Exhibit 10.16.2




                        December 13, 1999

Mr. Drake N. Smiley, Vice President
RAM Energy, Inc.
5100 East Skelly Drive, Suite 650
Tulsa, OK 74135

                                 RE:  Employment and Severance Agreement

Dear Drake:

     This letter agreement (this "Agreement"), when executed by
you in the time and manner hereinafter provided, will constitute
an employment and severance agreement between you and RAM Energy,
Inc. (the "Company"), superseding all existing employment,
severance and similar agreements between you and the Company;
provided, however, that the existing Employment and Severance
Agreement between you and the Company dated January 1, 1999
through December 31, 1999 shall remain in effect until execution
of this agreement.  The terms of this Agreement are as follows:

     1.   Term.  The term of this Agreement shall commence
January 1, 2000, and shall continue until December 31, 2000.

     2.   Title; Duties.  Your job title will be "Senior Vice
President Land" of the Company.  You will perform duties
commensurate with your position and as assigned to you by the
President or Chairman of the Company or their designee.  During
the term of this Agreement you will devote your full time and
attention during normal business hours to the business of the
Company and will not be employed by or perform any professional
work or services, including consulting, for any other person,
firm or entity.

     3.   Salary.  Your base salary will be $11,666.67 per month,
payable twice monthly in equal installments, less applicable
withholding and other payroll taxes and deposits.  Additionally,
you will receive life, disability and health insurance, expense
account and other benefits as are available to other non-director
officers of the Company, and three weeks paid vacation annually
during the term hereof.

     4.   Termination of Employment.

          4.1  By the Company.  Your employment may be terminated
by the Company at any time upon two weeks prior written notice
(except where termination is for gross neglect of your duties,
breach by you of the terms of this Agreement or willful
misconduct, hereinafter referred to as "Good Cause", in which
event termination may be effective immediately upon notice).
Subject to the provisions in Section 4.3 hereof regarding
termination of employment following a "Change of Control" (as
hereinafter defined), in the event your employment is terminated
by the Company at any time (i) prior to June 30, 2000 (other than
for Good Cause), you will be entitled to receive as a severance
payment (A) an amount equal to your monthly base salary times the
number of months (pro rated for any partial month if the
effective date of termination is other than the end of a month)
remaining until the expiration of the term hereof, plus (B) an
amount equal to your monthly base salary times the number of
years (pro rated for any partial year) you have been employed by
the Company, or (ii) after June 30, 2000 (other than for Good
Cause), you will be entitled to receive as a severance payment
(A) an amount equal to six (6) times your monthly base salary,
plus (B) an amount equal to your monthly base salary times the
number of years (pro rated for any partial year) you have been
employed by the Company, all less applicable withholding and
other payroll taxes and deposits.  For purposes of the foregoing,
the date of your initial employment with the Company shall be
conclusively determined to be June 1, 1990, such that each full
year of your employment with the Company shall end on May 31 of
each subsequent year.  In addition to the payment described at
(i) or (ii) above, whichever is applicable, you also shall be
entitled to receive payment for accrued but unused vacation based
on your monthly base salary.  In the event your employment is
terminated by the Company at any time for Good Cause, you shall
not be entitled to receive any severance payment other than for
accrued but unused vacation.  In the event the Company fails to
make any salary payment due under this Agreement within five (5)
days after the due date, and provided you are not in breach of
the terms of this Agreement, you may terminate your employment at
any time thereafter (but prior to the time the delinquent payment
is made) by a written notice to the President or Chairman of the
Company, in which event your employment will be deemed to have
been terminated by the Company for purposes of this Section 4.1
as of the date such notice is delivered.

          4.2  By You.  If during the term hereof you terminate
(other than a termination by you pursuant to the last sentence of
Section 4.1) or are deemed to have terminated (by becoming an
employee of or performing professional work for or consulting
with any other person, firm or entity) your employment with the
Company, then you shall not be entitled to receive any severance
payment (other than for accrued but unused vacation as provided
in Section 4.1 above).

          4.3  Termination Following a Change of Control.  In the
event a Change of Control occurs during the term hereof, and
following such Change of Control (i) your employment is
terminated by the Company (other than for Good Cause) during the
term hereof, or (ii) you are not offered, prior to December 1,
2000, a renewal contract for calendar year 2001 for employment by
the Company (or its successor by merger), in a comparable
position in the same general location (i.e., the same city or
metropolitan area in which you are employed by the Company at the
time such Change of Control occurs), at not less than the same
salary, and with comparable severances and other benefits as
provided under this Agreement (other than a Change of Control
provision such as this Section 4.3), then upon the effective date
of termination of your employment (in the case of clause (ii)
next above, December 31, 2000), you will be entitled to receive
as a severance payment the same amount calculated pursuant to
Section 4.1 hereof, except  that the amount calculated pursuant
to clause (i) (B) or (ii) (B) of Section 4.1, whichever is
applicable, shall be doubled, that is, in addition to the amount
calculated pursuant to clause (i) (A) or (ii) (A), you shall
receive two (2) month's base salary for each year of employment
by the Company (pro rated for a partial year).  As used herein,
the term "Change of Control" shall mean any change in the
composition of the Board of Directors of the Company (the
"Board") resulting in the current stockholder directors (M. Helen
Bennett, Larry E. Lee and William W. Talley, II) or their
designees (in the event one of more of the current directors
chooses not to serve as a director and causes his or her designee
to be elected in lieu of such director), comprising less than one-
half (1/2) of the members of the Board.  Notwithstanding the
foregoing, in no event shall you ever be entitled to receive as a
severance payment upon a Change of Control an amount that would
result in the imposition of the excise tax provided for in
Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Excise Tax"), and in the event the severance payment
calculated pursuant to this Section 4.3 would result in the
imposition of the Excise Tax, the amount so calculated shall be
reduced to the amount that is one dollar ($1) less than the
amount that would result in the imposition of the Excise Tax.

          4.4  Death or Disability.  In the event you die during
the term hereof, your employment will be deemed to have been
terminated by the Company (other than for cause) as of the date
of death.  In the event you become permanently disabled during
the term hereof, you shall continue to receive your base salary
for a period of 12 months following the date of disability and
shall be deemed an employee of the Company during such 12-month
period for purposes of other employee benefit plans and programs,
except to the extent prohibited by the terms of any such plan.

     5.   Renewal.  In the event the Company desires to continue
your employment with the Company beyond December 31, 2000, the
Company will so notify you during the month of November 2000, but
in no event later than November 30, 2000.  In such event, the
President of the Company will discuss with you the Company's
proposal for renewal of this Agreement for an additional one-year
term on substantially the same terms and conditions as this
Agreement at a salary not less than the salary provided herein.
In the event a renewal agreement as hereinabove described is not
offered by the Company, then provided you have complied with the
provisions of Section 2 of this Agreement at all times prior
thereto, your employment will be deemed terminated by the Company
effective December 31, 2000.  In the event a renewal agreement as
hereinabove described is offered by the Company but rejected by
you, then provided you have complied with the provisions of
Section 2 of this Agreement at all times prior thereto, your
employment will be deemed terminated by you effective December
31, 2000; however, and notwithstanding the provisions of Section
4.2 hereof, in such event you will be entitled to receive as a
severance payment upon such termination an amount equal to three
(3) times your monthly base salary, plus an amount for accrued
but unused vacation based on your monthly salary, less applicable
withholding and other payroll taxes and deposits.

     6.   Exclusive Obligation.  You acknowledge and agree that
the Company has no obligation to continue your employment or to
make any severance payment of any nature upon termination of your
employment except as provided herein or in a subsequent written
agreement executed by you and the Company.

     7.   Indemnification.  To the fullest extent allowed by the
Delaware General Corporation Law and the Company's bylaws with
respect to its officers and directors, the Company agrees to
indemnify you and to hold you harmless from and against any and
all losses, claims, damages, liabilities and legal and other
expenses (including costs of investigation) incurred by you and
arising out of the performance of your duties and
responsibilities under this Agreement, regardless of the time
such claim or cause of action is asserted.

     8.   Confidentiality.  The terms of this Agreement shall be
held by you in strict confidence and shall not be released or
disclosed by you to any third party.

     9.   Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State
of Oklahoma applicable to contracts made and to be performed
entirely therein.

     10.  Binding Effect.  This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective successors (including successors by merger or
reorganization) and assigns; provided, however, that your
obligations hereunder are personal in nature and may not be
assigned, and that the obligations of the Company hereunder may
be assigned only with your prior written consent.

     If you are in agreement with the terms hereof, please so
indicate by executing a copy of this letter in the space provided
and returning it to us within five days of the date hereof.

                                   Very truly yours,

                                   RAM Energy, Inc.

                                   By   LARRY E. LEE
                                        Larry E. Lee, President
                                        Chief Executive Officer
Agreed to and accepted
this 15th day of December, 1999

DRAKE N. SMILEY
Drake N. Smiley