NET PROFITS AGREEMENT


         This Net Profits  Agreement  (the "Net Profits  Agreement")  is entered
into  effective  this 14th day of December,  1995,  by and between  Swift Energy
Pension Partners 1995-B, Ltd., a Texas limited partnership (hereinafter "Pension
Partnership"), and Swift Energy Operating Partners 1995-B, Ltd., a Texas limited
partnership (hereinafter "Operating Partnership").

                                    RECITALS

         WHEREAS,  Operating  Partnership  has been  formed  for the  purpose of
acquiring  working  interests,  and Pension  Partnership has been formed for the
purpose  of  acquiring  nonoperating   interests,   in  producing  oil  and  gas
properties;

         WHEREAS,  Operating  Partnership and Pension Partnership each desire to
commit capital to acquire various  interests in producing  properties,  so as to
increase the number and diversity of properties in which each  partnership  owns
interests;

         WHEREAS,   Pension  Partnership  desires  that  Operating   Partnership
purchase  interests in producing  properties and thereafter carve out and convey
to Pension Partnership certain nonoperating interests in such properties, namely
Net Profits Interests and Overriding Royalty Interests, as defined herein; and

         WHEREAS,  Operating Partnership and Pension Partnership desire to enter
into this Net Profits Agreement to establish the terms and conditions upon which
such purchases of producing  properties will be made and nonoperating  interests
will be carved out and conveyed;

         NOW,  THEREFORE,  BE IT RESOLVED,  that in  consideration of the mutual
covenants,  agreements,  representations  and warranties herein  contained,  and
other good and valuable consideration,  the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

                                    Article I
                                   Definitions

         As herein used the following words, terms or phrases have the following
meanings:

         Section 1.01.  "Adjusted Fixed Percentage"  means, when the election in
Section  4.04 has been  made by the  Pension  Partnership  to  increase  its Net
Profits  Interest as a result of interim  revenues and there has been compliance
with all of the  provisions of said Section 4.04,  the quotient,  expressed as a
percentage,  obtained  by  dividing  the  total  of (i) the  unexpended  and not
withdrawn  amount of the Allocated  Amount and (ii) the Fixed  Percentage of any
interim  revenues,  net of expenses,  generated by the properties to be burdened
with the  relevant  Net Profits  Interest  since the closing date of purchase of
said properties by the Operating Partnership, by the total of (i) the unexpended
and not withdrawn amount of the Allocated Amount and (ii) the unexpended and not
withdrawn amount of the Committed Amount,  which for purposes of this definition
shall  include  the  portion  of the  Committed  Amount  used  to  purchase  the
properties  to be burdened with the Net Profits  Interest  being  conveyed.  The
Adjusted Fixed Percentage shall replace the Fixed Percentage,  when appropriate,
for all sections of this Net Profits Agreement  (including Section 4.03), except
in Section 1.10, when making determinations of a Net Profits Interest subject to
the election in Section 4.04.

         Section 1.02. "Affiliate" means when used with reference to a specified
Person,  (i)  any  Person  that  directly  or  indirectly  through  one or  more
intermediaries  controls or is controlled by or is under common control with the
specified Person, (ii) any Person that is an officer, director, general partner,
or trustee of, or serves in a similar  capacity  with respect to, the  specified
Person or of which the specified Person is an officer, director, general partner
or trustee,  or with respect to which the  specified  Person serves in a similar
capacity, (iii) any Person that, directly or indirectly, is the beneficial owner
of 10% or more of any class of equity  securities of the specified  Person or of
which the specified Person is directly or indirectly the owner of 10% or more of
any class of equity  securities,  (iv) any member of the immediate family of the
specified  Person or his or her spouse,  and (v) if the  specified  Person is an
officer,  director  or  partner,  any company for which such Person acts in such
capacity.

         Section 1.03.  "Affiliated Entity" means any corporation,  partnership,
joint venture or entity owned, in whole or in part, by the Operating Partnership
and which owns Leases.


<PAGE>


         Section 1.04.  "Allocated  Amount" means that amount of money allocated
by Pension  Partnership in Section 2.02 hereof to the future purchase of the Net
Profits Interests and Overriding  Royalty Interests from Operating  Partnership,
subject to Pension  Partnership's rights of withdrawal and redirection of all or
portions of such amount pursuant to Section 2.05 hereof.

         Section 1.05.  "Committed  Amount" means that amount of money committed
by Operating  Partnership in Section 2.01 hereof to the purchase of Leases under
this Net  Profits  Agreement  and/ or a net profits  agreement  with one or more
Affiliated Entities, subject to Operating Partnership's rights of withdrawal and
redirection of up to thirty percent (30%) of the Committed  Amount under Section
2.04 hereof.

         Section 1.06.  "Consultant" means any one of the independent  petroleum
engineering firms of Golden Engineering,  Inc., R.E. Davis and Associates, Inc.,
Gruy  Engineering  Corporation,  Kahn  and  Associates  or any  other  qualified
independent  petroleum  engineering  firm or independent  geologist or petroleum
engineer that performs the duties of the Consultant described herein.

         Section  1.07.  "Conveyance(s)"  means  those  certain  Net Profits and
Overriding Royalty Interest  Conveyance(s) from Operating Partnership to Pension
Partnership under which Pension  Partnership shall acquire Net Profits Interests
and Overriding Royalty Interests from Operating  Partnership.  There may be more
than one Conveyance to accommodate  successive  acquisitions or purchases of Net
Profits Interests.

         Section 1.08.  "Development Well" means a well drilled as an additional
well to the same reservoir as other producing wells on a lease, or drilled on an
offset lease usually not more than one location away from a well  producing from
the same reservoir or drilled to otherwise develop Proved Undeveloped Reserves.

         Section 1.09. "Excess Operating Costs" at any point in time means, with
respect to a Net Profits  Interest,  an amount  equal to the excess of Operating
Costs over Gross  Proceeds of such Net  Profits  Interest  for each  calculation
period.  Excess  Operating  Costs  shall be reduced by any  revenues  that would
reduce  Operating  Costs  pursuant  to  Section  1.17  hereinbelow  but have not
otherwise reduced such Operating Costs.

         Section 1.10. "Fixed  Percentage"  means, the quotient,  expressed as a
percentage,  obtained by dividing the unexpended and not withdrawn amount of the
Allocated Amount, at the time a Net Profits Interest is assigned by the total of
(i) the unexpended and not withdrawn amount of the Allocated Amount and (ii) the
unexpended and not withdrawn amount of the Committed Amount,  which for purposes
of this  definition  shall include the portion of the  Committed  Amount used to
purchase  the  properties  to be  burdened  by the Net  Profits  Interest  being
conveyed,  each amount being determined at the time such Net Profits Interest is
conveyed.

         Section 1.11.  "Gross Proceeds" means the amounts received by Operating
Partnership from the Sale of Subject Minerals, subject to the following:

                  (a) If any Subject Minerals are Processed before  disposition,
         the amount of the Gross Proceeds for such Subject Minerals shall be the
         Wellhead Value thereof.

                  (b) There  shall be excluded  any amount for Subject  Minerals
         attributable  to nonconsent  operations  conducted  with respect to the
         Operating  Partnership  (or any portion  thereof) as to which Operating
         Partnership  shall be a  nonconsenting  party and which is dedicated to
         the recoupment or reimbursement of costs and expenses of the consenting
         party or parties by the terms of the relevant operating agreement, unit
         agreement,  contract for development or other instrument  providing for
         such nonconsent operations,  provided, Operating Partnership's election
         not to  participate in such  operations is made in conformity  with the
         provisions of Section 8.01 of this Net Profits Agreement.

                  (c) If a controversy or possible  controversy  exists (whether
         by reason of any statute, order, decree, rule, regulation,  litigation,
         contract or otherwise) between Operating  Partnership and any purchaser
         as to the correct  sales price or sales  volume of any Subject  Mineral
         then

                           (i) amounts withheld by the purchaser or deposited by
                  it with an escrow agent shall not be considered to be received
                  by Operating Partnership until actually collected by Operating
                  Partnership, but the amounts received by Operating Partnership
                  shall include any interest,  penalty,  or other amount paid to
                  Operating Partnership in respect thereof;

                           (ii) amounts  received by Operating  Partnership  and
                  promptly  deposited  by it with an escrow  agent  shall not be
                  considered to have been received by Operating Partnership, but
                  all amounts  thereafter paid to Operating  Partnership by such
                  escrow agent shall be considered  to be amounts  received from
                  the sale of Subject Minerals; and


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<PAGE>


                           (iii) amounts  received by Operating  Partnership and
                  not  deposited in an escrow  account shall be considered to be
                  received for purposes of this definition.

                  (d)  There  shall  be  excluded  any  amount  which  Operating
         Partnership shall receive as a bonus for any Lease or assignment of any
         of  the  Subject  Interests  or  out  of  payments  made  to  Operating
         Partnership in connection with the drilling or deferring of drilling of
         any well on any of the  Subject  Interests  or in  connection  with any
         adjustment of any well and leasehold  equipment upon unitization of any
         of the Subject Interests.

                  (e) There  shall be excluded  any amount for Subject  Minerals
         unavoidably  lost  in the  production  thereof  or  used  by  Operating
         Partnership  in  conformity   with  prudent   practices  for  drilling,
         production and plant operations (including gas injection,  secondary or
         tertiary  recovery,   pressure   maintenance,   repressuring,   cycling
         operations,  plant  fuel or  shrinkage)  conducted  for the  purpose of
         producing  Subject  Minerals  or  producing  from any unit to which the
         Subject  Interests  are  committed,  but  only so long as such  Subject
         Minerals are so used.

                  (f) Except as  provided  in Section  1.11(i)  hereof,  amounts
         received as a loan by Operating Partnership from a purchaser of Subject
         Minerals,  whether with or without interest, shall not be considered to
         be derived from the sale of Subject Minerals, provided that the related
         Sales Contract meets the requirements of Section 7.04 hereof.

                  (g) So long as and to the extent that the same may be required
         by applicable  laws and  regulations  in the case of any Lease from the
         United  States  of  America  included  in the  Subject  Interests,  the
         obligation to pay and the right of Pension  Partnership  to receive the
         proceeds  of oil  produced  from such Lease shall be  suspended  in the
         event that the Secretary of the Interior  suspends such  obligation and
         right  upon  determination  pursuant  to  43  CFR  3103.3-3,  and  such
         suspension  shall apply separately to any zone or portion of such Lease
         segregated for computing government royalties.

                  (h)  Unless  the same  item is  otherwise  treated  as part of
         Operating Costs hereunder,  there shall be deducted from Gross Proceeds
         all  general  property  (ad  valorem),   production  severance,  sales,
         gathering  and  other  taxes  (whether  state,  federal  or  otherwise)
         assessed or levied on or in connection with the Subject Interests,  the
         Net  Profits  Interest,  the  Overriding  Royalty  Interests,   or  the
         production  therefrom  or  equipment  on the Subject  Leases or against
         Operating  Partnership  as owner of the  Subject  Interests  or Pension
         Partnership  as owner of the Net  Profits  Interest  or the  Overriding
         Royalty  Interests,   and  which  taxes  (as  adjusted  or  as  finally
         determined)  are deducted or excluded from proceeds of Sale received by
         Operating  Partnership or paid by Operating  Partnership and, in either
         case, are attributable to the Pension Partnership's proportionate share
         of Subject Minerals.

                  (i) There shall be included in Gross Proceeds amounts received
         by  Operating  Partnership  from a  purchaser  of Subject  Minerals  as
         advance  payments  and  payments  pursuant to  take-or-pay  and similar
         provisions   of  Sales   Contracts   as  and  when  paid  to  Operating
         Partnership.

                  (j) Except as otherwise  provided in this Section 1.11,  there
         shall be included in Gross  Proceeds any amounts  received by Operating
         Partnership for use of the Subject Interests  burdened by a Net Profits
         Interest or Overriding  Royalty Interest without regard to whether such
         Subject Interests have ceased to produce Subject Minerals.

                  (k) All  payments  made to Pension  Partnership  shall be made
         entirely and exclusively out of amounts received from the sale or other
         disposition  of Subject  Minerals as described in  subsections  1.11(a)
         through  (j)  above,  and in no event  shall such  payments  exceed the
         percentages  set forth herein with respect to the Net Profits  Interest
         and the Overriding Royalty Interests.

         Section  1.12.  "Leases"  means all oil, gas and other  mineral  leases
acquired by Operating  Partnership under this Net Profits Agreement and from out
of which the Net Profits Interests and the Overriding Royalty Interests shall be
conveyed to Pension  Partnership  under and pursuant to the Conveyances.  To the
extent that Operating  Partnership shall also acquire mineral fee interest(s) in
any  acquisition(s),  the term  "Leases"  shall  include  such  mineral  fees or
interests,  but "Leases" shall not include any nonoperating interest(s) acquired
by Operating Partnership.

         Section 1.13.  "Managing  General  Partner" means the managing  general
partner of Operating Partnership.


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<PAGE>


         Section 1.14.  "Net  Proceeds" for any period means the excess of Gross
Proceeds received by or for the account of Operating Partnership attributable to
the Subject Interests burdened by a Net Profits Interest during such period over
the  sum of  (a)  Operating  Costs  paid  by or for  the  account  of  Operating
Partnership  attributable to the Subject Interests  burdened by such Net Profits
Interest  during such period and (b)  cumulative  unrecovered  Excess  Operating
Costs as of the end of the  immediately  preceding  period  attributable  to the
Subject Interests burdened by such Net Profits Interest.

         Section 1.15.  "Net Profits  Interest"  means a  nonoperating  interest
carved out of the  working  interest  or a mineral  fee  interest  purchased  by
Operating  Partnership  in the Leases  specified  by the  Operating  Partnership
insofar as such Leases  cover the Net  Profits  Depth and insofar as such Leases
cover Net Profits Surface Acreage and pursuant to which the Pension  Partnership
will be entitled to the Fixed Percentage share of the Net Proceeds  attributable
to Subject Minerals produced from the Net Profits Depth.

         Section 1.16.  "Non-Affiliate"  means, as to the party  specified,  any
Person who is not an Affiliate of such party.

         Section 1.17.  "Operating Costs" means, all expenditures made and costs
incurred and which are attributable to the Subject  Interests in connection with
the operation and maintenance of Leases designated by the Operating  Partnership
in which Pension Partnership owns nonoperating  interests and the production and
marketing of hydrocarbons therefrom, including without limitation: (i) all costs
of lifting  and  producing  hydrocarbons,  including  all costs of labor,  fuel,
repair, hauling,  materials,  supplies,  utility charges,  supervisory fees, and
other costs incident  thereto;  (ii) unless the same items are otherwise paid by
virtue of being excluded from Gross Proceeds, all general property (ad valorem),
production severance,  sales, gathering, and other taxes (whether state, federal
or  otherwise);  (iii)  insurance and casualty loss  expenses;  (iv) expenses of
recompleting,  equipping, reworking, and other remedial servicing operations, as
well as plugging and abandoning  wells and including all costs  associated  with
development,  as well as all costs of identifying and analyzing the need for and
all costs of undertaking  said  expenditures  and capital  items;  (v) interest,
commitment  fees  and  other   financing   charges  and  expenses  of  Operating
Partnership's  borrowings  associated with these operations;  (vi) to the extent
such costs and  expenditures  do not relate to or arise out of costs  associated
with  purchasing  or acquiring the Leases,  the costs of processing  facilities,
pipelines,  gas sales facilities,  secondary or tertiary recovery operations and
other procedures and facilities necessary to produce efficiently the reserves of
oil and gas from the Leases;  (vii) delay rentals,  shut-in well  payments,  and
other lease maintenance payments; (viii) any other compensation or reimbursement
made to operators or others for services rendered in conducting such operations,
including  compensation or reimbursement paid to the Managing General Partner or
its Affiliates;  (ix) all costs incurred by operators and other working interest
owners to market or to transport  Subject  Minerals to the point of sale thereof
or charged by  third-party  marketers or  transporters,  including  the Managing
General Partner or its Affiliates, to transport Subject Minerals off the Leases;
and (x) all other costs and expenses  incurred and which are attributable to the
Subject Interests in connection with the operation,  maintenance and development
of the Leases and the  production of  hydrocarbons  therefrom.  Operating  Costs
shall be  reduced  by (i) any  revenues  generated  directly  or  indirectly  by
equipment  located on or below Net Profits  Surface  Acreage or related right of
way acreage and  directly or  indirectly  related to the  production  of Subject
Minerals from Net Profits  Depth,  (ii) any fees received for  operations on the
Net Profits Surface  Acreage not related to the production of Subject  Minerals,
and (iii) any funds  received in the form of or  attributable  to the payment of
interest on Sales  proceeds for Subject  Minerals  held in suspense by any third
party,  which Sales proceeds relate to Subject  Minerals  produced and sold from
the Net Profits Depth. Operating Costs shall not include any amounts included in
the determination of the Property Acquisition Cost of any Lease.

         Section  1.18.  "Overriding  Royalty  Depth"  means (i) with respect to
acreage  within each of the Leases but outside the Net Profits  Surface  Acreage
(as defined in Section 4.02.c(ii)), all depths, and (ii) with respect to the Net
Profits  Surface  Acreage,  those depths not included in the  definition  of Net
Profits Depth (as defined in Section  4.02(c)(i)).  The Overriding Royalty Depth
as to each of the  Subject  Interests  in the Leases  shall be  determined  by a
Consultant  based upon  information  provided to the Consultant by the Operating
Partnership or the Pension Partnership.

         Section 1.19.  "Overriding  Royalty  Interest(s)"  means the fractional
interests  delineated in Section 5.01 hereof in the Gross Proceeds  derived from
the sale of Subject  Minerals from each of the Leases  burdened by a Net Profits
Interest  insofar  as each  such  Lease  covers  the  Overriding  Royalty  Depth
(including the Overriding  Royalty Depth as it underlies the Net Profits Surface
Acreage)  or  insofar  as each such  Lease  covers  Overriding  Royalty  Surface
Acreage.

         Section  1.20.  "Overriding  Royalty  Surface  Acreage"  means  all the
surface  acreage  of  each  of the  Leases,  although  to the  extent  that  the
Overriding  Royalty Surface Acreage is coextensive  with the Net Profits Surface
Acreage,  it is understood that depth  distinctions are made herein with respect
to the nonoperating interests attaching thereto.


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<PAGE>



         Section 1.21. "Person" means any individual, corporation,  partnership,
trust, estate or other entity or organization.

         Section 1.22.  "Prime  Interest  Rate" means the average  highest daily
prime rate stated in the "Money Rates" column of the Wall Street Journal for the
90-day period  preceding  the date as of which the Prime  Interest Rate is to be
determined, provided that the interest rate used shall not be less than 10%.

         Section 1.23.  "Process" or "Processing" means to manufacture,  refine,
market,  compress  or  transport  Subject  Minerals  in a manner  which does not
constitute well operations.

         Section  1.24.  "Property  Acquisition  Cost"  means the amount paid by
Operating  Partnership  to  identify,  analyze and  purchase one or more Subject
Interests,  and shall  include,  in addition to the price actually paid for such
Subject  Interests,  bonuses and all  expenses  relating to the  acquisition  of
Subject Interests. The expenses relating to the acquisition of Subject Interests
shall include,  but not be limited to: (i) title insurance and title examination
costs, brokers' commissions,  finders' fees, escrow fees, filing fees, recording
costs,  and  transfer  taxes,  if  any;  (ii)  taxes  paid  in  connection  with
acquisition of the Subject Interests, including, but not limited to, ad valorem,
real  estate,  personal  property  and  excise  taxes  paid;  (iii)  geological,
geophysical,  seismic, land, engineering,  drafting, accounting, auditing, legal
and other costs  incurred in  connection  with the  property  transaction;  (iv)
Development  Costs and Secondary or Tertiary  recovery  costs  undertaken on the
property  by  the  Operating  Partnership  prior  to  creation  of  Nonoperating
Interests  burdening  such  property;  and (v) such  portion of the  reasonable,
necessary and actual  expenses  incurred by the Managing  General  Partner,  its
Affiliates or Operating Partnership not more than thirty-six months prior to the
property  transaction  for  geological,  geophysical,  seismic,  land,  nominee,
engineering, drafting, accounting, auditing, legal or like services, Development
Costs,  and  Secondary or Tertiary  recovery  costs  obtained or provided by the
Managing  General  Partner,  its Affiliates or Operating  Partnership  which are
allocated to the Subject Interests in accordance with accepted industry practice
normally employed by the Managing General Partner and its Affiliates,  including
the costs of funds used for any of these purposes,  inclusive of interest,  loan
commitment  fees and  other  financing  fees and  charges  for such  funds.  The
Property  Acquisition Cost for a particular  Subject Interest shall also include
all reasonable,  necessary and actual expenses  incurred by the Managing General
Partner,  its Affiliates or Operating  Partnership for the services listed above
in connection with the evaluation of properties which, for whatever reasons, are
not  subsequently  purchased by Operating  Partnership,  and which  expenses are
allocated to that Subject Interest. If it is determined on or before the date of
acquisition  of a Producing  Property  that  Development  Costs or  Secondary or
Tertiary Recovery Operations should be undertaken on that property, and both the
conducting of such operations and the Managing General Partner's estimate of the
costs of those operations are approved by the Consultant on or before such date,
then the costs of such  operations  shall be classified as Property  Acquisition
Costs.

         Section 1.25.  "Proved  Reserves" shall mean those  quantities of crude
oil,  natural gas, and natural gas liquids which,  upon analysis of geologic and
engineering  data,  appear with  reasonable  certainty to be  recoverable in the
future from known oil and gas reservoirs  under existing  economic and operating
conditions. Proved Reserves are limited to those quantities of oil and gas which
can be reasonably expected to be recoverable  commercially at current prices and
costs,  under  existing  regulatory  practices  and with  existing  conventional
equipment and operating  methods.  Depending  upon their status of  development,
such Proved Reserves are subdivided into the following classifications:

                  (i) Proved  Developed  Reserves.  These are crude oil, natural
         gas and  natural  gas  liquids  reserves  which can be  expected  to be
         recovered through existing wells with existing  equipment and operating
         methods. This classification includes:

                           (A) Proved Developed  Producing  Reserves.  These are
                  Proved  Developed  Reserves  which are expected to be produced
                  from existing completion  intervals now open for production in
                  existing wells; and

                           (B) Proved Developed Nonproducing Reserves. These are
                  Proved  Developed  Reserves  which exist  behind the casing of
                  existing wells, or in minor depths below the present bottom of
                  such wells,  which are expected to be produced  through  these
                  wells in the predictable future, where the cost of making such
                  oil and gas  available  for  production  should be  relatively
                  small compared to the cost of a new well.

         Additional oil and gas expected to be obtained  through the application
         of  fluid   injection  or  other  improved   recovery   techniques  for
         supplementing  the natural  forces and  mechanisms of primary  recovery
         shall be included as Proved Developed  Reserves only after testing by a
         pilot  project  or after the  operation  of an  installed  program  has
         confirmed through production  responses that increased recovery will be
         achieved.


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<PAGE>


                  (ii) Proved  Undeveloped  Reserves.  These are Proved Reserves
         which are expected to be recovered from new wells on undrilled acreage,
         or from existing wells where relatively major expenditures are required
         for  recompletion.  Reserves on undrilled  acreage are limited to those
         drilling units offsetting productive units, which are virtually certain
         of production  when drilled.  Proved Reserves for other undrilled units
         can be claimed only where it can be  demonstrated  with  certainty that
         there  is  continuity  of  production  from  the  existing   productive
         formation.  Estimates  for Proved  Undeveloped  Reserves do not include
         estimates  relating to any acreage  for which an  application  of fluid
         injection or other improved recovery technique is contemplated,  unless
         such techniques have been proved  effective by actual tests in the area
         in the same reservoir.

         Section 1.26. "Purchase Percentage" means the quotient,  expressed as a
percentage,  obtained by dividing the then-unused  and not withdrawn  amounts of
the  Committed  Amount by the  total of (i) the  then-unused  and not  withdrawn
amounts of the  Committed  Amount  and (ii) the  then-unused  and not  withdrawn
amounts of the Allocated Amount.

         Section 1.27.  "Royalty Owner" means Pension  Partnership while it owns
an interest in the Net Profits Interest or the Overriding Royalty Interests, and
any other person or persons who  subsequently  acquire legal title to all or any
portion of the Net Profits Interest or the Overriding Royalty Interests.

         Section 1.28.  "Sale" includes sales, exchanges and other dispositions
 for value.

         Section 1.29.  "Sales Contracts" means all contracts and agreements for
the offer or sale of, or  commitment to offer or sell, or right of first refusal
to purchase, Subject Minerals.

         Section  1.30.  "Subject  Interests"  means each kind and  character of
right,  title,  claim or interest  (subject to those  interests  excluded  under
Section 2.04 hereof) which  Operating  Partnership  has in the Leases or, as the
case may be, the Leases  insofar as they cover  variously,  (i) the Net  Profits
Depth, (ii) the Net Profits Surface Acreage, (iii) the Overriding Royalty Depth,
or (iv) the Overriding Royalty Surface Acreage,  and the unitization and pooling
agreements  and the units  created  thereby which are described in the documents
under which  Operating  Partnership  acquires  the Leases,  whether  such right,
title,  claim or interest be under and by virtue of a Lease,  a  unitization  or
pooling  agreement,  a unitization or pooling order, an operating  agreement,  a
division  order, a transfer  order or any other type of contract,  conveyance or
instrument  or under  any  other  type of claim or  title,  legal or  equitable,
recorded or unrecorded,  even though the  assignor's or Operating  Partnership's
interests be incorrectly or incompletely  described in, or a description thereof
be  omitted  from  such  documents,  all as the same  shall be  enlarged  by the
discharge of any payments out of  production or by the removal of any charges or
encumbrances  to which any of the same are subject and any and all  renewals and
extensions of any of the same; provided,  however,  that Subject Interests shall
never include any form of nonoperating  mineral  interests,  royalty  interests,
overriding  royalty interests,  or any other types of nonoperating  interests of
Operating  Partnership,  but Subject Interests may include mineral fee interests
acquired by Operating  Partnership on the date upon which Operating  Partnership
acquires  Subject  Interests in the Leases,  provided such mineral fee interests
are not nonoperating in nature.

         Section 1.31.  "Subject Minerals" means all oil, gas and other minerals
(whether similar or dissimilar) in and under and produced,  saved and sold from,
and which shall accrue and be  attributable  to, the Subject  Interests from and
after the date upon which Operating  Partnership  acquires Subject  Interests in
the Leases.

         Section 1.32.  "Wellhead Value" means the amount for which such Subject
Minerals  are sold less a charge for the  Processing  which occurs prior to such
sale equal to the sum of (A) any Processing charges  attributable to the Subject
Minerals paid to Non-Affiliates and (B) the expenditures  incurred  attributable
to the Subject Minerals in Processing such Subject Minerals;  provided, however,
that in no event shall the expenses of Operating  Partnership and its Affiliates
in such Processing  exceed the costs which third parties charge in the same area
for rendering comparable services.

                                   Article II
                  Partnerships' Committed and Allocated Amounts

         Section  2.01.  Operating  Partnership   Committed  Amount.   Operating
Partnership  agrees  that it shall make  available  for the  purchase of Subject
Interests in Leases in accordance  with the terms of this Net Profits  Agreement
the sum of  $2,500,000.00,  which shall be the  initial  Committed  Amount.  The
Committed  Amount  may be  reduced  from time to time  after the date  hereof in
accordance  with  Section  2.04  hereof  and shall be reduced  as  expended  for
interests  in  Properties  pursuant to this Net Profits  Agreement  but shall be
increased by Net Profits  Interests  sales  proceeds  received  from the Pension
Partnership.


                                       6


<PAGE>


         Section 2.02. Pension Partnership Allocated Amount. Pension Partnership
agrees that it shall make available for the purchase of  nonoperating  interests
in Leases from Operating  Partnership  in accordance  with the terms of this Net
Profits Agreement the sum of $2,866,912.00, which shall be the initial Allocated
Amount.  The  Allocated  Amount may be reduced  from time to time after the date
hereof in  accordance  with Section 2.05 hereof and shall be reduced as expended
for interests in Properties pursuant to this Net Profits Agreement.

         Section 2.03.  Other Net Profits  Agreements.  Pension  Partnership may
enter into other Net Profits  Agreements with partnerships  other than Operating
Partnership  managed by the Managing  General  Partner,  on or after the date of
this Net  Profits  Agreement,  and may  reserve  any  portion  of its  funds for
commitment to such other agreements.  Operating Partnership may enter into other
Net Profits Agreements with partnerships other than Pension  Partnership managed
by the Managing General Partner, but only subject to the following conditions:

                  a.  Operating  Partnership  must enter into and  execute  such
other agreements and make its designation of any committed amounts thereunder on
the  date of this  Net  Profits  Agreement,  and  failing  which  execution  and
designation,  Operating  Partnership  shall not be  permitted  to enter into any
other Net Profits Agreement; and

                  b. Operating Partnership must collectively  contribute to this
Net Profits  Agreement and such other  agreements all of its funds available for
the purchase of Leases as of such execution date.

         Section 2.04. Reduction of Committed Amount.  Operating Partnership may
reduce the Committed Amount under the following circumstances:

                  a. After having provided notice to the Pension  Partnership of
such  reduction,  an amount equal to up to thirty  percent  (30%) of the initial
Committed  Amount  (as set forth in Section  2.01  above)  may be  withdrawn  by
Operating  Partnership for the purchase of Subject Interests in Leases which are
not suitable for  acquisition  hereunder  because the Managing  General  Partner
anticipates that when taken together with interests in other properties  subject
to the Net Profits Agreement,  material drilling or development  activities will
be required in connection with such Leases.  The determination that a Lease will
require material drilling or development activities will be made by the Managing
General Partner in its sole discretion.

                  b. If  Pension  Partnership  withdraws  some  fraction  of the
Allocated  Amount in the manner  permitted by Section 2.05.a  hereof,  Operating
Partnership  may  withdraw an equal  fraction  of the  Committed  Amount,  which
reduction shall not diminish the amount of the reduction  permitted by paragraph
a. above.

         Section  2.05.  Reduction of Allocated  Amount.  After having  provided
notice to the Operating  Partnership of such reduction,  Pension Partnership may
reduce the  Allocated  Amount  under the  following  circumstances  and with the
following exceptions:

                  a. From the date Producing  Properties are first acquired that
are subject to this Net Profits  Agreement  until the first  anniversary  of the
date thereof,  Pension Partnership shall be entitled at any time to withdraw all
or  any  portion  of  the  Allocated  Amount  for  use  in  the  acquisition  of
nonoperating interests from Persons other than Operating Partnership.

                  b. From the end of the period  specified in paragraph a. above
until that date which is eighteen  (18) months from the date of this Net Profits
Agreement,  Pension  Partnership  shall have no right to withdraw any portion of
the Allocated Amount.

                  c. If by the end of the period specified in paragraph b. above
Operating  Partnership has not (i) assigned to Pension Partnership  nonoperating
interests  and/or (ii) provided notice to the Pension  Partnership  informing it
that  Leases  have been  acquired  and/or  are being  acquired  that will be the
subject of a Net Profits  Interest  within a  reasonable  period of time,  which
collectively will constitute sufficient  nonoperating  interests to cause all of
the  Allocated  Amount  to be  expended,  then  the  unexpended  balance  of the
Allocated Amount shall no longer be subject to this Net Profits Agreement.

                  d. If Operating  Partnership  withdraws  some  fraction of the
Committed Amount in the manner  permitted by Section 2.04.a above,  then Pension
Partnership  shall be entitled to  withdraw an equal  fraction of the  Allocated
Amount.  Such withdrawal shall be made within thirty (30) days of the withdrawal
by Operating Partnership.


                                       7


<PAGE>


                                   Article III
                Identification and Purchase of Subject Interests

         Section 3.01. Identification of Leases. Promptly after the date of this
Net Profits Agreement,  the Managing General Partner shall begin to identify and
analyze  Leases  suitable for purchase by Operating  Partnership  and from which
nonoperating  interests  suitably  may be carved  out and  conveyed  to  Pension
Partnership.  Suitable  Leases  shall be Leases:  (i) from which there is either
current oil and/or gas  production  in commercial  quantities,  or upon which is
located a well or wells  capable  of such  production  but which is  shut-in  or
otherwise not producing  for reasons  found  acceptable to the Managing  General
Partner; (ii) which are located in the continental United States,  including all
state and federal  waters,  or in Canada;  and (iii) which,  when taken together
with interests in other properties subject to the Net Profits Agreement, are not
anticipated  by the Managing  General  Partner to require  material  drilling or
development activities.

         Section  3.02.  Purchase of Leases.  The  Operating  Partnership  shall
purchase suitable Leases.  Such Leases may be purchased in whole or in part from
either the Managing  General Partner or its Affiliates or  Non-Affiliated  third
parties. The Operating Partnership shall acquire only the Purchase Percentage of
any  Leases to be  acquired  more than  thirty  (30) days  prior to the time the
Operating  Partnership  intends to assign a Net Profits Interest  burdening such
Leases. At such time as Operating  Partnership  intends to create and sell a Net
Profits Interest to Pension Partnership, it shall purchase additional Leases, or
additional  portions  of Leases it  already  holds,  from the  Managing  General
Partner,  its  Affiliates,  or  Non-Affiliated  third parties.  Payment for such
Leases, or portions of Leases,  shall be made in a manner reasonably  acceptable
to the seller.

                                   Article IV
                 Creation and Conveyance of Net Profits Interest

         Section  4.01.  Operating  Partnership's  Obligation  to Carve  Out and
Convey Net  Profits  Interests;  Notice.  From time to time during the period in
which Operating Partnership is acquiring Subject Interests in Leases,  Operating
Partnership  shall  carve out of such  Subject  Interests  and convey to Pension
Partnership  Net  Profits  Interests  burdening  such  Leases.  Each Net Profits
Interest may burden more than one Lease.  Each Net Profits Interest shall burden
all Leases acquired by Operating  Partnership  using funds committed to this Net
Profits Agreement which were acquired prior to the date of assignment to Pension
Partnership, which are not otherwise excluded from this Net Profits Agreement by
virtue of being subject to material  drilling and  development  activities,  and
which are not subject to previously  conveyed Net Profits Interests.  The number
of Net Profits Interests to be conveyed to Pension Partnership  pursuant to this
Net Profits  Agreement and the time or times at which such Net Profits Interests
are to be conveyed  shall be  determined  by Operating  Partnership  in its sole
discretion. The Operating Partnership shall provide the Pension Partnership with
notice of an  assignment  of a Net Profits  Interest at least two business  days
prior to such assignment.

         Section 4.02.  Description  of Net Profits  Interest.  Each Net Profits
Interest   conveyed   to   Pension   Partnership   shall   have  the   following
characteristics:

         a.  Percentage  Size.  Except as otherwise  modified by Section 4.04 or
4.05,  each Net Profits  Interest  shall be in a percentage  amount equal to the
Fixed Percentage as determined at the time of assignment.

         b. Amount  Payable.  The dollar  amount  payable under each Net Profits
Interest for any period shall be equal to the Fixed  Percentage of Net Proceeds,
but in no event shall exceed gross income from the Property.

         c. Depths and Acreage Burdened.  Each Net Profits Interest shall attach
to the  burdened  Leases  only  insofar  as such  Leases  cover  both the depths
described in  subparagraph  i. below (the "Net  Profits  Depth") and the acreage
described in subparagraph ii. below (the "Net Profits Surface Acreage"):

                  i. The Net  Profits  Depth  with  respect  to a  specific  Net
         Profits  Interest  shall be those  depths  underlying  the Net  Profits
         Surface  Acreage in the burdened Leases downward from one hundred (100)
         feet above the top of the  reservoir(s)  or  formation(s)  evaluated as
         containing  Proved  Reserves,  on the date the Net Profits  Interest is
         created,  for the Subject  Interests in the Leases to one hundred (100)
         feet  below  the  base of such  reservoir(s)  or  formation(s),  or the
         stratigraphic  equivalent(s) of such depth(s);  provided, however, that
         should the  Subject  Interests  in the Leases be limited to an interval
         less  than that  designated  herein,  the Net  Profits  Depth  shall be
         limited to such lesser  interval.  It is understood that there could be
         more than one depth in a well or on a lease which meet this definition.
         The Net Profits Depth as to each of the Subject Interests in the Leases
         shall be determined by the Consultant based upon  information  provided
         to the Consultant by Operating  Partnership or Pension Partnership.  In
         the event of any question  concerning  reservoir(s)  or formation(s) as
         above mentioned,  determinations  made by the governmental  body having
         jurisdiction  over the production of oil and gas in the state concerned
         (or,  in the  case of  federal  lands,  the  governmental  body  having
         jurisdiction  over oil and gas  production  from such  lands)  shall be
         given due weight by the Consultant.


                                       8


<PAGE>


                  ii. The Net Profits Surface Acreage with respect to a specific
         Net  Profits  Interest  shall be that  surface  acreage  of each of the
         burdened Leases for the Subject Interests,  on the date the Net Profits
         Interest is created,  which is  included in any  production  or spacing
         unit filed with or designated by the  governmental  agency or authority
         of the state  concerned  having  jurisdiction of oil and gas production
         or, if federal lands, the federal body or agency having jurisdiction of
         oil  and gas  production  from  federal  lands  or,  if  included  in a
         voluntarily pooled unit for production purposes, the surface acreage of
         the Leases included within that pooled unit,  plus, in any of the above
         cases, an additional  amount of surface acreage in all directions equal
         to the  equivalent  of one  spacing  unit  from all  boundaries  of the
         production  unit,  spaced unit or voluntarily  pooled unit, as the case
         may be,  provided,  however,  that there  shall be  excluded  from such
         surface  acreage those  production  units,  spaced units or voluntarily
         pooled  units  no  portion  of  which  overlies  that  subsurface  area
         containing   Proved  Reserves.   Should  there  not  be  an  applicable
         production unit, spaced unit or pooled unit as above contemplated,  the
         Net Profits Surface Acreage shall be the surface acreage which overlies
         that subsurface area containing  Proved Reserves for the existing well,
         all as determined by the Consultant based upon information  provided by
         Operating Partnership or Pension Partnership.

In determining  the Net Profits Depth and the Net Profits  Surface  Acreage of a
Subject  Interest at the date of the creation of the Net Profits  Interest,  the
Operating  Partnership  and the  Consultant  shall be  entitled to rely upon the
determination  of the Consultant at the time such Subject  Interest was acquired
by the Operating  Partnership or Managing  General Partner;  provided,  however,
that (i) if any material capital  expenditures  relating to the Subject Interest
have been undertaken  since the acquisition or are projected and included within
Property Acquisition Costs, or (ii) in the judgment of the Consultant,  material
changes have occurred since the acquisition,  the Consultant  shall  redetermine
the Net Profits Depth and Net Profits Surface Acreage.

         Section 4.03.  Payment for Net Profits Interest and Overriding  Royalty
Interests.  At the  time  the  Operating  Partnership  assigns  to  the  Pension
Partnership  a Net  Profits  Interest  and  the  associated  Overriding  Royalty
Interests,   the  Pension  Partnership  shall  pay  in  cash  to  the  Operating
Partnership the Fixed Percentage of the Property Acquisition Costs as reduced by
any  interim  revenues,  less  related  expenses,   received  by  the  Operating
Partnership prior to the assignment of the Net Profits Interest. Notwithstanding
anything to the contrary  hereinabove,  if a Subject  Interest or a nonoperating
interest  has been held by an  Operating  Partnership  for more than nine months
prior to the transfer by the Operating  Partnership of a  nonoperating  interest
carved out of such  Subject  Interest  or a  nonoperating  interest  held by the
Operating Partnership, then the Property Acquisition Cost of such interest shall
be the  lesser of the  Property  Acquisition  Costs as  reduced  by any  interim
revenues,  less related  expenses,  or the fair market value of such interest as
determined  by  an  independent   expert,   i.e.,  a  person  with  no  material
relationship  to the Managing  General  Partner or its  Affiliates who is in the
business of rendering  opinions  regarding  the value of oil and gas  properties
based upon the  evaluation of all pertinent  economic,  financial,  geologic and
engineering  information  available  to  the  Managing  General  Partner  or its
Affiliates.

         Section  4.04.  Election  to  Increase  Net  Profits  Interest.  If the
Property  Acquisition  Cost for any Net Profits Interest will be reduced because
of net revenues generated by some or all of the properties to be burdened by the
Net Profits  Interest  prior to the carve out  pursuant to Section  4.01 herein,
then the Pension  Partnership may elect to increase its Net Profits  Interest in
such group of properties being conveyed by an amount proportionally equal to the
reduced  purchase  price.  Such election may be made by providing  notice to the
Operating  Partnership  within  twenty-four  hours of  receiving  notice  of the
Operating  Partnership's notice of intended assignment pursuant to Section 4.01.
In no event  shall the  Operating  Partnership  be  required  to convey  any Net
Profits  Interest that is greater than ninety percent  (90%).  If an election is
made  pursuant to this Section  4.04,  then the  calculation  of the Net Profits
Interest  and  Overriding  Royalty  Interests  shall be made as provided  herein
except that the Adjusted Fixed Percentage shall replace the Fixed Percentage.

         Section  4.05.  Final Gross Up  Election.  After notice of and prior to
creation of a Net Profits  Interest by the  Operating  Partnership,  the Pension
Partnership  may notify the  Operating  Partnership  of its  election  to make a
greater cash payment for the Net Profits Interest and receive a  correspondingly
larger Net Profits Interest.  This "Final Gross Up Election" may be made subject
to the  following  requirements:  (i) the  Operating  Partnership  shall  not be
required to convey a Net Profits  Interest  that is greater than ninety  percent
(90%);  (ii) the  Pension  Partnership  may only  make  this  election  when the
Managing General Partner  determines in its sole discretion that the Net Profits
Interest  intended to be subject to this  election will be the final Net Profits
Interest  acquired under this Net Profits  Agreement;  and (iii) the increase in
purchase  price  resulting  from this election can not be an amount in excess of
fifteen percent (15%) of Pension  Partnership's  initial Allocated  Amount.  For
purposes of calculating the Fixed Percentage or the Adjusted Fixed Percentage of
the Net Profits Interest and Overriding  Royalty  Interests,  the amount of cash
associated  with  the  Final  Gross  Up  Election  shall  be  added  to  Pension
Partnership's  Allocated  Amount (for purposes of the numerator and denominator)
in Section 1.04 and Section 1.01.


                                       9


<PAGE>


                                    Article V
             Creation and Conveyance Of Overriding Royalty Interests

         Section 5.01.  Overriding Royalty Interest Defined.  Whenever Operating
Partnership  conveys a Net Profits  Interest to Pension  Partnership,  Operating
Partnership shall, in addition to the transfer to Pension Partnership of the Net
Profits  Interest as  contemplated  and provided for above,  convey unto Pension
Partnership  Overriding  Royalty  Interests in the Subject  Interests insofar as
Subject  Interests  and the Leases cover the  Overriding  Royalty  Depth and the
Overriding Royalty Surface Acreage.  The Overriding Royalty Interests of Pension
Partnership shall be applicable to Gross Proceeds attributable to the production
of Subject  Minerals from either the Overriding  Royalty Depth or the Overriding
Royalty Surface Acreage and such Overriding Royalty Interests shall not bear any
portion of  Operating  Costs.  The  Overriding  Royalty  Interest  shall be in a
percentage amount equal to the following:

                  (a)  Before  Payout.  Until such time as one  hundred  percent
         (100%) of the development and operating costs incurred to establish and
         maintain production from the Overriding Royalty Depth or the Overriding
         Royalty Surface Acreage and  attributable to the Subject  Interests are
         recovered  by the party  paying  such  costs,  the  Overriding  Royalty
         Interest shall equal that percentage derived by (i) deducting all lease
         burdens  filed of record in the county or parish on the date  Operating
         Partnership  acquires the Subject Interests (expressed as a percentage)
         as  to  such  depth  or  surface   acreage   (not   including   Pension
         Partnership's Overriding Royalty Interest) from twenty-two and one-half
         percent (22.5%),  (ii) multiplying the difference obtained by the Fixed
         Percentage,  and (iii)  multiplying  such  resultant  percentage by the
         percentage amount of working interest owned by Operating Partnership in
         that particular Lease. By way of example,  assume Operating Partnership
         owns sixty percent (60%) of the working  interest in a Subject Interest
         at the relevant depth or as to the relevant surface acreage, assume the
         Fixed  Percentage  equals  fifty  percent  (50%)  and  that  the  Fixed
         Percentage  attaches  to the  Operating  Partnership's  entire  working
         interest  in the Lease,  and assume  further  that the  existing  lease
         burdens are only mineral owners' royalty of twelve and one-half percent
         (12.5%),  then in such event the Overriding Royalty Interest of Pension
         Partnership shall equal three percent (3%). That is to say, ten percent
         (10%) (the percent by which  existing  lease burdens are less than 22%)
         multiplied by fifty percent (50%) (the Fixed Percentage), multiplied by
         sixty percent (60%) (the Operating  Partnership's working interest). It
         is understood,  however,  and agreed that should existing lease burdens
         (not including Pension Partnership's Overriding Royalty Interest) equal
         or exceed  twenty-two  and one-half  percent  (22.5%),  the  Overriding
         Royalty Interest before cost recoupment will be zero.

                  (b)  After  Payout.  At that  point in time  when one  hundred
         percent  (100%) of the  development  and  operating  costs  expended to
         establish and maintain  production  from the  Overriding  Royalty Depth
         and/or the  Overriding  Royalty  Surface  Acreage are  recovered by the
         party  paying  such  costs,   then  the  Overriding   Royalty  Interest
         determined under Section 5.01(a) above shall  automatically be adjusted
         to an  Overriding  Royalty  Interest  equal to (i) twelve and  one-half
         percent  (12.5%) of 8/8ths,  (ii)  multiplied by the Fixed  Percentage,
         then (iii)  multiplied by the percentage  working interest of Operating
         Partnership  in that Lease.  That is to say, if it is assumed as in the
         example above that  Operating  Partnership  owns sixty percent (60%) of
         the working  interest  which is fully subject to Pension  Partnership's
         Net Profits Interest, and if it is assumed that the Fixed Percentage is
         fifty percent  (50%),  then Pension  Partnership's  Overriding  Royalty
         Interest converts to three and  three-quarters  percent (3.75%),  i.e.,
         twelve  and  one-half  percent  (12.5%) of 8/8ths  multiplied  by fifty
         percent (50%) (the Fixed Percentage)  multiplied by sixty percent (60%)
         (the Operating Partnership's working interest).

         The resultant  Overriding Royalty Interest  calculated under (a) or (b)
above shall be reduced or increased proportionately to reflect any sliding scale
or reversionary  overriding  royalty,  working interest or similar  arrangements
contained in the Leases or Subject  Interests  covering the  Overriding  Royalty
Depth or Overriding  Royalty  Surface Acreage or contained in any other document
as to which such Leases or Subject  Interests are made subject as of the date of
acquisition.

         Section 5.02. Payment of Overriding  Royalty Interests.  The Overriding
Royalty Interests of Pension  Partnership  shall be payable  separately from the
Net Profits  Interests owned by Pension  Partnership.  Further,  such Overriding
Royalty  Interests  shall be payable on a well-by-well  basis (and recoupment of
costs as above provided  shall be determined on a well-by-well  basis) and shall
not be aggregated in any manner by Operating  Partnership for payment  purposes.
Further,  should Operating Partnership enter into a farmout agreement or similar
agreement with a Non-Affiliate  relating to the Overriding  Royalty Depth and/or
the Overriding Royalty Surface Acreage, or should Operating  Partnership acquire
an interest in the Overriding  Royalty Depth and/or  Overriding  Royalty Surface
Acreage which is at the date of acquisition burdened by a farmout agreement or a
similar  instrument with a Non-Affiliate,  which farmout agreement or instrument
therein  specifies a definition  of cost  recoupment  or "payout"  applicable to
establishing and maintaining production from the Overriding Royalty Depth or the
Overriding  Royalty  Surface  Acreage,  then the  definition  of "payout" or the
concept of cost recoupment utilized in such third-party  agreement shall prevail
for purposes of  determining  when the  provisions  of Sections  5.01(a) and (b)
above and this Section 5.02 apply.


                                       10


<PAGE>


         Section 5.03. Payment of Taxes. Overriding Royalty Interests shall bear
their  proportionate  share of all ad valorem,  production  severance and excise
taxes  applicable  to such  interests  and any  treatment  fees or other fees or
expenses of whatever  nature  necessary  or  appropriate  in the judgment of the
operator of the Leases to prepare the Subject Minerals  produced from such depth
or surface acreage for sale and actually to market such Subject Minerals.

                                   Article VI
                 Form Of Conveyance Of Net Profits Interests And
                          Overriding Royalty Interests

         Section  6.01.  Conveyances.  At the  point(s)  in time when  Operating
Partnership  has  acquired  Subject  Interests in Leases and desires to sell and
convey to Pension  Partnership  a Net Profits  Interest and  Overriding  Royalty
Interests in such Subject  Interests,  Operating  Partnership  shall execute and
deliver unto Pension Partnership a form of conveyance denominated a "Net Profits
and  Overriding  Royalty  Interest  Conveyance"  ("Conveyance"),  the  terms and
conditions of which shall  accomplish  the objectives and intentions of this Net
Profits Agreement and be consistent herewith.  Pension Partnership and Operating
Partnership  agree that the  Conveyance is subject to such  modifications  as to
form, but not as to substance,  as are necessary for compliance with the laws of
the  jurisdiction  in which the Leases are located.  The  Conveyance  shall make
specific reference to this Net Profits Agreement and relevant terms hereof shall
be incorporated  by reference into the  Conveyance.  Both parties agree that the
purpose  of  the  Conveyance  is  to  implement  the  terms,   conditions,   and
relationships delineated in this Net Profits Agreement.

         Section 6.02. Filing of Conveyances in Real Property  Records.  Pension
Partnership and Operating  Partnership agree that a Conveyance shall be made and
filed of record in each county or parish in which Operating Partnership acquires
Subject  Interests in Leases out of which it conveys Net Profits  Interests  and
Overriding   Royalty  Interests  to  Pension   Partnership.   If  the  Operating
Partnership and Pension Partnership so agree, the parties may stipulate that the
Net Profits  Interest and the  Overriding  Royalty  Interests  applicable to the
Subject  Interests in the Leases shall relate to each and every Subject Interest
owned by  Operating  Partnership  in such  county  or  parish  unless  Operating
Partnership  and  Pension  Partnership  prepare  and  execute a schedule  to the
Conveyance  setting  forth  those  leases  as to which  either  the Net  Profits
Interest and the Overriding  Royalty Interests are not applicable or as to which
the Net Profits Interest of Pension Partnership attaches to less than all of the
working interest owned by Operating Partnership. Additionally, the parties agree
that in lieu of filing  this Net Profits  Agreement  in each county or parish in
which there are located  Leases,  it shall be sufficient to file a memorandum or
some  other  notice  to  interested  parties  that a copy  of this  Net  Profits
Agreement is filed of record in Harris County, Texas, or, in the alternative, in
some county or parish within a state at the option of Operating Partnership.

                                   Article VII
                              Payment And Marketing

         Section 7.01.  Payment.  No later than the  thirtieth  (30th) day after
receipt by the Operating  Partnership of revenues attributable to the production
of Subject  Minerals as to which the Net  Profits  Interests  and/or  Overriding
Royalty Interests relate (excluding  Saturday,  Sunday or any other day on which
national  banking  institutions  in the City of  Houston,  Texas  are  closed as
authorized  or  required  by law),  Operating  Partnership  shall pay to Pension
Partnership its Net Profits Interests and Overriding Royalty Interests.  Pension
Partnership  shall be  entitled  to  receive  all  interest  earned on  revenues
attributable  to its Net Profits  Interests  and  Overriding  Royalty  Interests
between the date of their receipt by Operating Partnership and the date of their
payment to Pension  Partnership.  Operating  Partnership  is  authorized to make
estimated  payments  to Pension  Partnership  hereunder  and  adjust  subsequent
payments to take into account  shortfalls  or overages in estimated  payments so
made.

         Section  7.02.  Interest on Past Due  Payments.  Any amount not paid by
Operating  Partnership to Pension Partnership when due shall bear, and Operating
Partnership  will pay,  interest at the per annum rate of one  percentage  point
over the Prime  Interest  Rate in effect  during the period of such  nonpayment,
provided that such interest shall not be in excess of the maximum amount allowed
by law.

         Section  7.03.  Overpayment.  If  at  any  time  Operating  Partnership
inadvertently  pays  Pension  Partnership  more  than the  amount  due,  Pension
Partnership  shall not be  obligated  to return  any such  overpayment,  but the
amount or amounts  otherwise  payable for any subsequent period or periods shall
be  reduced  by the sum of (i) such  overpayment,  plus (ii) an amount  equal to
interest  computed at a per annum rate of one percentage point over the weighted
average Prime  Interest  Rate in effect  during the period of such  overpayment,
provided such interest  shall not be in excess of the maximum  amount allowed by
law.


                                       11


<PAGE>


         Section  7.04.  Marketing of Subject  Minerals.  Operating  Partnership
shall market or use its best efforts to cause  operators of the Leases to market
the  Subject  Minerals  at the best  prices and on the best terms that it or the
operator of the Leases shall deem reasonably  obtainable under the circumstances
and in any  event  at  prices  and  terms at least  as  favorable  as  Operating
Partnership obtains for minerals not subject to this Net Profits Agreement which
are of the same type, in the same location and similarly dedicated,  but Pension
Partnership shall have, and at all times retain, the right to receive production
in kind with respect to Subject Minerals  attributable to either the Net Profits
Interests or the Overriding Royalty Interests.  Subject to the foregoing, to the
extent comparisons exist, sales of the Subject Minerals by Operating Partnership
to an Affiliate  shall be made at prices and on terms  comparable  to the prices
and terms  received by other  Persons in the area.  Operating  Partnership  will
exercise its best efforts to perform all  obligations  binding on it under Sales
Contracts in accordance  with the terms thereof and will use its best efforts to
enforce  performance of the  obligations of third parties  thereunder;  provided
that Operating Partnership shall have no liability for its failure to so perform
except  where  such  failure is due to  Operating  Partnership's  negligence  or
misconduct.  As to any third parties, the acts of Operating Partnership shall be
binding on Pension  Partnership.  Operating  Partnership  will bring the Subject
Minerals to market in accordance with reasonable and prudent  business  judgment
and sound oil and gas field practices.

         Section 7.05.  Non-Liability of Pension Partnership.  In no event shall
Pension  Partnership  be liable or responsible in any way for the direct payment
to Operating  Partnership or to any third party for any Operating Costs or other
costs  or  liabilities  incurred  by  Operating  Partnership  or  other  lessees
attributable to the Leases or to the Subject Minerals produced therefrom.

                                  Article VIII
                          Operation of Leased Premises

         Section  8.01.  Prudent  Operator  Standard.  To the  extent  Operating
Partnership  controls such matters,  Operating  Partnership  agrees that it will
conduct and carry on or cause to be  conducted  and carried on the  development,
maintenance  and operation of the Leases with  reasonable  and prudent  business
judgment and in accordance with sound oil and gas field  practices,  and that it
will drill or cause to be drilled such wells as a prudent  operator  would drill
from  time to time in order to  develop  the  Overriding  Royalty  Depth and the
Overriding  Royalty Surface Acreage and to protect them from drainage.  However,
nothing  contained  in this  Section 8.01 shall be deemed to prevent or restrict
Operating Partnership from electing not to participate in any operation which is
to be  conducted  under the terms of any  operating  agreement,  unit  operating
agreement,   contract  for  development  or  similar  instrument   affecting  or
pertaining  to the Leases  (or any  portion  thereof)  and  allowing  consenting
parties to conduct nonconsent  operations  thereon,  if such election is made by
Operating  Partnership  in  good  faith  and  in  conformity  with  sound  field
practices,  unless the operator under such operating  agreement,  unit operating
agreement,  contract for  development  or similar  instrument is an Affiliate of
Operating Partnership.

         Section 8.02. Abandonment of Properties. Nothing herein contained shall
obligate Operating  Partnership to drill any well, or to continue to operate any
well or to operate or  maintain  in force or attempt to maintain in force any of
the Leases when, in Operating  Partnership's  opinion, such well or Lease ceases
to produce or is not capable of producing  oil, gas or other  minerals in paying
quantities.  The  expiration  of a  Lease  in  accordance  with  the  terms  and
conditions  applicable  thereto  shall  not  be  considered  to  be a  voluntary
surrender or abandonment thereof.

         Section 8.03.  Insurance.  Operating Partnership shall acquire or cause
to be  acquired  such  insurance  as it  deems  to be  (i)  reasonable  for  the
protection of the Subject  Interests in the Leases and (ii) economical under the
circumstances.

         Section 8.04. Farmout.  Operating  Partnership shall have the power and
right to enter  into  farmout  agreements  with  respect  to (i) the  Overriding
Royalty Depth and the  Overriding  Royalty  Surface  Acreage,  free from any Net
Profits  Interest  but  subject  to  Pension  Partnership's  Overriding  Royalty
Interests,  and (ii) the Net Profits Depth and the Net Profits Surface  Acreage,
free  from the  Overriding  Royalty  Interest  but  subject  to any Net  Profits
Interest.


                                       12


<PAGE>


                                   Article IX
                                   Unitization

         Section  9.01.  Pooled  Subject  Interests.   Certain  of  the  Subject
Interests  may be pooled and unitized  for the  production  of Subject  Minerals
prior to acquisition by Operating  Partnership.  Such Subject  Interests are and
shall be subject to the terms and  provisions  of such  pooling and  unitization
agreements,  the depth and surface acreage distinctions required hereunder shall
be made subject to such pooling and unitization  agreement,  and the Net Profits
Interest and  Overriding  Royalty  Interest of Pension  Partnership in each such
Subject  Interest shall apply to and affect only the production  from such units
which accrues to such interests  under and by virtue of the  applicable  pooling
and  unitization  agreements;  provided,  however,  that  should  certain of the
Subject  Interests  be so  pooled  and  unitized  or  form  all or a  part  of a
production unit, a spacing unit, an area of unitization or communitization,  or,
in the case of federal lands, a participation area, on or prior to the date upon
which Operating  Partnership  acquires  Subject  Interests in the Leases,  in no
event shall any change  occurring  after such date in either the surface acreage
configuration or the depth  designation(s)  of any such pooled unit,  production
unit,  spacing unit, area of unitization or  communitization,  or  participation
area,  whether such change is voluntary or compulsory  (pursuant to governmental
rule,  regulation or order) alter or have the effect of altering the Net Profits
Surface Acreage,  the Net Profits Depth, the Overriding Royalty Surface Acreage,
or the Overriding Royalty Depth under this Net Profits Agreement,  a Net Profits
Interest or in the Conveyance(s) contemplated hereunder.

         Section 9.02. Right to Pool.  Subject to the terms of the last sentence
of this  Section  9.02,  Operating  Partnership  shall have the right and power,
exercisable only during the period provided in Section 9.03 hereof,  to pool and
unitize any of the Subject Interests and to alter,  change or amend or terminate
any pooling or unitization  agreements  heretofore or hereafter entered into, as
to all or any part of the  land  covered  thereby,  as to any one or more of the
formations or horizons  thereunder,  and as to any one or more Subject Minerals,
upon such  terms  and  provisions  as  Operating  Partnership  shall in its sole
discretion determine, subject in all events to the Net Profits Interests and the
Overriding Royalty Interests of Pension  Partnership as herein provided.  If and
whenever  through the  exercise of such right and power,  or pursuant to any law
hereafter  enacted or any rule,  regulation or order of any governmental body or
official  hereunder  promulgated,  any of the  Subject  Interests  are pooled or
unitized in any manner,  the Net Profits  Interests and the  Overriding  Royalty
Interests insofar as they affect such Subject Interests shall also be pooled and
unitized and in any such event such Net Profits Interests and Overriding Royalty
Interests  in  such  Subject  Interests  shall  apply  to and  affect  only  the
production  which accrues to such Subject  Interests  under and by virtue of the
pooling and unitization.  The right and power of Operating  Partnership as above
provided to pool and unitize any of the Subject Interests or to alter, change or
amend or  terminate  any  pooling or  unitization  agreements  shall in no event
change or have the effect of changing the Net Profits Surface  Acreage,  the Net
Profits Depth, the Overriding  Royalty Surface Acreage or the Overriding Royalty
Depth  under  this  Net  Profits  Agreement,  a  Net  Profits  Interest  or  the
Conveyance(s) contemplated hereunder.

         Section 9.03.  Applicable  Period.  Operating  Partnership's  power and
right to pool and unitize the Subject  Interests  and the Net Profits  Interests
and Overriding  Royalty  Interests  shall be exercisable and enjoyed only during
the  period of the life of the last  survivor  of the  descendants  of Joseph P.
Kennedy, father of the late President of the United States of America, living on
the date of execution hereof, plus twenty-one (21) years after the death of such
last survivor,  or the term of the  Conveyance  itself,  whichever  period shall
first expire.

                                    Article X
                              Government Regulation

         Section 10.01.  Compliance  with Laws.  All  obligations of the parties
hereunder shall be subject to all applicable  laws of the federal  government of
the United States or Canada and any other state, provincial, or local government
having jurisdiction,  as well as to the applicable rules, regulations and orders
of any  federal,  state or local body,  agency,  board,  official or  commission
having jurisdiction.  Rates permitted under the Natural Gas Act, the Natural Gas
Policy Act of 1978, and any other  applicable  statute or law, and the rules and
regulations thereunder, to be paid for the Subject Minerals shall be controlling
if lower than prices established in Sales Contracts. Operating Partnership shall
be entitled to use its reasonable  discretion in making filings,  for itself and
on  behalf  of the  Pension  Partnership,  with the  Federal  Energy  Regulatory
Commission,  the Department of Energy or any other  governmental  body,  agency,
board,  official or  commission  having  jurisdiction,  affecting the prices and
other matters at which Subject Minerals may be sold.


                                       13


<PAGE>


                                   Article XI
                                   Assignments

         Section   11.01.   Assignment  by  Operating   Partnership.   Operating
Partnership shall have the right to assign,  sell, transfer or convey its rights
and  obligations  under this Net  Profits  Agreement  and/or all of the  Subject
Interests,  or any  part  thereof,  subject  to any Net  Profits  Interests  and
Overriding Royalty Interests of Pension Partnership and the terms and provisions
of this Net Profits Agreement.  Should Operating  Partnership sell,  transfer or
convey less than all of the Subject Interests burdened by a Net Profits Interest
to a third party,  each of the Subject  Interests  so sold or conveyed  shall be
subject to this Net Profits  Agreement and the Net Profits  Interest and Pension
Partnership's  interests  hereunder and in and to each of the Subject  Interests
sold or conveyed;  provided, however, that all of the provisions hereof relating
to the aggregation of proceeds and costs as to such Subject  Interests shall not
then apply and Pension  Partnership's  Net Profits  Interest shall be calculable
with respect to each of the sold or conveyed  Subject  Interests  separately and
the Fixed Percentage determined hereunder shall apply thereto.

         Section 11.02.  Assignment by Pension Partnership.  Pension Partnership
has the right to assign any Net Profits Interest or Overriding  Royalty Interest
in whole or in part.  However,  an assignment of a Net Profits Interest will not
affect the method of aggregation contemplated hereunder.

         Section 11.03. Change in Ownership.  No change of ownership or right to
receive payment of a Net Profits Interest or the Overriding Royalty Interest, or
of any part of either,  however  accomplished,  shall be binding upon  Operating
Partnership  until  notice  thereof  shall  have been  furnished  by the  Person
claiming the benefit thereof,  and then only with respect to payments thereafter
made.  Notice of sale or  assignment  shall  consist of a certified  copy of the
recorded  instrument  accomplishing  the same;  notice of change of ownership or
right to receive payment accomplished in any other manner (for example by reason
of  incapacity,  death or  dissolution)  shall  consist of  certified  copies of
recorded  documents and complete  proceedings  legally binding and conclusive of
the rights of all parties. Until such notice shall have been furnished Operating
Partnership  as is above  provided  herein,  the  payment  or tender of all sums
payable on the Net Profits Interests or the Overriding  Royalty Interests may be
made in the manner provided herein precisely as if no such change in interest or
ownership or right to receive  payment had  occurred.  The kind of notice herein
provided shall be exclusive,  and no other kind, whether actual or constructive,
shall be binding on Operating Partnership.

                                   Article XII
                               Records and Reports

         Section 12.01.  Books and Records.  Operating  Partnership shall at all
times  maintain  or have  maintained  true and  correct  books  and  records  to
determine  the  amounts  payable to  Pension  Partnership  for each Net  Profits
Interest and the attendant  Overriding  Royalty  Interests,  including,  but not
limited to, a Net Proceeds account to which Gross Proceeds,  Operating Costs and
Excess   Operating  Costs  are  credited  and  charged,   as  well  as  separate
well-by-well  records with respect to Overriding  Royalty  Interests  payable to
Pension Partnership.

         Section  12.02.  Inspections.  The books  and  records  referred  to in
Section 12.01 shall be open for inspection at the office of the Managing General
Partner during normal business hours.

         Section 12.03.  Quarterly Statements.  Within forty-five (45) days next
following  the  close of each  calendar  quarter,  Operating  Partnership  shall
deliver to Pension  Partnership  a  statement  showing  the  computation  of all
payments paid or due to Pension  Partnership  for each interest owned by Pension
Partnership attributable to such quarter.

         Section   12.04.   Pension   Partnership's   Exceptions   to  Quarterly
Statements.  If Pension  Partnership  shall take  exception to any item or items
included in the quarterly statements rendered by Operating Partnership,  Pension
Partnership  shall notify  Operating  Partnership  in writing within ninety (90)
days after the receipt of the report,  setting forth in such notice the specific
charges or  computations  complained  of and to which  exception is taken or the
specific  credits  which should have been made and allowed;  and with respect to
such complaints and exceptions as are agreed upon,  adjustment shall be made. If
Pension  Partnership  shall fail to give  Operating  Partnership  notice of such
complaints  and exceptions  prior to the expiration of such 90 day period,  then
the  statements  for such calendar  quarter as originally  rendered by Operating
Partnership shall be deemed to be correct as rendered.


                                       14


<PAGE>


                                  Article XIII
                                  Miscellaneous

         Section  13.01.  Proportionate  Reduction.  In the event of  failure or
deficiency  in  title  to any of  the  Subject  Interests,  the  portion  of the
production  from such Subject  Interests out of which a Net Profits  Interest or
the Overriding Royalty Interests attributable to such Subject Interests shall be
payable shall be reduced in the same proportion that such Subject  Interests are
reduced.

         Section 13.02.  Term. This Net Profits  Agreement and the Conveyance(s)
made pursuant hereto shall remain in force so long as the Subject  Interests are
in effect.

         Section 13.03.  Amendments  Hereof and Further  Assurances.  Should any
additional instruments of assignment and conveyance be required to describe more
specifically  any  interests  subject  hereto or any  conveyance  made  pursuant
hereto,  Operating  Partnership agrees to execute and deliver the same. Also, if
any other or additional instruments are required in connection with the transfer
of state or federal lease  interests in order to comply with  applicable laws or
regulations,  Operating  Partnership will execute and deliver the same. Further,
this Net Profits  Agreement  may be amended by a writing  executed by  Operating
Partnership  and Pension  Partnership and multiple  amendments are  specifically
authorized.

         Section  13.04.   Notices.  All  notices,   statements,   payments  and
communications  between  the  parties  hereto  shall  be  deemed  to  have  been
sufficiently  given and  delivered  if  enclosed in a postage  paid  wrapper and
deposited  in the United  States  mails  directed or to be  furnished or made at
their respective addresses, as follows:

         Operating Partnership:             Swift Energy Company
                                            16825 Northchase Drive, Suite 400
                                            Houston, Texas 77060
                                            Attn: Terry E. Swift

         Pension Partnership:               Swift Energy Company
                                            16825 Northchase Drive, Suite 400
                                            Houston, Texas 77060
                                            Attn: Bruce H. Vincent

         Either party or the  successors or assignees of the interests or rights
or obligations  of either party  hereunder may change its address or designate a
new or  different  address or  addresses  for the  purposes  hereof by a similar
notice given or directed to all parties interested hereunder at the time.

         Section  13.05.  Binding  Effect.  This Net Profits  Agreement  and any
Conveyance  executed  pursuant  hereto  shall  bind and inure to the  benefit of
successors and assigns of Operating Partnership and Pension Partnership.

         Section 13.06. Headings.  Article and Section headings used in this Net
Profits Agreement are for convenience only and shall not affect the construction
of this Net Profits Agreement.

         Section 13.07.  Substitution of Warranty.  Any Conveyance made pursuant
hereto  shall  be  made  with  full  substitution  and  subrogation  of  Pension
Partnership  in and to all covenants of warranty by others  heretofore  given or
made with respect to the Leases or any part thereof or interest therein.

         Section  13.08.  Severability.  Every  provision  of this  Net  Profits
Agreement  is  intended  to be  severable.  If any term or  provision  hereof is
illegal or invalid for any reason  whatsoever,  such  illegality  or  invalidity
shall not affect the validity of the remainder hereof.

         Section  13.09.  Choice of Law.  This Net  Profits  Agreement,  and the
application or interpretation hereof, shall be governed exclusively by its terms
and by the local, internal laws of the State of Texas.

         Section 13.10.  Cumulative  Rights. The rights and remedies provided by
this Net Profits Agreement are cumulative and the use of any one right or remedy
by any party  shall  not  preclude  or waive its  rights to use any or all other
remedies. Said rights and remedies are given in addition to any other rights the
parties may have by law, statute, ordinance or otherwise.

         Section 13.11. Counterparts. This Net Profits Agreement may be executed
in any number of counterparts  with the same effect as if all parties  hereunder
had signed the same document.  All counterparts  shall be construed together and
shall constitute one agreement.


                                       15


<PAGE>


         Section 13.12.  Successors and Assigns.  Each and all of the covenants,
terms,  provisions and  agreements  herein  contained  shall be binding upon and
inure to the benefit of the parties hereto and, to the extent  permitted by this
Net Profits Agreement, their respective successors and assigns.

         IN WITNESS  WHEREOF,  each of the  parties  hereto has caused  this Net
Profits  Agreement to be executed in its name and behalf in multiple  originals,
as of December 14, 1995.



                                    SWIFT ENERGY OPERATING PARTNERS 1995-B, LTD.
ATTEST:
                           BY:      Swift Energy Company, Managing
                                    General Partner
--------------------------
Adrian D. Shelley
Assistant Secretary        BY:      --------------------------------
                                    Terry E. Swift
                                    Executive Vice President
WITNESS:

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

                                    SWIFT ENERGY PENSION PARTNERS 1995-B, LTD.
ATTEST:
                                    BY:      Swift Energy Company, Managing
                                    General Partner
--------------------------
Adrian D. Shelley
Assistant Secretary        BY:      --------------------------------
                                    Bruce H. Vincent
                                    Senior Vice President - Funds Management
WITNESS:

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




STATE OF TEXAS   :

COUNTY OF HARRIS :

         On this 29th day of December, 1995, before me the undersigned, a Notary
Public in and for the county and state aforesaid,  personally  appeared TERRY E.
SWIFT to me personally  known to be the identical  person who signed the name of
the maker thereof to the within and foregoing  instrument as its Executive  Vice
President  and  acknowledged  to me that he  executed  the  same as his free and
voluntary  act and  deed,  and as the  free and  voluntary  act and deed of said
corporation, for the uses and purposes therein set forth.

         Given under my hand and seal this day and year last above written.


                                 ----------------------------------
                                 Notary Public in and for the
                                 STATE OF TEXAS


                                 ----------------------------------
                                 PRINT NAME OF NOTARY


                                       16


<PAGE>


STATE OF TEXAS   :

COUNTY OF HARRIS :

         On this 29th day of December, 1995, before me the undersigned, a Notary
Public in and for the county and state aforesaid,  personally  appeared BRUCE H.
VINCENT to me personally known to be the identical person who signed the name of
the maker  thereof to the within and  foregoing  instrument  as its Senior  Vice
President Funds  Management and  acknowledged to me that he executed the same as
his free and voluntary act and deed,  and as the free and voluntary act and deed
of said corporation, for the uses and purposes therein set forth.

         Given under my hand and seal this day and year last above written.


                                 ----------------------------------
                                 Notary Public in and for the
                                 STATE OF TEXAS


                                 ----------------------------------
                                 PRINT NAME OF NOTARY