EXHIBIT 10.1

                 ESCROW INSTRUCTIONS AND AGREEMENT DATED AS OF
                                AUGUST 28, 2002







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                   ESCROW INSTRUCTIONS AND AGREEMENT

         THIS AGREEMENT AND ESCROW  INSTRUCTIONS  are made and entered into this
day by and between TOM HORN, LLC, a Wyoming  Limited  Liability  Company,  whose
address is in care of D. Scott Bliss, 1334 Lewis Street, Sheridan, Wyoming 82801
(the "Seller") and DOLPHIN ENERGY CORPORATION,  whose address is 6251 Palm Trace
Landing,  #115,  Davie,  Florida 33314 (the "Buyer") and MOUNTAIN STATES ESCROW,
INC.,  whose  address is P. O. Box 826, 326 Coffeen  Avenue,  Sheridan,  Wyoming
82801 (the "Escrow Agent").

         WITNESSETH, that:

         WHEREAS,  the Seller has executed and  delivered to the Buyer a certain
Assignment  of Oil and Gas Leases  (the "Oil and Gas  Leases")  reserving  a net
profits interest, a copy of which is marked Exhibit "A", attached hereto; and

         WHEREAS, the parties wish to provide for a reassignment of said Oil and
Gas Leases  from the Buyer to the  Seller in the event  that the Buyer  fails to
make a payment of  $396,000.00  to the Seller on or before one (1) year from the
date  hereof and other  matters  and for  delivery  to Buyer of a Receipt in the
event Buyer timely makes such payment.

         NOW,  THEREFORE,  in  consideration  of the  premises and of the mutual
promises and covenants contained herein, it is agreed as follows:

         1.       PAYMENT BY BUYER. Buyer has paid Seller as of the execution of
this instrument the sum of $36,000. Buyer shall pay to the Seller by a cashier's
check the sum of $396,000.00 on or before one (1) year from the date hereof, and
shall deliver such cashier's check to the Escrow Agent  for  re-delivery  to the
Seller.

         2.       DOCUMENTS  IN  ESCROW  AND  INSTRUCTIONS.  There  are   hereby
tendered  to  the  Escrow  Agent  by  the  Seller  and  the  Buyer the following
documents:

                  a)       A recordable "Receipt" signed by the Seller  for  the
                           payment described in Paragraph 1, above.

                  b)       A  reassignment  of  the  Oil and Gas Leases from the
                           Buyer back to the Seller.

provided, however, that  if  the Buyer shall have timely made the payment to the
Seller of $396,000.00 as described in Paragraph 1, then the Escrow  Agent  shall
terminate  the  escrow  and  deliver  all documents in escrow to the Buyer.  If,
however, the Buyer does not make the payment to the Seller of $396,000.00 within
the  time  period  described  in Paragraph 1, above, then the Escrow Agent shall
terminate the escrow and deliver all documents in escrow to the Seller.

         3.       TIME.  Time  is  of the  essence of this Agreement between the
parties.  In the event that  the  Buyer does not make the payment of $396,000.00
by cashier's check to the Seller, delivering said check  to the Escrow Agent for
re-delivery to the Seller on or before one (1) year from the date hereof,  then,
time  being  of the essence, the escrow shall be terminated and all documents in
escrow  shall  be  delivered  to  the  Seller.  Otherwise, upon full performance
of  all  of  the  obligations  of  the  Buyer  hereunder,  the  escrow  shall be
terminated  following  payment  by  the  Buyer of  the sum  and  in  the  manner
described  in  Paragraph 1, above, within one (1) year from the date hereof, and
the documents in escrow shall be delivered to the Buyer.

         4.       DISAGREEMENT. In the event of a disagreement between the Buyer
and the Seller as  to  the  release of  the documents held in escrow, the Escrow
Agent shall continue to



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hold all documents in escrow until such dispute is resolved by agreement between
the Buyer and the Seller or a court of competent jurisdiction.  In the  event of
litigation or other controversy regarding the disbursement  of  the  escrow, the
Escrow Agent shall not be obligated to incur any  expense  but rather the Seller
and the Buyer shall hold the Escrow Agent harmless  with respect to any damages,
costs or  liabilities,  including  attorney's  fees  and  costs, incurred by the
Escrow  Agent  with  respect  to  this escrow provided, however, that the Escrow
Agent shall  act  honestly  and  faithfully  in  holding the documents in escrow
pursuant to the terms and conditions of this Agreement.

         5.       COUNTERPART  EXECUTION.  This  Agreement  may  be  executed in
counterpart originals.

         DATED this   28TH   day of     AUGUST      , 2002
                    --------        ----------------

SELLER:                             TOM HORN, INC.


                                    By:      /a/ GLENN J. BARLOW
                                       ----------------------------------------
                                        Glenn J. Barlow - Managing Member


BUYER:                              DOLPHIN ENERGY CORPORATION



                                    By:      /s/ CARMEN J. LOTITO
                                       ----------------------------------------
                                        Carmen J. Lotito, Treasurer




                              ACCEPTANCE OF ESCROW

         This escrow is accepted and the  documents  described  above are hereby
accepted in escrow this _____ day of _______________, 2002.

                                    MOUNTAIN STATES ESCROW


                                    By: ______________________________
                                             Authorized Officer



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