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                                                                   EXHIBIT 10.24

                               ALLIANCE AGREEMENT

                 PRODUCTION OPERATIONS AND MAINTENANCE SERVICES


         THIS AGREEMENT is made and entered into this the 4th day of June, 1998,
by and between PRODUCTION MANAGEMENT CORPORATION, a Louisiana corporation,
hereinafter referred to as "CONTRACTOR" and ENERGY PARTNERS, LTD., a Delaware
corporation, hereinafter referred to as "OPERATOR" concerning its subject
matter.

         WHEREAS, OPERATOR and CONTRACTOR desire to establish an Alliance
Relationship under which CONTRACTOR shall supply certain services and materials
and share its expertise with OPERATOR. The agreed scope and purpose of the
alliance is to:

         o   Establish a mutually-beneficial long-term relationship between the
             parties;

         o   Develop a thorough understanding and awareness of each parties'
             needs, concerns and objectives;

         o   Maximize the efficiencies of each parties' activities associated
             with OPERATOR'S producing properties.

         o   Seek additional producing properties to increase the revenues and
             profits for both parties to this Alliance Agreement.

         In furtherance of the Alliance efforts, OPERATOR agrees that is shall
endeavor to provide CONTRACTOR the opportunity to propose its services for each
producing property that OPERATOR now has, or may acquire in the future, and
CONTRACTOR agrees that it shall endeavor to provide its best pricing to OPERATOR
for services which may be rendered hereunder.

         For and in consideration of the mutual promises and agreements herein
set forth and in accordance with the following terms and conditions, OPERATOR
and CONTRACTOR agree as follows:

1.0      CONTRACT DOCUMENTS AND WORK DESCRIPTION

         1.1      This Agreement and the documents identified below, said
                  documents being attached hereto and made a part hereof or
                  incorporated herein by reference for all purposes, including
                  any and all modifications incorporated herein prior to
                  execution of this Agreement, shall be collectively known as
                  the "Contract Documents".

                  The above-referenced documents include:

                  Exhibit "A", Property Schedule, updated as needed
                  Contractor's Accepted Proposal(s), to be incorporated and
                     attached and numbered as Exhibits "B-1", "B-2", etc.


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                  Operator's Award of Contract Letter(s), to be incorporated and
                      attached and numbered as Exhibits "C-1", "C-2", etc.
                  Exhibit "D", Insurance Requirements
                  Exhibit "E", Executive Order No. 11246 -- non-discrimination;
                      certificate of non-segregated facilities; and related
                      federal contracting issues.

         1.2      The Contract Documents shall constitute the entire agreement
                  between the parties hereto with respect to the matters covered
                  hereby.

         1.3      The work is defined as production operations and maintenance
                  services for OPERATOR'S properties scheduled on Exhibit A,
                  attached. The CONTRACTOR shall furnish all labor, supervision,
                  associated transportation and subsistence necessary to provide
                  these services as per CONTRACTOR'S proposal. All work shall be
                  performed in accordance with the Contract Documents, and
                  CONTRACTOR'S quality of services shall be such that the
                  operations will be those of a prudent operator.

         1.4      The CONTRACTOR warrants that he is familiar with the terms of
                  the Contract Documents and is, therefore, apprised of the
                  scope and description of the work in such derail that he may
                  estimate his costs in connection with the performance thereof.

2.0      CONTRACTOR'S DUTIES AND OBLIGATIONS

         2.1      The CONTRACTOR shall perform the work as defined above.

         2.2      It is agreed that time is of the essence and the CONTRACTOR
                  shall commence the performance of his duties within ten (10)
                  days after receiving notification from the OPERATOR to
                  commence with the work and shall proceed diligently
                  thereafter. CONTRACTOR shall perform the work in a safe, good
                  and workmanlike manner in accordance with industry standards
                  and all applicable laws and regulations.

         2.3      The CONTRACTOR further warrants that:

                  2.3.1    He has fully acquainted himself with and knows of
                           no reason why any physical or material factors would
                           interrupt his diligent performance.

                  2.3.2    He is fully acquainted with the nature of the duties
                           he hereby undertakes to perform in this Agreement and
                           knows of no reason and anticipates no interruptions,
                           whether by labor disputes or otherwise, which would
                           prevent his diligently pursuing the work.

                  2.3.3    In the performance hereunder, CONTRACTOR is an
                           independent contractor, the OPERATOR being interested
                           only in the results obtained.


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                           The CONTRACTOR acknowledges that neither he nor any
                           of his employees are employees of the OPERATOR.

                  2.3.4    The actual performance and supervision of all work
                           hereunder shall be by CONTRACTOR, but OPERATOR or its
                           representatives shall have access to the operations
                           to determine whether performance by CONTRACTOR is in
                           accordance with all provisions of the Contract
                           Documents.

                  2.3.5    CONTRACTOR shall pay and discharge all taxes,
                           leinable claims, charges or other impositions imposed
                           on CONTRACTOR and shall keep all properties free and
                           clear of all liens and encumbrances arising from the
                           activities of CONTRACTOR OPERATOR, at its option,
                           may require lien waivers prior to full payment to
                           CONTRACTOR, and may set off amounts payable to
                           satisfy any liens or encumbrances arising from
                           CONTRACTOR'S work.

3.0      INDEMNITY

         The CONTRACTOR and OPERATOR further agree that:

         3.1      For the purposes of the indemnity provisions set forth in this
                  section, the term "CONTRACTOR GROUP" as used herein as a
                  reference shall mean, individually and collectively,
                  CONTRACTOR and the employees, agents, representatives,
                  contractors and subcontractors of CONTRACTOR and the subrogees
                  of said parties. Similarly, the term "OPERATOR GROUP" as used
                  herein as a reference, shall mean, individually and
                  collectively, OPERATOR and the employees, agents,
                  representatives, contractors, and subcontractors of OPERATOR
                  and the subrogees of said parties. It is also specifically
                  understood and agreed that a contractor, supplier, or
                  subcontractor furnishing any of the services and/or materials
                  which are prescribed in this Agreement shall be deemed a
                  member of the Group (CONTRACTOR GROUP or OPERATOR GROUP) of
                  the party hereto who has or is charged with the responsibility
                  for furnishing such services and/or materials under and in
                  accordance with this Agreement. Solely for the purposes of the
                  indemnity provisions set forth in this section, the negligent
                  or willful acts or omissions of CONTRACTOR GROUP shall be
                  imputed to CONTRACTOR, and the negligent or willful acts or
                  omissions of OPERATOR GROUP shall be imputed to OPERATOR.

         3.2      CONTRACTOR agrees to protect, defend, indemnify and hold
                  OPERATOR, its co-owners, contracting landowners, and joint
                  owners/joint venture partners of oil, gas and/or other mineral
                  leases, harmless from and against all claims, demands,
                  damages, costs, expenses and causes of action of any and every
                  type and character (collectively, "Claims"), without limit and
                  without regard to the cause or causes thereof which are
                  related in any way to performance by CONTRACTOR GROUP under
                  this Agreement and which arise in favor of or are made by
                  CONTRACTOR GROUP due to personal injury, death, or property
                  damage, whether or not caused


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                  by the joint and/or concurrent negligance of OPERATOR GROUP or
                  CONTRACTOR GROUP, except however, to the extent any Claims
                  result from the gross negligence or willful acts or omissions
                  of OPERATOR GROUP.

                  OPERATOR agrees to protect, defend, indemnfy and hold
                  CONTRACTOR safe and harmless from and against all Claims
                  without limit and without regard to the cause or causes
                  thereof which are related in any way to performance by
                  OPERATOR GROUP under this Agreement and which arise in favor
                  of or are made by OPERATOR GROUP due to personal injury,
                  death, or property damage whether or not caused by the joint
                  and/or concurrent negligence of OPERATOR GROUP or CONTRACTOR
                  GROUP, except however, to the extent any Claims result from
                  the gross negligence or willful acts or omissions of
                  CONTRACTOR GROUP.

                  Notwithstanding the foregoing, CONTRACTOR'S obligation under
                  this Paragraph 3.2 shall be limited to the amount of insurance
                  coverage required under this Agreement pursuant to Exhibit
                  "B", Insurance Requirements. Conversely, OPERATOR'S obligation
                  under this Paragraph 3.2 shall be limited to ten million
                  dollars ($10,000,000) per claim.

         3.3      CONTRACTOR agrees to protect, indemnify, and hold OPERATOR,
                  its co-owners, contracting landowners, and joint
                  operators/joint venture partners of oil, gas and/or other
                  mineral leases; safe and harmless from and against all Claims
                  of every kind and character on account of personal injury to,
                  illness or death of, or loss of or damage to property of,
                  third parties other than OPERATOR GROUP or CONTRACTOR GROUP
                  where the personal injury, illness, death, or loss of or
                  damage to property is related to performance by CONTRACTOR
                  under this Agreement. CONTRACTOR'S obligation to defend and
                  indemnify OPERATOR hereunder shall be limited to the same
                  degree that the underlying cause of action results from the
                  willful or negligent acts or omissions of CONTRACTOR.
                  CONTRACTOR'S responsibility to OPERATOR for all such damages
                  shall in all events be limited to the amount of insurance
                  coverage required of CONTRACTOR in Exhibit "B" -- Insurance
                  Requirements.

         3.4      OPERATOR and CONTRACTOR agree to defend each other,
                  respectively, against all suits brought upon any claim,
                  demand, or cause of action covered by their indemnity
                  obligations, but each party shall have the right, at its
                  option, to participate at its own expense with attorneys of
                  its own selection in the defense of any such suits without
                  releasing the other party of any indemnity obligation
                  hereunder.

         3.5      CONTRACTOR GROUP shall not be liable to OPERATOR,
                  co-operators, contracting landowners and joint operators/joint
                  venture partners of oil, gas and/for other mineral leases for
                  delays, curtailment of operations, deferred production, loss
                  of product, process failures, loss of profits, well control
                  expenses, reservoir damages, blowout and cratering damages,
                  pollution damages caused by an


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                  uncontrolled flow of oil emanating from beneath the surface,
                  or any other such consequential damages, howsoever caused,
                  including that resulting from the sole and/or concurrent
                  negligent acts or omissions of CONTRACTOR GROUP.

         3.6      Any action against CONTRACTOR by OPERATOR must be commenced
                  within one year after notice to OPERATOR of the claim.

         3.7      CONTRACTOR shall assume all responsibility for, including
                  control and removal of, and shall protect, defend and hold
                  harmless OPERATOR from any and all Claims (as defined in
                  Paragraph 3.2 above) for personal injury, death or property
                  damage and including claims for response costs or actions or
                  orders issued by governmental entities, claims for
                  restitution, contribution or equitable indemnity and other
                  claims, orders or notices of violation from federal, state or
                  local agencies or courts, arising from pollution,
                  contamination or other environmental conditions emanating from
                  above the surface or non-compliance with law, order or
                  regulation, to the extent caused by CONTRACTOR'S negligent act
                  or omission, up to a maximum of $l million, and excluding wild
                  well control and well blow-out claims, for which OPERATOR
                  sha1l assume all responsibility, including control and removal
                  and claims for response costs, or actions or orders issued by
                  governmental entities, claims for restitution, contribution,
                  or equitable indemnity and other claims, orders, or notices of
                  violations from federal, state or local courts arising from
                  pollution (surface and subsurface), contamination or other
                  environmental conditions arising from a wild well or well
                  blow-out.

         3.8      Both OPERATOR and CONTRACTOR acknowledge that certain State or
                  Federal laws may act to bar, limit, or otherwise modify the
                  indemnity provisions contained herein, and both OPERATOR and
                  CONTRACTOR agree that in the event such law(s) should be
                  determined to apply to this Agreement, then the indemnity
                  provisions shall be deemed to be amended so as to comply with
                  such applicable law. To the extent that the law of the State
                  in which the work is performed, or, in instances where work
                  is performed on the Federal Outer Continental Shelf, the laws
                  of the adjoining State, are deemed not to apply to this
                  Agreement, then the Federal Maritime Laws of the United States
                  shall apply.

         3.9      It is acknowledged that from time to time during the
                  performance by CONTRACTOR, its personnel may have their advice
                  and assistance solicited by OPERATOR'S personnel in matters
                  and relative to tasks which fall outside the Scope of Work
                  covered by this Agreement. CONTRACTOR does not have adequate
                  knowledge of, and lacks adequate control over, such unplanned
                  and unanticipated advice and assistance; consequently,
                  OPERATOR WILL INDEMNIFY AND HOLD CONTRACTOR HARMLESS FROM ALL
                  DAMAGES, ACTIONS, PROCEDURES, CLAIMS AND DEMANDS BY REASON OF
                  ANY SUCH ADVICE AND ASSISTANCE.


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         3.10     The terms and provisions of Subparagraphs 3.1 through 3.9 of
                  this section shall be applicable only between OPERATOR and
                  CONTRACTOR and do not create any affirmative rights in third
                  parties or governments.

4.0      "FORCE MAJEURE"

         Neither party hereto shall be liable for damage to the other for any
         acts, omissions or circumstances occasioned by or in connection with,
         or as a consequence of, and the obligations of the parties shall be
         suspended during continuance of, any "force majeure" conditions,
         including but not limited to any acts of God, strikes, lockouts or
         other industrial disturbances, acts of the public enemy, sabotage,
         wars, blockades, insurrections, riots, epidemics, lightning,
         landslides, earthquakes, floods, fires, arrests, restraints of rulers
         and peoples, civil disturbances, or the binding order of any court or
         governmental authority which has been resisted in good faith by all
         reasonable legal means, or any other cause, whether of the kind herein
         enumerated or otherwise, not within the control of the party claiming
         suspension, and which, by the exercise of due diligence, such party is
         unable to prevent or overcome. Such causes or contingencies affecting
         the performance of this Agreement by the parties hereto, however, shall
         not relieve either party of liability in the event of its concurring
         negligence or in the event of its failure to use diligence to remedy
         the situation and remove the cause in an adequate manner and with all
         reasonable dispatch, nor shall such causes or contingencies affecting
         the performance of this Agreement relieve any party of liability unless
         such party shall give notice and full particulars of the same in
         writing or by telegram to the other party as soon as possible after the
         occurrence relied upon, and like notice shall be given upon termination
         of such "force majeure" conditions.

5.0      COMPENSATION TO CONTRACTOR

         5.1      Base Compensation. The CONTRACTOR shall receive, as monthly
                  compensation for the performance of his duties hereunder, the
                  monthly sum on the basis of the Contractor's Accepted
                  Proposal. All such invoices shall be sent directly to the
                  OPERATOR at the end of each month services are provided unless
                  the CONTRACTOR receives written notice from the OPERATOR with
                  different instructions.

         5.2      Incentive Compensation. It is the intent of the OPERATOR that
                  the CONTRACTOR shall be eligible to earn incentive payments
                  over and above the Base Compensation provided for in
                  Subparagraph 5.1, above.

                  The extent of incentive available, if any, and the manner of
                  computation and method of payment shall be determined
                  individually for each property operated under this Alliance
                  Agreement.


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         5.3      The OPERATOR shall pay CONTRACTOR'S invoice within thirty (30)
                  days after the date of such invoice. In the event of a
                  disputed invoice, OPERATOR agrees to pay the undisputed
                  portions(s) of such invoice within thirty (30) days of
                  receipt. All invoice amounts not paid by OPERATOR within
                  thirty (30) days of the invoice date shall accrue interest at
                  the rate of one and one-half percent (1 1/2%) per month until
                  paid. Interest shall also accrue to disputed invoice amounts
                  should the amounts be determined, either by agreement or
                  arbitration, to be valid.

         5.4      CONTRACTOR acknowledges that payment of any funds or
                  inspection of work by OPERATOR shall not constitute a waiver
                  of acceptance of the work.

6.0      TERM

         This Alliance Agreement shall remain in full force and effect for a
         period of three (3) years from the date first written, provided,
         however, that this Agreement shall automatically renew for additional
         one (1) year periods unless either party hereto provides sixty (60)
         days prior written notice of its intent not to renew the Agreement. In
         the event that either party is in default of this Agreement during the
         sixty- (60) day notice period, then the automatic renewal provision
         herein shall be of no force and effect and this Agreement shall not
         renew.

7.0      TERMINATION OF WORK

         7.1      Nothing in the Contract Documents shall be construed so as to
                  limit in any way the obligations that as stated, continue
                  after completion and acceptance of Work or other termination
                  of this Agreement, including the obligations of indemnity,
                  insurance and warranty.

         7.2      Pursuant to Subparagraph 7.4, OPERATOR may terminate
                  CONTRACTOR'S right to proceed with the Work, or any part
                  thereof regardless of its stage of completion, or this
                  Agreement, upon the occurrence of any of the following events
                  enumerated in this Subparagraph 7.2 but only after CONTRACTOR
                  has failed to cure any alleged default or condition after
                  thirty (30) days' written notice from OPERATOR specifying the
                  nature of such default:

                  a.       CONTRACTOR'S failure to prosecute the Work or any
                           portion thereof in a diligent, efficient,
                           workmanlike, skillful and careful manner, or to
                           reasonable satisfaction of OPERATOR, including
                           CONTRACTOR'S refusal or neglect to supply a
                           sufficiency of properly skilled workmen or materials
                           of the proper quality or quantity.

                  b.       CONTRACTOR'S failure to comply with any of the
                           material terms of the Contract Documents;


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                  c.       The insolvency of CONTRACTOR; any assignment by
                           CONTRACTOR for the benefit of creditors; any
                           admission by CONTRACTOR in writing of its inability
                           to pay its debts generally as the same become due; or

                  d.       The levy or attachment upon CONTRACTOR'S equipment
                           which is not removed or contested within thirty (30)
                           days.

         7.3      Should conditions arise that in the opinion of OPERATOR make
                  it advisable or necessary to cease Work, OPERATOR may
                  terminate the applicable Work Order and Scope of Work for its
                  convenience (but not this Agreement) upon written notice to
                  CONTRACTOR and CONTRACTOR shall perform an orderly and
                  expedient close of the Work, which is in progress at that
                  time. Such termination shall include the right to direct
                  CONTRACTOR to complete any distinct phase of the Work, and to
                  terminate all other Work associated with such Work Order. Any
                  Work which may be recommenced as a new project after the
                  termination of a Contractor Work Order pursuant to this
                  Subparagraph 7.3 shall be subject to the provisions
                  of Paragraph 8.0 below.

         7.4      Upon termination of the parties' obligations under this
                  Paragraph 7.0, CONTRACTOR shall (i) take all steps necessary
                  or advisable to close out the Work in progress in a safe and
                  prudent manner, (ii) cease ordering materials or supplies to
                  the extent permissible; and (iii) make every reasonably
                  possible effort to procure cancellation of all existing orders
                  upon terms satisfactory to OPERATOR. Upon such termination,
                  it is agreed that the obligations of this Agreement shall
                  continue as to Work already performed. It is further agreed
                  that in the event of such termination, CONTRACTOR shall be
                  entitled to be paid for its performance to the date of such
                  termination. OPERATOR shall cooperate fully in such closeout.
                  OPERATOR shall pay CONTRACTOR a prorated portion of a monthly
                  Fixed Fee paid pursuant to Paragraph 5.0, prorated based upon
                  the number of days worked in each month, plus all sums due and
                  owing for Work completed, including that Work done during
                  closeout. In addition, should the termination of Work occur
                  under Subparagraphs 7.3, 7.5 or 7.6, OPERATOR shall pay to
                  CONTRACTOR a penalty amount equal to the Fixed Fee for one
                  month under the applicable Work Order and Scope of Work.

         7.5      Each of the following shall constitute an "Operator Event of
                  Default," under which CONTRACTOR may terminate Work under a
                  Work Order or this Agreement.

                  a.       OPERATOR'S failure to pay an aggregate of $50,000 or
                           more of undisputed invoices submitted by CONTRACTOR
                           within thirty (30) days of receipt by OPERATOR;

                  b.       OPERATOR'S failure to comply with any other material
                           term of the Contract Documents following thirty (30)
                           days' prior written notice from CONTRACTOR to
                           OPERATOR specifying such non-compliance;


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                  c.       The filing of a lien or liens aggregating $100,000 or
                           more against any OPERATOR property by any party other
                           than CONTRACTOR or its subcontractors which is not
                           cancelled, released or bonded within thirty (30) days
                           of date of written notice to OPERATOR of filing; or

                  d.       The filing of a voluntary bankruptcy petition by or
                           an involuntary bankruptcy petition against OPERATOR,
                           any assignment by OPERATOR for the benefit of its
                           creditors or any admission by OPERATOR in writing of
                           its inability to pay its debts generally as they
                           become due.

8.0      RIGHT OF FIRST REFUSAL

         8.1      Each party hereto recognizes that the other is bringing an
                  expertise to the Alliance which the other party does not have.
                  Each party hereto grants the other party a right of first
                  refusal to act as an alliance partner in any project which,
                  during the term of this Agreement, (i) would require their
                  particular areas of expertise, which for CONTRACTOR only are
                  specifically described above in Paragraph 1.3 of this Alliance
                  Agreement; and (ii) take place in offshore or onshore
                  Louisiana, Texas, Alabama or Mississippi.

         8.2      A party with a potential project subject to this mutual right
                  of first refusal shall give the other party fifteen (15) days'
                  written notice as to the nature and particulars of the
                  project, with such details so as to permit the other party to
                  make an informed decision whether or not to participate as an
                  alliance partner in said project. Such party shall be
                  permitted to inspect any facilities or platforms potentially
                  involved, if permission may be secured by the owner of the
                  facilities or platforms. Such notice shall also state whether
                  a time frame shorter than fifteen (15) days will be required
                  for a response, in which case the right of first refusal must
                  be exercised prior to three full twenty-four (24) hour days
                  before the time for response is due to the owner.

         8.3      Any material modification to a project which is later received
                  by the offering party from the potential project owner after
                  the other party to this Agreement has rejected the original
                  project scope shall constitute a new proposal and shall
                  require a new notice under this Paragraph 8.0. Once a
                  potential project is so offered under this Paragraph 8.0 and
                  is rejected by the other party, the originating party may
                  utilize any company it deems prudent to perform the particular
                  project.

         8.4      If a potential project is offered by a party hereto and such
                  project is accepted by the receiving party, then the project
                  shall so be awarded. The parties shall thereafter enter into a
                  Work Order, a Contractor's Accepted Proposal and
                  Qualifications and an Award of Contract Letter, so as to
                  define the scope of the project and the agreed Contract Price
                  (as defined in the General Conditions).


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         9.0      COMPETITIVE RATES

                  In exchange for the right of first refusal given by OPERATOR
                  in Paragraph 8.0 above, CONTRACTOR shall offer its most
                  competitive rates to OPERATOR on a "most-favored nations"
                  basis for the Work to be provided under this Agreement.
                  CONTRACTOR warrants its "best" prices are based upon the
                  following factors: the Works' schedule, the number and skill
                  level of the personnel required to perform the Work, the
                  anticipated type and quantity of hydrocarbon production
                  involved, the Work's location, the anticipated costs of goods
                  and services to be obtained from third parties in connection
                  with the Work, cost sharing opportunities with other projects
                  of CONTRACTOR, the amount of due diligence CONTRACTOR has been
                  permitted to perform for the Work prior to establishing a
                  price, regulatory issues involved in the Work, the identity of
                  the platform owners, whether OPERATOR anticipates using the
                  platforms and facilities involved for additional exploration
                  activities, the age and condition of the platforms and
                  facilities involved, and other inherent dangers and
                  difficulties associated with the Work.

        10.0      SUBCONTRACTORS

                  As soon as is practicable, and before awarding any
                  subcontracts, the CONTRACTOR shall notify the OPERATOR in
                  writing of the names of the subcontractors proposed and shall
                  not employ any to whom the OPERATOR may have an objection. The
                  CONTRACTOR agrees that he is as fully responsible to the
                  OPERATOR for the acts, omissions and delivery dates of his
                  subcontractors, and of persons either directly or indirectly
                  employed by him, as he is of persons directly employed by him.
                  The CONTRACTOR shall be responsible for the coordination of
                  the trades, subcontractors, materials and men engaged in his
                  work hereunder.

         11.0     EXCLUSION

                  Notwithstanding any other provision of the Contract Documents
                  and regardless of whether recovery is sought under contract,
                  warranty, tort, negligence, a deceptive trade practices act,
                  strict liability or other legal theory, neither party shall be
                  liable to the other party for and any indemnity hereunder
                  shall not include any special, punitive, incidental, indirect,
                  or consequential damages of any nature, including, but not
                  limited to, loss of use, downtime, reservoir loss, loss of
                  product, loss of operating supplies or loss of revenues,
                  profits, or income.

        12.0      CONFIDENTIALITY

                  12.1     It is understood by CONTRACTOR that in the
                           performance of the Work contemplated hereunder,
                           CONTRACTOR may have access to information considered
                           sensitive, proprietary, and/or confidential by
                           OPERATOR. As additional consideration for the
                           Alliance Agreement, CONTRACTOR agrees that unless
                           prior written approval by an officer of OPERATOR is
                           granted, it will not disclose to any person, other
                           than to an officer of OPERATOR, any information
                           disclosed to or acquired by CONTRACTOR in connection
                           with the Contract Documents. CONTRACTOR further
                           agrees that it will not use such information


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                           for purposes other than those contemplated by the
                           Contract Documents. Should any such sensitive,
                           proprietary or confidential information be legally
                           required to be disclosed, CONTRACTOR shall
                           immediately notify OPERATOR of such requirement, the
                           information potentially to be disclosed and provide a
                           legal opinion stating the requirement of such
                           disclosure. OPERATOR shall be given time to defend
                           the disclosure of such information to the extent
                           practicable.

                  12.2     It is understood by OPERATOR that in the performance
                           of the Work contemplated hereunder, OPERATOR may have
                           access to information considered sensitive,
                           proprietary, and/or confidential by CONTRACTOR. As
                           additional consideration for the Alliance Agreement,
                           OPERATOR agrees that, unless prior written approval
                           by an officer of CONTRACTOR is granted, it will not
                           disclose to any person, other than to an officer of
                           OPERATOR, any information disclosed to or acquired by
                           OPERATOR in connection with the Contract Documents.
                           OPERATOR further agrees that it will not use such
                           information for purposes other than those
                           contemplated by the Contract Documents. Should any
                           such sensitive, proprietary or confidential
                           information be legally required to be disclosed,
                           OPERATOR shall immediately notify CONTRACTOR of such
                           requirement, the information potentially to be
                           disclosed and provide a legal opinion stating the
                           requirement of such disclosure. CONTRACTOR shall be
                           given time to defend the disclosure of such
                           information to the extent practicable.

         13.0     MAINTENANCE OF RECORDS AND RIGHT OF AUDIT

                  CONTRACTOR shall maintain true and correct records pertaining
                  to the Work performed hereunder, including on a daily basis
                  the names of the employees, starting and ending times for
                  each, travel time, the type of Work performed by each crew of
                  employees, the materials used and other records which are
                  subject to inspection hereunder for a period of two (2) years
                  after the invoice date for the portion of the Work involved.
                  OPERATOR may audit any books and records of CONTRACTOR
                  relating directly or indirectly to work and services performed
                  hereunder and the prices or rates charged therefor. The
                  results of OPERATOR'S audits shell be kept confidential and
                  may not be disclosed except as necessary to enforce OPERATOR'S
                  rights under the Contract Documents or to comply with
                  OPERATOR'S audit obligations to others. OPERATOR shall have no
                  right to audit records of CONTRACTOR pertaining to
                  CONTRACTOR'S other customers. CONTRACTOR agrees to modify this
                  Paragraph 13.0 as necessary to satisfy any and all audit
                  requirements placed upon OPERATOR (of which CONTRACTOR shall
                  be provided a copy).

         14.0     STATUTORY EMPLOYER

                  In the event the laws of the State of Louisiana govern this
                  Alliance Agreement, the parties agree as follows:

                  The work performed by CONTRACTOR pursuant to this Alliance
                  Agreement is part of OPERATOR'S trade, business or occupation.
                  As such, CONTRACTOR'S work constitutes an integral part of
                  OPERATOR'S business necessary to generate


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                  OPERATOR'S goods, products and services. The parties recognize
                  OPERATOR as the statutory employer of CONTRACTOR'S employees;
                  and

                  OPERATOR'S legal status as a statutory employer in no way
                  effects the CONTRACTOR'S status as an independent contractor,
                  nor does it give OPERATOR the right to direct or control the
                  operations of the CONTRACTOR or its employees and agents,
                  except as to the results to be obtained under this Alliance
                  Agreement.

        15.0      LIMITATION OF LIABILITY

                  Nothing contained in the Contract Documents shall be construed
                  or held to deprive the parties hereto of any right to claim
                  limitation of liability against any third party plaintiff or
                  libelant, but not as against OPERATOR in any claims, suits or
                  libels brought by OPERATOR against CONTRACTOR or against
                  OPERATOR for which CONTRACTOR has agreed to indemnify
                  OPERATOR herein, nor as against CONTRACTOR in any claims,
                  suits or libels brought by CONTRACTOR against OPERATOR or
                  against CONTRACTOR for which OPERATOR has agreed to indemnify
                  CONTRACTOR herein.

         16.0     PRECEDENCE

                  The Contractor's Accepted Proposal and Qualifications take
                  precedence over all other Contract Documents, except the Award
                  of Contract Letter. The Award of Contract Letter takes
                  precedence over all Contract Documents,

         17.0     NOTICES

                  All notices, statements, communications and monies, payable
                  hereunder shall be forwarded to the parties hereto at the
                  addresses specified below. Any party may, at any time, change
                  its address by giving written notice of the change to the
                  other party.


OPERATOR:      ENERGY PARTNERS, LTD.
               1100 POYDRAS STREET, SUITE 1850
               NEW ORLEANS, LA 70170

CONTRACTOR:    PRODUCTION MANAGEMENT CORPORATION
               2439 MANHATTAN BOULEVARD, SUITE 500
               HARVEY, LA 70058

         This agreement may be executed in counterparts, with all counterparts
taken together having the same effect as if both parties had signed the same
instrument.


                                      -12-
<PAGE>   13

     EXECUTED as of the day and year first above written.

<TABLE>
<CAPTION>
Witnesseth:

                                         ENERGY PARTNERS, LTD.

<S>                                     <C>
                                         By:
----------------------------------           ----------------------------------
Witness

                                         Title:
----------------------------------             --------------------------------
Witness


                                         PRODUCTION MANAGEMENT
                                             CORPORATION

                                         By:
----------------------------------           ----------------------------------
Witness

                                         Title:
----------------------------------             --------------------------------
Witness
</TABLE>


                                      -13-