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                                                                   EXHIBIT 10.21


                           PURCHASE AND SALE AGREEMENT


This Purchase and Sale Agreement ("Agreement") is made this 31st day of March,
2000, between UNION OIL COMPANY OF CALIFORNIA, a California corporation, whose
address is P. O. Box 69200, Lafayette, Louisiana 70593-9200 ("Seller"), and
ENERGY PARTNERS, LTD., a Delaware corporation, whose address is 201 St. Charles
Avenue, Suite 3400, New Orleans, Louisiana 70170 ("Purchaser").

                                    RECITALS


WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase
from Seller on the terms and conditions set forth in this Agreement certain oil
and gas interests, properties and related rights.

NOW, THEREFORE, for good and valuable consideration and the covenants and
agreements contained herein, Seller and Purchaser agree as follows:

                                       I.

                                PURCHASE AND SALE

1.1      EFFECTIVE DATE AND ASSETS AND DISCLAIMER OF REPRESENTATIONS AND
         WARRANTIES: Subject to the terms and conditions of this Agreement,
         Seller shall sell and Purchaser shall purchase and pay for at Closing
         (as defined herein), effective as of 7:00 a.m. on January 1, 2000
         ("Effective Date"), ON AN "AS IS, WHERE IS, WITH ALL FAULTS" BASIS,
         WITHOUT ANY REPRESENTATION OR WARRANTY OF TITLE, EXCEPT AS SET FORTH IN
         SECTION 1.6, WHATSOEVER, EITHER EXPRESS OR IMPLIED, EVEN FOR THE RETURN
         OF THE PURCHASE PRICE, AND WITHOUT ANY OTHER REPRESENTATIONS AND
         WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING,
         WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY OF TITLE, FITNESS
         FOR A PARTICULAR PURPOSE, MERCHANTABILITY, OR FREEDOM FROM HIDDEN VICES
         OR DEFECTS OF THE MATERIAL, EQUIPMENT OR FACILITIES CONVEYED, AND
         WITHOUT WARRANTY OF ANY KIND OR NATURE WHATSOEVER, the following:



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All of Seller's right, title and interest in and to:

(a)      The oil, gas and mineral leases described on Exhibit "A" attached
         hereto, including any and all record title, operating rights, leasehold
         interests, oil and gas leasehold estates, royalties, overriding
         royalties and other mineral interests as set forth in Exhibit "A"
         attached hereto and made a part hereof, whether or not specifically
         described on said exhibit ("Leasehold Property"); and,

(b)      All wells, equipment and facilities which are located on, appurtenant
         to, or used directly in connection with the production, treatment or
         transportation of oil and gas from the Leasehold Property including but
         not limited to platforms, pipelines, gathering systems, fixtures, tools
         and other personal property acquired for use or used on the Leasehold
         Property; and,

(c)      Any easements, rights of way, permits, licenses, surface leases, use
         agreements, and servitudes to the extent assignable, applicable or used
         in connection with operation of the Leasehold Property, including but
         not limited to those listed on Exhibit "B", together with all of
         Seller's rights and interests in and to all units, pooling and
         unitization agreements, operating agreements, gas balancing agreements,
         gas sales contracts and other agreements and instruments to the extent
         that they directly relate to or are associated with the Leasehold
         Property, including, but not limited to those identified on Exhibit "E"
         attached hereto; except any insurance contracts or bonds held by Seller
         or its parent, subsidiary or affiliated Corporations for Seller's
         benefit; and any employment, consulting, office lease or accounting
         service contracts; and,

(d)      All other miscellaneous interests or other assets on or used in
         connection with the Leasehold Property, including at Purchaser's
         expense, copies of all files and records (except as set forth below)
         relating to the Leasehold Property: subject to any restrictions on
         Seller's disclosure of the same, including but not limited to lease
         files, unit files, lease contract files, well files and geological
         data, but excluding data or information which is (1) utilized to
         calculate reserves (2) restricted by third party agreement (3) covered
         by the attorney-client privilege and (4) corporate, tax or computer
         records (collectively, the "Records"). THIS AGREEMENT BY SELLER TO
         CONVEY COPIES OF THE AFOREMENTIONED RECORDS IS GRANTED BY SELLER TO THE
         EXTENT THAT SELLER HAS AUTHORITY TO DO SO WITHOUT VIOLATING ANY
         CONFIDENTIALITY OBLIGATIONS TO A THIRD PARTY, IS WITHOUT WARRANTY AS TO
         THE ACCURACY OR COMPLETENESS OF THE INFORMATION DELIVERED, AND SHALL BE
         AT PURCHASER'S SOLE EXPENSE.

All of the foregoing rights, interests and properties are hereinafter
collectively referred to as the "Assets."

It is specifically agreed that Seller is not selling and Purchaser is not
purchasing the following assets ("Excluded Assets"):


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         (i)      Those interests in pipelines, facilities, contract rights and
                  surface access agreements owned by Unocal that are not used in
                  connection with the Assets or which cover lands described in
                  the Leasehold Property, but which are used in connection with
                  properties that are not being sold under the terms of this
                  Agreement to the extent only identified on Exhibit "C";

         (ii)     any right to use the "Seller" name, marks, trade dress or
                  insignia, or to use the name of any other subsidiary of Seller
                  and all of Seller's intellectual property, including, but not
                  limited to patents, trade secrets, and copyrights;

         (iii)    all amounts due or payable to Seller as adjustments or refunds
                  under any contracts affecting the Assets for all periods of
                  time prior to the Effective Date, specifically including,
                  without limitation, amounts recoverable from audits under
                  operating agreements;

         (iv)     all rights, titles, claims and interests of Seller or its
                  Affiliates, which accrued prior to the Effective Date, to or
                  under any policy or agreement of insurance or indemnity, any
                  bond, or to any insurance proceeds or awards; and any
                  employment, consulting, office lease or accounting service
                  contracts;

         (v)      all claims and chooses in action of Seller arising from acts,
                  omissions or events, or damages to or destruction of property,
                  occurring prior to the Effective Date; and

         (vi)     all proceeds, benefits, refunds, settlement, income or revenue
                  accruing and attributable to the Assets prior to the Effective
                  Date, and any claims of Seller for refunds of or losses
                  carried forwards with respect to taxes attributable to the
                  Assets for any period prior to the Effective Date.

1.2      CLOSING: Closing, as used herein, shall mean the date on which the
         Purchase Price (as defined below) is to be paid to Seller and the
         conveyancing instruments (as described herein) are to be delivered to
         Purchaser. Closing shall occur on March 31, 2000, at Seller's office
         located at Suite 3400, 201 St. Charles Avenue, New Orleans, Louisiana
         70170, or at such other place, date and time as may be mutually agreed
         upon by Seller and Purchaser.

1.3      ASSUMPTION OF OBLIGATIONS: From and after the Effective Date, but
         subject to the terms of Section 1.5 and except for those matters
         specifically retained by Seller in this Agreement and those matters set
         forth on Exhibit "D", for which Seller retains liability ("Retained
         Matters"), Purchaser shall personally assume, pay for, discharge, be
         responsible for, perform and comply with all duties, liabilities and
         obligations of Seller, express or implied, relating to the Assets,
         including, but not limited to, those arising from or by virtue of
         Contract, as hereinafter defined, and those arising from or by virtue
         of any permit, statute, rule, regulation or order of any governmental
         authority, together with all


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         Assumed Liabilities (as hereinafter defined), REGARDLESS OF WHETHER
         ATTRIBUTABLE (IN WHOLE OR IN PART) TO THE SOLE, JOINT OR CONCURRENT
         NEGLIGENCE, STRICT LIABILITY, BREACH OF CONTRACT, ENVIRONMENTAL
         LIABILITY, REGULATORY LIABILITY OR OTHER FAULT OR RESPONSIBILITY OF
         SELLER OR ANY OTHER PERSON OR PARTY, except as otherwise set forth
         herein. For purposes hereof, the following terms shall have the
         following respective definitions:

         "ASSUMED LIABILITIES" means all Environmental Liabilities, General
         Liabilities, Plugging and Abandonment Obligations and other liabilities
         and obligations assumed by Purchaser under the terms of this Agreement.

         "GENERAL LIABILITIES" means subject to the limitations of Section 1.5
         below, all obligations, duties, losses, liabilities, claims, fines,
         expenses, damages, costs (including attorneys fees and expenses) or
         penalties created by, related to, or arising out of ownership or
         operation of the Assets, any contractual relationship, or any
         applicable law, order, rule, regulation, judgment or decree of any
         federal, state, tribal, county or municipal governing authority having
         jurisdiction over the Assets or the Parties, whether Accruing before or
         after the Effective Date and whether attributable, in whole or in part,
         to actions, events or conditions existing or occurring before or after
         the Effective Date; excluding those obligations, duties or liabilities
         for the payment of royalties, overriding royalties and taxes which
         Accrued prior to the Effective Date, those addressed in Section 1.5 and
         Retained Matters.

         "ENVIRONMENTAL LAWS" means any applicable laws, orders, rules,
         regulations, judgments or decrees of any federal, state, tribal, county
         or municipal governing authority having jurisdiction over any Asset or
         Party which relate to pollution, the protection or cleanup of the
         environment, or the release or disposal of deleterious substances into
         the environment, including but not limited to ambient air, surface
         water, groundwater, land surface or subsurface strata; including all
         such laws, orders, rules, regulations, judgments or decrees as they may
         be amended, varied or modified in the future.

         "ENVIRONMENTAL LIABILITIES" means all obligations, duties, losses,
         liabilities, claims, fines, expenses, damages, costs (including
         attorney's fees and expenses) or penalties created by, related to, or
         arising out of any Environmental Law, whether Accruing before or after
         the Effective Date, and whether attributable, in whole or in part, to
         actions, events or conditions existing or occurring before or after the
         Effective Date.

         "PLUGGING AND ABANDONMENT OBLIGATIONS" means all usual and normal
         prudent operations for the plugging, abandonment, surface restoration,
         site clearance, and disposal of related waste materials, including NORM
         and asbestos, of all oil, gas, injection, water or other wells, sumps,
         pits, ponds, tanks, impoundments, foundations, pipelines, structures
         and equipment of any kind or description on the Assets, in compliance
         with all applicable contractual obligations and applicable rules and
         regulations of governmental bodies having


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         jurisdiction over the Assets. Plugging and Abandonment Obligations do
         not include cleanup of polluted lands, air or water other than routine
         cleanup normally associated with plugging and abandonment (such cleanup
         obligations which are other than routine being included within the
         definition of Environmental Liabilities).

         "ACCRUING" or "ACCRUED" means, with respect to any obligation, duty,
         loss, liability, claim, fine, expense, damage, cost or penalty, the
         occurring or happening of any event which causes such obligation, duty,
         loss, liability, claim, fine, expense, damage, cost or penalty to
         become demandable, requirable, assertible, enforceable, due and owing,
         or being incurred or occurring, as the case may be.

1.4      CALL ON PRODUCTION:

(a)      On Oil - If not already reserved by another party, Seller hereby
         reserves, at its option, the option to buy any and all oil and other
         liquid hydrocarbons produced from or attributable to the Assets from
         the Effective Date to May 1, 2000 at 7:00 a.m.

(b)      Applicable price - The price to be paid shall be:

         (i)      Seller's posted market price at the wells for oil or
                  condensate, or if Seller has no posted price at the well
                  prevailing in the field where produced for substance of like
                  grade and gravity. If there are no such posted price, the
                  price to be paid by Seller will be the average price being
                  paid by purchasing companies in the field or locality where
                  the Assets are located for substance of like grade and
                  gravity.

         (ii)     Seller shall never be required to pay a price higher than the
                  price allowed by State or Federal statutes or regulations in
                  effect at the time of purchase.

1.5      RETAINED CONTRACTUAL OBLIGATIONS: To the extent binding on Seller,
         Purchaser and Seller agree that the Assets shall be conveyed subject to
         the terms and conditions of the contracts, agreements, letter
         agreements, pooling agreements, easements, rights-of-way and all other
         agreements or instruments which are listed on Exhibit "E" and the
         leases described on Exhibit "A" hereto (collectively the "Contracts").

         Upon closing, Purchaser shall expressly assume Seller's obligations
         under the Contracts insofar as such obligations relate to the Assets
         and are attributable to the period of time after the Effective Date.

         However, under no circumstance shall Purchaser assume or be responsible
         for (i) contractual performance or non-performance by Seller due and
         owing prior to the Effective Date; (ii) underpayments or failure to pay
         royalties, overriding royalties, and other burdens due by Seller on or
         under the Assets prior to the Effective Date; or (iii) any accounting
         or payments due to third parties for hydrocarbon production (or the
         proceeds from the sale thereof) or transportation or processing
         attributable to the period of time


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         prior to the Effective Date; all of which shall remain the
         responsibility of Seller for which Seller shall indemnify and hold
         harmless Purchaser.

1.6      TITLE:

         Seller will convey all of its rights, title and interest in and to the
         Assets to Purchaser without warranty of title, express, statutory or
         implied, EXCEPT that Seller specifically warrants and agrees to defend
         title to the interests in the Assets as set forth and described on
         Exhibit "A" hereto, against any and all claims and demands of all
         persons claiming an interest (including an encumbrance) in the Assets
         by, through and/or under Seller and/or Spirit (as hereinafter defined)
         but not otherwise; and with full substitution and subrogation to all
         rights and actions of warranty against all former owners and vendors.

                                       II.

                                  CONSIDERATION

2.1      PURCHASE PRICE; ALLOCATIONS: Subject to the terms and conditions of
         this Agreement, Purchaser shall purchase the Assets at Closing for
         forty-eight million two hundred fifty thousand ($48,250,000.00)
         ("Purchase Price"), in cash, subject to the adjustments provided in
         Section 2.3 below and other amounts provided elsewhere herein.

2.2      Intentionally omitted.

2.3      ADJUSTED PURCHASE PRICE: The net price which Purchaser shall pay for
         the Assets ("Adjusted Purchase Price") shall be:

(a)      The Purchase Price as set forth in Section 2.1 above;

(b)      Plus the amount of all expenditures made by Seller that are
         attributable to the Assets for the period between the Effective Date
         and Closing, including, without limitation, royalties, rentals and
         similar charges and expenses, including those billed under applicable
         operating agreements, and all prepaid expenses;

(c)      Less the amount of (or Purchaser's good faith estimate of) any
         expenditures that are attributable to the Assets prior to the Effective
         Date, which have not been paid for or satisfied by Seller.

(d)      Plus the value of all oil in storage at 7:00 a.m. on the Effective Date
         that is credited to the Assets (value to be the market or contract
         price in effect as of Effective Date less royalties, other lease
         burdens and taxes on production) which has not been sold prior to
         closing. If the Effective Date is subsequent to the date of this
         instrument, all oil, condensate or liquid hydrocarbons in storage shall
         be gauged and all gas meter charts


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         shall be replaced at the Effective Date with Purchaser having the right
         to have a representative present at the Effective Date for
         Seller-operated interests;

(e)      Less the amount of the proceeds received by Seller between the
         Effective Date and Closing that are attributable to the Assets after
         the Effective Date, net of any royalties, other lease burdens and any
         production, severance, sales or windfall profit taxes not reimbursed to
         Seller by the Purchaser;

(f)      Less the amount of (or Seller's good faith estimate of) all proceeds
         owed by Seller to Purchaser for the oil and other liquid hydrocarbons
         produced from or attributable to the Assets from the Effective Date to
         May 1, 2000 at 7:00 a.m.

(g)      Less or plus, as applicable, any amounts determined to be a price
         adjustment pursuant to Article III hereof ("Title Examination");

(h)      Less an amount equal to the value of the Assets, determined pursuant to
         Article III hereof, with respect to which Preferential Purchase Rights
         have been exercised;

(i)      Less or plus any other amounts mutually agreed upon in writing by the
         parties hereto;

(j)      Plus the amount of royalty overpaid to the MMS by Purchaser for
         production attributable to Seller's interest in the Assets prior to the
         Effective Date. The parties agree for the limited purpose of this
         adjustment (subject to the provisions of Section 9.3 below) that this
         amount is $2,447,124.92.

2.4      PAYMENT OF ADJUSTED PURCHASE PRICE: At Closing, Purchaser shall pay to
         Seller the Adjusted Purchase Price, by cashier's check or wire transfer
         of cash in United States Currency, in a manner specified by Seller in
         writing. Seller shall present to Purchaser at least three business days
         prior to Closing a proposed closing statement and the parties shall
         agree on said statement prior to Closing.

2.5      Intentionally omitted.

                                      III.

                                TITLE EXAMINATION

3.1      ACCESS TO TITLE INFORMATION: After the date of this Agreement and until
         Closing, at Purchaser's request, Seller shall make the records
         described in Section 1.1(d) available to Purchaser at Seller's office
         located at 4021-4023 Ambassador Caffery Parkway, Lafayette, Louisiana
         70503, or such other place as deemed appropriate by Seller, during
         normal business hours for examination by Purchaser. Seller shall not be
         obligated to perform any additional title work, and any additional
         abstracts and title opinions will not be made current by Seller. NO
         WARRANTY OR REPRESENTATION OF ANY KIND


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         IS MADE BY SELLER, AS TO THE INFORMATION SO SUPPLIED, AND PURCHASER
         AGREES THAT ANY CONCLUSIONS DRAWN THEREFROM SHALL BE THE RESULT OF ITS
         OWN INDEPENDENT REVIEW AND JUDGMENT. NO WARRANTY OF ANY KIND IS MADE BY
         SELLER AS TO THE INFORMATION SO SUPPLIED, AND PURCHASER AGREES THAT ANY
         CONCLUSIONS DRAWN THEREFROM SHALL BE THE RESULT OF ITS OWN INDEPENDENT
         REVIEW AND JUDGMENT. SUBJECT TO THE OTHER PROVISIONS OF THIS AGREEMENT,
         PURCHASER ASSUMES THE RISK OF ANY TITLE DEFECTS AND/OR CONFLICTING
         ADVERSE RIGHT(S), TITLE(S) AND/OR INTEREST(S) WHICH A RECORD TITLE
         CHECK AND/OR PHYSICAL INSPECTION REVEALS OR WOULD HAVE REVEALED.

3.2      TITLE DEFECTS: For the purpose of this Agreement, a "Title Defect"
         shall mean a material (defined as greater than $10,000) deficiency
         (other than with respect to a Permitted Encumbrance, as defined below)
         in one or more of the following respects only:

(a)      Seller's title at the Effective Date, as to one or more of the Assets,
         is subject to an outstanding mortgage, deed of trust, lien or
         encumbrance or adverse claim that is not listed on Exhibit "F" attached
         hereto, nor considered a "Permitted Encumbrance," as that term is
         defined below;

(b)      Seller's interest in any of the Assets is more or less than represented
         on Exhibit "A" hereto;

(c)      Seller's rights and interests are subject to being reduced now or in
         the future by virtue of the exercise by a third party of a
         reversionary, back-in or similar right not listed on Exhibit "G"
         attached hereto, nor considered a "Permitted Encumbrance," as that term
         is defined below;

3.3      PERMITTED ENCUMBRANCES: "Permitted Encumbrances," as that term is used
         in this Agreement, means:

(a)      liens for taxes not yet delinquent;

(b)      lessor's royalties, overriding royalties, reversionary interests and
         other lease burdens that do not operate, now or in the future, to
         reduce the net revenue interest of Seller in any of the Assets to less
         than the amount set forth therefor on Exhibit "A";

(c)      Contracts that do not, now or in the future, operate to increase the
         working interest or decrease the net revenue interest of Seller in any
         of the Assets from that set forth on Exhibit "A";

(d)      rights of way, easements, and other agreements of a similar nature
         relating to or restricting surface use on, over or in respect of the
         Assets;


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(e)      preferential rights to purchase which, prior to Closing, have either
         expired or have been waived by the holders thereof to the extent such
         rights affect the Assets;

(f)      all necessary consents, permissions and approvals by third parties in
         connection with the sale and transfer of the Assets which have been
         obtained prior to Closing and those governmental consents customarily
         generated and received in the ordinary course of business at a
         post-Closing date;

(g)      such Title Defects or other deficiencies or irregularities waived by
         Purchaser in writing;

(h)      liens released at or prior to Closing;

(i)      rights reserved or vested in any governmental subdivision, political
         entity or public authority to control rights or regulate the Assets in
         any manner, and all applicable laws, rules and orders of such
         subdivisions, entities and authorities; and

(j)      all matters disclosed in Exhibit "H" hereto which affect the quality or
         quantity of title.

3.4      NOTICE OF TITLE DEFECT: Upon discovery of a Title Defect, the
         discovering party shall immediately notify the other party in writing
         of the nature of the Title Defect and the proposed adjustment in the
         Purchase Price attributable to such Title Defect.

3.5      REMEDIES FOR TITLE DEFECTS:

(a)      Upon timely delivery of notice of a Title Defect either by Purchaser or
         by Seller of an increase or decrease in interest, Purchaser and Seller
         shall meet and use their reasonable efforts to agree on the validity of
         the claim and the amount of any required price adjustment. If the
         parties cannot agree on the amount of a price adjustment, such amount
         shall be determined in accordance with the following guidelines:

         (i)      If it is determined that a Title Defect exists which results
                  in Seller owning a different interest than that shown on
                  Exhibit "A" and Seller has elected not to attempt to cure such
                  Title Defect, then Seller shall reduce or increase the
                  Purchase Price, as appropriate. Purchaser must accept or
                  reject this adjusted Purchase Price within twenty-four (24)
                  hours from receipt of written notice thereof. If rejected by
                  Purchaser, this Agreement shall terminate.

         (ii)     Seller may elect to cure any or all Title Defects; provided,
                  however, if Seller elects to cure a Title Defect, but has not
                  been able to do so by the Closing Date, the Parties shall
                  proceed with the Closing, with the Defect Value being an
                  adjustment to the Purchase Price.


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         (iii)    If a Title Defect is a lien, encumbrance or other charge which
                  is liquidated in amount, and provided that Purchaser approves
                  same, Seller can reserve the option to retain the obligation
                  of this Title Defect and to challenge the validity of any such
                  Title Defect or any portion thereof and to hold Purchaser
                  harmless with regard thereto. Purchaser agrees to cooperate
                  with Seller in such efforts at no risk or expense to
                  Purchaser.

(b)      Notwithstanding anything to the contrary hereinabove, the Purchase
         Price will be adjusted only if the net amount of all adjustments in
         favor of Purchaser or Seller, taken together, exceeds five percent (5%)
         of the Purchase Price. In the event the net amount of the purchase
         price adjustments exceeds twenty percent (20%) of the total Purchase
         Price, then either Seller or Purchaser may, upon written notice to the
         other party, terminate this Agreement, and the same shall be of no
         further force and effect.

(c)      If a Title Defect is a Section 3.2 (a)-(c) Title Defect which increases
         or decreases Seller's interest in the Assets, and Seller does not elect
         to or does not cure the Title Defect, the Purchase Price shall be
         adjusted up or down by the Defect Value of the Title Defect.

(d)      If Seller contests the existence of a Title Defect or Purchaser's good
         faith estimate of the Defect Value of the Title Defect or if Purchaser
         contests Seller's cure, the Parties shall meet and use their best
         efforts to agree on the validity, cure and/or value of the Title
         Defect. If the Parties cannot agree on the validity, cure and/or value
         of a Title Defect, and neither Party elects to waive its claim, the
         dispute shall be submitted to arbitration in accordance with the
         arbitration procedures set forth in EXHIBIT "I".

(e)      For purposes hereof, the term "Defect Value shall mean (i) with respect
         to a claim of Title Defect is made pursuant to Section 3.2 (a) for a
         matter not covered by Sections 3.2 (b) or (c), the value of the defect
         for a defect that is a liquidated or certain amount shall be such
         liquidated or certain amount, and as to unliquidated or uncertain
         amounts it shall be an amount necessary to compensate Purchaser for the
         adverse economic effect of such Title Defect on the value of the
         property(ies) affected, taking into consideration all relevant factors,
         including the practical and legal effect of the Title Defect.

(f)      If Purchaser is entitled to receive an adjustment for a Title Defect,
         as provided in this Agreement, Seller shall have the right, but not the
         obligation, to attempt to cure the Title Defect and cancel the
         reduction in the Purchase Price. If Seller chooses to cure the Title
         Defect, but has not done so by Closing, Seller shall have the right to
         postpone Closing for a period not to exceed twenty (20) business days
         from the original Closing Date.

3.6      PREFERENTIAL PURCHASE RIGHTS: With respect to each preferential
         purchase right covering the Leasehold Property, Seller shall send to
         the holder of such right a notice offering to sell to such holder, in
         accordance with the contractual provisions applicable to such right,
         those Assets covered by such right on substantially the same terms
         hereof, subject to


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         adjustments in the same manner as the Purchase Price is adjusted
         pursuant to Section 3.5 of this Agreement. Preferential purchase rights
         shall not be considered Title Defects hereunder provided such are
         waived or exercised prior to Closing.

         If, prior to Closing, any holder of a preferential purchase right
         notifies Seller that it intends to consummate the purchase of the
         Assets to which its preferential purchase right applies, then those
         Assets shall be excluded from the Assets to be conveyed to Purchaser,
         and the Purchase Price shall be reduced as set forth in Section 3.5.


                                       IV.

                             ENVIRONMENTAL CONDITION

4.1      NO ADMISSION AGAINST INTEREST: Nothing contained in this Article IV, or
         elsewhere in this Agreement, shall be construed to be an admission
         against interest as to Seller or Purchaser. Seller and Purchaser have
         not included environmental liability related provisions herein due to
         any perceived liability and specifically disclaim the existence of any
         such liability to third parties (including governmental entities) based
         on contract, tort, statute or otherwise.

4.2      PHYSICAL CONDITION OF THE ASSETS: The Assets have been used for oil and
         gas drilling and production operations, related oil field operations,
         and possibly, for the storage and disposal of waste materials or
         hazardous substances. Physical changes in or under the Leasehold
         Properties or adjacent lands may have occurred as a result of such
         uses. The Assets also may contain buried pipelines and other equipment,
         whether or not of a similar nature, the locations of which may not now
         be known by Seller nor readily apparent by a physical inspection of the
         property. Purchaser understands that Seller does not have the requisite
         information with which to determine the exact nature or condition of
         the Assets nor the effect any such use has had on the physical
         condition of the Assets. Pursuant to the Safe Water Drinking and Toxic
         Enforcement Act of 1986, Purchaser is hereby notified and assumes the
         risk that detectable amounts of chemicals known to cause cancer, birth
         defects and other reproductive harm may be found in, on or around the
         Assets. In addition, Purchaser acknowledges that some oil field
         production equipment may contain asbestos and/or naturally-occurring
         radioactive material (NORM). In this regard, Purchaser expressly
         understands that NORM may affix or attach itself to the inside of
         wells, materials and equipment as scale or in other forms, and that
         wells, materials and equipment located on the Assets described herein
         may contain NORM and that NORM-containing materials may be buried or
         have been otherwise disposed of on or under the Assets. Purchaser also
         expressly understands that special procedures may be required for the
         removal and disposal of asbestos and NORM from the Assets where it may
         be found, and that Purchaser assumes all liability and responsibility
         for such activities when and if performed.


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4.3      ENDANGERED SPECIES, CRITICAL HABITAT, WETLANDS, GEOLOGIC HAZARDS AND
         FLOODING: "Endangered Species" as used herein shall have the same
         meaning as "endangered species" is defined pursuant to 16 U.S.C.
         1532(6) or the laws of the state in which the Leasehold Property is
         located; as "threatened species" is defined pursuant to 16 U.S.C.
         1533(30) or the laws of the state in which the Leasehold Property is
         located; and/or, as a candidate species for such listing under federal
         or state law. "Critical Habitat" as used herein shall have the meaning
         as defined pursuant to 16 U.S.C. 1532(5). "Wetland" as used herein
         shall have the meaning as defined in 40 Code of Federal Regulations
         ss.230.3(a), or under the laws of the state in which the Leasehold
         Property is located. "Geologic Hazards" as used herein shall include
         seismic hazard and any earth slides or other earth movement. "Flooding"
         as used herein shall include the risks associated with a flood plain,
         flood way or restriction zone and/or any diminution in the value of the
         Leasehold Property or restriction of its use by reason of the risk of
         water entering or remaining thereon. WITHOUT IN ANY WAY LIMITING ANY
         OTHER DISCLAIMERS OF WARRANTY HEREIN AND NOTWITHSTANDING ANY
         DISCLOSURES MADE BY SELLER TO PURCHASER, SELLER DISCLAIMS ANY EXPRESS
         OR IMPLIED WARRANTY OR REPRESENTATION AS OF THE DATE OF THIS AGREEMENT
         AND/OR AS OF THE CLOSING OF THE COMPLETENESS OF ANY SUCH DISCLOSURE OR
         THAT THE PROPERTY IS FREE FROM ANY ENDANGERED SPECIES OR THAT ALL OR
         ANY PART OF THE PROPERTY IS NOT A CRITICAL HABITAT OR A WETLAND, OR
         THAT ANY PART OF THE ASSETS DOES NOT INCLUDE A GEOLOGIC HAZARD, OR THAT
         ANY PART OF THE PROPERTY IS NOT SUBJECT TO FLOODING. Notwithstanding
         any knowledge that could be imputed to Seller, Purchaser has the
         obligation to ascertain the presence of and extent of any Endangered
         Species, Critical Habitat, Wetland, Geologic Hazards and the risk of
         Flooding on the Property.

4.4      ENVIRONMENTAL ASSESSMENT DURING EXAMINATION PERIOD: Purchaser has had
         at least thirty (30) days to make its environmental assessment
         ("Examination Period"). Purchaser and its agents shall have the right
         to enter upon the Assets and all buildings and improvements thereon,
         inspect the same, conduct soil and water tests and borings, and
         generally conduct such tests, examinations, investigations and studies
         as may be necessary or appropriate for the preparation of appropriate
         engineering and other reports, and evaluations relating to the Assets,
         their condition, and the presence of waste or contaminants. If such an
         assessment was performed, Purchaser agrees to immediately provide to
         Seller a copy of the environmental assessment, including any reports,
         data and conclusions upon which it is based.

4.5      WITHDRAWAL BY PURCHASER DUE TO ENVIRONMENTAL PROBLEMS: If, during the
         Examination Period, Purchaser, in its sole discretion, determines that
         hazardous waste materials located on the Assets may create substantial
         problems for Purchaser or users of the Assets and the reasonable
         remediation and/or clean up costs which are asserted and currently
         required by a governmental entity, having jurisdiction over the
         affective property(ies), pursuant to applicable law exceeds 5% of the
         Purchase Price, then, by so notifying Seller in writing within the
         Examination Period, Purchaser may, if Seller in its


<PAGE>   13

Purchase and Sale Agreement
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         sole discretion elects not to indemnify Purchaser against any loss,
         terminate this Agreement, upon which termination of this Agreement
         shall be null and void, and Purchaser shall have no further obligation
         or liability of any kind hereunder or with respect hereto. Failure of
         Purchaser to so notify Seller within the Examination Period shall be
         deemed a waiver of any right to terminate the Agreement relating to any
         environmental problems. If Seller contests the existence of an
         environmental problem or the amount of reasonable remediation and/or
         clean-up costs (which shall mean only the cost to remedy such
         Environmental Liability using the most cost effective methods and
         manner to satisfy applicable Environmental Laws, and which are
         consistent with the continued use of the affected Assets in the same
         capacity and for the same purposes as they were being used on the
         Effective Dates) and the parties are unable to reach mutual agreement,
         then if after Seller notifies Purchaser that it does not concur with
         the existence of a required remediation or cleanup or with respect to
         Purchaser's determination of the estimated remediation and/or clean-up
         costs, Purchaser may still elect to terminate this Agreement and
         request a determination of the value of the required remediation and/or
         clean-up costs by the following procedure: the Parties will submit the
         issue to arbitration in accordance with the arbitration procedures set
         forth in EXHIBIT "I". If the arbitrators determine that the required
         remediation and/or clean-up costs are equal to or less than 5% of the
         Purchase Price, Purchaser will pay the arbitration costs. If the
         arbitrators find that the required remediation and/or clean-up costs do
         exceed 5% of the Purchase Price, Seller will pay the arbitration costs.
         If Purchaser does not elect to terminate this Agreement in a written
         notice to Seller prior to the commencement of arbitration in connection
         with this Section, then Purchaser shall be deemed to have waived its
         right to terminate this Agreement under this Section unless and until
         the arbitors determine that the required remediation and/or clean-up
         costs do exceed 5% of the Purchase Price, and if such arbitors
         determine that the required remediation and/or clean-up costs are equal
         to or less than 5% of the Purchase Price, then Purchaser shall pay all
         arbitration costs an proceed toward Closing, subject to the other terms
         and conditions of this Agreement. Notwithstanding anything stated
         herein to the contrary, if Purchaser elects to pursue arbitration under
         this Section, then at any time prior to a determination by the
         arbitors, Seller has the right, upon written notice to Purchaser, to
         elect to terminate this Agreement (and this Agreement shall thereafter
         be null and void) and the parties will be responsible for their own
         respective fees or other costs regarding arbitration incurred them.

4.6      CONDITIONAL ACCESS TO ASSETS: Purchaser is hereby granted access to the
         Assets to conduct its environmental assessment upon the following
         conditions:

(a)      The environmental assessment shall be conducted at Purchaser's sole
         risk and expense, and Purchaser waives and releases all claims against
         Seller, its directors, officers, employees and agents and parent or
         subsidiary companies for injury to, or death of, persons or damage to
         property arising in any way from the exercise of rights granted to
         Purchaser hereby. REGARDLESS OF THE SOLE, JOINT OR CONCURRENT
         NEGLIGENCE, STRICT LIABILITY, PREMISES LIABILITY, BREACH OF


<PAGE>   14

Purchase and Sale Agreement
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         CONTRACT OR OTHER FAULT OR RESPONSIBILITY OF SELLER OR ANY OTHER PERSON
         OR PARTY.

(b)      Purchaser RELEASES AND AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS
         Seller, its directors, officers, employees, agents and Affiliates
         against all claims for injury to, or death of, persons or damage to
         property arising in any way from the exercise of access rights granted
         to Purchaser for environmental due diligence or due diligence for any
         other purpose. Purchaser shall indemnify Seller, its directors,
         officers, employees, agents and Affiliates against and hold each and
         all of said indemnitees harmless from any and all loss, cost, damage,
         expense or liability, including attorney's fees, arising out of (i) any
         and all third party statutory or common-law liens or other encumbrances
         for labor or materials furnished in connection with such tests,
         samplings, studies or surveys as Purchaser may conduct with respect to
         the Assets; and (ii) any injury to or death of persons or damage to
         property occurring in, on or about the Assets as the result of
         Purchaser's due diligence activities REGARDLESS OF THE SOLE, JOINT OR
         CONCURRENT NEGLIGENCE, STRICT LIABILITY, PREMISES LIABILITY, BREACH OF
         CONTRACT, OR OTHER FAULT OR RESPONSIBILITY OF SELLER OR ANY OTHER PARTY
         OR PERSON (except for any such injuries or damages caused solely by the
         gross negligence or willful misconduct of any said indemnitees). The
         foregoing obligation of indemnity shall survive Closing or termination
         of this Agreement without Closing.

4.7      "AS IS, WHERE IS" PURCHASE: In the event Purchaser does not elect to
         terminate this Agreement as above provided, then Purchaser shall
         acquire the Assets in their "AS IS, WHERE IS, WITH ALL FAULTS"
         condition and shall assume the risks that the Assets may contain waste
         materials, contaminants or hazardous substances, that adverse physical
         conditions, including, but not limited to, the presence of waste
         materials, contaminants or hazardous substances or the presence of
         unknown abandoned oil and gas wells, water wells, pits, sumps and
         pipelines may not have been revealed by Purchaser's investigation,
         including, but not limited to, any and all Environmental Liabilities
         and other Assumed Liabilities. Except as otherwise set forth herein, on
         and after the Effective Date, all responsibility and liability related
         to all such adverse environmental conditions, whether known or unknown,
         shall be transferred to and borne solely by Purchaser.

4.8      ASSUMPTION AND INDEMNIFICATION OF ENVIRONMENTAL RISK AND ENVIRONMENTAL
         LIABILITIES: Except as otherwise set forth herein, Purchaser, subject
         to the terms of this Agreement, shall assume full responsibility for,
         and agrees to comply with and perform all environmentally-related
         duties and obligations of Seller and TO INDEMNIFY, DEFEND AND HOLD
         HARMLESS SELLER, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
         REPRESENTATIVES AND AFFILIATED OR PARENT COMPANIES (WHICH ADDITIONAL
         PARTIES ARE HEREINAFTER COLLECTIVELY REFERRED TO AS "SELLER'S AGENTS"),
         from and against all losses, liabilities, causes of action, damages,
         liens, penalties, fines, settlements, judgments, expenses, attorney's
         fees, court costs and claims (hereinafter


<PAGE>   15

Purchase and Sale Agreement
Page No. 15

         referred to collectively as "claims") caused by or arising out of any
         rule, order, permit, statute, or regulation of a governmental authority
         applicable to any waste material, contaminant or hazardous substance on
         or included with the Assets or the presence, disposal, release or
         threatened release of any waste material, contaminant or hazardous
         substance from the Assets into the atmosphere or into or upon land or
         any water course or body of water, including ground water, whether or
         not such claims are attributable to Seller's activities or the
         activities of third parties, whether or not Seller or the Seller's
         Agents were or are aware of such activities and whether or not such
         claims arose prior to, during or after the period of Seller's ownership
         of the Assets, including, but not limited to, any and all Environmental
         Liabilities. This indemnification and assumption of responsibility
         shall also apply to liability for voluntary environmental response
         actions undertaken pursuant to the Comprehensive Environmental Response
         Compensation and Liability Act (CERCLA) or any other federal, state or
         local law, regulation or order. THE ASSUMPTION AND INDEMNIFICATION OF
         ALL ENVIRONMENTAL LIABILITIES BY PURCHASER, UNDER SECTION IV SHALL
         APPLY REGARDLESS OF WHETHER SUCH LIABILITIES ARE KNOWN OR UNKNOWN,
         RELATE TO ACTIONS, EVENTS OR CONDITIONS EXISTING OR OCCURRING PRIOR TO
         OR AFTER THE EFFECTIVE DATE, AND REGARDLESS OF WHETHER ATTRIBUTABLE (IN
         WHOLE OR IN PART) TO THE ACTIONS, SOLE, JOINT OR CONCURRENT NEGLIGENCE,
         STRICT LIABILITY, BREACH OF CONTRACT, PRODUCTS LIABILITY, ENVIRONMENTAL
         LIABILITY, OR OTHER FAULT, LIABILITY OR RESPONSIBILITY OF SELLER, THE
         SELLER'S AGENTS OR ANY OTHER PERSON OR PARTY, AND REGARDLESS OF WHETHER
         ASSERTED UNDER ANY THEORY OF LIABILITY; PROVIDED, HOWEVER, THAT THIS
         ASSUMPTION AND INDEMNIFICATION BY PURCHASER SHALL NOT COVER OR INCLUDE
         CLAIMS OR LIABILITIES DIRECTLY RELATING TO THOSE HAZARDOUS MATERIALS
         WHICH HAVE BEEN TRANSPORTED FOR DISPOSAL PRIOR TO THE EFFECTIVE DATE BY
         SELLER OFF OF THE ASSETS TO PROPERTIES OWNED BY SELLER AND/OR THIRD
         PARTIES (INSOFAR AS SUCH HAZARDOUS MATERIALS ARE REGULATED BY
         GOVERNMENTAL AGENCIES UNDER CURRENT, APPLICABLE ENVIRONMENTAL LAWS) AND
         SELLER RETAINS SUCH LIABILITY AND SHALL INDEMNIFY PURCHASER FOR SAME.

4.9      EXCLUSIVE REMEDY. The indemnities provided in this Article IV and
         elsewhere in this Agreement set forth the exclusive remedy of the
         parties with respect to the claims, liabilities and obligations covered
         thereby.

                                       V.

5.1      CASUALTY LOSS: The risk of casualty loss relating to the Assets shall
         pass from Seller to Purchaser as of the Effective Date, and Purchaser
         shall assume all risk of any change in condition of the Assets from and
         after the Effective Date, REGARDLESS OF THE


<PAGE>   16

Purchase and Sale Agreement
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         SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, BREACH OF
         CONTRACT OR OTHER FAULT OR RESPONSIBILITY OF SELLER OR ANY OTHER PARTY
         OR PERSON, except to the extent any change in condition is directly
         caused by the gross negligence or willful misconduct of Seller.

                                       VI.

                                 REPRESENTATIONS

6.1      PURCHASER'S REPRESENTATIONS: Purchaser represents and warrants to
         Seller as of the Effective Date and Closing as follows:

(a)      EXISTENCE: Purchaser is duly organized, validly existing, and in good
         standing under the corporation laws of the jurisdiction of its
         organization and is duly qualified at Closing to carry on business in
         the state(s) where the Assets are located.

(b)      AUTHORIZATION: Purchaser has the corporate power and authority to enter
         into and perform this Agreement and the transactions contemplated
         hereby. The execution, delivery and performance of this Agreement and
         the transactions contemplated hereby have been duly and validly
         authorized by all requisite corporate action on the part of Purchaser.
         This Agreement has been duly executed and delivered on behalf of
         Purchaser, and at Closing all documents and instruments required
         hereunder to be executed and delivered by Purchaser shall have been
         fully executed and delivered.

(c)      BROKERS: Purchaser has not incurred any obligation or liability,
         contingent or otherwise, for brokers' or finders' fees with respect to
         the matters provided for in this Agreement which will be the
         responsibility of Seller; and any such obligation or liability that may
         exist shall be the sole obligation of the creating party.

(d)      ENFORCEABILITY: This Agreement constitutes, and the documents and
         instruments to be executed pursuant hereto will constitute, the legal,
         valid and binding obligations of Purchaser, enforceable against
         Purchaser in accordance with their respective terms, except to the
         extent that such enforcement may be limited by applicable bankruptcy,
         insolvency and similar laws affecting creditors' rights generally and
         by general equitable principles.

(e)      FURTHER DISTRIBUTION: Purchaser is acquiring the Assets for its own
         account and not with the intent of making a public distribution thereof
         within the meaning of the Securities Act of 1933, as amended, and the
         rules and regulations promulgated thereunder.

(f)      FEDERAL LEASES: If the Assets include any federal leases, Purchaser is
         qualified to own such federal leases or will be so qualified at
         Closing, and, if Purchaser intends to operate such assets, Purchaser is
         qualified to operate such federal lease or will be so qualified at
         Closing.


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Purchase and Sale Agreement
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6.2      SELLER'S REPRESENTATIONS: Seller represents and warrants to Purchaser
         as follows as of the Effective Date and the Closing:

(a)      EXISTENCE: Seller is duly organized, validly existing, and in good
         standing under the corporation laws of the jurisdiction of its
         organization and is duly qualified at to carry on business in the
         state(s) where the Assets are located.

(b)      AUTHORIZATION: Seller has the corporate power and authority to enter
         into and perform this Agreement and the transactions contemplated
         hereby. The execution, delivery and performance of this Agreement and
         the transactions contemplated hereby have been duly and validly
         authorized by all requisite corporate action on the part of Seller.
         This Agreement has been duly executed and delivered on behalf of
         Seller, and at Closing all documents and instruments required hereunder
         to be executed and delivered by Seller shall have been fully executed
         and delivered.

(c)      BROKERS: Seller has not incurred any obligation or liability,
         contingent or otherwise, for brokers' or finders' fees with respect to
         the matters provided for in this Agreement which will be the
         responsibility of Purchaser; and any such obligation or liability that
         may exist shall be the sole obligation of the creating party.

(d)      ENFORCEABILITY: This Agreement constitutes, and the documents and
         instruments to be executed pursuant hereto will constitute, the legal,
         valid and binding obligations of Seller, enforceable against Seller in
         accordance with their respective terms, except to the extent that such
         enforcement may be limited by applicable bankruptcy, insolvency and
         similar laws affecting creditors' rights generally and by general
         equitable principles.

(e)      NO VIOLATIONS: The execution, delivery and performance of this
         Agreement by Seller, and the transactions contemplated hereby, will not
         violate (i) any material agreement or instrument to which Seller is a
         party or by which Seller or the Assets is bound, (ii) any judgment,
         order, ruling or decree applicable to Seller or the Assets, (iii) any
         law, rule or regulation applicable to Seller or the Assets or (iv) any
         of the organizational documents of Seller.

(f)      NO CONSENTS: The execution, delivery and performance of this Agreement
         by Seller does not require the consent, approval, authorization, order
         or other action of, nor any filing with, any third party.

(g)      PREFERENTIAL PURCHASE RIGHTS AND CONSENTS TO ASSIGNMENT: To the best of
         Seller's knowledge, the Assets are not subject to any agreements
         containing preferential purchase rights or consent to assignment
         provisions that must be complied with prior to the assignment of the
         Assets to Purchaser.


<PAGE>   18

Purchase and Sale Agreement
Page No. 18

(h)      LITIGATION: Excluding any ongoing MMS audits, and except as set forth
         on Exhibit "J" is neither any claim, suit, action, or other proceeding
         pending before any court or governmental agency nor, to Seller's
         knowledge, any claim, dispute, suit, action, investigation or other
         proceeding threatened against the Assets or against Seller or any
         Affiliate of Seller relating to the Assets.

(i)      TAXES: To Seller's knowledge, all ad valorem, property, production,
         excise, severance, windfall profit and similar taxes and assessments
         payable with respect to the Assets and based on or measured by the
         ownership of property or the production or removal of hydrocarbons or
         the receipt of proceeds therefrom have been and will be timely paid in
         all respects.

(j)      LEASES: To Seller's knowledge, (i) Seller is not in material default
         under any of the terms and provisions of any of the leases or under any
         agreement to which the same are subject; and (ii) all royalties,
         rentals, and other payments due thereunder by Seller have been timely
         and properly paid in full on or before the due dates thereof.

(k)      MARKETING: Except as provided in Section 1.4 above and as set forth on
         Exhibit "K", no amount of Seller's hydrocarbons produced from the
         Assets and marketed by others is subject to a sales or processing
         contract (except for contracts terminable without penalty by Seller on
         not more than 30 days' notice), and no person has any call upon, option
         to purchase or similar rights under any agreement with respect to the
         Assets or to the production therefrom. Seller has not in any respect
         collected, nor will Seller in any respect collect, any proceeds from
         the Assets that are subject to refund by Purchaser. Seller has not been
         nor will Seller be obligated by virtue of any prepayment made under any
         gas transportation, production sales contract or any other contract
         containing a "take or pay" clause, or under any gas balancing, deferred
         production or similar arrangement to deliver oil, gas or other minerals
         produced from or allocated to any of the Assets at some future time
         without receiving full payment therefor at the time of delivery.

(l)      CONTRACT RIGHTS: To Seller's knowledge, with respect to the Contracts:
         (i) all Contracts are identified on Exhibit "E" which have not
         previously expired or been terminated by mutual agreement and all such
         Contracts are in full force and effect and are the valid and legally
         binding obligations of the parties thereto and are enforceable in
         accordance with their respective terms, except to the extent that such
         enforcement may be limited by applicable bankruptcy, insolvency and
         similar laws affecting creditors' rights generally, and by general
         equitable principles; (ii) Seller is not in material breach or default
         with respect to any of its obligations under any Contract; and (iii)
         neither Seller nor any other party to any Contract has given or
         threatened to give notice of any action to terminate, cancel, rescind,
         or procure a judicial reformation of any Contract or any provision
         thereof.

6.3      DISCLAIMER OF REPRESENTATIONS AND WARRANTIES: Except as otherwise set
         forth herein, including but not limited to the warranties set forth in
         Section 1.6, THE ASSETS ARE SOLD "AS IS," "WHERE IS" AND "WITH ALL
         FAULTS AS TO ALL MATTERS,"


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Purchase and Sale Agreement
Page No. 19

         AND SELLER EXPRESSLY DISCLAIMS AND NEGATES ANY REPRESENTATION OR
         WARRANTY, EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE, OR OTHERWISE
         RELATING TO (a) THE CONDITIONS OF THE ASSETS (INCLUDING, WITHOUT
         LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, OF
         FITNESS FOR A PARTICULAR PURPOSE, OR OF CONFORMITY TO MODELS OR SAMPLES
         OF MATERIALS), (b) ANY INFRINGEMENT BY SELLER OF ANY PATENT OR
         PROPRIETARY RIGHT OF ANY THIRD PARTY, (c) ANY INFORMATION, DATA OR
         OTHER MATERIALS (WRITTEN OR ORAL) FURNISHED TO PURCHASER BY OR ON
         BEHALF OF SELLER (INCLUDING WITHOUT LIMITATION, IN RESPECT OF
         GEOLOGICAL AND ENGINEERING DATA, THE EXISTENCE OR EXTENT OF OIL, GAS OR
         OTHER MINERAL RESERVES, THE RECOVERABILITY OF OR THE COST OF RECOVERING
         ANY SUCH RESERVES, THE VALUE OF SUCH RESERVES, ANY PRODUCT PRICING
         ASSUMPTIONS, AND THE ABILITY TO SELL OIL OR GAS PRODUCTION AFTER
         CLOSING), (d) THE ENVIRONMENTAL CONDITION AND OTHER CONDITION OF THE
         ASSETS AND ANY POTENTIAL LIABILITY ARISING FROM OR RELATED TO THE
         ASSETS, AND (e) THE FAILURE OF ANY COMPUTER, ELECTRONICS, SOFTWARE, OR
         COMPONENTS TO BE FREE OF ANY BUGS OR ERRORS, INCLUDING, BUT NOT LIMITED
         TO, ANY DEFICIENCIES RELATING TO THE INABILITY TO PROPERLY FUNCTION
         BEYOND DECEMBER 31, 1999.


                                      VII.

                              CONDITIONS OF CLOSING

Purchaser's and Seller's obligations to consummate the transactions provided for
herein are subject to the satisfaction or waiver by the other party of the
following conditions:

7.1      REPRESENTATIONS: The representations of Purchaser and Seller contained
         in Article VI hereof shall be true and correct in all material respects
         on the date of Closing as though made on and as of that date.

7.2      PERFORMANCE: Both Purchaser and Seller shall have performed in all
         material respects the obligations, covenants and agreements hereunder
         to be performed by them at or prior to Closing.

7.3      PENDING MATTERS: No suit, action or other proceeding by a third party
         or a governmental authority shall be pending or threatened which seeks
         substantial damages from Purchaser or Seller in connection with the
         Assets, or seeks to restrain, enjoin or otherwise prohibit the
         consummation of the transactions contemplated by this Agreement.


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Purchase and Sale Agreement
Page No. 20

7.4      HART-SCOTT-RODINO ACT: If either party is of the opinion that the
         transaction described in this instrument falls within the purview of
         the Hart-Scott-Rodino ("HSR Act"), Purchaser shall prepare and submit
         in a timely manner, any necessary filings for Purchaser in connection
         with the transactions contemplated by this Agreement under the HSR Act
         and the rules and regulations thereunder. Purchaser shall request
         expedited treatment of such filing by the Federal Trade Commission,
         shall promptly make any appropriate or necessary subsequent or
         supplemental filings, and shall furnish to Seller copies of all filings
         made under the HSR Act at the same time they are filed with the
         government.

7.5      GOVERNMENTAL BONDS: Purchaser shall have delivered to Seller either:
         (i) copies of any bonds covering the Assets required under any laws,
         rules or regulations of any federal, state or local governmental agency
         having jurisdiction over the Assets issued by corporate sureties
         satisfactory to Seller; or (ii) a commitment by a surety company,
         satisfactory to Seller, to issue such bonds upon Closing, and (iii)
         copies of all other necessary or appropriate consents, permits,
         insurance, approvals, authorizations and similar items required of
         Purchaser to purchase, receive, own, and operate the Assets as of the
         Closing and to otherwise transact business in the applicable
         jurisdiction(s).

7.6      CONSENTS AND WAIVERS: All necessary consents, permissions and approvals
         by third parties in connection with the sale and transfer of the Assets
         shall have been received prior to Closing, except those governmental
         consents customarily generated and received in the ordinary course of
         business at a post-Closing date.

7.7      PLUGGING AND ABANDONMENT: The parties hereto recognize that the United
         States Department of Interior, Minerals Management Service ("MMS")
         shall require Purchaser to post supplemental bonds specific to the
         plugging and abandonment and restoration of the Leasehold Property (the
         "P&A Bonds"). In the event (i) Purchaser qualifies with the MMS as a
         company exempt from this type of supplemental bonding requirement and
         (ii) as a result of such qualification, the MMS releases in favor of
         Purchaser the P&A Bonds, Purchaser shall immediately provide to Seller
         a bond in an amount equal to the lessor of (i) an amount sufficient to
         cover the costs (limited to Seller's interest, being 80%), at the time,
         to plug and abandon and restore the Leasehold Property to the extent
         and only the extent such Leasehold Property includes those wells and
         platforms, which were in existence before the date that the Regional
         Director of the MMS approves the assignment of leasehold interest from
         Seller in favor of Purchaser (the "Assignment"); or (ii) an amount
         equal to the amount of the P&A Bonds, as required by the MMS to approve
         the Assignment.


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Purchase and Sale Agreement
Page No. 21

                                      VIII.

                                     CLOSING

8.1      CLOSING ITEMS: At Closing, as defined in Section 1.2 hereof, the
         following shall occur, unless postponed pursuant to Section 3.5(g)
         hereof:

(a)      Seller shall execute, acknowledge and deliver Assignments of Oil and
         Gas Lease and a Bill of Sale substantially in the form and substance of
         Exhibit "L" attached hereto, covering all of the Assets to be sold
         pursuant hereto and the Indemnity Agreement substantially in the form
         and substance of Exhibit "L-1" attached hereto ("Indemnity Agreement").

(b)      Purchaser shall deliver to Seller either by cashier's check or wire
         transfer of cash as specified by Seller the remaining balance of the
         total Purchase Price as adjusted hereunder.

(c)      Purchaser shall provide Seller with executed change of operator forms
         on all wells (active or inactive) operated by Seller, as required by
         the Minerals Management Service to effect a change of operator for the
         properties being sold. Seller shall execute same at Closing, and
         promptly thereafter, file said forms with the Minerals Management
         Service.

(d)      Seller shall provide Purchaser with executed non-foreign affidavits,
         and such other instruments and documents as may be reasonably requested
         by Seller.

(e)      Seller shall (subject to the terms of applicable operating agreements
         and other provisions hereof) deliver to Purchaser exclusive possession
         of the Assets, effective as of the Effective Date.

(f)      Upon Purchaser's request, Seller shall, at or as promptly as reasonably
         possible after Closing, provide Purchaser, at Purchaser's expense, with
         copies of the Records. All information and data shall be furnished as a
         matter of convenience only to Purchaser and Purchaser's reliance on
         same shall be at Purchaser's sole risk.

(g)      Seller shall deliver letters in lieu of transfer orders directing all
         purchasers of production to pay Purchaser the proceeds of production
         produced from the Assets from and after the Effective Date, to the
         extent that such purchasers of production have not already paid the
         same to Seller.

(h)      Seller and Purchaser will execute all documentation necessary to
         reflect the termination of agreements between the parties relating to
         the Assets described on Exhibit "M". Copies of such instruments shall
         be in substantially the form and substance of Exhibit "M-1" attached
         hereto.


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Purchase and Sale Agreement
Page No. 22

Immediately after Closing, Purchaser shall notify all pertinent operators,
non-operators, oil or gas purchasers, governmental agencies and royalty owners
that it has purchased the Assets.

8.2      ADDITIONAL CLOSING ITEMS: Contemporaneously with the Closing of the
         transactions contemplated hereby, and for the same stated
         consideration, Seller will (i) cause Spirit Energy Management, L.L.C.
         and Spirit 76 Development, L.P. (collectively "Spirit") to convey to
         Purchaser all of their rights in the Assets, being all rights in the
         Assets created by that certain deed entitled "Conveyance of Overriding
         Royalty Interest", executed by Seller in favor of Spirit and (ii)
         execute and cause Spirit and Concord Investors LLC to execute a waiver
         in connection therewith. Such conveyance and waiver to be in the form
         attached hereto as Exhibit "N-1". At Closing, Seller shall provide to
         Purchaser a legal opinion in a form similar to that attached hereto as
         Exhibit "N" upon which Purchaser may rely in connection with these
         matters.

         Contemporaneously with the Closing, Seller will also cause Unocal
         Pipeline Company to convey in favor EPL Pipeline, L.L.C. the pipeline,
         rights-of-way, surface lease and equipment, as further identified in
         the Pipeline Purchase Agreement to be entered into by said parties, a
         copy of which is attached hereto and made a part hereof as Exhibit "O".

                                       IX.

                             CONTINUING OBLIGATIONS

9.1      FINAL ACCOUNTING: Within 120 days after Closing, Seller shall provide
         Buyer with a statement of accounting ("Final Accounting"). Buyer shall
         have the right to cause its accountant, in consultation with Seller's
         accountant, to review the Final Accounting within an additional sixty
         (60) days following Seller's delivery of such notice. If Buyer's
         accountant and Seller's accountant are unable to agree upon the Final
         Accounting within an additional sixty (60) days following completion of
         Buyer's review thereof, then the two respective accountants jointly
         shall select, within such sixty (60) day period, an independent
         accounting firm of national reputation that shall determine the Final
         Accounting as soon as reasonably possible, but in no event later than
         210 days after Closing. The determination by such independent
         accounting firm shall be conclusive. The expense of such independent
         accounting firm shall be borne by Seller and Buyer, in equal
         proportions. The Final Accounting, including a determination by an
         accounting firm, shall not limit the parties' rights and obligations
         pursuant to Section 9.3 below.

9.2      RECEIPTS AND CREDITS: Except as otherwise provided in this Agreement,

(a)      All monies, proceeds, receipts, credits and income attributable to the
         Assets for all periods of time on and after the Effective Date shall be
         the sole property and entitlement of the Purchaser, and to the extent
         received by Seller, Seller shall fully disclose, account for and
         transmit same to Purchaser promptly.


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(b)      All monies, proceeds, receipts and income attributable to the Assets
         for all periods of time prior to the Effective Date shall be the sole
         property and entitlement of Seller and, to the extent received by
         Purchaser, Purchaser shall fully disclose, account for and transmit
         same to Seller promptly.

(c)      All costs, expenses, disbursements, obligations and liabilities
         attributable to the Assets for periods of time prior to the Effective
         Date, regardless of when due or payable shall be the sole obligation of
         Seller and Seller shall promptly pay, or if paid by Purchaser, promptly
         reimburse Purchaser for and hold Purchaser harmless from and against
         same.

(d)      All costs, expenses, disbursements, obligations and liabilities
         attributable to the Assets for periods of time on and after the
         Effective Date, regardless of when due or payable, shall be the sole
         obligation of Purchaser, and Purchaser shall promptly pay, or if paid
         by Seller, promptly reimburse Seller for and hold Seller harmless from
         and against same.

9.3      UNDERPAYMENT OR FAILURE TO PAY ROYALTY

         Notwithstanding the adjustment to the Purchase Price contained in
         Section 2.3(j) or the Final Accounting (including a determination by an
         accounting firm), the obligation of Seller to indemnify and hold
         harmless Purchaser from any claims or damages arising out of or related
         to Seller's underpayment or failure to pay royalties shall survive the
         Final Accounting and any determination by an accounting firm pursuant
         thereto.


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9.4      INDEMNITIES:

(a)      Purchaser agrees to indemnify, defend and hold harmless Seller, its
         officers, directors, employees, agents, representatives and affiliated
         or parent companies (which additional parties are hereinafter
         collectively referred to as "Seller Agents") from and against any and
         all losses, liabilities, causes of action, damages, liens, penalties,
         fines, settlements, judgments, expenses, attorney's fees, court costs
         and claims (hereinafter referred to collectively as "claims") arising
         (i) from the breach of this Agreement by Purchaser, (ii) from the
         Assumed Liabilities, or (iii) on or after the Effective Date, in any
         way connected with, attributable to, or resulting from Purchaser's
         ownership or operation of, or activities on the Assets, including, but
         not limited to, claims for damage to property or injury or death to
         persons, claims for breach of duties and obligations arising under or
         by virtue of any lease, contract, agreement, permit, applicable statute
         or rule. Purchaser's obligations to indemnify, defend and hold
         harmless, as set forth above, shall also specifically extend to all
         such claims REGARDLESS OF WHETHER ATTRIBUTABLE, IN WHOLE OR IN PART TO,
         CLAIMS WHICH ARE KNOWN OR UNKNOWN, CLAIMS ARISING FROM THE SOLE, JOINT,
         CONCURRENT NEGLIGENCE, STRICT LIABILITY, BREACH OF CONTRACT,
         ENVIRONMENTAL LIABILITY, PRODUCTS LIABILITY, OR OTHER FAULT OR
         RESPONSIBILITY OF SELLER, ITS SELLER AGENTS OR ANY OTHER PARTY OR
         PERSON, AND REGARDLESS WHETHER OR NOT SUCH CLAIMS AROSE PRIOR TO THE
         EFFECTIVE DATE OR RELATE TO CONDITIONS THAT EXISTED PRIOR TO THE
         EFFECTIVE DATE. In addition, and without limiting the generality of the
         foregoing, Purchaser shall be solely liable and responsible for the
         proper plugging and abandoning of all wells now located on or hereafter
         drilled on the Assets, and any surface restoration or environmental
         clean-up associated therewith, and shall indemnify, defend and hold
         harmless Seller and its agents from and against all claims relating to
         same.

(b)      Except as otherwise set forth herein and except for the Assumed
         Liabilities of Purchaser, Seller agrees to indemnify, defend and hold
         harmless, Purchaser and its agents, officers, from and against any and
         all claims arising from the breach of this Agreement by Seller and/or
         any obligations or liabilities retained by Seller hereinafter. Seller's
         obligations to indemnify, defend and hold harmless, as set forth above,
         shall also specifically extend to all such claims REGARDLESS OF WHETHER
         ATTRIBUTABLE, IN WHOLE OR IN PART TO, CLAIMS WHICH ARE KNOWN OR
         UNKNOWN, CLAIMS ARISING FROM THE SOLE, JOINT, CONCURRENT NEGLIGENCE,
         STRICT LIABILITY, BREACH OF CONTRACT, ENVIRONMENTAL LIABILITY, PRODUCTS
         LIABILITY, OR OTHER FAULT OR RESPONSIBILITY OF PURCHASER, ITS
         PURCHASER AGENTS OR ANY OTHER PARTY OR PERSON.

(c)      Nothing in this section shall reduce or diminish the specific indemnity
         and assumption of liability and responsibility by Purchaser with regard
         to environmental risks set forth


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Purchase and Sale Agreement
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         hereinabove in Article IV or the specific indemnity and assumption of
         liability and responsibility of Seller as set forth in Indemnity
         Agreement to be executed by Seller at Closing.

(d)      Any claim for indemnity under any provision of this Agreement,
         including Sections 4.8 and 9.4, shall be made by written notice from
         the party seeking indemnification (the "Indemnified Party") to the
         party required to provide same (the "Indemnifying Party"), together
         with a written description of any third party claim against the
         Indemnified Party, stating the nature and basis of such claim and, if
         ascertainable, the amount thereof. The Indemnifying Party shall have a
         period of thirty (30) days after receipt of such notice within which to
         respond thereto or, in the case of a third party claim which requires a
         shorter time for response, then within such shorter period as specified
         by the Indemnified Party in such notice (the "Notice Period"). If the
         Indemnifying Party denies liability or fails to respond to the notice
         within the Notice Period, the Indemnified Party may defend or
         compromise the claim as it deems appropriate without prejudice to any
         of the Indemnified Party's rights hereunder, with no further obligation
         to inform the Indemnifying Party of the status of the claim and no
         right of the Indemnifying Party to approve or disapprove any action,
         taken in connection therewith by the Indemnified Party. If the
         Indemnifying Party accepts liability, it shall so notify the
         Indemnified Party within the Notice Period and elect either: (i) to
         undertake the defense or compromise of such third party claim with
         counsel selected by the Indemnifying Party and reasonably approved by
         the Indemnified Party, or (ii) to instruct the Indemnified Party to
         defend or compromise such claim. If the Indemnifying Party undertakes
         the defense or compromise of such third party claim, the Indemnified
         Party shall be entitled, at its own expense, to participate in such
         defense. No compromise or settlement of any third party claim shall be
         made without reasonable notice to the Indemnified Party and, unless
         such compromise or settlement includes a general release of the
         Indemnified Party in respect of the matter with no admission of
         liability on the part of the Indemnified Party and non constraints on
         the future conduct of its business, without the prior written approval
         of the Indemnified Party.

9.5      FURTHER ASSURANCES: After Closing, Seller and Purchaser agree to take
         such further actions and to execute, acknowledge and deliver all such
         further documents that are necessary or useful in carrying out the
         purposes of this Agreement or of any document delivered pursuant
         hereto.

9.6      RECORDING: Purchaser shall immediately file for all requisite approvals
         of the appropriate federal governmental agencies to the Assignment(s)
         of the Assets. The Assignment(s) of federal oil and gas leases shall be
         filed in the appropriate governmental offices in compliance with the
         applicable rules of such governmental agencies. Purchaser shall supply
         Seller with a true and accurate photocopy of all the recorded and filed
         Assignment(s) within a reasonable period of time after their recording
         and filing.


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9.7      CONFIDENTIALITY AND PUBLICITY: In the event Closing does not occur for
         any reason except as required by law and with prior notice to Seller,
         Purchaser and its officers, directors, employees, agents and
         representatives will hold in strict confidence all data and information
         obtained from Seller in connection with the Assets, whether before or
         after execution of this Agreement, except any data or information
         which:

(a)      at the time of the disclosure to Purchaser by Seller is in the public
         domain;

(b)      after disclosure to Purchaser by Seller becomes part of the public
         domain by publication or otherwise, except by breach of this provision
         by Purchaser;

(c)      Purchaser can establish by competent proof was rightfully in its
         possession at the time of disclosure to Purchaser by Seller;

(d)      Purchaser rightfully received from third parties free of any
         obligations of confidence; or,

(e)      is developed independently by Purchaser, provided the person or persons
         alleged to have independently developed the information shall not have
         any access to data or information obtained from Seller in connection
         with the transactions contemplated by this Agreement.

If this Agreement is terminated for any reason, Purchaser shall return to Seller
all copies of confidential information, as requested by Seller, in the
possession of Purchaser obtained from Seller or pursuant to any provision of
this Agreement, which information is at the time of termination required to be
held in confidence pursuant to this section.

9.8      PRESERVATION OF BOOKS AND RECORDS: For a period of six (6) years after
         Closing, Seller will retain the books, records and files pertaining to
         the Assets and will make such books, records and files available to
         Purchaser upon reasonable notice at Seller's headquarters (or at such
         other location in the United States as Seller may designate in writing
         to Purchaser) at reasonable times and during regular office hours.

9.9      THIRD-PARTY CONSENTS Certain of the transfers contemplated by this
         Agreement are subject to various forms of third-party consents, which
         are identified on Exhibit "P" ("Consents"). Seller and Purchaser shall
         cooperate and shall promptly take such action as may be required to
         obtain all necessary Consents prior to Closing. Seller and Purchaser
         agree that to the extent any Assets, contract or permit that would
         otherwise be assigned under this Agreement is not capable of being
         assigned, transferred, subleased or sublicensed without any such
         Consent of, or waiver by any other party thereto, or any other Person,
         or if such assignment, transfer, sublease or sublicense or attempted
         assignment, transfer, sublease or sublicense would constitute a breach
         thereof, or a violation of any law, this Agreement shall not constitute
         an assignment, transfer, sublease or sublicense, or an attempted
         assignment, transfer, sublease or sublicense of any such contract or
         permit. With respect to each Asset, contract that, but for the reasons
         set forth in the first sentence of this Section, would be assigned,
         Seller agrees to provide Purchaser with the benefits (including the
         right to


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Purchase and Sale Agreement
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         terminate any such contract or permit in accordance with the terms
         thereof) of such Asset, contract or permit, to the extent related to
         transactions or periods that occur at or after Closing, and to the
         extent it is possible to do so; and, if and to the extent such benefits
         are provided to Purchaser, Purchaser agrees to observe and perform such
         contract or permit. Seller shall continue to use its reasonable efforts
         to obtain an assignment to Purchaser of each Asset, contract or permit
         that, but for the reasons set forth in the first sentence of this
         Section, would be assigned; provided, however, that Seller shall not be
         required to pay any consideration or suffer any financial disadvantage
         to obtain such assignment.

                                       X.

                                      TAXES

10.1     APPORTIONMENT OF AD VALOREM AND PROPERTY TAXES: All ad valorem taxes,
         real property taxes, personal property taxes and similar obligations
         with respect to the Assets for the tax period in which the Effective
         Date occurs shall be apportioned as of the Effective Date between
         Seller and Purchaser. That portion of such apportioned tax liability
         which is attributable to Seller shall be credited to Purchaser's
         account. Purchaser shall file or cause to be filed all required reports
         and returns incident to such taxes and shall pay or cause to be paid to
         the taxing authorities all such taxes relating to the tax period in
         which the Effective Date occurs. Seller will use its reasonable efforts
         to provide Purchaser with all necessary information. Purchaser shall
         supply Seller with copies of the filed reports and proof of payment
         promptly after filing and paying them.

10.2     SALES TAXES, FILING FEES, ETC.: The transactions contemplated by this
         Agreement are an occasional sale and should be deemed exempt from any
         state and local sales and use taxes, and the Parties hereto will use
         reasonable efforts to report and have this transfer treated as exempt
         from such taxes. The Purchase Price and the Adjusted Purchase Price
         provided for herein are net of any sales taxes or other transfer taxes
         in connection with the sale of the Assets. Purchaser shall be liable
         for any sales tax or other transfer tax, as well as any applicable
         conveyance, transfer and recording fees and real estate transfer stamps
         or taxes imposed on the transfer of the Assets pursuant to this
         Agreement. If Seller is required by applicable state law to report and
         pay these taxes and/or fees, Purchaser shall, upon presentment of an
         invoice by Seller, promptly deliver a check to Seller in full payment
         of the invoice. Purchaser shall defend, indemnify and hold Seller
         harmless with respect to the payment of any of those taxes including
         any interest or penalties assessed thereon.

10.3     OTHER TAXES: All production, severance, excise, and other similar such
         taxes or fees (other than income taxes) relating to production of oil,
         gas and condensate attributable to the Assets prior to the Effective
         Date shall be paid by Seller, and all such taxes relating to such
         production on and after the Effective Date shall be paid by Purchaser.
         Purchaser and Seller shall supply each other with copies of the filed
         reports and proof of payment promptly after filing and paying them.


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                                       XI.

                                   TERMINATION

This Agreement and the transactions contemplated hereby may be terminated only
in the following instances:

(a)      If the conditions set forth in Article VII are not satisfied or waived
         as of Closing;

(b)      By way of Sections 3.5(b), 4.5 hereof or any other right to terminate
         under Article IV hereof;

(c)      At any time by mutual written agreement of Seller and Purchaser and in
         accordance with any other express provisions of this Agreement.

                                      XII.

                                  MISCELLANEOUS

12.1     GOVERNING LAW: This Agreement shall be governed by and interpreted in
         accordance with the laws of the State of Louisiana. All assignments and
         instruments executed in accordance with this Agreement shall be
         governed by and interpreted in accordance with the laws of the state
         where the Assets conveyed thereby are located.

12.2     ENTIRE AGREEMENT: This Agreement, together with any confidentiality
         agreements relating to the Assets previously executed by Purchaser, and
         the Indemnity Agreement to be executed by Seller at Closing constitute
         the entire agreement between the parties and supersede all prior
         agreements, understandings, negotiations and discussions, whether oral
         or written, of the parties. No supplement, amendment, alteration,
         modification, waiver or termination of this Agreement shall be binding
         unless executed in writing by the parties hereto.

12.3     WAIVER: No waiver of any of the provisions of this Agreement shall be
         deemed or shall constitute a waiver of any other provisions hereof
         (whether or not similar), nor shall such waiver constitute a continuing
         waiver unless otherwise expressly provided.

12.4     CAPTIONS: The captions in this Agreement are for convenience only and
         shall not be considered a part of or affect the construction or
         interpretation of any provision of this Agreement.


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12.5     ASSIGNMENT: Prior to closing, neither party hereto shall assign this
         Agreement or any of its rights or obligations hereunder without the
         prior written consent of the other party, and any assignment made
         without such consent shall be void. Except as otherwise provided
         herein, this Agreement shall be binding upon and inure to the benefit
         of the parties hereto and their respective permitted successors and
         assigns.

12.6     NOTICES: Any notice provided or permitted to be given under this
         Agreement shall be in writing, and may be served by personal delivery
         or by depositing same in the United States mail, addressed to the party
         to be notified, postage prepaid, and registered or certified with a
         return receipt requested. Notices deposited in the mail in the manner
         hereinabove described shall be deemed to have been given and received
         upon the date of delivery as shown on the return receipt. Notice served
         in any other manner shall be deemed to have been given and received
         only if and when actually received by the addressee. For purposes of
         notice, until receipt of written notice changing same, the addresses of
         the parties shall be as follows:

         SELLER'S MAILING
         Union Oil Company of California
         4021-4023 Ambassador Caffery Parkway
         Post Office Box 69200 (70596-9200)
         Lafayette, Louisiana 70503
         Attention: Dalton F. Smith III

         PURCHASER'S MAILING ADDRESS:
         Energy Partners, Ltd.
         201 St. Charles Avenue
         Suite 3400
         New Orleans, Louisiana  70170
         Attention: L. Keith Vincent

12.7     WAIVER OF COMPLIANCE WITH BULK TRANSFER LAWS: Purchaser waives
         compliance with any applicable bulk transfer law relating to the
         transactions contemplated by this Agreement, and agrees to assume all
         risk and liability in connection with the failure to so comply.

12.8     UTPCPL WAIVER: TO THE EXTENT APPLICABLE TO THE ASSETS OR ANY PORTION
         THEREOF, PURCHASER HEREBY WAIVES THE PROVISIONS OF THE LOUISIANA UNFAIR
         TRADE PRACTICES AND CONSUMER PROTECTION LAW (LA. R. S. 51:1402, ET
         SEQ.). PURCHASER WARRANTS AND REPRESENTS THAT IT: (i) IS EXPERIENCED
         AND KNOWLEDGEABLE WITH RESPECT TO THE OIL AND GAS INDUSTRY GENERALLY
         AND WITH TRANSACTIONS OF THIS TYPE SPECIFICALLY; (ii) POSSESSES AMPLE
         KNOWLEDGE, EXPERIENCE AND EXPERTISE TO EVALUATE INDEPENDENTLY THE
         MERITS AND RISKS OF THE TRANSACTION HEREIN CONTEMPLATED; AND, (iii) IS


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Purchase and Sale Agreement
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         NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION IN NEGOTIATIONS
         WITH SELLER.

12.9     WAIVER OF CONSUMER RIGHTS PURCHASER HEREBY WAIVES ITS RIGHTS UNDER THE
         DECEPTIVE TRADE PRACTICES - CONSUMER PROTECTION ACT, SECTION 17.41 ET
         SEQ., BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL
         RIGHTS AND PROTECTIONS. AFTER CONSULTATION WITH AN ATTORNEY OF ITS OWN
         SELECTION, PURCHASER VOLUNTARILY CONSENTS TO THIS WAIVER. IN ADDITION,
         TO THE EXTENT APPLICABLE TO THE ASSETS OR ANY PORTION THEREOF,
         PURCHASER HEREBY WAIVES THE PROVISIONS OF THE TEXAS CONSUMER PROTECTION
         LAWS REGARDING FALSE, MISLEADING AND DECEPTIVE BUSINESS PRACTICES,
         UNCONSCIONABLE ACTIONS AND BREACHES OF WARRANTY; PROVIDED, HOWEVER,
         THAT NOTHING HEREIN CONTAINED SHALL BE DEEMED A WAIVER BY PURCHASER
         WHERE SUCH WAIVER IS PROHIBITED BY LAW. IN ORDER TO EVIDENCE ITS
         ABILITY TO GRANT SUCH WAIVER, PURCHASER HEREBY REPRESENTS AND WARRANTS
         TO SELLER THAT PURCHASER (i) IS IN THE BUSINESS OF SEEKING OR
         ACQUIRING, BY PURCHASE OR LEASE, GOODS, OR SERVICES FOR COMMERCIAL OR
         BUSINESS USE, (ii) HAS ASSETS OF FIVE MILLION DOLLARS OR MORE ACCORDING
         TO IT MOST RECENT FINANCIAL STATEMENT PREPARED IN ACCORDANCE WITH
         GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, (iii) HAS KNOWLEDGE AND
         EXPERIENCE IN FINANCIAL MATTERS THAT ENABLE IT TO EVALUATE THE MERITS
         AND RISKS OF THE TRANSACTION CONTEMPLATED HEREBY, AND (iv) IS NOT IN A
         SIGNIFICANTLY DISPARATE BARGAINING POSITION. Nothing in this Section
         shall be interpreted as a waiver of the express representations and
         warranties in this Agreement.

12.10    WAIVER OF JURY TRIAL: SELLER AND PURCHASER DO HEREBY IRREVOCABLY WAIVE,
         TO THE FULLEST EXTENT PERMITTED BY LAW, AND ANY AND ALL RIGHT TO A
         TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER LEGAL PROCEEDING BASED UPON,
         ARISING OUT OF, OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
         CONTEMPLATED HEREBY.

12.11    LIMITATION OF LIABILITY: NOTWITHSTANDING ANYTHING HEREIN PROVIDED TO
         THE CONTRARY, SELLER AND PURCHASER DO HEREBY COVENANT AND AGREE THAT
         THE RECOVERY BY EITHER PARTY HERETO OF ANY DAMAGES SUFFERED OR INCURRED
         BY IT AS A RESULT OF ANY BREACH BY THE OTHER PARTY OF ANY OF ITS
         COVENANTS, AGREEMENTS, REPRESENTATIONS, GUARANTIES, WARRANTIES,
         DISCLAIMERS, WAIVERS OR CONTINUING OBLIGATIONS UNDER THIS AGREEMENT
         SHALL BE LIMITED TO THE ACTUAL DAMAGES SUFFERED OR INCURRED BY THE
         NON-BREACHING PARTY AS A RESULT OF SUCH BREACH, AND IN NO EVENT SHALL
         SUCH RECOVERY INCLUDE ANY INDIRECT,


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         CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES; PROVIDED, HOWEVER, THAT
         NOTHING IN THIS SECTION SHALL REDUCE OR DIMINISH THE SPECIFIC INDEMNITY
         AND ASSUMPTIONS OF LIABILITY AND RESPONSIBILITY OF SELLER AS SET FORTH
         IN THE INDEMNITY AGREEMENT TO BE EXECUTED BY SELLER AT CLOSING.

12.12    NO ADMISSIONS: The Purchaser and Seller agree that neither this
         Agreement, nor any part hereof, nor any performance under this
         Agreement, nor any payment of any amount pursuant to any provision of
         this Agreement shall constitute or be construed as a finding, evidence
         of, or an admission or acknowledgment of any liability, fault, or past
         or present wrongdoing, or violation of any law, rule, regulation, or
         policy, by either Seller or Purchaser or by their respective officers,
         directors, employees or agents.

12.13    ANNOUNCEMENTS: Purchaser agrees that prior to the issuance of its
         initial press announcement, if any, which specifically addresses its
         acquisition of the Assets as being from Seller, it shall seek the
         approval of Seller of same; provided, however, that such approval
         cannot be unreasonably withheld. Seller and Purchaser, including their
         respective Affiliates, agree that from the date of this Agreement and
         continuing for twelve (12) months after the Closing if reserve volumes
         are estimated in a news release in conjunction with a Purchase Price
         disclosure the release must state that the reserve estimates are the
         disclosing Party's reserve estimates; provided, that either Party may
         make all disclosures which are required or prudent under applicable
         laws, including, but not limited to, rules, regulations and guidelines
         of the Securities and Exchange Commission and applicable stock
         exchanges.

12.14    BOOKS AND RECORDS: Seller shall, at or as promptly as reasonably
         possible after Closing, provide and make available to the Purchaser, at
         Purchaser's cost and expense, subject to the attorney-client privilege,
         photocopies of the Records. Notwithstanding any other provision herein
         contained, Purchaser shall retain all original documents, if any,
         delivered by Seller hereunder which pertain to the Assets (documents
         delivered by Seller hereunder may be maintained on compact discs) for
         as long as it so desires and make the same available after the Closing
         for inspection and copying by Seller during normal business hours, upon
         reasonable request and upon reasonable notice; provided, however, that
         during the first six (6) years after Closing, such books, records or
         documents shall not be disposed of or destroyed by Purchaser without
         first advising Seller in writing and giving Seller reasonable
         opportunity to obtain possession thereof.

12.15    THIRD PARTY BENEFICIARIES: Neither this Agreement, nor any performance
         hereunder by Seller or Purchaser, shall be deemed or interpreted to
         create any right, claim, cause of action, or remedy on behalf of any
         person not a party hereto.

12.16    EXPENSES: Except as otherwise provided herein, each party shall be
         solely responsible for all expenses incurred by it in connection with
         this transaction, including without limitation, fees and expenses of
         its own legal counsel and accountants.


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12.17    SEVERABILITY: If any term or other provision of this Agreement is
         invalid, illegal or incapable of being enforced under any applicable
         rule or law, all other conditions and provisions of this Agreement
         shall nevertheless remain in full force and effect so long as the
         economic or legal substance of the transaction contemplated hereby is
         not affected in a materially adverse manner with respect to either
         party.

12.18    USE OF SELLER'S NAME: As soon as practicable after Closing, Purchaser
         shall remove or cause to be removed the names and marks used by Seller
         and all variations and derivations thereof and logos relating thereto
         from the Assets and shall not thereafter make any use whatsoever of
         those names, marks and logos.

12.19    SURVIVAL: Except as otherwise specifically provided in this Agreement,
         all covenants, agreements, representations, guaranties, warranties,
         disclaimers, waivers and continuing obligations shall survive the
         execution of the Agreement, the Closing, and the delivery and recording
         of any deeds, assignments or bills of sale which convey title to the
         Assets from Seller to Purchaser.

12.20    LISTING OF EXHIBITS: The Exhibits listed below are attached to this
         Agreement and by this reference are fully incorporated herein:

         Exhibit "A" - Assets
         Exhibit "B" - Easements etc.
         Exhibit "C" - Assets Not Sold
         Exhibit "D" - Retained Matters
         Exhibit "E" - Contracts
         Exhibit "F" - Liens, Mortgage etc.
         Exhibit "G" - Back-in, Reversion etc.
         Exhibit "H" - Quality or Quantity of Title
         Exhibit "I" - Arbitration
         Exhibit "J" - Litigation
         Exhibit "K" - Marketing
         Exhibit "L" - Assignment and Bill of Sale
         Exhibit "L-1" - Indemnity Agreement
         Exhibit "M" - Termination of Agreement
         Exhibit "M-1" - Termination of Agreement
         Exhibit "N" - Legal Opinion
         Exhibit "N-1" - Override Conveyance
         Exhibit "N-2" - Consent and Waiver
         Exhibit "O" - Pipeline Purchase Agreement
         Exhibit "P" - Consents

12.21    COUNTERPARTS: This Agreement may be executed in one or more
         counterparts, each of which shall be deemed an original, but all of
         which shall constitute one and the same instrument.



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Page No. 33

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first set forth above.

WITNESSES:                                   SELLER:

                                             UNION OIL COMPANY OF CALIFORNIA


                                             BY:
-------------------------------                 --------------------------------
                                                 Robert C. Gnagy
                                                 Attorney-in-Fact


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


                                             PURCHASER:

                                             ENERGY PARTNERS, LTD.


                                             BY:
-------------------------------                 --------------------------------
                                                 Richard A. Bachmann
                                                 President


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




<PAGE>   34

Purchase and Sale Agreement
Page No. 34


STATE OF LOUISIANA

PARISH OF ORLEANS

         On this 31st day of March, 2000, before me appeared Robert C. Gnagy, to
me personally known, who, being by me duly sworn, did say that he is the
Attorney-in-Fact of UNION OIL COMPANY OF CALIFORNIA, a California Corporation,
and that the foregoing instrument was executed on behalf of said Corporation and
said Appearer acknowledged said instrument to be the free act and deed of said
Corporation.



                             ------------------------
                                  NOTARY PUBLIC


My commission is for life.


STATE OF LOUISIANA

PARISH OF ORLEANS

         On this 31st day of March, 2000, before me appeared Richard A.
Bachmann, to me personally known, who, being by me duly sworn, did say that he
is the President of ENERGY PARTNERS, LTD. a Delaware Corporation, and that the
foregoing instrument was executed on behalf of said Corporation and said
Appearer acknowledged said instrument to be the free act and deed of said
Corporation.



                             ------------------------
                                  NOTARY PUBLIC


My commission is for life.