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Exhibit 10(l)




Description of Cash Bonus Compensation Arrangements for Employees and Officers




     Since 1995, we have had a practice of paying cash bonuses to all of our employees each year
except in 1998, when no bonuses were paid to employees. There is no formal bonus plan, nor any
written formulas for determining bonus amounts. Because whether or not bonuses will be paid and in
what amounts is determined by the Compensation Committee of our Board of Directors on a
Company-wide basis; executive officers receive bonuses only if all employees receive bonuses.



     Our bonus practices currently classify employees into five levels for bonus compensation
purposes, three of which are determined solely based on salary level. The remaining two levels
include managers, as defined by senior executives, and officers. At the first bonus level, which
includes all employees, bonuses generally range from zero to ten percent of base salaries, although
in the past bonuses paid at this and all other levels have been as high as twelve and one-half
percent of base salary in an exceptionally good year. There is an additional compensation layer
for all employees in the next salary level, which generally includes the professional group (the
second level), whereby these employees may receive an additional level of bonuses of up to ten
percent of base salaries, for or a total bonus ranging from zero to twenty percent. Those in the
third or highest salary level, which generally includes the higher performing professionals,
technical experts or supervisors and managers, can receive an additional bonus equal to seven and
one-half percent of base salary, or a total bonus ranging from zero to twenty-seven and one-half
percent. In addition, employees that are considered managers, as determined by senior executives,
(the fourth level) are eligible to receive an additional level of bonuses of up to seven and
one-half percent of base salaries in addition to the bonus they receive from the first three
levels, or a maximum bonus of 35%. Lastly, our corporate officers (the fifth level) are eligible
to receive an additional level of bonuses of up to seven and one-half percent of base salaries, for
a total bonus ranging from zero to forty-two and one-half percent. All of our executive officers
are eligible for bonuses at all five levels. All bonuses are paid at the same percentage for each
level (i.e. if level one is 10%, level two is 10% and levels three through five are 7.5%).



     Since this practice began in 1995, we have paid cash bonuses ranging from 0% to 50% of base
salary to our executive officers, depending on the Company’s results for that year, as determined
by the Compensation Committee of our Board of Directors. In addition to the aforementioned bonus
practice, we have usually paid a Christmas bonus each year that is equivalent to one week of each
employee’s base salary.



     Bonus determinations are made by the directors on our Compensation Committee subjectively, not
based on arithmetic methods or formulas, generally based on our overall corporate results and
whether or not the Company has achieved predetermined Company-wide goals and objectives. Any
measure that might be considered to determine whether or not an oil and gas company had a good year
(or other measures of success or failure) is a possible consideration by the Compensation
Committee. These measures have historically included an evaluation of production levels, stock
performance, achievement of acquisition or disposition goals, completion of significant
transactions, completion of significant projects (such as software



 









 







systems or significant construction projects), operating and administrative expense levels as
compared to budget, capital expenditures as compared to budget, and the changes in our proved,
probable and possible reserves for that period as compared to costs incurred. As the Compensation
Committee’s decisions are subjective evaluations made on an overall basis, it is not possible to
determine how these measures are weighted or evaluated by the Compensation Committee.