<PAGE>   1
                                                                   EXHIBIT 10.30

                                SEVERANCE POLICY


     The Company Severance Plan ("Plan") shall act to provide severance pay 
to eligible participants as described below:

1.   EFFECTIVE DATE:  November 23, 1998.

2.   ELIGIBLE PARTICIPANT:

     (a)    all full-time employees as of the Effective Date, and 
     (b)    all new, full-time employees employed after the Effective Date, 
            subject to limitations as may be determined by the President and CEO
            as conditions to such new employee's employment with the Company.

3.   TERM OF PLAN:  The Plan shall be in effect for a period of two (2) years, 
     commencing November 1, 1998 and ending October 31, 2000.

4.   CLASSIFICATIONS:  Each Eligible Participant shall be classified and 
     entitled to a Severance Pay Benefit as follows:

<TABLE>
<CAPTION>

          Classification                Severance Pay Benefit
          --------------                ---------------------
              <S>                    <C>
               A                     eighteen (18) months base pay
               B                     eighteen (18) months base pay
               C                     eighteen (18) months base pay
               D                      twelve (12) months base pay
               E                       nine (9) months base pay
               F                        six (6) months base pay
</TABLE>

5.   SEVERANCE PAYMENT:  Each Eligible Participant terminated by the Company 
     for any reason other than "cause" (as such term is defined below) shall be
     entitled to the Severance Pay Benefit described above, payable in equal
     monthly installments commencing on the first (1st) day of the month
     immediately following the date of such Eligible Participant's termination
     by the Company; provided that in the event the Company's is sold pursuant
     to a merger or liquidation proceeding and the Eligible Participant is not
     offered the same or substantially similar employment, such Severance Pay
     Benefit shall be paid to each Eligible Participant in a lump sum.

     For purposes of this Severance Policy, termination for "cause" shall 
     include:

     (a)  willful breach or habitual neglect of duties and responsibilities;
     (b)  conviction of a felony offense during the Term of Plan;
     (c)  habitual or serious violation of the Company's Personnel Policies and 
          Procedures; or
     (d)  any activity that acts to impugn the integrity of the Company, its 
          officers and directors, or compromises the confidentiality of the
          Company's business or business relationships.

6.   SPECIAL PROVISIONS:  The Severance Pay Benefit described above SHALL BE 
     SUBJECT TO THE FOLLOWING:

     (a)  each Eligible Participant shall, upon termination and prior to 
          receipt of any Severance Pay Benefit, execute a Separation Agreement
          with the Company which shall include the following provisions:

          (i)    a release of all claims against the Company;
          (ii)   a confidentiality provision; and
          (iii)  agreement to give notice to the Company and not accept or 
                 retain any further Severance Pay Benefit in the event the
                 Eligible Participant shall accept the same or substantially
                 similar employment with any other employer.

     (b)  Severance Pay Benefits provided under this Plan shall automatically 
          terminate as to any Eligible Participant at such time the Eligible
          Participant shall accept the same or substantially similar employment
          with any other employer.

<PAGE>   2
                                                                   EXHIBIT 10.25

                      [NATIONAL ENERGY GROUP, INC. LOGO]



                                October 28, 1998

Mr. C.L. Elsey
2200 Sheffield Court
Flower Mound, TX 75028

         Re:      Notice of Termination of Employment

Dear Mr. Elsey:

         Your employment with National Energy Group, Inc. (the "Company") is
subject to that certain Offer of Employment between you and the Company dated
February 25, 1998 (the "Offer of Employment") which provides that such
employment is "At Will" as may be determined by the Company and in accordance
with the laws of the State of Texas. Pursuant to Paragraph 5(c) of the Offer of
Employment, if the Company terminates you during the first year of your
employment for any reason other than cause, the Company is obligated to pay you
six (6) months salary ($100,000.00) plus 85% of your COBRA insurance premiums
for a period of six (6) months ($2,999.06).

         This Notice shall act to advise you that the Company is terminating
your employment effective October 30, 1998, at which time your Executive
Employment Agreement described in Paragraph 5(b) of the Offer of Employment
shall also terminate.

         Your insurance with the Company shall be paid through October 31, 1998
and you shall be eligible for a COBRA insurance election effective November 1,
1998. It shall be your responsibility to fill out the applicable COBRA
enrollment form and make payment each month to National Energy Group, Inc. and
mail to the COBRA representative, EPOCH Group, P.O. Box 12170, Overland Park,
Kansas 66282-2170. A copy of the COBRA enrollment form is being supplied to you
with this Notice, and you are advised that your failure to properly complete
the forms and timely make the required monthly payment may result in
interruption and/or suspension of your benefits. Ms. Christy Cansler will
forward to you under separate cover another notice and copy of your COBRA
enrollment form.

         Concurrent with your execution and delivery of this Notice in the
space provided below, the Company shall deliver to you a check in the amount of
$110,691.36 (less applicable taxes, legal and other deductions previously
authorized by you) which shall include the payments described in Paragraph 1
above, plus ten (10) days of accrued vacation ($7,692.30). Additionally, the
Company shall pay the cost and expense of moving your personal furniture from
your office at the Company to your residence or other location you may
designate in Dallas, Texas.

         You hereby acknowledge and agree as follows:

         1.    You have received notice that your employment with the
               Company is terminated effective October 30, 1998.

<PAGE>   3
Mr. C.L. Elsey
October 28, 1998
Page 2

         2.    The payments described in this Notice have been delivered to you
               and constitute full and complete payment of all monies owed to
               you pursuant to the terms of the Offer of Employment;

         3.    All expenses incurred by you on behalf of the Company in
               connection with your employment have been reimbursed to you;

         4.    The Bonus, the Executive Employment Agreement, the shares of
               Common Stock of the Company and the Incentive Stock Options
               described in Paragraphs 5(a), (b), (d) and (e) of the Offer of
               Employment, respectively, are terminated effective October 30,
               1998;

         5.    Notwithstanding the termination of your employment with the
               Company, the Confidentiality provision contained in Paragraph 6
               of the Offer of Employment is a continuing obligation upon you
               as provided therein;

         6.    You have returned all Company property (keys, credit cards,
               telephones, automobiles, etc.) to the Company, and in the event
               you shall subsequently be in possession of additional property
               belonging to the Company, you will immediately return it or make
               arrangements for its return to the Company; and

         7.    There are no other agreements, written or oral, by and between
               you and the Company for which you are due or may be due
               additional compensation, and that the Offer of Employment and
               Executive Employment Agreement were and are the only such
               agreements for which the Company incurred any obligation to you.

                                         Sincerely,


                                         /s/ MILES D. BENDER
                                         Miles D. Bender
                                         Chairman, President and CEO
Acknowledged and Agreed to
this 28th day of October, 1998


/s/ C. L. ELSEY
----------------------------------
C.L. Elsey
an individual

PDD:mjg
Enclosures:  COBRA Enrollment Forms

<PAGE>   4
                                                                   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.


<PAGE>   5
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


<PAGE>   6
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-

<PAGE>   7
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

<PAGE>   8
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


<PAGE>   9
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


<PAGE>   10
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

<PAGE>   11
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.


<PAGE>   12
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


<PAGE>   13
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>   14

                                  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


<PAGE>   15
                                                                   EXHIBIT 10.22

                      [NATIONAL ENERGY GROUP, INC. LOGO]



                                  May 18, 1998



VIA HAND DELIVERY

Mr. C. Dewayne Cravens
3629 Cross Bend Road
Plano, TX 75023

         Re:  Separation Agreement

Dear Dewayne:

National Energy Group, Inc. (the "Company") recognizes your service as an
employee of the Company. 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 separation agreement (this
"Separation Agreement") on the terms set forth below.

1.    Resignation; Termination of Employment. Your employment with the Company
      as Vice President-Engineering is terminated effective May 18, 1998
      (hereinafter the "Separation Date"), at which time your Employment
      Agreement dated August 25, 1997 (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 May 18, 1998, less all
            legal deductions;

      (b)   Payment of accrued and unused vacation leave, if any, through the
            Separation Date, less all legally required deductions; and

      (c)   Payment of two (2) weeks of your base salary in the amount of
            $4,231.00.


<PAGE>   16
Mr. C. Dewayne Cravens
May 18, 1998
Page 2


      The amounts paid in accordance with subparagraphs (a), (b) and (c) 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.

      Your paid group health insurance benefits are paid through May 18, 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 May 25, 1998.

3.    Special Separation Benefits. 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
      Special Separation Benefits, in addition to the benefits you will receive
      pursuant to Paragraph 2:

      (a)   Termination Allowance. A termination allowance in the amount of
            $27,500.00, which is equivalent to your base salary for three (3)
            months, payable concurrently with the execution and delivery of
            both this Separation Agreement and the Reaffirmation of Separation
            Agreement described in Paragraph 13 hereof.

      (b)   Additional Benefits. The Company shall continue to pay your group
            health benefits through May 31, 1998.

4.    Return of Property. Whether or not you accept the terms of this
      Separation Agreement, you must return to the Company any and all items of
      its property, including without limitation: automobiles, telephones,
      office keys, security access cards, computers, equipment, credit 


<PAGE>   17
Mr. C. Dewayne Cravens
May 18, 1998
Page 3


      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 May 25, 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-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, 


<PAGE>   18
Mr. C. Dewayne Cravens
May 18, 1998
Page 4


      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
            Special Separation Benefits 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 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 


<PAGE>   19
Mr. C. Dewayne Cravens
May 18, 1998
Page 5


            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, or the termination of
            your employment relationship with the Company.

      (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. 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, or (ii)
            any rights, claims or obligations which may accrue as between the
            parties after the date of this Separation Agreement.

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 relationship,
      or the employment of other persons by the Company or any of the Company


<PAGE>   20
Mr. C. Dewayne Cravens
May 18, 1998
Page 6


      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. 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
      Special Separation Benefits 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.

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 two (2) years 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 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. 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 


<PAGE>   21
Mr. C. Dewayne Cravens
May 18, 1998
Page 7


      liability or wrongdoing, and enter into this Separation Agreement for the
      sole purpose of avoiding further trouble and expense; 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, (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, and (v) is not contemplating, nor
      are any bankruptcy or insolvency proceedings threatened against such
      party of which it is aware.

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. 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.

12.   Expiration of Offer. The Company's offer of the proposed Special
      Separation Benefits will expire at midnight on the 21st day (the
      "Expiration of Offer") following the date of this correspondence, i.e.,
      on June 8, 1998. 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(a), (b) and (c) and are required to follow the obligations
      set forth in Paragraphs 4 and 5 hereof.


<PAGE>   22
Mr. C. Dewayne Cravens
May 18, 1998
Page 8


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 and
      decision 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 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



<PAGE>   23
Mr. C. Dewayne Cravens
May 18, 1998
Page 9


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 consideration or special separation benefits 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
                                             9TH DAY OF JUNE, 1998.

By: /s/ CHUCK L. ELSEY                       /s/ C. DEWAYNE CRAVENS
  ------------------------------             ---------------------------------
Name:   Chuck L. Elsey                       Name: C. Dewayne Cravens,
Title:  Executive Vice President                   an Individual
        and Chief Operating Officer



<PAGE>   24

                                  EXHIBIT "A"

                     REAFFIRMATION OF SEPARATION AGREEMENT


         I, C. Dewayne Cravens, 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 16th day of June, 1998.


                              /s/ C. DEWAYNE CRAVENS
                              ------------------------------------
                              C. Dewayne Cravens,
                              an Individual


THE STATE OF TEXAS         )
                           )
COUNTY OF DALLAS           )

         BEFORE ME, the undersigned, a Notary Public, on this day personally
appeared C. Dewayne Cravens, 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 16th day of June, 1998.


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

<PAGE>   25
                                                                   EXHIBIT 10.21

                         EXECUTIVE EMPLOYMENT AGREEMENT

         This Executive Employment Agreement (the "Agreement") is made the 25th
day of August, 1997, by and between National Energy Group, Inc., a Delaware
corporation acting by and through its hereunto duly authorized officer (the
("Company"), and C. Dewayne Cravens (the ("Executive").

         WHEREAS, the Executive is presently in the employ of the Company in
the capacity of Vice President of Engineering and Production is willing to
provide certain employment assurances to the Executive in the event of a Change
of Control (as defined below) of the Company as incentive and inducement for
the Executive to continue in such employment in his present capacity after a
Change of Control; and

         WHEREAS, in consideration of such employment assurances, the Executive
is willing to remain in the employ of the Company in the capacity of Vice
President of Engineering and Production after a Change of Control of the
Company.

         NOW, THEREFORE, in consideration of the premises and the mutual terms
and conditions hereof, the Company and the Executive hereby agree as follows:

         1.   Employment. In consideration of the benefits hereinafter 
specified, the Executive hereby agrees to continue his employment with the
Company in the capacity of Vice President of Engineering and Production after a
Change of Control of the Company and to discharge his duties in such capacity
during the term of this Agreement.

         2.   Exclusive Services. The Executive shall devote his full working
time, ability and attention to the business of the Company during the term of
this Agreement and shall not, directly or indirectly, render any services of a
business, commercial or professional nature to any other person, corporation or
organization, whether for compensation or otherwise, without the prior
knowledge and consent of the Board of Directors (the "Board") or President and
Chief Executive Officer of the Company; provided, however, that the provisions
of this Agreement shall not be construed as preventing the Executive from
investing in other non-competitive businesses or enterprises if such
investments do not require substantial services on the part of the Executive in
the affairs or operations of any such business or enterprise so as to
significantly diminish the performance by the Executive of his duties,
functions and responsibilities under this Agreement. During the term of this
Agreement, the Executive shall not, directly or indirectly, either through any
kind of ownership (other than ownership of securities of publicly held
corporations of which the Executive owns less than five percent (5%) of any
class of outstanding securities) or as a director, officer, agent, employee or
consultant engage in any business that is competitive with the Company.

         3.   Authority and Duties. During the term of this Agreement, the
Executive shall have such authority and shall perform such duties, functions
and responsibilities as are specified by the Bylaws of the Company, the
Executive Committee, the Board of Directors, or the President of the Company
and/or as are appropriate for the office of the Vice President of Engineering
and Production and shall serve with the necessary power and authority
commensurate with such position. If the Company removes the Executive from the
office of the Vice President of Engineering and Production of the Company after
a Change of Control or limits, restricts or reassigns his authority and
responsibility after a Change of Control so as to be less significant than, or
not comparable to, that to which he held immediately preceding such Change of
Control in his capacity as Vice President of Engineering and Production without
his prior mutual consent, the Executive shall be entitled to resign for good
reason and receive the Severance Benefits set  


<PAGE>   26

forth in this Agreement.

         4.   Compensation. In consideration for the services to be rendered by
the Executive to the Company and/or its subsidiaries, the Company shall pay to
the Executive at least the gross cash compensation and shall award to the
Executive at least the bonuses as set forth below:

<TABLE>
<CAPTION>
=========================================================================================================================
             ANNUAL PERIOD                                 ANNUAL                                ANNUAL BONUS
                                                         BASE SALARY
-------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                                        <C>
For the one year period following         100% of the average of the Executive's     100% of the average of the 
effective date of a Change of Control     annual base salary in effect immediately   bonuses paid to the Executive for
                                          prior to the Change in Control and of      each of the three fiscal years
                                          the Executive's annual base salary for     before the Change in Control 
                                          each of the immediately preceding two 
                                          years
-------------------------------------------------------------------------------------------------------------------------
For the second year following             100% of the average of the Executive's     100% of the average of the 
effective date of a Change of Control     annual base salary on the date that is     bonuses paid to the Executive for
                                          one year after the Change in Control       the three immediately preceding
                                          and of the Executive's annual base         fiscal years 
                                          salary for each of the immediately 
                                          preceding two years
-------------------------------------------------------------------------------------------------------------------------
For the third year following effective    100% of the average of the Executive's     100% of the average of the 
date of a Change of Control               annual base salary on the date that is     bonuses paid to the Executive for
                                          two years after the Change in Control      the three immediately preceding
                                          and of the Executive's annual base         fiscal years 
                                          salary for each of the immediately 
                                          preceding two years
=========================================================================================================================
</TABLE>

In the event that the Executive shall not have been employed for three years
prior to the effective date of this Agreement, the Executive's annual base
compensation rate or bonus rate shall be averaged over the actual period of
employment of the Executive by the Company.

         Each of the annual base salary amounts set forth above shall be paid
to the Executive in equal monthly installments, or as otherwise agreed, during
each corresponding year of the term of this Agreement, provided that for any
period of less than one (1) year, the annual base salary shall be pro-rated
accordingly. The annual bonus amount indicated above or amounts in excess of
such indicated bonus shall be awarded no later than December 31 of the
corresponding annual period. The amount set forth above is compensation to the
Executive or gross amounts due hereunder, and the Company shall have the right
to deduct therefrom all taxes and other amounts which may be required to be
deducted or withheld by law (including, but not limited to, income tax,
withholding, social security and medicare payments) whether such law is now in
effect or becomes effective after the execution of this Agreement.

         5.       Benefits and Business Expenses. During the term hereof:

                  (a) The Executive shall be entitled to continue his
         participation in programs maintained by the Company for the benefit of
         its employees and officers and to participate in new or amended
         programs, including, but not limited to, medical, health, life,
         accident and disability insurance programs, pension plans, incentive
         compensation plans, stock option plans, stock appreciation rights
         plans, and limited stock appreciation rights plans. 


                                       2
<PAGE>   27

         The Company shall not terminate nor amend such plans to the detriment 
         of the Executive.

                  (b) To the extent that the Company has provided the Officer
         with an automobile, club memberships, association and trade
         memberships and other memberships prior to the Change of Control, the
         Company shall continue to provide the Officer with such items, of a
         comparable nature, following a Change of Control. The Company shall
         pay the expenses of such automobile, memberships and subscriptions.

                  (c) The Executive shall be reimbursed for any business
         expenses reasonably incurred in carrying out his duties, functions and
         responsibilities upon presentation of expense reports to the Company.

         6.       Term. This Agreement shall have a term of three (3) years
commencing on the effective date of a Change of Control and shall be
automatically extended on the 9th day of each and every calendar month during
the term of this Agreement for an additional calendar month so that at the
beginning of each and every month during the term of this Agreement there shall
be a remaining term of three (3) years (but in no event beyond the time the
Executive reaches age 65 unless and until the Company gives written notice to
the Executive that the term of this Agreement shall not be further so extended,
in which case the Executive shall be entitled to resign for good reason. The
provisions of this Section 6 shall apply to each Change of Control irrespective
of any Changes of Control which may have occurred previously.

         7.       Severance Benefits After Change Of Control. In addition to 
such compensation and other benefits payable to or provided for the Executive
as authorized by the Board from time to time, Executive shall be entitled to
receive in lieu of the compensation described in paragraph 4 hereof, and the
Company shall pay or provide to the Executive the following severance benefits
(the "Severance Benefits") in the event that, during the term hereof, the
Company discharges the Executive without cause or the Executive resigns for
good reason after a Change of Control, to-wit:

                  (a) The Company shall pay to the Executive a lump sum cash
         payment (multiplied by the applicable factor described below) payable
         on such date of termination of employment equal to the Executive's
         Abase compensation@ then in effect, which shall, and is defined to,
         consist of the sum of (i) the Executive's annual base salary then in
         effect, (ii) the average of the amounts of the last three annual cash
         bonuses paid or granted to, or earned by, the Executive, and (iii) the
         average of the total amounts of the Company's contributions to its
         retirement plan allocable to the Executive on a fully vested basis for
         the last three fiscal years of the retirement plan. The amount of the
         Abase compensation@ payable to the Executive pursuant to this Section
         7(a) shall be multiplied by the number three (3) for the purposes of
         determining the lump sum cash severance payment due under this Section
         7(a).

                  (b) All stock options granted by the Company to the
         Executive, all contributions made by the Executive and by the Company
         for the account of the Executive to any pension, retirement or any
         other benefit plan, and all other benefits or bonuses, including but
         not limited to net profits interests which contain vesting or
         exercisability provisions conditioned upon or subject to the continued
         employment of the Executive, shall become fully vested and exercisable
         and shall remain fully exercisable for a period of the later of three
         hundred sixty (360) days after (i) the date of such termination of
         employment, or (ii) the termination of this Agreement.


                                       3
<PAGE>   28

                  (c) The Company shall continue the participation of the
         Executive in all life, accident, disability, medical, dental and all
         other health and casualty insurance plans maintained by the Company
         for its officers and employees for a period of one (1) year after the
         date of such termination of employment or for such longer period as
         may be required by applicable law.

                  (d) Notwithstanding any provision of this Agreement to the
         contrary, if the Executive is a disqualified individual (as the term
         "disqualified individual" is defined in Section 280G of the Code) and
         if any portion of the Severance Benefits under this Section 7 of this
         Agreement would be an excess parachute payment (as the term "excess
         parachute payment" is defined in Section 280G of the Code) but for the
         application of this sentence, then the amount of the Severance
         Benefits otherwise payable to the Executive pursuant to this Agreement
         will be reduced to the minimum extent necessary (but in no event to
         less than zero) so that no portion of the Severance Benefits, as so
         reduced, constitutes an excess parachute payment. The determination of
         whether any reduction in the amount of the Severance Benefits is
         required pursuant to this Section 7(d) will be made by the Company's
         independent accountants. The fact that the Executive has his Severance
         Benefits reduced as a result of the limitations set forth in this
         Section 7(d) will not of itself limit or otherwise affect any rights
         of the Executive arising other than pursuant to this Agreement.

                  (e) The Company has determined that the amounts payable under
         this Agreement constitute reasonable compensation for services
         rendered. Accordingly, notwithstanding any other provision hereof,
         unless such action would be expressly prohibited by applicable law, if
         any amount is paid pursuant to this Agreement which is determined to
         be subject to the excise tax imposed by Section 4999 of the Code, the
         Company will pay to the Executive an additional amount in cash equal
         to the amount necessary to cause the aggregate amount payable under
         this Agreement, including such additional cash payment (net of all
         federal, state and local income taxes and all taxes payable as the
         result of the application of Sections 280G and 4999 of the Code), to
         be equal to the aggregate amount payable under this Agreement,
         excluding such additional payment (net of all federal, state and local
         income taxes), as if Sections 280G and 4999 of the Code (and any
         successor provisions thereto) had not been enacted into law.

         8.       Place of Performance. During the term hereof:

                  (a) The principal office of the Executive and the principal
         place for performance by him of his duties, functions and
         responsibilities under this Agreement shall be in the City or suburbs
         of Dallas, Texas.

                  (b) It is recognized that the performance of the Executive's
         duties hereunder may occasionally require the Executive, on behalf of
         the Company, to be away from his principal office for business
         reasons. Unless consent of the Executive is obtained, such periods of
         being away from his principal office on behalf of the Company shall
         not exceed thirty (30) calendar days per year.

         9.       Definition of Change of Control. For purposes of this 
Agreement, "Change of Control" shall mean the occurrence of one or more of the
following events: (i) a person or entity or group (as that term is used in
Section 13(d)(3) of the Exchange Act) of persons or entities shall have become
the beneficial owner of a majority of the securities of the Company ordinarily
having the right to vote in the election of directors, (ii) during any
consecutive two-year period, 


                                       4
<PAGE>   29

individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any directors who are members of such
Board of Directors of the Company on the date hereof and any new directors
whose election by such Board of Directors of the Company or whose nomination
for election by the stockholders of the Company was approved by a vote of 66b%
of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office, (iii) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, the assets of the Company to any
person or entity or group (as so defined in Section 13(d)(3) of the Exchange
Act) of persons or entities (other than any wholly owned subsidiary of the
Company), or (iv) the merger or consolidation of the Company into or with
another corporation or the merger of another corporation into the Company with
the effect that immediately after such transaction any person or entity or
group (as so defined in Section 13(d)(3) of the Exchange Act) of persons or
entities, or the stockholders of any other entity, shall have become the
beneficial owner of securities of the surviving corporation of such merger or
consolidation representing a majority of the voting power of the outstanding
securities of the surviving corporation ordinarily having the right to vote in
the election of directors. The Alexander Energy Corporation merger, however it
might be structured, shall not constitute a Change of Control under this
Agreement.

         10.      Discharge with Cause. For the purposes of this Agreement, the
Company shall be deemed to have discharged the Executive for cause only if any
one of the following conditions existed:

                  (a) If the Executive shall have willfully breached or
         habitually neglected his duties and responsibilities as the Vice
         President of Engineering and Production of the Company; or

                  (b) If the Executive shall have been convicted of any felony
         offense during the term of this Agreement.

The discharge of the Executive by the Company when none of the foregoing
conditions exist shall be deemed to be a discharge without cause.

         11.      Resignation for Good Reason. For the purposes of this 
Agreement, the Executive shall have resigned for good reason if any one of the
following conditions existed at the time of his resignation:

                  (a) If the Company shall have assigned to the Executive
         authority and responsibilities less significant than, or not
         comparable to, that which he had in his capacity as Vice President of
         Engineering and Production immediately preceding a Change of Control
         or shall otherwise so limit or restrict his authority and
         responsibilities after a Change of Control;

                  (b) The Company shall have reduced the Executive's annual
         base salary below his annual base salary in effect on the effective
         date of a Change of Control or the Company shall have reduced the
         Executive's annual cash bonus below that of his last annual cash bonus
         prior to the effective date of a Change of Control;


                                       5
<PAGE>   30

                  (c) The Company shall have taken any actions having the
         purpose or intent and the effect of inducing the Executive to resign,
         such as failing to provide the Executive with all personnel benefits
         which are otherwise generally provided to executive officers of the
         Company or reasonably necessary or appropriate for the performance by
         the Executive of his duties as Vice President of Engineering and
         Production of the Company; or

                  (d) The Company shall have declined to extend the term of
         this Agreement pursuant to Section 6 hereof.

         12.      Termination Upon Death. This Agreement shall terminate 
immediately upon the date of the death of the Executive.

         13.      Remedies. If the Executive shall file any judicial action for
enforcement of this Agreement and successfully recover compensation or damages,
the Executive shall be entitled to recover from the Company an additional
amount equal to interest at ten percent (10%) per annum on the amount recovered
from the date such amount was due and payable together with all expenses and
reasonable attorneys' fees incurred in obtaining legal advice and counselling
respecting his rights under this Agreement and in prosecuting and disposing of
such action. The provisions of this Section shall be cumulative and without
prejudice to any other right or remedy to which the Executive may be entitled
either at law, in equity or under this Agreement and shall not constitute the
exclusive remedy of the Executive for breach of this Agreement.

         14.      General Provisions.

                  (a) Notices. Any notices to be given hereunder by either
         party to the other may be given either by personal delivery in writing
         or by fax, or by mail, registered or certified, postage prepaid,
         return receipt requested, addressed to the parties at their respective
         addresses set forth below their signatures to this Agreement, or at
         such other addresses as they may specify to the other in writing.

                  (b) Law Governing. This Agreement shall be governed by and
         construed in accordance with the laws of the State of Texas.

                  (c) Invalid Provisions. If any provision of this Agreement is
         held to be illegal, invalid or unenforceable under present or future
         laws effective during the term hereof, such provision shall be fully
         severable and this Agreement shall be construed and enforced as if
         such illegal, invalid or unenforceable provision had never comprised a
         part hereof, and the remaining provisions hereof shall remain in full
         force and effect and shall not be affected by the illegal, invalid or
         unenforceable provision or by its severance herefrom. Furthermore, in
         lieu of such illegal, invalid or unenforceable provision, there shall
         be added automatically as part of this Agreement a provision as
         similar in terms to such illegal, invalid or unenforceable provision
         as may be possible and still be legal, valid or enforceable.

                  (d) Entire Agreement. This Agreement sets forth the entire
         understanding of the parties and supersedes all prior agreements or
         understandings, whether written or oral, with respect to the subject
         matter hereof. No terms, conditions or warranties, other than those
         contained herein, and no amendments or modifications hereto shall be
         binding unless made in writing and signed by the parties hereto.


                                       6
<PAGE>   31

                  (e) Binding Effect. This Agreement shall extend to and be
         binding upon and inure to the benefit of the parties hereto, their
         respective heirs, representatives, successors and assigns. All of the
         provisions of this Agreement shall be fully applicable to any
         successor to the Company resulting from a Change of Control. The
         Company agrees that in the event of a tender or exchange offer,
         merger, consolidation or liquidation or any such similar event
         involving the Company, its securities or assets, it shall reveal the
         existence of this Agreement to the acquiring person or entity. The
         Company further agrees that if such action is not inconsistent with
         the best interests of the Company, it shall condition approval of any
         transactions proposed by the acquiror upon obtaining the consent, in
         writing, of the potential successor to the Company to be bound by this
         Agreement. In the event the Executive dies prior to the termination of
         this Agreement, any compensation or other payment due and owing to the
         Executive on or before the date of the Executive's death shall be paid
         to his estate, executors, administrators, heirs or legal
         representatives. Since the duties and services of the Executive
         hereunder are special, personal and unique in nature, the Executive
         may not transfer, sell or otherwise assign his rights, obligations or
         benefits under this Agreement.

                  (f) Waiver. The waiver by either party hereto of a breach of
         any term or provision of this Agreement shall not operate or be
         construed as a waiver of a subsequent breach of the same provisions by
         either party or of the breach of any other term or provision of this
         Agreement.

                  (g) Titles. Titles of the paragraphs herein are used solely
         for convenience and shall not be used for interpretation or construing
         any word, clause, paragraph or provision of this Agreement.

                  (h) Certain Conflicts. The parties hereto acknowledge and
         agree that Executive has entered into that certain letter agreement
         pertaining to the Executive's employment with the Company dated August
         13, 1997 (the "Letter Agreement"). Where a conflict may arise between
         the provisions of this Agreement and the Letter Agreement, the
         provisions of the Letter Agreement shall apply.

                  (i) Mediation/Arbitration. In the event of a dispute between
         the parties to this agreement, the parties agree to participate in
         good faith in a minimum of four (4) hours of mediation in Dallas,
         Texas with an attorney-mediator 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 and decision 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 on
         the award to the prevailing party (inclusive of reasonable attorney's
         fees and costs) may be entered in any court having competent
         jurisdiction.

 
                                      7
<PAGE>   32

         IN WITNESS WHEREOF, the Company and the Executive have executed this
Executive Employment Agreement as of the day and year first written above,
effective as of the date specified above.

                                   COMPANY:

                                   NATIONAL ENERGY GROUP, INC.


                                   By: /s/ MILES D. BENDER
                                       ----------------------------------------
                                       Miles D. Bender
                                       President and Chief Executive Officer

                                   4925 Greenville Avenue, Suite 1400
                                   Dallas, Texas 75206
                                   (214) 692-9211
                                   (214) 692-5055 (Fax)


                                   EXECUTIVE:


                                   /s/ C. DEWAYNE CRAVENS
                                   ---------------------------------
                                   C. DEWAYNE CRAVENS

                                   3629 Cross Bend Road
                                   Plano, TX 75023-5826


                                       8