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                                                                   EXHIBIT 10.11


                               FIRST AMENDMENT TO

                     CREDIT AGREEMENT AND SECURITY AGREEMENT

                  This FIRST AMENDMENT TO CREDIT AGREEMENT AND SECURITY
AGREEMENT (this "Amendment"), effective as of August 30, 1996, is entered into
by and among THE HOUSTON EXPLORATION COMPANY, a Delaware corporation (the
"Company'); THEC HOLDINGS CORP., a Delaware corporation (the "Pledgor"); and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national banking association
("TCB"), with offices at 712 Main Street, Houston, Texas 77002, individually and
as Administrative Agent (TCB, in its capacity as Administrative Agent
hereinafter called "Administrative Agent") for itself and such other banks or
lending institutions (collectively the "Banks") which are or hereafter become a
party to the "Credit Agreement" (hereinafter defined).

                             PRELIMINARY STATEMENTS:

                  A. The Company, the Administrative Agent, and TCB entered into
that certain Credit Agreement dated as of July 2,1996 (as the same may from time
to time be amended, supplemented, or modified, the "Credit Agreement") under the
terms of which the Banks agreed to make available to the Company a revolving
line of credit not to exceed, in the aggregate, $150,000,000 at any one time
outstanding.

                  B. Pursuant to the Credit Agreement, the Pledgor and the
Administrative Agent, as Secured Party, entered into that certain Security
Agreement dated as of July 2, 1996 ("Security Agreement").

                  C. The Company and the Pledgor have requested that TCB and the
Administrative Agent modify certain terms of the Credit Agreement and Security
Agreement, and, subject to the terms and conditions contained herein, TCB and
the Administrative Agent have agreed so to do.

                  NOW THEREFORE, in consideration of the foregoing the parties
hereto hereby agree as follows:

                  Section 1.   Certain Defined Terms. All capitalized terms used
herein (including in the preliminary statements hereof) and not otherwise 
defined shall have the meanings set forth in the Credit Agreement.




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                  Section 2. Amendment to definition of IPO in Credit Agreement.
The definition of IPO in the Credit Agreement is hereby deleted in its entirety,
and the following definition shall be substituted therefor:

                  "IPO" shall mean the public offering of stock of the Company,
                  which is scheduled to occur on or before October 1, 1996."

                  Section 3. Amendment to Section 8.12 of the Security 
Agreement. The last sentence of Section 8.12 of the Credit Agreement is hereby
deleted in its entirety, and the following sentence shall be substituted 
therefor:

                  "Upon (i) the closing of the IPO and the prepayment of the
                  Loans by the Borrower pursuant to Section 2.08(c) of the
                  Credit Agreement or (ii) the full and final payment of the
                  Obligations and the compliance by Pledgor with all covenants
                  and agreements hereof, Secured Party will release, reassign
                  and transfer the Collateral to Pledgor without any further
                  action of any kind and regardless of the existence of an Event
                  of Default; provided, however, if the IPO is not completed
                  within 90 days after the Closing Date, Secured Party shall
                  retain the pledge of the Collateral and all of Secured Party's
                  rights, titles and security interests in the Collateral
                  conveyed hereby."

                  Section 4. Ratification. The Company and the Pledgor
acknowledges ratify, respectively, the Credit Agreement and the Security
Agreement as amended hereby, and agree and acknowledge that all the terms
thereof as amended hereby (a) are hereby brought forward for the benefit of the
Banks and the Administrative Agent and (b) shall remain in full force and
effect.

                  Section 5. Counterparts.  This Amendment may be signed in any
number of counterparts, each of which shall be construed as an original, but all
of which together shall constitute one and the same instrument.

                  Section 6. Choice of Law.  This Amendment shall be governed 
by, and construed in accordance with, the laws of the State of Texas.

                  Section 7. Final Agreement of the Parties.  THIS AMENDMENT,
THE CREDIT AGREEMENT, THE NOTES AND THE OTHER SECURITY INSTRUMENTS CONSTITUTE A
"LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(A) OF THE TEXAS BUSINESS AND
COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.


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                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first above written.


                              COMPANY:                                          
                                                                                
                              THE HOUSTON EXPLORATION COMPANY.                  
                                                                                
                              By: /s/ Thomas W. Powers                          
                                 ----------------------------------------
                                 Thomas W. Powers                               
                                 Senior Vice President                          
                                                                                
                                                                                
                              PLEDGOR:                                          
                                                                                
                              THEC HOLDINGS CORP.                               
                                                                                
                              By: /s/ Randall J. Fleming                        
                                 ----------------------------------------
                                 Randall J. Fleming                             
                                 Vice President                                 
                                                                                
                              TCB AND ADMINISTRATIVE AGENT:                     
                                                                                
                              TEXAS COMMERCE BANK NATIONAL                      
                               ASSOCIATION, Individually as a Bank 
                               and in its capacity as Administrative Agent  
                                                                                
                              By: /s/ Paul J. Nidoh                             
                                 ----------------------------------------- 
                                 Paul J. Nidoh                                  
                                 Vice President