EMPLOYMENT AGREEMENT

This
Employment Agreement (the Agreement) is made and entered into as of the
16th day of September, 2002 (the Effective Date), by and between
Magnum Hunter Resources, Inc., a Nevada corporation (Magnum Hunter) and its
affiliates, Gruy Petroleum Management Co., a Texas corporation and a wholly-owned
subsidiary of Magnum Hunter, (collectively, the Employer) and M. Bradley Davis
(Employee).

WHEREAS,
the Board of Directors of the Employer (the Board) recognizes that it is
important to attract, hire and retain key officers and management personnel;

WHEREAS,
the Board also recognizes that, in the event of a Change in Control (as hereinafter
defined), significant distractions of its key management and operations personnel can
result because of the uncertainties inherent in such a situation;

WHEREAS,
the Board has determined that it is essential and in the best interest of the Employer and
its stockholders to retain officers and key employees in the event of a threat or
occurrence of Change in Control and to ensure their continued dedication and efforts in
such event without undue concern for their personal, financial and employment security;
and

WHEREAS,
in order to induce qualified candidates to accept employment with the Employer and to
remain in the employ of the Employer in the event of a threat or the occurrence of a
Change in Control, the Employer desires to enter into this Agreement with the Employee.

NOW
THEREFORE, for and in consideration of the mutual covenants and agreements contained
herein and for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:

|1. | Employment. Employer hereby employs Employee and Employee hereby accepts
                    employment with Employer upon the terms and conditions hereinafter set forth.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | Duties. Employee shall serve the Employer as Senior Vice President
                     Capital Markets & Corporate Development of the Employer with such
                    responsibilities as shall be determined from time to time by the Chief Executive
                    Officer and the Board; provided, however, that all duties assigned to Employee
                    hereunder shall be commensurate with the skill and experience of Employee.
                    Employee agrees to devote all of his professional time, attention, skills,
                    benefits and best efforts to the performance of his duties hereunder and to the
                    promotion of the business and interests of Employer.
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|3. | Term. This Agreement shall become effective on the Effective Date, and
                    shall continue, unless earlier terminated in accordance with the terms of this
                    Agreement, for a period of three (3) years commencing on the Effective Date.
                    This Agreement shall thereafter be automatically renewed for a period of six (6)
                    months, unless earlier terminated as provided herein, and unless one party has
                    given written notice to the other party of its or his intention not to renew
                    this Agreement at least thirty (30) days prior to the expiration of its then
                    current term (the Term).
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|4. | Compensation. As compensation for his services rendered under this
                    Agreement, Employee shall be entitled to receive the following:
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------

|(a) | Base Salary. During the Term, Employee shall initially be paid an annual
                    salary of One Hundred Fifty Thousand and No/100 dollars ($150,000.00) per annum
                    (the Base Salary) payable in equal payments twice a month for a
                    total of twenty-four (24) payments per year. The Base Salary may be increased or
                    decreased as the Board may determine from time to time, however in no event will
                    the Base Salary be less than One Hundred Fifty Thousand and No/100 dollars
                    ($150,000.00);
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|(b) | Acceptance Bonus. Employee shall be paid an acceptance bonus of Twenty-
                    Five Thousand Dollars ($25,000) payable upon the effective date of this
                    Agreement;
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|(c) | Performance Bonus. Employee shall be guaranteed a performance bonus not
                    to exceed Thirty-Seven Thousand Five Hundred Dollars ($37,500) due and payable
                    on or about March 31, 2003. An additional payment of up to Thirty-Seven Thousand
                    Five Hundred Dollars ($37,500) will be due and payable based upon meeting a
                    minimum average stock price of $10.50 per share for any thirty (30) consecutive
                    trading day period preceding June 30, 2003. Such additional payment will be
                    pro-rated should the minimum average stock price not be achieved. A $7.50
                    average floor price and a $10.50 average ceiling price will be the range; i.e.
                    an average stock price of $9.00 per share would equate to 50% or $18,750 of the
                    guaranteed performance bonus becoming due and payable.
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| | Notwithstanding
the above, the Employees eligibility to earn any bonus to be paid under this
Agreement, will be contingent upon the physical move of the Employee and his family to the
Dallas/Ft. Worth metroplex on or before January 15, 2003;
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|(d) | Annual Bonus. Expressly conditioned on the Employee being employed on
                    the last day of the fiscal year of the Employer, the Employee may receive a
                    bonus in an amount determined solely by the unanimous approval of the
                    compensation committee of the Employer and the Board, in their sole discretion,
                    taking into account other forms of bonuses referred to in this Agreement;
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|(e) | Automobile and Telephone. During the Term, Employee shall be entitled to
                    an automobile allowance in the amount of Five Hundred dollars ($500.00) per
                    month and shall be given a cellular telephone for Employer business use at no
                    cost to the Employee;
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|(f) | Expenses. Employer shall reimburse Employee for all reasonable and
                    necessary out-of-pocket travel and other expenses incurred by Employee in
                    rendering services required under the terms of this Agreement, promptly after
                    submission, on a monthly basis, of a detailed statement of such expenses and
                    reasonable documentation;
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|(g) | Benefits. During the Term, Employee shall be entitled to receive such
                    group benefits as Employer may provide to its other employees at comparable
                    salaries and responsibilities to those of Employee;
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|(h) | Stock Options. Employee shall be initially granted stock options to
                    acquire Fifty Thousand (50,000) shares of the Companys common stock with a
                    five (5) year vesting schedule and an exercise price equal to $5.45 per share.
                    The form of stock option agreement shall be the same form as provided to all
                    other employees of the Employer during 2002.
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| | An
option to purchase an additional One Hundred Thousand (100,000) shares of common stock
will be granted to the Employee at an exercise price equal to $5.45 per share, the vesting
of which will be only triggered by certain stock price objectives detailed as follows:
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|Stock Price Average* | Vesting Percent
|-------------------- | ---------------
|$7.50 or greater     |                
|$9.00 or greater     |                
|$10.50 or greater    |                
|$12.00 or greater    |                
|$13.50 or greater    |                

| | *
Stock price average is the closing price as reported on the NYSE for any thirty (30)
consecutive trading days.
| | ----------------------------------------------------------------------------------------------------------------

| | Should
a sufficient number of shares of common stock as called for under this section not be
readily available under the Employers existing 2001 Stock Option Plan, then the
granting of such stock options to the holder will be subject to shareholder approval at
the next yet to be determined shareholder meeting date (excluding September 19, 2002)
which is presently anticipated to occur on or about the month of June 2003;
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|(i) | Reimbursement of Moving Expenses. Employee shall be reimbursed up to a
                    maximum of Fifty Thousand Dollars ($50,000) for all reasonable and necessary
                    out-of-pocket travel and other expenses incurred by the Employee moving to the
                    Dallas/Ft. Worth metroplex. At the Employees option, the Employee may be
                    reimbursed for such expenses or may cause the provider of such services to bill
                    the Employer directly; (j) Country Club Membership. The Employee shall be
                    reimbursed for expenses of up to Two Hundred Fifty Dollars ($250) per month for
                    a business or country club membership of the Employees choosing.
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| | Except
as provided in Section 7, the compensation set forth in this Section 4 will be the sole
compensation payable to Employee and no additional compensation or fee will be payable by
Employer to Employee by reason of any benefit gained by the Employer directly or
indirectly through Employees efforts on Employers behalf, nor shall Employer
be liable in any way for any additional compensation or fee unless Employer shall have
expressly agreed thereto in writing.
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5.       
          Confidentiality; Covenants Not-To-Compete.

|(a) | Acknowledgment of Proprietary Interest. Employee acknowledges and agrees
                    that he has had access to proprietary information and also recognizes the sole
                    proprietary interest of Employer in any Trade Secrets (as hereinafter defined)
                    of Employer. Employee further acknowledges and agrees that any and all Trade
                    Secrets of Employer, learned by Employee during the course of his employment by
                    Employer or otherwise, whether developed by Employee alone or in conjunction
                    with others or otherwise, is and shall be the property of Employer. Employee
                    further acknowledges and understands that his disclosure of any Trade Secrets of
                    Employer will result in irreparable injury and damage to Employer. As used
                    herein, Trade Secrets means all non-public confidential and
                    proprietary information of Employer whether embodied in writing, a computer
                    disk, video or magnetic tape, CD-Rom or in other form, relating to the business,
                    operations or affairs of Employer and, any other confidential information that
                    Employee may then possess or have under Employees control, including,
                    without limitation, information derived from reports, investigations,
                    experiments, research, work in progress, drawings, designs, plans, proposals,
                    codes, marketing and sales programs, client lists, mailing lists, financial
                    projections, any information regarding Employers oil and gas properties,
                    maps, plats, surveys, geophysical and geological data, cost summaries, pricing
                    formula, reports, studies, well logs, production data, land and title records,
                    leases and all other materials, or information prepared, compiled, evaluated,
                    interpreted or performed, for or by Employer. Trade Secrets also
                    includes confidential information related to the business, products or sales of
                    Employer or Employers customers or other business relationships.
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|(b) | Covenants Not-To-Divulge Trade Secrets. Employee acknowledges and agrees
                    that Employer is entitled to prevent the disclosure of Trade Secrets of
                    Employer. As a portion of the consideration for the employment of Employee and
                    for the compensation being paid to Employee by Employer, Employee agrees at all
                    times during the term of this Agreement and for three (3) years thereafter to
                    hold in strictest confidence and not to disclose or allow to be disclosed to any
                    person, firm, or corporation, other than to persons engaged by Employer to
                    further the business of Employer, Trade Secrets of Employer, without the prior
                    written consent of Employer, including Trade Secrets developed by Employee.
                    Notwithstanding the foregoing, Employee shall not be obligated to keep secret
                    and not to disclose or allow to be disclosed knowledge or information (a) which
                    has become generally known to the public through no wrongful act of Employee;
                    (b) which has been rightfully received by Employee from a third party which to
                    Employees knowledge was received without restriction on disclosure and not
                    in violation of any confidentiality obligation of said third party; (c) which
                    has been approved for release without restriction as to use or disclosure by
                    written authorization of Employer; or (d) which has been disclosed pursuant to a
                    requirement of a governmental agency or of law without similar restrictions or
                    other protections against public disclosure, or which disclosure is required by
                    operation of law. Without limiting the generality of the foregoing, Employee
                    agrees to affirmatively take such precautions as Employer may reasonably request
                    or Employee
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| | reasonably
believes are appropriate to prevent the disclosure, copying or use of any of the computer
software programs, data bases or other such information now existing or hereafter
developed to any person or for any purpose not specifically authorized by Employer.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Abide by Third Party Confidentiality Agreements. Employee acknowledges
                    that Employer enters into confidentiality agreements with third parties. Without
                    limiting the generality of the foregoing, Employee agrees to abide by the terms
                    and conditions of such confidentiality agreements during the term of this
                    Agreement for a period beginning on the Effective Date and ending three (3)
                    years following the Employees termination of employment with the Employer
                    for any reason.
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|(d) | Return of Materials at Termination. In the event of any termination of
                    this Agreement for any reason whatsoever, Employee will promptly deliver to
                    Employer all documents, data and other information pertaining to Trade Secrets.
                    Employee shall not take any documents or other information, or any reproduction
                    or excerpt thereof, containing or pertaining to any Trade Secrets.
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|(e) | Competition During the Term of this Agreement. From the period beginning
                    on the Effective Date and ending two (2) years following the Employees
                    voluntary termination of employment with the Employer:
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| | (i)       
               Employee shall not, directly or indirectly, either for himself or any other
               person, engage or invest in, own, manage, operate, finance, control or
               participate in the ownership, management, operation, financing or control of, or
               be employed by, associated with, or in any manner connected with, lend
               Employees credit to, or render services or advice to, any business whose
               products or activities compete in whole or in part with the oil and gas
               exploration and production activities or the Employer in the southwestern and
               southeastern portions of the United States and the Gulf of Mexico (including any
               offshore activities) and any other business which Employer is involved in or
               pursuing in the regions in which Employer is conducting such activities at the
               time of Employees termination; provided, however, that (aa) this Section
               5(e) shall not prohibit Employee from purchasing or holding an equity interest
               of any class of securities of any enterprise (but without otherwise
               participating in the activities of such enterprise) whether or not such
               securities are listed on any national or regional securities exchanges or have
               been registered under Section 12(g) of the Securities Exchange Act of 1934, as
               amended (the Exchange Act), and (bb) this Section 5(e) shall not
               prohibit Employee from engaging in any such activities unless such Employee is
               using Employers Trade Secrets in connection therewith.
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| | (ii)       
               Employee shall not, directly or indirectly, either for himself or any other
               person (A) solicit, induce, recruit, or attempt to solicit, induce or recruit
               any employee of the Employer or to leave the employ of the Employer, (B) in any
               way interfere with the relationship between the Employer and any employee
               thereof, (C) employ, or otherwise engage as an employee, independent contractor
               or otherwise, any employee of the Employer or (D) induce or attempt to induce
               any customer, representative,
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5

| | supplier,
licensee or business relation of the Employer to cease doing business with the Employer,
or in any way interfere with the relationship between any customer, representative,
supplier, licensee or business relation of the Employer.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)       
               Employee shall not, directly or indirectly, either for himself or any other
               person, do business with or solicit the business of any person known to Employee
               to be a customer of, or potential customer of, the Employer, whether or not the
               Employee had personal contact with such person, with respect to products,
               services or other business activities which compete in whole or in part with the
               products, services or other business activities of the Employer.
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|(f) | Tolling of Statute of Limitations. In the event of a breach by Employee
                    of any covenant set forth in Section 5 above, the term of such covenants shall
                    be extended by the period of the duration of such breach.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(g) | Reasonableness of Terms. The time, scope, geographic area and other
                    provisions hereof are reasonable and are necessary under the circumstances to
                    protect the Employer and to enable the Employer to receive the benefit of this
                    bargain under this Agreement.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(h) | Reformation. If a court of competent jurisdiction determines that the
                    limitations as to time, geographical area or scope of activity to be restrained
                    contained herein are not reasonable and impose a greater restraint than is
                    necessary to protect the goodwill or other business interest of the Employer,
                    then the parties agree that such court should (and Employee will request such
                    court to) reform this Agreement to the extent necessary to cause the limitations
                    contained herein as to time, geographical area and scope of activity to be
                    restrained to be reasonable and to impose a restraint that is not greater than
                    necessary to protect the goodwill or other business interests of the Employer
                    and such court then shall enforce this Agreement as reformed.
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|6. | Prohibition of Disparaging Remarks. Employee shall, during the term of
                    this Agreement, refrain from making disparaging, negative or other similar
                    remarks concerning Employer, any of its subsidiaries or other affiliated
                    companies or any of their directors, officers or key employees, to any third
                    party that causes substantial harm to Employer, except to the extent that
                    Employee is required to make such remarks (a) by applicable law or regulation or
                    judicial or regulatory process or (b) in or in connection with any pending or
                    threatened litigation relating to this Agreement or any transaction contemplated
                    hereby or thereby. Similarly, Employer shall, during the term of this Agreement,
                    refrain from making disparaging, negative or other similar remarks concerning
                    Employee to any third party except to the extent that Employer is required to
                    make such remarks (a) by applicable law or regulation or judicial or regulatory
                    process or (b) in or in connection with any pending or threatened litigation
                    relating to this Agreement or any transaction contemplated hereby or thereby. In
                    view of the difficulty of determining the amount of damages that may result to
                    the parties hereto from the breach of the provision of this Section 6, it is the
                    intent of the parties hereto that, in addition to monetary damages, any
                    non-breaching party shall have the right to prevent any such breach in equity or
                    otherwise, including without limitation prevention by means of injunctive
                    relief.
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6

|7. | Termination Events.
|-- | -------------------

|(a) | This Agreement and the employment relationship created hereby shall terminate
                    upon the occurrence of any of the following events:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | The expiration of the Term or any renewal period as set forth in Section 3
          above, provided that either Employee or Employer has given at least thirty (30)
          days prior written notice to the other party of such partys intention not
          to renew;
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|(ii) | The death of Employee;
|---- | ----------------------

|(iii) | The Disability (as hereinafter defined) of Employee;
|----- | ------------------------------------------------------

|(iv) | Written notice from Employer to Employee of termination for Just
          Cause (as hereinafter defined); or
|---- | ---------------------------------------------------------------------------------------------------------------

|(v) | Thirty (30) days written notice by Employee to Employer for Good
          Reason (as hereinafter defined) provided that the event constituting Good
          Reason occurs within two (2) years of a Change in Control (as
          hereinafter defined).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Definitions.
|--- | ------------

|(i) | For purposes of Section 7(a)(iii) above, the Disability of Employee
                    shall mean a physical or mental infirmity which impairs the Employees
                    ability to substantially perform his duties under this Agreement for a period of
                    120 consecutive days or for 120 days out of any 150 consecutive day period.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | For purposes of Section 7(a)(iv) above, Just Cause shall mean:
|---- | ----------------------------------------------------------------

|(1) | the failure of Employee to diligently or effectively perform his duties under
          this Agreement;
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|(2) | If Employee has been accused of sexually-harassing another individual and such
          accusation is either confirmed by Employer upon its own investigation or
          confirmed by a finding of a court of competent jurisdiction or the EEOC;
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | the commission by Employee of any act involving moral turpitude or the
          commission by Employee of any act or the suffering by Employee of any occurrence
          or state of facts which renders Employee incapable of performing his duties
          under this Agreement, or adversely affects or could reasonably be expected to
          adversely affect Employers business reputation;
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|(4) | any breach by Employee of any of the material terms of, or the failure to
          perform any material covenant contained in, this Agreement; or
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7

|(5) | the violation by Employee of material instructions or material policies
          established by Employer with respect to the operation of its business and
          affairs or Employees failure, in a material respect, to carry out the
          reasonable instructions of the President or the Board of Employer;
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | provided,
however, that no termination of Employees employment shall be for Just Cause under
Section 7(a)(iv) until there shall have been delivered to the Employee a copy of a written
notice setting forth that the Employee was guilty of the particular conduct and specifying
the particulars thereof in detail, and the Employee shall have been provided an
opportunity to be heard by the entire Board.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) | For purposes of Section 7(a)(v) above, the term Good Reason shall
                    mean the occurrence of any of the events or conditions described in items (1)
                    through (7) below within two (2) years after a Change in Control has occurred:
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(1) | A substantial adverse change in the Employees status, position or
          responsibilities (including reporting responsibilities) which represents an
          adverse change from his status, position or responsibilities as in effect
          immediately prior thereto;
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|(2) | Any reduction in the Employees Base Salary;
|--- | --------------------------------------------

|(3) | The Employers requiring the Employee to be based at any place outside
          fifty (50) miles from Irving, Texas, except for reasonably required travel in
          connection with the Employers business which is not greater than such
          travel requirements prior to the Change in Control;
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | The insolvency of Employer or the filing (by any party, including the Employer)
          of a petition for the bankruptcy of the Employer;
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|(5) | Any material breach by the Employer of any provision of this Agreement;
|--- | -----------------------------------------------------------------------

|(6) | Any purported termination of the Employees employment for Just Cause by
          the Employer which does not comply with the terms of Section 7(a)(iv) or Section
          7(b)(ii); or
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | The failure of the Employer to obtain an agreement, satisfactory to the
          Employee, from any successor or assignee of the Employer to assume and agree to
          perform this Agreement, as contemplated in Sections 2, 3, 7 and 8 hereof.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iv) | For purposes of Section 7(a)(v) above, the term Change in Control
                    of the Employer shall mean if any of the following events have occurred:
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|(1) | An acquisition of any voting securities of the Employer (the Voting
          Securities) by a Person (as that term is used for the purposes
          of Section 13(d) of the Exchange Act) immediately after which such person has
          Beneficial
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8

| | Ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of one hundred
percent (100%) or more of the combined voting power of the Employers then
outstanding Voting Securities; or
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The following events have occurred during a one (1) year period:
|--- | ----------------------------------------------------------------

|(a) | The Chief Executive Officer changes for any reason; and
|--- | -------------------------------------------------------

|(b) | An acquisition of any voting securities of the Employer (the Voting
          Securities) by a Person (as that term is used for the purposes
          of Section 13(d) of the Exchange Act) immediately after which such person has
          Beneficial Ownership (within the meaning of Rule 13d-3 promulgated
          under the Exchange Act) of forty percent (40%) or more of the combined voting
          power of the Employers then outstanding Voting Securities; and
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|(c) | The individuals who, as of January 1, 2002, and each January 1 thereafter are
          members of the Board (the Incumbent Board) cease to constitute at
          least fifty-one percent (51%) of the members of the Board.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8.       
          Termination Payments.

|(a) | In the event of the termination of Employees employment for any reason
                    specified in Section 7 (other than the reasons set forth in Sections 7(a)(iii)
                    or Section (a)(v)), Employee shall be entitled only to the compensation earned
                    by him as of the effective date of termination, including any declared but
                    unpaid, bonus or pro-rata portion thereof.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | In the event of the termination of Employees employment as the result of
                    Section 7(a)(iii), Employee shall be entitled to compensation for the remaining
                    term of the Agreement until the disability insurance company begins making
                    payments to the Employee.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | In the event of the termination of the Employees employment for the
                    reason specified in Section 7(a)(v), Employee shall be entitled to receive,
                    immediately in one lump sum, two (2) times the sum of the following: (i) the
                    current Base Salary, plus (ii) annualized bonus from the previous year, plus
                    (iii) the value of the car allowance for the current year.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | In addition, any medical, dental and group life insurance covering the Employee
                    and his dependents shall continue until the earlier of (i) twelve (12) months
                    after the Change in Control or (ii) the date the Employee becomes a participant
                    in the group insurance benefit program of a new employer, with the understanding
                    that the Employer shall pay for such benefits for the Employee, and the Employee
                    shall pay for that portion of the premiums related to the coverage for
                    Employees dependents.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9

|(e) | If the Employee pays or becomes obligated to pay any excise tax under Section
                    4999 of the Internal Revenue Code of 1986, as amended (the Code) on
                    any payment or benefit he receives (whether pursuant to this Agreement or
                    otherwise) in connection with the event giving rise to his right to receive
                    payments and benefits under Section 8(c) of this Agreement, the Employer shall
                    pay to the Employee an amount equal to the total excise tax paid or payable.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9. | Remedies. Each party recognizes and acknowledges that in the event of
                    any default in, or breach of any of, the terms, conditions and provisions of
                    this Agreement (either actual or threatened) by the other party, then the
                    non-defaulting partys remedies at law shall be inadequate. Accordingly,
                    each party agrees that in such event, the non-defaulting party shall have the
                    right of specific performance and/or injunctive relief in addition to any and
                    all other remedies and rights at law or in equity, and such rights and remedies
                    shall be cumulative.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10. | Acknowledgments. Employee acknowledges and recognizes that the
                    enforcement of any of the non-competition provisions set forth in Section 5
                    above by Employer will not interfere with Employees ability to pursue a
                    proper livelihood. Employee further represents that he is capable of pursuing a
                    career in other industries to earn a proper livelihood. Employee recognizes and
                    agrees that the enforcement of this Agreement is necessary to ensure the
                    preservation and continuity of the business and good will of Employer. Employee
                    agrees that due to the nature of Employers business, the non-competition
                    restrictions set forth in this Agreement are reasonable as to time and
                    geographic area. Employer and Employee hereby agree that notwithstanding any
                    other provision of this Agreement, Employee shall have all rights to products or
                    information, or applications of such information, which do not relate to
                    Employers business and were developed during the non-employment hours and
                    without utilizing any resources of Employer.
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|11. | Notices. Any notices, consents, demands, requests, approvals and other
                    communications to be given under this Agreement by either party to the other
                    shall be deemed to have been duly given in writing personally delivered, by
                    facsimile or sent by mail, registered or certified, postage prepaid with return
                    receipt requested, as follows:
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|                |                                                                                                                                             
|--------------- | --------------------------------------------------------------------------------------------------------------------------------------------
|If to Employer: | 600 East Las Colinas Blvd. Suite 1100 Irving, Texas 75039 Attention: Morgan F. Johnston Telephone: (972) 401-0752 Facsimile:  (972) 401-3110
|If to Employee: | 3424 Wickersham Lane Houston, TX 77027 Facsimile: (281) 493-3722                                                                            

| | Notices
delivered personally shall be deemed communicated as of actual receipt or receipt of
facsimile; mailed notices shall be deemed communicated as of three (3) days after mailing.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|12. | Survival. The following sections of this Agreement shall survive
                    termination of this Agreement for any reason: Sections 5, 6, 7, 8, 9, 11, 13,
                    14, 15, 16 and 17.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13. | Arbitration. The parties agree to binding arbitration in any action,
                    proceeding or counterclaim arising out of or relating to this Agreement. Such
                    arbitration will be conducted in Dallas, Texas through the offices of and in
                    accordance with the Commercial Arbitration Rules of the American Arbitration
                    Association. Judgment upon the award rendered in any arbitration may be entered
                    in any court of competent jurisdiction or application may be made to such court
                    for a judicial acceptance of the award and an enforcement, as the law of such
                    jurisdiction may require or allow.
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|14. | Entire Agreement. This Agreement contains the entire agreement of the
                    parties hereto and supersedes all prior agreements and understandings, oral or
                    written between the parties hereto. No modification or amendment of any of the
                    terms, conditions or provisions herein may be made otherwise than by written
                    agreement signed by the parties hereto.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|15. | GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
                    PARTIES HERETO SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
                    LAWS OF THE STATE OF TEXAS AND VENUE SHALL LIE IN DALLAS COUNTY, TEXAS.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|16. | Parties Bound. This Agreement and the rights and obligations hereunder
                    shall be binding upon and inure to the benefit of Employer and Employee, and
                    their respective heirs, personal representatives, successors and assigns.
                    Employer shall have the right to assign this Agreement to any affiliate or to
                    its successors or assigns provided that such affiliate, successor or assign
                    agrees to be bound by the terms hereof. The terms successors and
                    assigns shall include any person, corporation, partnership or other
                    entity that buys all or substantially all of Employers assets or all of
                    its stock, or with which Employer merges or consolidates. The rights, duties or
                    benefits to Employee hereunder are personal to him, and no such right or benefit
                    may be assigned by him.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|17. | Estate. If Employee dies prior to the payment of all sums owed, or to be
                    owed, to Employee pursuant to Section 4 above, then such sums, as they become
                    due, shall be paid to Employees estate.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|18. | Enforceability. If, for any reason, any provision contained in this
                    Agreement should be held invalid in part by a court of competent jurisdiction,
                    then it is the intent of each of the parties hereto that the balance of this
                    Agreement be enforced to the fullest extent permitted by applicable law. It is
                    the intent of each of the parties that the covenants not-to-compete contained in
                    Section 5 above be enforced to the fullest extent permitted by applicable law.
                    Accordingly, should a court of competent jurisdiction determine that the scope
                    of any covenant is too broad to be enforced as written, it is the intent of each
                    of the parties that the court should reform such covenant to such narrower scope
                    as it determines enforceable.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|19. | Waiver of Breach. The waiver by any party hereto of a breach of any
                    provision of this Agreement shall not operate or be construed as a waiver of any
                    subsequent breach by any party.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11

|20. | Captions. The captions in this Agreement are for convenience of
                    reference only and shall not limit or otherwise affect any of the terms or
                    provisions hereof.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21. | Costs. If any action at law or in equity is necessary to enforce or
                    interpret the terms of this Agreement, the prevailing party shall be entitled to
                    reasonable attorneys fees, costs and necessary disbursements in addition
                    to any other relief to which he or it may be entitled.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|22. | Counterparts. This Agreement may be executed in one or more
                    counterparts, each of which shall be deemed an original and all of which shall
                    constitute one and the same instrument, but only one of which need be produced.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|EMPLOYER:GRUY PETROLEUM MANAGEMENT CO.By:   /s/Gary C. Evans          
Gary C. Evans          Chief Executive OfficerEMPLOYER'S PARENT COMPANY:MAGNUM HUNTER RESOURCES, INC.
By:   /s/ Gary C. Evans          Gary C. Evans, Chairman          
President and CEOEMPLOYEE:/s/ M. Bradley Davis          M. Bradley Davis | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 

12

Magnum Hunter Resources, Inc.600 East Las Colinas Blvd.  Suite 1100  Irving, TX 75039  (972) 401-0752  Fax (972) 401-3110Mailing Address:  P.O. Box 140908  Irving, TX 75014-0908     A NYSE Listed Company  MHR

December 1, 2004

M. Bradley Davis600 East
Las Colinas Blvd.Irving, Texas 75039

Dear Mr. Davis:

Reference
is made to the Employment Agreement dated September 16, 2002 (the Employment
Agreement) by and among Magnum Hunter Resources, Inc. (MHR), Gruy
Petroleum Management Co. (Gruy) and yourself in connection with your
employment by MHR and Gruy.

When
executed by you below, this letter will evidence an agreement between MHR, Gruy and
yourself to amend the Employment Agreement as follows:

1.       
          Section 2 of the Employment Agreement is hereby amended to change your title to
          Sr. Vice President  Chief Financial Officer (Interim).

2.       
          Section 3 of the Employment Agreement is hereby amended to extend the term of
          the Employment Agreement from September 16, 2005 to December 31, 2005.

If
this letter correctly sets forth the agreement between MHR, Gruy and yourself, please so
indicate by signing below in the space provided.

| |                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Sincerely yours,  MAGNUM HUNTER RESOURCES, INC. By:/s/ Morgan F. Johnston, Sr. Vice PresidentGRUY PETROLEUM MANAGEMENT CO.By:/s/ Morgan F. Johnston, Sr. Vice President

|                                                                 | 
|---------------------------------------------------------------- | 
|ACCEPTED AND AGREED: M. BRADLEY DAVISBy:    /s/ M. Bradley Davis |