"),  including  without  limitation  those  Related  Contracts
         described in Attachment 1.

1.2  Exclusions.  The Property sold and assigned under this  Assignment does not
include:

         1.2.1  SELLER's  intellectual  property used in developing or operating
         the  Property,   including  without  limitation   proprietary  computer
         software, patents, trade secrets, copyrights, names, marks and logos;

         1.2.2 Trade credits, accounts and notes receivable,  and adjustments or
         refunds (including without  limitation  transportation  tariff refunds,
         take-or-pay claims, and audit adjustments) attributable to the Property
         with respect to any period before the Effective Date;

                                       1
<PAGE>

                              ARTICLE 2. WARRANTIES

2.1 Title;  Encumbrances.  SELLER  SELLS AND  TRANSFERS  THE  PROPERTY  TO BUYER
SUBJECT TO ALL ROYALTIES,  OVERRIDING ROYALTIES,  BURDENS AND ENCUMBRANCES,  AND
WITHOUT WARRANTY OF TITLE, EXPRESS,  STATUTORY, OR IMPLIED,  PROVIDED,  HOWEVER,
SELLER SHALL AGREE TO DEFEND THE TITLE TO THE PROPERTY AGAINST THE LAWFUL CLAIMS
AND DEMANDS OF ALL PERSONS OR ENTITIES CLAIMING THE SAME OR ANY PART THEREOF BY,
THROUGH OR UNDER SELLER, BUT NOT OTHERWISE.

2.2 Information About the Property.  SELLER MAKES NO WARRANTY OR REPRESENTATION,
EXPRESS,  STATUTORY  OR  IMPLIED,  AS TO  (i)  THE  ACCURACY,  COMPLETENESS,  OR
MATERIALITY OF ANY DATA, INFORMATION OR RECORDS FURNISHED TO BUYER IN CONNECTION
WITH THE  PROPERTY;  (ii) THE QUALITY AND QUANTITY OF  HYDROCARBON  RESERVES (IF
ANY) ATTRIBUTABLE TO THE PROPERTY;  (iii) THE ABILITY OF THE PROPERTY TO PRODUCE
HYDROCARBONS,  INCLUDING WITHOUT LIMITATION  PRODUCTION RATES, DECLINE RATES AND
RECOMPLETION OPPORTUNITIES;  (iv) ALLOWABLES OR OTHER REGULATORY MATTERS, OR (v)
THE PRESENT OR FUTURE VALUE OF THE ANTICIPATED INCOME, COSTS OR PROFITS, IF ANY,
TO BE DERIVED FROM THE PROPERTY.  ANY AND ALL DATA, INFORMATION OR OTHER RECORDS
FURNISHED BY SELLER ARE PROVIDED TO BUYER AS A CONVENIENCE AND BUYER'S  RELIANCE
ON OR USE OF THE SAME IS AT BUYER'S SOLE RISK.

                      ARTICLE 3. ASSUMPTION OF OBLIGATIONS

3.1 Ownership and Operations.  Except as provided in Section 5.1, upon and after
Closing, BUYER shall assume and perform all the rights, duties,  obligations and
liabilities  of ownership  and  operation  of the  Property,  including  without
limitation:  (i) all of SELLER's  express and implied  obligations and covenants
under the terms of the Leases,  the Related  Contracts  and all other orders and
contracts  to  which  the  Property  is  subject;  (ii)  responsibility  for all
royalties,  overriding royalties,  production payments, net profits obligations,
rentals,  shut-in  payments  and  other  burdens  or  encumbrances  to which the
Property is subject accruing after the Effective Date; (iii)  responsibility for
compliance  with  all  applicable  laws,   ordinances,   rules  and  regulations
pertaining to the Property,  and the  procurement and maintenance of all permits
required by public  authorities  in connection  with the Property;  and (iv) all
other  obligations  assumed by BUYER under this Assignment.  With respect to (i)
any part of the Property for which BUYER is not duly elected  operator,  or (ii)
any  non-operating  interests in the Property  being  transferred to BUYER under
this Agreement,  BUYER shall assume full  responsibility  and liability for that
portion of the foregoing rights,  duties,  obligations and liabilities for which
non-operators  are  responsible.  SELLER will remain  responsible for all costs,
expenses and liabilities  incurred by SELLER in connection with the ownership or
operation  of the Property  before the  Effective  Date,  except those for which
BUYER indemnifies SELLER, or which BUYER assumes in the Agreement.

3.2 Plugging and  Abandonment  Obligations.  From and after the Effective  Date,
BUYER assumes full  responsibility  and liability for the following  obligations
related to the Property ("Plugging and Abandonment Obligations"):  (i) plugging,
replugging and abandoning all wells on the Property  plugged after the Effective
Date; (ii) removing and disposing of all structures and equipment  located on or
comprising  part of the Property;  (iii) the  necessary  and proper  capping and
burying of all  associated  flow  lines  located  on or  comprising  part of the
Property;  (iv) restoring the leasehold  premises of the Property,  both surface
and subsurface, to the condition they were in before commencement of oil and gas
operations,  as may be required by applicable laws, regulation or contract;  and
(v) any  necessary  disposal of Property  contaminated  by  naturally  occurring
radioactive  material  ("NORM").  BUYER shall conduct all plugging,  replugging,
abandonment,  removal,  disposal  and  restoration  operations  in  a  good  and
workmanlike  manner and in compliance with all applicable laws and  regulations.
With respect to any non-operating interests in the Property being transferred to
BUYER  under  this  Agreement,   BUYER  shall  assume  full  responsibility  and
liability,  from and after the Effective  Date, for that portion of the Plugging
and Abandonment Obligations for which non-operators are responsible.

3.3 Environmental  Obligations.  BUYER assumes full responsibility and liability
for the  following  occurrences,  events  and  activities  on or  related to the
Property  ("Environmental  Obligations")  whether  arising  before  or after the
Effective  Date:  (i)  environmental   pollution  or  contamination,   including
pollution of the soil, groundwater or air; (ii) underground injection activities
and  waste  disposal  onsite;   (iii)  clean-up  responses,   and  the  cost  of
remediation,  control or  compliance  with  respect to  surface  and  subsurface
pollution caused by spills, pits, ponds or lagoons;  (iv) failure to comply with
applicable   land  use,   surface   disturbance,   licensing   or   notification
requirements; and (v) violation of environmental or land use rules, regulations,
demands or orders of  appropriate  state or federal  regulatory  agencies.  With
respect to any  non-operating  interests in the Property  being  transferred  to
BUYER under this  Assignment,  BUYER  agrees to assume full  responsibility  and
liability,  from  and  after  the  Effective  Date,  for  that  portion  of  the
Environmental Obligations for which non-operators are responsible.

                                       2

<PAGE>

                             ARTICLE 4. INDEMNITIES

4.1 Definition of Claims.  As used in this  Assignment,  the term "Claims" means
any  and  all  losses,  liabilities,  damages,  obligations,   expenses,  fines,
penalties,  costs,  claims,  causes of action and  judgments for (i) breaches of
contract;  (ii) loss or damage to property;  and (iii)  violations of applicable
laws, rules, regulations,  orders or any other legal right or duty actionable at
law or equity.  The term "Claims" also includes  attorneys  fees and court costs
resulting  from the defense of any claim or cause of action  within the scope of
the indemnities in this Assignment

4.2 Application of Indemnities. Unless this Assignment expressly provides to the
contrary,  the  indemnities  set forth in this  Assignment  apply  regardless of
whether:  (i) the  indemnified  party (or its  employees,  agents,  contractors,
successors or assigns) causes,  in whole or part, an indemnified  Claim; (ii) an
indemnified Claim arises out of or results from the indemnified  party's (or its
employees',  agents', contractors',  successors' or assigns') sole or concurrent
negligence;  (iii) the indemnified party (or its employees, agents, contractors,
successors or assigns) is deemed to be strictly liable, in whole or part, for an
indemnified Claim; or (iv) any part of an indemnified Claim is the result of the
imposition of punitive  damages.  All  indemnities  set forth in this Assignment
extend  to the  officers,  directors,  employees  and  affiliates  of the  party
indemnified,  and  cover  the acts and  omissions  of the  officers,  directors,
employees, contractors, successors and assigns of the indemnifying party.

4.3 BUYER's  Indemnity.  BUYER shall indemnify,  defend and hold SELLER harmless
from and against any and all Claims caused by,  resulting from or incidental to:
(i) BUYER's  ownership or operation of the Property  after the  Effective  Date,
including  without  limitation the obligations  assumed by BUYER in Section 3.1;
(ii) all Plugging and Abandonment  Obligations arising after the Effective Date;
(iii)  all  Environmental  Obligations,  whether  arising  before  or after  the
Effective  Date;  (iv) BUYER's  disbursement  of  production  proceeds  from the
Property  accruing  after the Effective  Date,  including  funds in any suspense
accounts received from SELLER; (v) any obligations for broker's fees incurred by
BUYER in  connection  with the  purchase of the  Property;  (vi) BUYER'S acts or
omissions;   (vii)  any  failure  by  BUYER  to  comply  with  applicable  laws,
ordinances,  rules and regulations  pertaining to the Property,  and procure and
maintain permits required by public authorities in connection with the Property;
(viii) any  violation by BUYER of state or federal  securities  laws, or BUYER's
dealings with its partners,  investors,  financial  institutions and other third
parties  with  respect to this  Agreement;  and (ix)  SELLER's  operation of the
Property  under  Article  10,  if  applicable,  except to the  extent  caused by
SELLER's  gross  negligence  or  willful  misconduct.  BUYER  further  agrees to
indemnify,  defend and hold SELLER  harmless from and against any and all claims
for personal  injury,  illness,  disease and  wrongful  death which arise or are
asserted  after the Effective Date and which are  attributable  to the ownership
and  operation  of the  Property by BUYER,  including  without  limitation,  any
interest,  penalty,  reasonable  attorney's  fees and other  costs and  expenses
incurred in connection therewith or the defense thereof.

4.4 SELLER's Indemnity.  SELLER shall indemnify,  defend and hold BUYER harmless
from and against any and all Claims caused by,  resulting from or incidental to:
(i) SELLER's  ownership or operation of the Property  before the Effective Date,
except to the extent such  obligations are assumed by BUYER in Section 4.3; (ii)
SELLER's  disbursement of production  proceeds from the Property accruing before
the Effective Date;  (iii) any failure by SELLER to comply with applicable laws,
ordinances,  rules and regulations pertaining to the Property, or to procure and
maintain permits required by public authorities in connection with the Property;
(iv) any  violation by SELLER of state or federal  securities  laws, or SELLER's
dealings with its partners,  investors,  financial  institutions and other third
parties  with  respect to this  Agreement;  and (v)  SELLER's  operation  of the
Property under Article 5, if applicable,  to the extent caused by SELLER's gross
negligence or willful misconduct. SELLER further agrees to indemnify, defend and
hold BUYER  harmless  from and against any and all claims for  personal  injury,
illness,  disease,  and wrongful  death which arise or are asserted prior to the
Effective Date or are asserted after Effective Date and are solely  attributable
to the  ownership and operation of the Property by SELLER prior to the Effective
Date, including without limitation, any interest, penalty, reasonable attorney's
fees,  and other  costs and  expenses  in  connection  therewith  or in  defense
thereof.  It is understood and agreed that SELLER's indemnity under this Section
is  limited  to claims  against  BUYER by third  parties,  including  government
agencies.

                                       3

<PAGE>


4.5  NORM.  BUYER  ACKNOWLEDGES  THAT  IT HAS  BEEN  INFORMED  THAT  OIL AND GAS
PRODUCING FORMATIONS CAN CONTAIN NATURALLY OCCURRING RADIOACTIVE MATERIAL.  SOME
OR ALL OF THE EQUIPMENT, MATERIALS AND OTHER PROPERTY SUBJECT TO THIS ASSIGNMENT
MAY HAVE LEVELS OF NORM ABOVE  BACKGROUND  LEVELS.  A HEALTH HAZARD MAY EXIST IN
CONNECTION WITH THIS EQUIPMENT,  MATERIALS AND OTHER PROPERTY.  THEREFORE, BUYER
MAY NEED TO FOLLOW SAFETY  PROCEDURES  WHEN HANDLING THIS  EQUIPMENT,  AND OTHER
PROPERTY.

                  ARTICLE 5. INTERIM OPERATION OF THE PROPERTY

         5.1  Operations  by SELLER.  If SELLER is the operator of the Property,
SELLER  shall  continue to operate the  Property  during the period  between the
Effective Date and 7:00 a.m., local time, where the Property is located,  on the
Closing Date, or such later date to which SELLER and BUYER agree in writing (the
"Interim  Period"),  but SELLER has no obligation to operate the Property  after
the Interim Period.  SELLER shall operate the Property during the Interim Period
in a prudent manner consistent with generally  accepted  industry  practices and
standards,  applicable laws and regulations,  and all applicable lease and other
agreement terms. SELLER is entitled to retain any overhead payments received and
attributable  to  operations   during  the  Interim  Period.   SELLER  makes  no
representation or warranty that BUYER will become operator of any portion of the
Property,  as that matter is controlled by the applicable  operating  agreements
and governmental regulatory requirements.

         5.2  Marketing  of  Production.  If SELLER  continues  to  operate  the
Property  after the  Closing  Date under this  Article 5,  SELLER and BUYER will
agree  on  continued  marketing  of  production,  disbursement  of  proceeds  of
production, billing and collection of amounts due from the nonoperating interest
owners, and payment of all delay rentals,  minimum royalties,  shut-in royalties
and other lease payments until BUYER begins operating the Property.

                          ARTICLE 6. TAXES AND EXPENSES

         6.1  Recording  Expenses.  BUYER shall pay all costs of  recording  and
filing the Assignment  and Bill of Sale for the Property,  all state and federal
transfer and assignment documents, and all other instruments.

         6.2 Ad Valorem,  Real Property and Personal  Property Taxes.  Except as
adjusted  pursuant to the terms of the  Agreement,  all Ad Valorem  Taxes,  Real
Property Taxes,  Personal  Property Taxes,  and similar  obligations  ("Property
Taxes") on the Property are SELLER's obligation for periods before the Effective
Date and BUYER's obligation for periods after the Effective Date.

         6.3 Severance  Taxes.  SELLER shall bear and pay all severance or other
taxes  measured  by  production  from the  Property,  or the receipt of proceeds
therefrom, to the extent attributable to production from the Property before the
Effective  Date.  BUYER shall bear and pay all such taxes on production from the
Property on and after the Closing Date.

         6.4 Sales  Taxes.  SELLER  shall remit on behalf of BUYER all state and
county sales taxes due on the  Property,  using the  allocated  values listed in
Exhibit D of the Agreement. BUYER will reimburse SELLER at Closing for all sales
taxes paid on behalf of BUYER.

                            ARTICLE 7. MISCELLANEOUS

7.1  Covenant  Running  With the Land.  This  Assignment  and all of its rights,
reservations, and covenants are covenants running with the land and inure to and
are binding upon the parties hereto, their heirs, successors, and assigns. BUYER
shall make any transfer or encumbrance of any of the Property  expressly subject
to this  Assignment and the assignee or transferee  must assume all  obligations
set forth herein.

                                       4

<PAGE>


7.2 Purchase and Sale Agreement.  The terms of the Agreement are incorporated by
reference in this Assignment.  In the event of a conflict between the provisions
of this  Assignment and the provisions of the Agreement,  the provisions of this
Assignment prevail.

The authorized  representatives  of SELLER and BUYER sign below indicating their
agreement to the terms of this Assignment.

SELLER:                                     BUYER:

CHAPARRAL RESOURCES, INC.                   CONOCO INC.



By:                                         By:
   ---------------------------------------     ---------------------------------
Name:  Howard Karren                        Name:
      ------------------------------------       -------------------------------
Title:  Chairman & Chief Executive Officer  Title: 
      ------------------------------------       -------------------------------
Date:                                       Date:
      ------------------------------------       -------------------------------

[Add Appropriate Acknowledgment Forms]

                                       5

<PAGE>

<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------
     PROPERTY NAME     COUNTY          STATE    OPERATOR                       GWI               NRI    ALLOCATED VALUE
<S>                   <C>              <C>      <C>                            <C>               <C>          <C>
-----------------------------------------------------------------------------------------------------------------------
SDC #6                 Rio Blanco       CO      Chaparral Resources, Inc.      0.150000          0.106876     $5,000.00
-----------------------------------------------------------------------------------------------------------------------
SDC #1-B               Rio Blanco       CO      Chaparral Resources, Inc.      0.150000          0.107509    $11,100.00
-----------------------------------------------------------------------------------------------------------------------
SDC #22                Rio Blanco       CO      Chaparral Resources, Inc.      0.150000          0.112500    $13,200.00
-----------------------------------------------------------------------------------------------------------------------
SDC #23                Rio Blanco       CO      Chaparral Resources, Inc.      0.150000          0.112500    $15,500.00
-----------------------------------------------------------------------------------------------------------------------
Superior Fee #1-18     Rio Blanco       CO      Chaparral Resources, Inc.      0.150000          0.107510     $6,500.00
-----------------------------------------------------------------------------------------------------------------------
SDC Fee #20            Rio Blanco       CO      Chaparral Resources, Inc.      0.150000          0.111708     $1,000.00
-----------------------------------------------------------------------------------------------------------------------
SDC #16                Rio Blanco       CO      Chaparral Resources, Inc.      0.300000          0.223417     $8,600.00
------------------------------------------------------------------------------------------------------------------------
SDC #13                Rio Blanco       CO      Chaparral Resources, Inc.      0.300000          0.225000    combined with SDC #16
------------------------------------------------------------------------------------------------------------------------
SDC #31                Rio Blanco       CO      Chaparral Resources, Inc.      0.150000          0.112500       $200.00
------------------------------------------------------------------------------------------------------------------------
SDC #10                Rio Blanco       CO      Chaparral Resources, Inc.      0.300000          0.227219       $300.00
------------------------------------------------------------------------------------------------------------------------
SDC #7                 Rio Blanco       CO      Chaparral Resources, Inc.      0.150000          0.106875     $6,200.00
------------------------------------------------------------------------------------------------------------------------
SDC #25                Rio Blanco       CO      Chaparral Resources, Inc.      0.150000          0.112500    $44,700.00
------------------------------------------------------------------------------------------------------------------------
SDC #26                Rio Blanco       CO      Chaparral Resources, Inc.      0.150000          0.112500     $7,500.00
------------------------------------------------------------------------------------------------------------------------
SDC #21                Rio Blanco       CO      Chaparral Resources, Inc.      0.150000          0.112500     $9,900.00
------------------------------------------------------------------------------------------------------------------------
SDC #24                Rio Blanco       CO      Chaparral Resources, Inc.      0.150000          0.112500    $13,500.00
------------------------------------------------------------------------------------------------------------------------
Tipperary #7-3         Rio Blanco       CO      Chaparral Resources, Inc.      0.135000          0.105469    $23,400.00
------------------------------------------------------------------------------------------------------------------------
SDC #17-2              Rio Blanco       CO      Chaparral Resources, Inc.      0.150000          0.112500     $1,500.00
------------------------------------------------------------------------------------------------------------------------
SDC #29                Rio Blanco       CO      Chaparral Resources, Inc.      0.211100          0.151464    $29,500.00
------------------------------------------------------------------------------------------------------------------------
Fuelco #7-4            Rio Blanco       CO      Chaparral Resources, Inc.      0.150000          0.123750    $16,900.00
------------------------------------------------------------------------------------------------------------------------
SDC Fee #15            Rio Blanco       CO      Chaparral Resources, Inc.      0.300000          0.228573       $300.00
------------------------------------------------------------------------------------------------------------------------
SDC #12                Rio Blanco       CO      Chaparral Resources, Inc.      0.300000          0.220500       $300.00
------------------------------------------------------------------------------------------------------------------------
SDC #30                Rio Blanco       CO      Chaparral Resources, Inc.      0.150000          0.107510       $800.00
------------------------------------------------------------------------------------------------------------------------
Superior #12-1         Rio Blanco       CO      Chaparral Resources, Inc.      0.221250          0.166055       $300.00
------------------------------------------------------------------------------------------------------------------------
SDC #14                Rio Blanco       CO      Chaparral Resources, Inc.      0.300000          0.241266       $300.00
------------------------------------------------------------------------------------------------------------------------
Government 32-3        Rio Blanco       CO      Chaparral Resources, Inc.      0.300000          0.236250    $15,800.00
------------------------------------------------------------------------------------------------------------------------
SDC #1M-34             Rio Blanco       CO      Chaparral Resources, Inc.      0.168750          0.134531       $200.00
------------------------------------------------------------------------------------------------------------------------
Undeveloped Acreage    Rio Blanco       CO      Chaparral Resources, Inc.                                     $37,500.00
------------------------------------------------------------------------------------------------------------------------
                                                                           TOTAL                             $270,000.00
                                                                           ---------------------------------------------
</TABLE>




<PAGE>


Rio Blanco County, Colorado            Oil and Gas Leases/Surface Leases/Mineral
Interests




Lessor   Lessee   Description       Date    Exp.     Gross Ac.





Hill Foundation   F.S. Di Grappa    T4S-R102W        8/8/75   HBP      320.000





                  Sec 12: S/2SW/4





                  Sec 13: E/2W/2




                  Sec 24: E/2NW/4










Robert M. Allan III        F.S. Di Grappa   T4S-R102W         8/1/75   HBP





                  Sec 12: S/2SW/4





                  Sec 13: E/2W/2


<PAGE>

                  Sec 24: E/2NW/4










Gerald Buckles et al       F.S. Di Grappa   T4S-R102W         8/12/75  HBP





                  Sec 12: S/2SW/4





                  Sec 13: E/2W/2




                  Sec 24: E/2NW/4








Ruth Mayes Guardian        F.S. Di Grappa   T4S-R102W         8/1/75   HBP





                  Sec 12: S/2SW/4




<PAGE>



                  Sec 13: E/2W/2




                  Sec 24: E/2NW/4









The Superior Oil Co    Cities Service Oil Co    T4S-R102W   4/15/64  HBP 320.000





                  Sec   1: SE/4SW/4





                  Sec 12: E1/2NW1/4, SW1/4NE1/4, NE1/4SW1/4, N1/2SE1/4





                  T4S-R101W




                  Sec  7:  NW1/4SW1/4





                  From the surface to 100' below the base of the Entrada.



<PAGE>




Frances M Spence  J.R. Williams     T4S-R102W        9/10/56  HBP      40.000





                  Sec 12: SW/4SW/4










Lillian D. McCowan         J.R. Williams    T4S-R102W         9/10/56  HBP





                  Sec 12: SW/4SW/4










M.J. Mayes        Cities Service Oil Co     T4S-R102W         2/5/62   HBP





                  Sec 12: SW/4SW/4







T.H. Hammett      Cities Service Oil Co     T4S-R102W         2/23/62  HBP

<PAGE>




                  Sec 12: SW/4SW/4










First National Bank     Cities Service Oil Co     T4S-R102W         2/23/62  HBP





                  Sec 12: SW/4SW/4









Robert M. Allan III      Cities Service Oil Co    T4S-R102W         2/5/62   HBP





                  Sec 12: SW/4SW/4









Lynn Allan Barr   Cities Service Oil Co     T4S-R102W         2/5/62   HBP

<PAGE>




                  Sec 12: SW/4SW/4








Virginia M. Colvin       Cities Service Oil Co     T4S-R102W        4/12/62  HBP





                  Sec 12: SW/4SW/4







Lou L. Powell     Cities Service Oil Co     T4S-R102W         3/20/63  HBP





                  Sec 12: SW/4SW/4










Lorraine L. Winterer     Cities Service Oil Co    T4S-R102W         3/21/63  HBP




                  Sec 12: SW/4SW/4
<PAGE>






Ralph E. Smith    Cities Service Oil Co     T4S-R102W         3/22/63  HBP





                  Sec 12: SW/4SW/4








Ray E. Jensen     Cities Service Oil Co     T4S-R102W         3/22/63  HBP





                  Sec 12: SW/4SW/4










Albert C. Kirby   C.B. Exploration Co   T4S-R102W      7/8/71   HBP      320.000





                  Sec 12: S/2SW/4

<PAGE>



                  Sec 13: E/2W/2




                  Sec 24: E/2NW/4








 R.W. Pendleton Tst        F.S. Di Grappa   T4S-R102W         12/8/75  HBP





                  Sec 12: S/2SW/4





                  Sec 13: E/2W/2




                  Sec 24: E/2NW/4








Virginia M. Colvin         F.S. Di Grappa   T4S-R102W         8/1/75   HBP





                  Sec 12: S/2SW/4
<PAGE>



                  Sec 13: E/2W/2




                  Sec 24: E/2NW/4








Edward Juhan et al         F.S. Di Grappa   T4S-R102W         8/1/75   HBP





                  Sec 12: S/2SW/4





                  Sec 13: E/2W/2




                  Sec 24: E/2NW/4








Lorraine L. Winterer       F.S. Di Grappa   T4S-R102W         8/1/75   HBP


<PAGE>



                  Sec 12: S/2SW/4





                  Sec 13: E/2W/2




                  Sec 24: E/2NW/4









Ray E. Jensen     F.S. Di Grappa    T4S-R102W        8/13/75  HBP





                  Sec 12: S/2SW/4





                  Sec 13: E/2W/2




                  Sec 24: E/2NW/4









Ralph E. Smith    F.S. Di Grappa    T4S-R102W        8/1/75   HBP

<PAGE>




                  Sec 12: S/2SW/4





                  Sec 13: E/2W/2




                  Sec 24: E/2NW/4









John R. Anderson  F.S. Di Grappa    T4S-R102W        8/12/75  HBP      320.000





                  Resurvey Tract 37





                  comprising parts of Sections 2, 3, 10 & 11








Albert G. Kirby   Cities Service Oil Co     T4S-R102W         3/22/75  HBP




                  Resurvey Tract 37
<PAGE>





                  comprising parts of Sections 2, 3, 10 & 11









David D. Robinson Cities Service Oil Co     T4S-R102W         3/22/75  HBP





                  Resurvey Tract 37





                  comprising parts of Sections 2, 3, 10 & 11









Max B. Lewis      Cities Service Oil Co     T4S-R102W         8/12/75  HBP





                  Resurvey Tract 37





                  comprising parts of Sections 2, 3, 10 & 11

<PAGE>




First Congregational     Cities Service Oil Co     T4S-R102W        3/10/74  HBP





Church of Grand            Resurvey Tract 37





Junction          comprising parts of Sections 2, 3, 10 & 11








Marguerite B. Smith       Lawrence Barker  T4S-R102W    1/1/78   HBP     200.000





                  Sec 12: SE/4SW/4





                  Sec 13: E1/2W1/2




                  Sec 24: E/2NW/4
<PAGE>




C-03997  Cascade Land      T4S-101W 6/1/68  HBP      640.000





         Leasing Co        Sec 3: N/2




                  Sec 4: S/2








C-03638  Cascade Land      T4S-R101





         Leasing Co     Sec 9: SW/4, NE/4SE/4, W/2SE/4    5/1/68   HBP   280.000









C-0121361         Walter Duncan     T3S-R102W        5/1/64   HBP      2,240.000





                  Sec 27: ALL
<PAGE>




                  Sec 28: ALL




                  Sec 33: ALL




                  Sec 34: N/2








C-2864   Robert L. Milkulich        T3S-R101W        12/1/67  HBP      640.000





                  Sec 32: ALL







C-03961  J. Pelham Johnston         T4S-R102W        4/1/52   HBP      1,403.780





                  Sec 1: Lots 5-8, S/2N/2, SE/4, N/2SW/4, SW/4SW/4





                  Sec 2: Lots 5-10, S/2N/2, N/2S/2, S/2SE/4

<PAGE>




                  Sec 3: Lots 5,6,9, S/2NE/4, N/2SE/4









C-03286  Preston Oil Co    T4S-R101W        9/1/51   HBP      280.000





                  Sec 11: NW/4SE/4, E/2SE/4





                  Sec 11: NE/4








C-03955  Cities Service Oil Co      T4S-R102W        4/1/52   HBP      1,800.000





                  Sec 12: SE/4NE/4, NW/4SW/4, S/2SE/4, N1/2NE1/4





                  Sec 13: E/2, W1/2W1/2





                  Sec 14: ALL

<PAGE>




                  Sec 15: N/2, N/2SE/4, SE/4SE/4








C-12755  Cascade Land      T4S-R101W        6/1/71   HBP      1,044.190





         Leasing Co        Sec 5: W/2SE/4





                  Sec  7:  S1/2SW1/4, NE1/4SW1/4, SE1/4





                  Sec   8: Lots 1,2, W/2NE/4, NW/4





                  Sec 17: Lots 1,2, W/2NE/4, NW1/4









C-03967  Carol Miller      T4S-R101W        4/1/52   HBP      1,160.520

<PAGE>




                  Sec  5: Lots 5-10, SW/4NE/4, S/2NW/4, SW/4





                  Sec  6: Lots 8-11, S/2N/2, S/2 (ALL)







C-03286-B         Preston Oil Co    T4S-R101W        9/1/51   HBP      40.000





                  Sec 11: SW/4SE/4







C-25358  John H. Brunel    T4S-R101W        6/1/77   HBP      200.000





                  Sec   9: SE/4SE/4





                  Sec 16: W/2NE/4, E/2SE/4

<PAGE>



C-03963  J. Pelham Johnston         T4S-R102W        4/1/52   HBP      754.100





                  Sec 10:  Lots 1-6, 8, 9, N1/2NW1/4, SW1/4NW1/4, SE1/4SE1/4





                  Sec 11: Lots 1,2,3, SE/4NW/4, SW/4





                  Sec 12: W/2NW/4









C-12754  Raymond Chorney   T4S-R101W        4/15/64  HBP      160.000





                  Sec  7:  NW1/4








Twin Buttes Land  Teton Energy Co.  T4S-R102W

<PAGE>





Company           Sec 10:  SE1/4NW1/4





                  Sec 13:  NE1/4SW1/4








                  Surface Access Agreement










         Chaparral Resources,       T4S-R102W





         Inc.     Sec 12:  S1/2SW/4





                  Sec 13:  E1/2W1/2





                  Sec 24:  E1/2NW1/4

<PAGE>






                  2/100ths mineral interest










                           TOTALS           12,162.590



<PAGE>






Rio Blanco County, Colorado                 Related Contracts




Effective Date    Contract Description




7/8/63   Operating Agreement     South Douglas Creek Unit and Unit Operating
Agreement




11/20/75 Operating Agreement        Cities Service Agreement




6/1/76   Operating Agreement        Mountain Fuel Agreement




11/3/76  Operating Agreement        Tipperary Agreement




9/1/77   Operating Agreement        Superior Agreement




4/18/84  Operating Agreement        Joint Operating Agreement (individual well)




6/21/84  Operating Agreement        Joint Operating Agreement (individual well)

<PAGE>




11/1/75  Farmout  Farmout Agreement between Cities Service and Frank
DiGrappa




6/1/76   Letter Agreement  Letter Agreement between Mountain Fuel and Frank
DiGrappa





7/19/76  Agreement         Agreement between Norris Oil Co. and Frank DiGrappa





9/23/76  Farmout  Farmout Agreement between Teton and Tipperary





6/3/77   Farmout  Superior - Teton Farmout Agreement





1/1/95   Marketing         Marketing Agreement between Conoco Inc. and Chaparral
Resources, et al




11/1/96  Marketing         Marketing Agreement between Wasatch Oil & Gas and
Chaparral Res., et al


<PAGE>

                                    EXHIBIT C

                          FORM OF NONFOREIGN AFFIDAVIT

                        Exemption from Withholding of Tax
                                       For
                  Dispositions of U.S. Real Property Interests


Section 1445 of the Internal  Revenue Code  provides that a transferee of a U.S.
real property  interest must withhold tax if the transferor is a foreign person.
To  inform  Conoco  Inc.  that  withholding  of  tax is not  required  upon  the
disposition of a U.S. real property  interest by -------------------------,  the
undersigned hereby certifies the following:

1.   ----------------------  is not a nonresident  alien,  foreign  corporation,
     foreign partnership,  foreign trust, or foreign estate for purposes of U.S.
     income taxation.

2.   ------------------------ taxpayer identifying number is ------------------.

3.   --------------------------- office address is --------------.

-----------------  understands that this  certification  may be disclosed to the
Internal  Revenue  Service  by ------------------ and that any  false  statement
contained herein could be punished by fine, imprisonment, or both.

Under  penalties of perjury,  I declare that I have examined this  certification
and, to the best of my knowledge and belief, it is true, correct,  and complete,
and I further declare I have authority to sign this document.



                                 By: 
                                     --------------------------------
                                 Title: 
                                        -----------------------------

       SUBSCRIBED AND SWORN TO by the said -------------------------------------
------------------------------------, --------------------------------------- of
---------------,  before me this ---- day of --------,  199-,  to certify  which
witness my hand and seal of office.

         My commission expires on the ----- day of ----------, 19--.

                                              ---------------------------------
                                              NOTARY PUBLIC in and for
                                              THE STATE OF ------------------


<PAGE>
                                   EXHIBIT E-1

                           SELLER'S ASSIGNMENT NOTICE

February 28, 1997

Conoco Inc.
10 Desta Drive, Suite 100W
Midland, TX   79705-4500


     Re: Notice of Assignment of Purchase and Sale Agreement dated February ---,
     1997,  Effective  January 1, 1997  between  Chaparral  Resources,  Inc. and
     Conoco Inc.

Chaparral Resources,  Inc. ("Seller") hereby notifies Conoco Inc. ("Buyer") that
Seller has assigned  all of its rights  under the  Purchase  and Sale  Agreement
dated February ---, 1997,  effective  January 1, 1997,  between Seller and Buyer
("Purchase  and  Sale   Agreement")  to ------------------------,   a  qualified
intermediary  (as that term is defined in Section  1.1031(k)-  1(g)(4)(v) of the
Treasury  Regulations),  as provided in Section  11.1 of the  Purchase  and Sale
Agreement.  The  assignment  of the  Purchase  and Sale  Agreement  is effective
February ---, 1997.

Seller makes this  assignment of the Purchase and Sale Agreement  solely for the
purpose of  completing  the  transaction  contemplated  by the Purchase and Sale
Agreement as a like-king exchange of property under Section 1031 of the Internal
Revenue  Code of 1986,  as  amended.  Nothing in this  letter  will be deemed to
evidence  and  release of either  Seller or Buyer  from any of their  respective
liabilities and obligations to each other under the Purchase and Sale Agreement.

Sincerely Yours,

CHAPARRAL RESOURCES, INC.


------------------------------

                     BUYER'S ACKNOWLEDGEMENT OF NOTIFICATION

Buyer  hereby  acknowledges  receipt of  notification  to Buyer as  required  by
Treasury  Regulation Section  1.1031(k)-1(g)(4)(v)  and Buyer's signature hereon
shall constitute  acceptance of such  notification.  Buyer's  acceptance of this
notification  shall in no way be deemed to  release  Seller or Buyer from any of
their agreements, representations,  warranties and/or indemnifications set forth
in the Purchase and Sale Agreement, nor shall the assignment of the Purchase and
Sale  Agreement be deemed to enlarge the rights,  duties or  obligations  of any
party under the Purchase and Sale Agreement.

CONOCO INC.


------------------------------

<PAGE>
                                   EXHIBIT E-2

                            BUYER'S ASSIGNMENT NOTICE

February 28, 1997

Chaparral Resources, Inc.
3400 Bissonnet, Suite 135
Houston, TX   77005


     Re: Notice of Assignment of Purchase and Sale Agreement dated February ---,
     1997,   Effective  January  1,  1997  between  Conoco  Inc.  and  Chaparral
     Resources, Inc.

Conoco Inc. ("Buyer") hereby notifies Chaparral Resources,  Inc. ("Seller") that
Buyer has assigned all of its rights under the Purchase and Sale Agreement dated
February  ----,  1997,  effective  January  1,  1997,  between  Seller and Buyer
("Purchase  and Sale  Agreement")  to  Petroleum  Strategies,  Inc., a qualified
intermediary  (as that term is defined in  Section  1.1031(k)-1(g)(4)(v)  of the
Treasury  Regulations),  as provided in Section  11.1 of the  Purchase  and Sale
Agreement.  The  assignment  of the  Purchase  and Sale  Agreement  is effective
February ----, 1997.

Buyer makes this  assignment of the Purchase and Sale  Agreement  solely for the
purpose of  completing  the  transaction  contemplated  by the Purchase and Sale
Agreement as a like-king exchange of property under Section 1031 of the Internal
Revenue  Code of 1986,  as  amended.  Nothing in this  letter  will be deemed to
evidence  and  release of either  Seller or Buyer  from any of their  respective
liabilities and obligations to each other under the Purchase and Sale Agreement.

Sincerely Yours,

CONOCO INC.


-------------------------

                    SELLER'S ACKNOWLEDGEMENT OF NOTIFICATION

Seller  hereby  acknowledges  receipt of  notification  to Seller as required by
Treasury Regulation Section  1.1031(k)-1(g)(4)(v)  and Seller's signature hereon
shall constitute  acceptance of such notification.  Seller's  acceptance of this
notification  shall in no way be deemed to  release  Seller or Buyer from any of
their agreements, representations,  warranties and/or indemnifications set forth
in the Purchase and Sale Agreement, nor shall the assignment of the Purchase and
Sale  Agreement be deemed to enlarge the rights,  duties or  obligations  of any
party under the Purchase and Sale Agreement.

CHAPARRAL RESOURCES, INC.


------------------------------