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                                                                 EXHIBIT 10.17


                              No. CC-97-8806-A


R. THOMAS FETTERS, JR.                     )            IN COUNTY COURT

vs.                                        )            AT LAW NUMBER ONE

NATIONAL ENERGY GROUP, INC.,               )            DALLAS COUNTY, TEXAS
and MILES G. BENDER

                      COMPROMISE AND SETTLEMENT AGREEMENT

         WHEREAS, NATIONAL ENERGY GROUP, INC., a Delaware corporation, herein
abbreviated "NEG" entered into an Employment Agreement with R. THOMAS FETTERS,
JR., herein shortened to "Fetters" on or about January 1, 1996;

         WHEREAS, NEG, through its President and Chief Executive Officer, MILES
D. BENDER, herein shortened to "Bender", entered into a Separation Agreement
pertaining to the termination of the employment of Tom Fetters on or about May
6, 1997;

         WHEREAS, a dispute has arisen between NEG and Fetters regarding his
employment and events related to his employment and termination;

         WHEREAS, Fetters filed suit against NEG and BENDER in County Court at
Law Number One, Dallas County, Texas, on September 22, 1997, 
cause # CC-97-8806-A. The causes of action by Fetters are identified in 
Plaintiff's Original Petition, which lawsuit is pending;

         WHEREAS, bona fide disputes and controversies exist between the
parties, both as to liability and the amount of liability, which they desire to
compromise and settle to the terms of this Compromise and Settlement Agreement;

         NOW THEREFORE in consideration of the mutual agreements contained
herein, the parties enter into the following agreements:

         (1) PAYMENT OF AGREED CONSIDERATION. Contemporaneously with the
         execution of this agreement, NEG agrees to pay to Fetters the sum of
         $75,625.00, plus an aggregate amount of $10,500.00 in attorney's fees
         to his attorneys, Charles B. Crowell and John Emmett, P.C.

         (2) COBRA BENEFITS, NEG represents that it has instructed its
         insurance carrier, EPOCH Group to keep in force COBRA benefits of
         Fetters, and contemporaneous with the execution of this agreement, in
         addition to the payment of sums provided for in paragraph (1), NEG
         agrees to reimburse Fetters 85% of the cost of his COBRA premiums for
         group health insurance coverage for the period from June

Compromise and Settlement Agreement - Page 1

Fetters. C&S
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         1, 1997 through November 30, 1997, being the sum of $2,999.05.

         (3) COMPREHENSIVE RELEASE BY FETTERS EXCLUDES COMPANY BENEFITS. Upon
         the payment of said sums, Fetters releases and forever discharges NEG,
         its President, and all other employees, officers, and directors, and
         agents and representatives and Bender from any claims, causes of
         action, controversies, and demands, including those of whatever nature
         or character, now known and those unknown, arising out of or in any
         way related to the employment of Fetters, excluding, however, the
         interest of Fetters in the company's benefits plans, including COBRA,
         which interest is acknowledged by NEG and Bender, and from all
         transactions arising out of or relating to the agreements between them
         and all action taken pursuant to said agreements, excluding the
         company benefits due Fetters.

         (4) COMPREHENSIVE RELEASE BY NATIONAL ENERGY AND BENDER. Upon the
         payment to Fetters, National Energy Group, Inc., and Miles D. Bender
         release and forever discharge, Fetters, his heirs, personal
         representative, successors and assigns, from any claims, causes of
         action, controversies, and demands, including those of whatever nature
         or character, now known and those unknown, arising out of or in any
         way related to the employment of Fetters, and from all transactions
         arising out of or relating to the agreements between them and all
         action taken pursuant to said agreements, excluding the obligations of
         Fetters in this agreement.

         (5) DISPUTED CLAIMS ARE NOT AN ADMISSION OF LIABILITY. The claims
         asserted by Fetters against NEG and Bender are disputed by them and
         the execution of this agreement is not an admission of liability on
         the part of any party hereto.

         (6) CORRECTION OF MISIDENTIFICATION OF DATES. The recitation of
         dates in this agreement are not contractual in nature. Any incorrect
         date or any dispute as to dates shall not affect the validity or
         extent of the releases granted herein. Fetters was only employed one
         time by NEG, and this document pertains to that period of employment.
         Each party agrees that a misidentification or mischaracterization of
         any date is to be corrected to reflect the actual dates, and shall not
         affect the validity of the releases granted herein or the
         extinguishment of the causes of action identified in numbered
         paragraphs (3) and (4).

         (7) MERGER CLAUSE. This agreement contains the entire agreement
         between the parties and supersedes all prior agreements, oral or
         written, arrangements, or understandings between the parties relating
         to the subject matter. Each party hereto acknowledges that each agrees
         that any oral understandings, statements or representations contrary
         to the terms of this agreement are superseded by this agreement. This
         agreement cannot be altered or modified except by a written agreement
         signed by the parties.

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         (8) DUPLICATE ORIGINALS OF THIS AGREEMENT. This Agreement is to be
         executed in multiple duplicate originals, each of which is to be "an
         original". Each signatory in a representative capacity warrants that
         his signature is an authorized act of the entity on whose behalf the
         signature is signed.

         (9) EXECUTION OF AGREEMENT. Whenever the expression "execution of this
         agreement" or substantially similar language is used in this agreement
         it shall mean that each party has received a signed original of this
         agreement, and the party to be paid any sums under this agreement has
         received such payment.

         (10) DISMISSAL OF PENDING LAWSUIT. Upon execution of this agreement,
         together with the payment of the sums provided for in paragraphs (1)
         and (2), an Agreed Motion and Order of Dismissal with Prejudice shall
         be submitted to the court for entry in the lawsuit, with each of the
         parties to pay their respective court costs.

         (11) PROHIBITED DISCLOSURES OF CONFIDENTIAL INFORMATION. All parties
         agree that none of them will at any time, discuss with or inform any
         parties not a party to the pending lawsuit or parties not a party to
         this agreement, any of the facts related to the disputes being
         compromised, including the terms and conditions of this Compromise and
         Settlement Agreement, all of which are strictly confidential between
         the parties to this agreement. All parties agree that the "facts
         related to the disputes" include all acts and transactions plead in
         the pending litigation, as well as those acts and transactions
         included in the releases which are the subject of this agreement. Acts
         and transactions include conversations related to any acts or
         transactions.  This confidentiality extends not only to factual
         information, but also to expressions of opinions, beliefs and personal
         comments. The only permissible statement or comment to be made by
         either party concerning the "facts related to the dispute" or and how
         the dispute was concluded is "All claims have been compromised", or
         words to that effect, provided that in the event either party is
         compelled by judicial process or court order to make any such
         disclosures, such party shall timely notify the other party of such
         judicial process or court order.

                 Fetters further agrees that prior to May 6, 1999, he will not
         disclose any confidential or proprietary information of NEG learned
         during his employment with NEG. Any information which was known to
         Fetters prior to his employment with NEG which is in the public domain
         other than through Fetters or comes to Fetters through a third party
         shall not be deemed confidential and proprietary information and is
         excluded from this agreement. Further, any testimony by Fetters under
         legal process is excluded and shall not be a breach of this paragraph,
         provided NEG has been given timely notice of such legal process so
         that it may file a motion for protective order or other appropriate
         motion to prevent such disclosure.

NATIONAL ENERGY GROUP., INC.

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By: /s/ MILES BENDER                       /s/ MILES D. BENDER
----------------------------------         ---------------------------------
MILES BENDER, PRESIDENT AND CEO            MILES D. BENDER, Individually
Date: November 18, 1997.                   Date: November 18, 1997.
 

/s/ R. THOMAS FETTERS, JR.  
----------------------------
R. THOMAS FETTERS, JR.
Date: November 1997



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