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                                                                    EXHIBIT 4.7

INSTRUMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE, dated as of October 23,
1998 among National Energy Group, Inc., a corporation duly organized and
existing under the laws of the State of Delaware, having its principal office
at 1400 One Energy Square, 4925 Greenville Avenue, Dallas, Texas 75206 (the
"Company"), Bank One, NA, a national banking association duly organized and
existing under the laws of the United States, having its principal Corporate
Trust Office at 100 East Broad Street, Columbus, Ohio 43271 ("BANK ONE"), and
Norwest Bank Minnesota, N.A., a national banking association duly organized and
existing under the laws of the United States, having its principal office at
Norwest Center, Sixth and Marquette, Minneapolis, Minnesota 55479-0069.

         WHEREAS, the Company issued its $165,000,000 10 3/4% Senior Notes due
2006 of which $165,000,000 principal amount is outstanding (the "Notes"), under
the Indenture dated as of August 21, 1997 (the "Indenture"), between the
Company and Bank One, NA, as the Trustee (the "Trustee");

         WHEREAS, the Company appointed the Trustee as the paying agent (the
"Paying Agent"), and the Note Registrar (the "Note Registrar"), under the
Indenture;

         WHEREAS, the Indenture provides that the Trustee may at any time
resign by giving written notice thereof to the Company;

         WHEREAS, the Trustee represents that it gave the Company a written
notice of its resignation as Trustee, a true copy of which is annexed hereto
marked Exhibit A;

         WHEREAS, the Indenture further provides that, if the Trustee shall
resign, the Company shall promptly appoint a successor Trustee;

         WHEREAS, the Indenture provides that the successor Trustee shall
execute, acknowledge and deliver to the Company and to the resigning Trustee an
Instrument accepting such appointment and thereupon the resignation of the
Trustee shall become effective and such successor Trustee without any further
act, deed or conveyance, shall become vested with all rights, powers, duties
and obligations of the resigning Trustee;

         WHEREAS, the Indenture further provides that no successor Trustee
shall accept appointment as such unless at the time it is qualified and
eligible under the Indenture;

         WHEREAS, Norwest Bank Minnesota, N.A. is qualified, eligible and
willing to accept such appointment as successor Trustee:

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         WHEREAS, Bank One, simultaneously with the execution and delivery of
this Instrument, has caused the notice required pursuant to the Indenture, a
form of which is annexed hereto marked Exhibit B, to be mailed to the Holders
of the Notes as therein required;

         NOW, THEREFORE, THIS INSTRUMENT OF RESIGNATION, APPOINTMENT AND
ACCEPTANCE, WITNESSETH: that for and in consideration of the premises and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, it is hereby covenanted, declared and decreed by the
Company, the successor Trustee and the Trustee as follows:

         1. The resignation of BANK ONE, as Trustee, and its discharge from the
trust created by the Indenture shall be effective as of the date hereof upon
the execution and delivery of this Instrument by all the parties hereto.

         2. The Company, in the exercise of the authority vested in it by the
Indenture hereby appoints Norwest Bank Minnesota, N.A. as successor Trustee
with all rights, powers, trusts, duties and obligations under the Indenture,
such appointment to be effective as of the date hereof upon the execution and
delivery of this Instrument by all the parties hereto.

         3. Norwest Bank Minnesota, N.A. hereby represents that it is qualified
and eligible under the provisions of the Indenture to be appointed successor
Trustee, and hereby accepts its appointment as successor Trustee, effective as
of the date hereof upon the execution and delivery of this Instrument by all
parties hereto, and hereby assumes the rights, powers, trusts, duties and
obligations of the Trustee under the Indenture, subject to all terms and
provisions therein contained.

         4. BANK ONE hereby grants, gives, bargains, sells, remises, releases,
conveys, confirms, assigns, transfers and sets over to Norwest Bank Minnesota,
N.A. as such successor Trustee and its successors and assigns all rights, title
and interest of BANK ONE in and to the trust estate and all rights, powers and
trusts, under the Indenture; and BANK ONE does hereby pay over, assign and
deliver to Norwest Bank Minnesota, N.A. as such successor Trustee any and all
money, if any, and property, if any, held by BANK ONE as Trustee; and the
Company for the purpose of more fully and certainly vesting in and confirming
to Norwest Bank Minnesota, N.A. as such successor Trustee said estate,
properties, rights, powers and, at the request of Norwest Bank Minnesota, N.A.,
joins in the execution hereof.

         5. Notwithstanding the resignation of BANK ONE, as Trustee under the
Indenture, the Company shall remain obligated under the Indenture to
compensate, reimburse and indemnify BANK ONE in connection with its Trusteeship
under the Indenture.

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         6. The Resigning Trustee agrees to pay or indemnify, as applicable,
the Successor Trustee and hereby saves the Successor Trustee harmless from and
against any and all costs, claims, liabilities, losses or damages whatsoever
arising out of the Resigning Trustee's actions or omissions during its tenure
as Trustee under the Indenture (including the reasonable fees, expenses and
disbursements of counsel and other advisors of the Successor Trustee) that the
Successor Trustee might suffer or incur arising out of actual, alleged or
adjudicated actions of omissions of the Resigning Trustee. The Resigning
Trustee will furnish to the Successor Trustee, promptly after receipt, all
papers with respect to any action the outcome of which would make the indemnity
provided for in this paragraph operative. The Resigning Trustee will have the
right to provide its own defense and to select counsel and other advisors for
the Successor Trustee in any such action. The Resigning Trustee and Successor
Trustee hereby agree that the indemnities provided for in this paragraph shall
apply only to claims, demands and actions that are made or brought against the
Successor Trustee on or before the expiration of the period established by a
statute of limitations (the "Statute of Limitations Period") adjudicated by any
final order of a court of competent jurisdiction to be applicable to such
claim, demand or action. The Resigning Trustee and the Successor Trustee
further hereby agree that the indemnities provided for in this paragraph shall
not apply to any claims, demands or actions brought against the Successor
Trustee after the expiration of an applicable Statute of Limitations Period, as
determined by a court of competent jurisdiction in any claim, demand or action
brought against the Successor Trustee.

         7. This Instrument may be executed in any number of counterparts, each
of which shall be an original but such counterparts shall together constitute 
but one and the same instrument.

         8. This Instrument shall be governed by and construed in accordance
with the laws of the State of New York.

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IN WITNESS WHEREOF, the parties hereto have caused this Instrument of
Resignation, Appointment and Acceptance to be duly executed and their
respective seals to be affixed hereunto and duly attested all as of the day and
year first above written.


                                       NATIONAL ENERGY GROUP, INC.             
                                                                               
                                                                               
                                       By /s/ MILES D. BENDER                  
                                          --------------------------------     
                                          Miles D. Bender                      
                                          Chairman and Chief Executive Officer 
                                       
[Seal]

ATTEST:


/s/ PHILIP D. DEVLIN
-----------------------------------
Philip D. Devlin
Secretary

                                       BANK ONE, NA                        
                                       as resigning Trustee                
                                                                           
                                                                           
                                       By /s/                              
                                          -------------------------------- 
                                                 Authorized Signer         
                                       
[Corporate Seal]

ATTEST:


/s/
-----------------------------------
        Authorized Signer

                                       Norwest Bank Minnesota, N.A.        
                                                     as successor Trustee, 
                                                                           
                                                                           
                                       By /s/                              
                                          -------------------------------- 
                                                 Authorized Signer         
                                       
[Corporate Seal]

ATTEST:


/s/
-----------------------------------
       Authorized Signer

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