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                                                                   EXHIBIT 10.14

                      [NATIONAL ENERGY GROUP, INC. LOGO]



                               November 24, 1998



Mr. Miles D. Bender
2809 Milton
Dallas, TX 75205

         Re:  Separation Agreement

Dear Miles:

National Energy Group, Inc. (the "Company") recognizes the issues you have
raised with respect to the Company's termination of your employment. This
letter confirms the discussions we have held concerning the termination of your
employment from the Company, and the Company's offer and your acceptance of
this proposed settlement and separation agreement (this "Separation Agreement")
on the terms set forth below.

1.    Resignation; Termination of Employment. Your employment with the Company
      as President and Chief Executive Officer is terminated effective November
      24, 1998 (hereinafter the "Separation Date"), at which time your
      Executive Employment Agreement effective January 1, 1996 (the "Employment
      Agreement") shall also terminate.

2.    Salary and Benefits. In accordance with the Company's existing policies,
      you have received, will receive, or are receiving with this letter the
      following payments and benefits pursuant to your employment with the
      Company and your participation in the Company's benefit plans:

      (a)   Payment of your regular base salary through November 30, 1998;
            and

      (b)   Payment of accrued and unused vacation leave, if any, through
            the Separation Date.

            The amounts paid in accordance with subparagraphs (a) and (b) of
            this Paragraph 2 are gross amounts, subject to lawful deductions,
            including any deductions you have previously authorized or
            authorize prior to your Separation Date.


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Mr. Miles D. Bender
November 24, 1998
Page 2


      Your paid group health insurance benefits are paid through December 31,
      1998. After the Separation Date, you are entitled at your option to
      continue your group health insurance coverage at your expense in
      accordance with applicable law. Please complete the COBRA election form
      which will be furnished to you if you elect to continue such insurance
      coverage.

      Payment of any benefits to which you have vested entitlements under the
      terms of the employee benefit plans established by the Company (including
      but not limited to the Company 401(k) Plan and Employee Stock Purchase
      Plan) shall be paid to you in accordance with the provisions of such
      plans.

      The Company will settle promptly all authorized reimbursable business
      expenses, if any, when you have submitted appropriate expense reports
      along with the required receipts and documenting information. To be
      eligible for reimbursement of these expenses, they must be submitted by
      the close of business on or before December 7, 1998.

3.    Settlement Consideration. In consideration of the General Release, the
      Confidentiality of Separation Agreement and Nondisparagement provision,
      and the Agreement Regarding Solicitation of Employees and Consultants set
      forth in this Separation Agreement, and contingent upon your acceptance
      of the terms contained herein, the Company offers you the following
      Settlement Consideration, in addition to the compensation you will
      receive pursuant to Paragraph 2:

      (a)   Settlement Payment. A lump-sum, cash settlement payment of
            $395,764.43, payable concurrently with the execution and delivery
            to the Company of both this Separation Agreement and the
            Reaffirmation of Separation Agreement described in Paragraph 13
            hereof;

      (b)   Stock Options. Any stock options granted to you shall continue to
            vest in accordance with the 1996 Incentive Compensation Plan for so
            long as you continue as a member of the Board of Directors of the
            Company;

      (c)   Cellular Telephone; Laptop Computer. The Company shall allow you to
            retain your cellular telephone and laptop computer;

      (d)   Transfer of Vehicle. Concurrent with the execution and delivery to
            the Company of both this Separation Agreement and the Reaffirmation
            of Separation Agreement described in Paragraph 13 hereof, the
            Company shall transfer to you the ownership of that certain 1996
            Infinity, VIN No. JNKNGO1D4TM400349; provided that you


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Mr. Miles D. Bender
November 24, 1998
Page 3


            shall pay all transfer, license, sales and other taxes, fees and/or
            assessments payable in connection with such transfer of ownership;

      (e)   Indemnification for Official Acts. The Company shall, to the
            fullest extent permitted under applicable law, defend and indemnify
            you and hold you harmless against any costs or expense (including
            reasonable attorneys' fees), judgments, fines, losses, claims,
            damages and liabilities incurred in connection with, and amounts
            paid in settlement of, any claim, action, suit, proceeding or
            investigation, whether civil, criminal, administrative or
            investigative and wherever asserted, brought or filed, arising out
            of or pertaining to any acts or omissions or alleged acts or
            omissions by you in your capacity as an officer and/or director of
            the Company or any of its subsidiaries. The foregoing shall be in
            addition to and not in lieu of any indemnification rights you may
            currently have by virtue of the Company's certificate of
            incorporation, bylaws, resolutions or otherwise, which shall
            continue in full force and effect notwithstanding any other
            provisions of this Separation Agreement. EXCEPT FOR WILLFUL
            CRIMINAL ACTS BY YOU, THE FOREGOING INDEMNIFICATION PROVISIONS
            SHALL APPLY NOTWITHSTANDING YOUR SOLE OR CONTRIBUTORY NEGLIGENCE OR
            STRICT LIABILITY; and

      (f)   Directors' and Officers' Liability Insurance. To the extent the
            Company maintains any policy of insurance applicable to directors
            and officers of the Company following the date of execution of this
            Separation Agreement, it shall arrange for your continued coverage
            under such policy for so long as you remain a director of the
            Company.

4.    Return of Property. Whether or not you accept the terms of this
      Separation Agreement, except as provided in Paragraph 3, you must return
      to the Company any and all items of its property, including without
      limitation: office keys, security access cards, equipment, credit cards,
      forms, files, manuals, correspondence, business records, personnel data,
      lists of employees, salary and benefits information, work product, maps,
      data and files relating to wells, leases, partners and/or contractors,
      seismic data and files, contracts, contract information, Prospect
      information and plans for future Prospects, brochures, catalogs, computer
      tapes and diskettes, and data processing reports, and any and all other
      documents or property which you have had possession of or control over
      during the course of your employment, and which you have not already
      returned to the Company. You agree that you will return such property to
      the Company by no later than the close of business on or before December
      2, 1998, or as soon thereafter as is possible with respect to any items
      not then immediately available or which you later find in your
      possession. The provisions of this Paragraph 4 do not prohibit the
      maintenance by you of copies of any non-confidential, non-

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Mr. Miles D. Bender
November 24, 1998
Page 4


      proprietary information, such as reading files, work papers,
      calculations, flowcharts and other similar information reflecting the
      performance of your job duties and responsibilities.

5.    Use of Confidential Information. You acknowledge and agree that, except
      for your knowledge and training to compete in the marketplace and except
      for information which is now or in the future becomes available in the
      public domain, all of the non-public documents and information to which
      you have had access during your employment, including but not limited to
      all information pertaining to any specific business transactions in which
      the Company or any other Company Released Parties (as defined in
      Paragraph 6(a) below) were, are, or may be involved, all information
      concerning salary and benefits paid to employees of the Company or any of
      the other Company Released Parties, all personnel information relating in
      any way to current or former employees of the Company or any of the other
      Company Released Parties, all non-public information obtained in the
      course of employment pertaining to acquisitions, divestitures, wells,
      Prospects and development plans of the Company or any of the other
      Company Released Parties, lease holdings and lease block bid information
      and strategies, all financial budgetary information, all other
      information specified in Paragraph 4 above, and in general, the business
      and operations of the Company or any of the other Company Released
      Parties in addition to any other work product, calculations, files, maps,
      logs, flowcharts and other related and/or similar information to which
      you had access through the Company, its partners or consultants are
      considered confidential and are not to be disseminated or disclosed by
      you to any other parties, except as may be required by law or judicial
      process. In the event you are required to disclose such information to
      any other party, you shall provide the Company immediate written notice
      to enable the Company to seek, at the Company's discretion and expense, a
      protective order or take other such action as the Company in its sole
      discretion deems advisable or necessary. You further agree that in the
      event it appears that you will be compelled by law or judicial process to
      disclose such confidential information, you will notify Mr. Philip D.
      Devlin, General Counsel, in writing at 4925 Greenville Avenue, Suite
      1400, Dallas, Texas, 75206, immediately upon your receipt of any such
      notice, a subpoena or other legal process.

6.    General Release.

      (a)   Except for the obligations of the Company and the Company Released
            Parties to be performed hereunder and in consideration of the
            Settlement Consideration described above, you and your family
            members, heirs, successors, and assigns (collectively, the
            "Employee Released Parties") hereby release, acquit, and forever
            discharge any and all claims and demands of whatever kind or
            character, whether vicarious, derivative, or direct, that you or
            they, individually, collectively, or otherwise, may have or assert
            against (i) National Energy Group, Inc. or (ii) any officer,
            director, stockholder, fiduciary, agent, employee, representative,
            insurer, attorney, or any successors and

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Mr. Miles D. Bender
November 24, 1998
Page 5


            assigns of National Energy Group, Inc. (collectively, the "Company
            Released Parties"). This Separation Agreement includes but is not
            limited to any claim or demand based on any federal, state, or
            local statutory or common law that applies or is asserted to apply,
            directly or indirectly, to the formation of your employment
            relationship, your employment relationship, or the termination of
            your employment relationship with the Company. Thus, you and the
            other Employee Released Parties agree not to make any claims or
            demands against the Company or any of the other Company Released
            Parties such as for wrongful discharge; unlawful employment
            discrimination; retaliation; breach of contract (express or
            implied); breach of the duty of good faith and fair dealing;
            violation of the public policy of the United States, the State of
            Texas, or any other state; intentional or negligent infliction of
            emotional distress; tortious interference with contract; promissory
            estoppel; detrimental reliance; defamation of character; duress;
            negligent misrepresentation; intentional misrepresentation or
            fraud; invasion of privacy; loss of consortium; assault; battery;
            conspiracy; bad faith; negligent hiring or supervision; any
            intentional or negligent act of personal injury; any alleged act of
            harassment or intimidation; or any other intentional or negligent
            tort; or any alleged violation of the Age Discrimination in
            Employment Act of 1967; Title VII of the Civil Rights Act of 1964;
            the Americans with Disabilities Act of 1990; the Employee
            Retirement Income Security Act of 1974; the Fair Labor Standards
            Act; the Fair Credit Reporting Act; the Texas Commission on Human
            Rights Act; or the Texas Wage Payment Statute, Tex. Rev. Civ. Stat.
            Ann. art. 5155.

      (b)   Except for your obligations to be performed hereunder, the Company
            and the other Company Released Parties hereby release, acquit, and
            forever discharge any and all claims and demands of whatever kind
            or character, whether vicarious, derivative, or direct, that it or
            they, individually, collectively, or otherwise may have or assert
            against you or any of the other Employee Released Parties. This
            Separation Agreement includes, but is not limited to, any claim or
            demand based on any federal, state, or local statutory or common
            law that applies or is asserted to apply, directly or indirectly,
            to the formation of your employment relationship, your employment,
            the termination of your employment relationship with the Company,
            or your service as an officer or director of the Company or any of
            its subsidiaries.

      (c)   Except as otherwise provided herein, the effect of this Separation
            Agreement is to mutually release, acquit, and forever discharge any
            and all claims and demands of whatever kind or character, that
            either party, the Employee Released Parties, or the Company
            Released Parties may now have, or hereafter have or assert against
            each other arising out of the employment relationship (including
            the formation and termination thereof) which has existed between
            you and the Company or your service


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Mr. Miles D. Bender
November 24, 1998
Page 6

            as an officer or director of the Company or any of its
            subsidiaries. It is further agreed that each of you and the Company
            agree to indemnify and hold harmless the other for any breach of
            the provisions of this Separation Agreement by the respective
            Employee Released Parties or Company Released Parties which results
            in damage to the other or to the respective parties hereto. This
            mutual general release does not include: (i) the executory
            obligations of either party yet to be performed, (ii) any rights,
            claims or obligations which may accrue as between the parties after
            the date of this Separation Agreement, or (iii) any rights, claim
            or obligation to defend, indemnify (and any related rights by
            virtue of Company insurance arrangements) in favor of you and any
            Employee Released Party in connection with your service as an
            officer and/or director of the Company or any of its subsidiaries.

      (d)   The parties acknowledge that the general release provisions of
            subsection (a) of this paragraph and the obligations of Paragraph 7
            and Paragraph 8 of this Separation Agreement are contingent upon
            and undertaken by you in exchange for the Settlement Consideration
            described in Paragraph 3. Accordingly, notwithstanding anything
            herein to the contrary, if you are required, for any reason, to
            return any material portion of the Settlement Consideration
            described in Paragraph 3, then your obligations under the foregoing
            General Release provision and under the provisions of Paragraph 7
            and Paragraph 8 shall be deemed, at your option, null and void, and
            upon your return of such material portion of the Settlement
            Consideration, you shall be entitled to assert any rights and
            claims you may have against the Company, including the Employment
            Agreement, as if this Separation Agreement had never been executed
            and delivered.

7.    Confidentiality of this Separation Agreement and Nondisparagement. In
      consideration of the Special Separation Benefits described above, each of
      the Company and you agree that the terms of this Separation Agreement
      shall be and remain confidential, and shall not be disclosed by you and
      the other Employee Release Parties or the Company and the other Company
      Released Parties to any party other than your spouse, attorney,
      accountant or tax return preparer; provided such persons have agreed to
      keep such information confidential, and except as may be required by law
      or judicial process. Each of the Company and you further agree, except as
      compelled by law or judicial process, not to cooperate or supply
      information of any kind in any proceeding, investigation, or inquiring
      raising issues under the Age Discrimination in Employment Act of 1967,
      Title VII of the Civil Rights Act of 1964, the Americans with
      Disabilities Act of 1990, the Employee Retirement Income Security Act of
      1974, the Fair Labor Standards Act, the Fair Credit Reporting Act, the
      Texas Commission on Human Rights Act, or the Texas Wage Payment Statute,
      Tex. Rev. Civ. Stat. Ann. art. 5155, or any other federal, state, or
      local law, involving the formation of your employment relationship, your
      employment relationship, the termination of your employment


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Mr. Miles D. Bender
November 24, 1998
Page 7


      relationship, or the employment of other persons by the Company or any of
      the Company Released Parties. In the event it appears that either party
      hereto shall be compelled by law or judicial process to disclose the
      terms and conditions of this Separation Agreement, such party shall
      immediately notify the other party in writing and provide a copy of any
      notice that such disclosure is being requested or required so that such
      party at its sole discretion and expense may seek a protective order or
      take other such action as such party in its sole discretion deems
      advisable or necessary.

      You and the other Employee Released Parties further agree not to make any
      statement, oral or written, which directly or indirectly impugns the
      quality or integrity of the Company's or any of the Company Released
      Parties' business practices, or to make any other disparaging or
      derogatory remarks or statements, oral or written, about the Company or
      any of the Company Released Parties, their officers, directors,
      stockholders, managerial personnel, or other employees or their partners
      and consultants to any other parties; provided, however, that nothing
      herein shall limit your right to provide full and truthful testimony as
      required by subpoena or other legal process. You agree and acknowledge
      that should you breach this obligation, in addition to any other remedy
      the Company may have at law or in equity, you may be required to repay
      the Settlement Consideration provided to you pursuant to this Separation
      Agreement, but all other provisions of this Separation Agreement shall
      remain in full force and effect.

      In consideration of the General Release, the Confidentiality of
      Separation Agreement and Nondisparagement provision, and the Agreement
      Regarding Solicitation of Employees and Consultants, set forth herein,
      the Company and the Company Released Parties agree that it and they,
      respectively, shall instruct its officers, directors, managerial
      personnel, or other employees not to make any statement, oral or written,
      which directly or indirectly impugns the quality or integrity of you or
      any of the Employee Released Parties' business practices, or to make any
      other disparaging or derogatory remarks or statements, oral or written,
      about you or your employment with the Company; provided, however, that
      nothing herein shall limit the Company Released Parties' right to provide
      full and truthful testimony as required by subpoena or other legal
      process. Any material breach of this obligation will, in addition to any
      other remedy you may have at law or in equity, relieve you of the duties
      and obligations provided for in this Separation Agreement.

8.    Agreement Regarding Solicitation of Employees. In consideration of the
      monetary payments and other benefits provided to you or on your behalf by
      the Company in this Separation Agreement, you acknowledge and agree that
      for a period of one (1) year following the termination of your employment
      with the Company, you will not, directly or indirectly, for your own
      account or for the benefit of any other person or party, solicit, induce,
      entice, or

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Mr. Miles D. Bender
November 24, 1998
Page 8


      attempt to entice any employee, or independent contractor of the Company
      to terminate his or her employment relationship, agreements or contracts
      with the Company.

9.    Nonadmission of Liability and Wrongdoing. This Separation Agreement is
      entered into for the purpose of resolving and settling any and all
      disputed issues between you and the Company, including without
      limitation, issues related to the Employment Agreement. Accordingly, it
      is acknowledged that this Separation Agreement does not in any manner
      constitute an admission of liability or wrongdoing on your part or that
      of the Company, but that you and the Company expressly deny any such
      liability or wrongdoing, and enter into this Separation Agreement for the
      sole purpose of avoiding further trouble and expense, including potential
      litigation; and, except to the extent necessary to enforce this
      Separation Agreement, neither this Separation Agreement, nor any part of
      it may be construed, used, or admitted into evidence in any judicial,
      administrative, or arbitral proceedings as an admission of any kind by
      the Company, the Company Released Parties, or you or any of the Employee
      Released Parties.

10.   Authority to Execute. Each of the parties hereto warrants and agrees that
      it (i) has full power and authority to execute, deliver and perform the
      obligations contained in this Separation Agreement, (ii) is a legally
      binding and enforceable agreement in accordance with its terms and
      conditions, (iii) has the power and authority to bind its respective
      Released Parties, and (iv) does not violate, conflict with or constitute
      a breach or default under any statute, rule, ordinance, regulation or
      administrative order of any federal, state, county or municipal court,
      board, office, agency or commission.

11.   GOVERNING LAW AND INTERPRETATION. THIS SEPARATION AGREEMENT AND THE
      RIGHTS AND DUTIES OF THE PARTIES UNDER IT SHALL BE GOVERNED BY AND
      CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND PERFORMED
      IN DALLAS COUNTY, TEXAS. Subject to Paragraph 6(d), if any provision of
      this Separation Agreement is held to be unenforceable, such provision
      shall be considered separate, distinct, and severable from the other
      remaining provisions and shall not affect the validity or enforceability
      of such other remaining provisions, and that, in all other respects, this
      Separation Agreement shall remain in full force and effect. If any
      provision of this Separation Agreement is held to be unenforceable as
      written and may be made to be enforceable by limitation thereof, then
      such provision shall be enforceable to the maximum extent permitted by
      applicable law and to the extent the remaining provisions further
      accomplish the goals, benefits and intent of this Separation Agreement.
      The language of all parts of this Separation Agreement shall in all cases
      be construed as a whole, according to its fair meaning, and not strictly
      for or against any of the parties.


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Mr. Miles D. Bender
November 24, 1998
Page 9


12.   Expiration of Offer. The Company's offer of the proposed Settlement
      Consideration will expire at midnight on the 21st day (the "Expiration of
      Offer") following the date of this correspondence You may accept this
      offer at any time before the Expiration of Offer by executing this
      Separation Agreement and returning it to the designated representative of
      the Company. Whether or not you execute this Separation Agreement, you
      will receive the items set forth in Paragraph 2 and are required to
      follow the obligations set forth in Paragraphs 4 and 5 hereof.

13.   The Effective Date. This Separation Agreement will become effective and
      enforceable seven (7) days after your execution hereof (the "Effective
      Date"). At any time prior to the Effective Date, you may revoke your
      acceptance of this Separation Agreement by delivering written notice
      thereof to the Company. You further agree to execute and deliver to the
      Company the Reaffirmation of this Separation Agreement, attached hereto
      as Exhibit "A", within seven (7) days of the execution and delivery of
      this Separation Agreement.

14.   Consultation With Counsel. You have the right to consult, and are
      encouraged by the Company to consult, an attorney before executing this
      Separation Agreement.

15.   Voluntary Agreement. You and the Company acknowledge that execution of
      this Separation Agreement is knowing and voluntary, that you and the
      Company have had reasonable time to deliberate regarding its terms, and
      that you and the Company have had the right to consult with an attorney.

16.   Entire Agreement. This Separation Agreement contains and constitutes the
      entire understanding and agreement between you and the Company and may be
      modified only by a writing of contemporaneous or subsequent date executed
      by both you and an authorized officer of the Company.

17.   In the event of a dispute between the parties to this Separation
      Agreement, the parties agree not to file any action or petition in any
      court of law or equity for any relief, but to participate in good faith
      in a minimum of four (4) hours of mediation in Dallas, Texas with an
      attorney-mediator who trained and certified by the American Arbitration
      Association, the United States Arbitration and Mediation Service, or any
      comparable organization, and to abide by the mediation procedures of
      such organization. The parties agree to equally bear the costs of the
      mediation. In the event the parties cannot resolve their dispute through
      mediation as described herein, the parties agree to participate in
      binding arbitration pursuant to the rules of the American Arbitration
      Association or mutually agreeable similar organization. Such arbitration
      shall be held in Dallas, Texas, shall be binding and nonappealable and a
      judgment


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Mr. Miles D. Bender
November 24, 1998
Page 10


      on the award to the prevailing party (inclusive of reasonable attorney's
      fees and costs) may be entered in any court having competent
      jurisdiction.

      If you are in agreement with the terms of this Separation Agreement,
please execute the attached duplicate of this letter in the space provided
below. By executing this Separation Agreement, you acknowledge that (a) you
have been offered at least twenty-one (21) days to consider the terms of this
Separation Agreement, (b) you were advised by the Company to consult with an
attorney regarding the terms of this Separation Agreement, (c) you have
consulted with, or have had sufficient opportunity to consult with, an attorney
of your own choosing regarding the terms of this Separation Agreement, (d) any
and all questions regarding the terms of this Separation Agreement have been
asked and answered to your complete satisfaction, (e) you have read this
Separation Agreement and fully understand its terms and their importance, (f)
the Settlement Consideration described in Paragraph 3 of this Separation
Agreement is good and valuable and of a kind to which you were not otherwise
entitled, and (g) you are entering into this Separation Agreement voluntarily,
of your own free will, and without any coercion, undue influence, threat or
intimidation of any kind or type whatsoever.

Sincerely,

National Energy Group, Inc.                  ACCEPTED AND AGREED THIS
                                             24th DAY OF NOVEMBER, 1998.

By:  /s/ BOB G. ALEXANDER                    /s/ MILES D. BENDER
     ----------------------------            -------------------------------
Name:   Bob G. Alexander                     Name: Miles D. Bender,
Title:   President and                             an Individual
        Chief Executive Officer


<PAGE>   11

                                  EXHIBIT "A"

                     REAFFIRMATION OF SEPARATION AGREEMENT


         I, Miles D. Bender, acknowledge that I executed that certain
separation agreement (the "Separation Agreement") with National Energy Group,
Inc. (the "Company") and that during the seven (7) day period immediately
following my execution of the Separation Agreement, I had the right to revoke
the Separation Agreement at any time. By executing the Separation Agreement, I
also understand that I agreed that I would receive no benefits thereunder
unless and until I executed this reaffirmation agreement (this
"Reaffirmation").

         By executing this Reaffirmation, I now affirm and attest that I (a)
have not heretofore, or contemporaneously with the execution of this
Reaffirmation, revoked, or attempted to revoke the Separation Agreement, either
by notice to the Company, or otherwise, and (b) am now, by virtue of my
execution of this Reaffirmation, within seven (7) days after the execution of
the Separation Agreement, fully bound by all of the terms and conditions of the
Separation Agreement.

                   EXECUTED this 2nd day of December, 1998.


                                /s/ MILES D. BENDER
                                ------------------------------------
                                Miles D. Bender,
                                an Individual


THE STATE OF TEXAS         )
                           )
COUNTY OF DALLAS           )

         BEFORE ME, the undersigned, a Notary Public, on this day personally
appeared Miles D. Bender, known to me to be the person whose name is subscribed
to the foregoing instrument and acknowledged to me that he executed the same
for the purposes and consideration therein expressed.

         GIVEN UNDER MY HAND AND SEAL OF OFFICE this 2nd day of December, 1998.


                                 /s/ MARILYN J. GRAHAM
                                 ------------------------------------
[SEAL]                           Notary Public, State of Texas