MAGNUM HUNTER RESOURCES, INC.
                             STOCK OPTION AGREEMENT

     THIS EMPLOYEE STOCK OPTION  AGREEMENT (the  "Agreement")  is made as of the
21st  day of  July  2000,  between  Magnum  Hunter  Resources,  Inc.,  a  Nevada
corporation  (hereinafter  referred  to  as  the  "Company"),  and  ____________
(hereinafter referred to as "Optionee").

                                 R E C I T A L S

     (a) The Company  grants a stock option to key  employees  and  directors to
encourage  such  persons to continue to work for the Company and obtain a larger
ownership interest in the Company.

     (b) The Optionee is an employee  and/or a director of the Company,  and the
Company and the Optionee desire that Optionee be granted a stock option.

     Now,  Therefore,  for and in consideration of the foregoing  premises,  the
mutual   covenants   herein   contained,   and  for  other  good  and   valuable
consideration,  the receipt of which is hereby acknowledged, the Company and the
Optionee agree as follows:

     1. Grant of Option.  The  Company  hereby  grants to  Optionee an option to
purchase up to _____ shares (the "Shares") of the Company's Common Stock, $0.002
par  value  ("Common  Stock"),  at a  purchase  price of $_____  per share  (the
"Option").

     2. Incentive Stock Option Status.

     (a) The Option granted hereby is intended to be an incentive  stock option.
Optionee  understands  that in order for the Option granted herein to qualify as
an incentive stock option, he must hold the shares acquired from the exercise of
such  Option  for a period of two years from the date of grant of the Option and
one year from the date of exercise of such Option.  Optionee further understands
that he must  continue  to be an employee or director of the Company or a parent
or  subsidiary  of the Company  until the earlier of (i) the date which is three
months before the date of exercise of the Option or (ii) the  termination of the
Option as provided in Section 3(d) or (e) below.

     (b) Optionee  shall notify the Company if he makes any  disposition  of any
shares acquired hereunder prior to the time specified by paragraph (a).

     3. Exercise of Option.

     (a) Subject to Section 4 below,  Optionee  shall have the right to purchase
any or all of the Shares at any time prior to July 21, 2005,  unless this Option
is sooner terminated or expires as provided in this Agreement.

     (b) Subject to any required action by the  stockholders of the Company,  if
the Company shall be the surviving  corporation in any merger,  consolidation or
reorganization,  the Option granted  hereunder shall pertain to and apply to the
securities  to which a holder of the  number of shares of stock  subject  to the
Option would have been entitled.

     (c) If the Company  shall not be the surviving  corporation  in any merger,
consolidation or  reorganization,  then the Board of Directors of the Company or
the Board of  Directors  of any  corporation  assuming  the  obligations  of the
Company,  shall,  as  to  the  unexercised  portion  of  the  Option,  (i)  make
appropriate  provision for the protection of such Option by the  substitution on
an equitable basis of appropriate  securities of the Company,  or of the merged,
consolidated  or otherwise  reorganized  corporation,  which will be issuable in
respect of the unexercised  portion of the Option or (ii)  immediately  prior to
such merger,  consolidation or  reorganization,  the unexercised  portion of the
Option, whether or not exercisable, shall immediately be exercisable.

<PAGE>

     (d) Except as provided in paragraph (e) below,  this Option shall terminate
with  respect  to any  unexercised  portion  of the  Option and may no longer be
exercised on the date the  Optionee  ceases to be an employee or director of the
Company or any subsidiary or affiliate of the Company.

     (e) If the Optionee dies or becomes totally and permanently  disabled prior
to the  expiration  of this  Option,  the  Optionee  or his  representative,  as
applicable,  may exercise  the Option with respect to any shares which  Optionee
could have purchased on his date of death or total and permanent disability. The
exercise of this Option under this paragraph (e) must occur prior to the earlier
of  twelve  (12)  months  after  the  Optionee's  death or  disability  or,  the
expiration of the term of this Option under paragraph (a).

     4. Vesting of Options.  The Option granted  hereunder shall be fully vested
and exercisable in installments as provided below:


                  Beginning                                  Number of Shares
                  ---------                                  ----------------
                July 21, 2000                                      ____
                July 21, 2001                                      ____
                July 21, 2002                                      ____
                July 21, 2003                                      ____
                July 21, 2004                                      ____

     To  the  extent  not  exercised,   installments  shall  accumulate  and  be
exercisable,  in whole  or in part,  in any  subsequent  period.  No part of the
Option may be exercised after the date set forth in Section 3.

     5. Manner of Exercise and Payment for Stock Upon  Exercise of Option.  Each
exercise  of this  Option  or a part of this  Option  shall be made by notice in
writing to the  Company,  specifying  the number of shares to be  purchased  and
accompanied by a certified or cashier's  check in payment in full for the shares
then being  purchased.  The Company shall cause  certificates  representing  the
shares  so  purchased  to be  issued  to the  Optionee  as soon  as  practicable
thereafter, subject to compliance with all laws which affect such issuance.

     6.  Nontransferability of Option. This Option may not be transferred either
voluntarily or involuntarily  except as provided in Section 3(e). The Option may
be exercised only by Optionee during his lifetime.

     7. No Rights Prior to Exercise of Option.  The Optionee shall not be deemed
to be a holder of any shares  pursuant  to the  exercise  of this  Option  until
payment of the option  price by him and delivery of a stock  certificate  to him
for such shares.  No adjustment  shall be made for dividends or other rights for
which the record date is prior to the date such stock certificate is delivered.

     8.  Restriction of Issuance of Shares.  This Option shall be subject to the
requirement  that if any  time the  Board  of  Directors  of the  Company  shall
determine,   in  its  sole  discretion,   that  the  listing,   registration  or
qualification of the Common Stock under any federal or state law, or the consent
or approval of any regulatory  agency,  is necessary or desirable as a condition
of, or in connection  with, the purchase or issuance of Common Stock  hereunder,
this  Option  may not be  exercised  in whole or in part  unless  such  listing,
registration,  qualification,  consent or approval  shall have been  effected or
obtained free of any conditions not acceptable to the Board of Directors.

     9. Registration. The Company shall endeavor, but shall not be obligated, to
register  the Common  Stock to be issued upon  exercise of the Option  under the
Securities Act of 1933, as amended, as well as any applicable state statutes. In
the event that the Common Stock to be issued upon  exercise of the Option is not
so registered,  the Company may, as a condition precedent to the exercise of the
Option,  require  from the  Optionee  (or, in the event of his death,  his legal
heirs, legatees or distributees) such written representations as, in the opinion
of counsel for the Company, may be

<PAGE>

     necessary to ensure that such exercise and subsequent  disposition will not
involve a violation of the  Securities  Act of 1933, as amended,  as well as any
applicable state statutes.

     10. Amendment.  This Agreement may be amended only in a writing executed by
both  parties  hereto.  If  additional  options  are granted to  Optionee,  such
additional  options  may be made  subject to the terms of this  Agreement  by an
addendum  hereto.   Any  restrictions  on  shares  purchased  pursuant  to  such
additional options shall be effective beginning on the date of execution of such
addendum unless otherwise provided therein.

     11. Governing Law; Venue. This Agreement shall be governed by and construed
in  accordance  with  the laws of the  State of  Texas.  In the  event  that any
judicial proceedings are instituted concerning the interpretation or enforcement
of this Agreement,  exclusive venue over such proceedings shall be vested in the
Federal and State Courts located in Dallas County, Texas.

     12. Binding Effect.  The provisions of this Agreement shall be binding upon
the  Optionee  and upon his heirs,  executors,  administrators,  successors  and
assigns.  The Board of Directors'  interpretation or resolution of any conflicts
or inconsistencies,  application of provisions and determination in the event of
omission, shall be binding and conclusive upon the Optionee.

     13. Notice. Any notices required or permitted to be given under this Option
by the Company or the Board of Directors  shall be deemed  delivered when placed
in the United States mails,  postage  prepaid,  in an envelope  addressed to the
last address of the  Optionee  which was  communicated  in writing to the person
giving the notice.

     14. Severability. In the event that any provisions of this Option shall for
any  reason be held to be  invalid,  such  holding  shall not  affect  any other
provision hereof, and the remaining provisions of this option shall be construed
as if such invalid provision had not been contained in the Option.

     15. Gender and Number.  As used in this  Agreement,  the  masculine  gender
shall  include the  feminine  gender and the singular  number shall  include the
plural number and vice versa.

     IN WITNESS WHEREOF, the Company and the Optionee have caused this Agreement
to be executed as of the date first above written.



                                         MAGNUM HUNTER RESOURCES, INC.



                                         By: _______________________________
                                             Gary C. Evans, President and CEO



                                         OPTIONEE:


                                         -----------------------------------
                                         Employee
<PAGE>
                                   EXHIBIT A
<TABLE>
<CAPTION>
<S>             <C>                     <C>             <C>             <C>             <C>
                                        Date of          Date of        Exercise
Year            Name                     Issue          Expiration       Price          Amount
------------------------------------------------------------------------------------------------
00              Karen Burnap            7/21/00         7/21/05          6.62500         3,000
00              Betty Epie              7/21/00         7/21/05          6.62500         3,000
00              Joyce Jones             7/21/00         7/21/05          6.62500         5,000
00              Sherrie Gaughan         3/02/00         3/02/05          3.43750        10,000
00              Rick Petrisko           7/21/00         7/21/05          6.62500        10,000
</TABLE>