EXHIBIT 1.5

# CONTROLLED EQUITY
OFFERINGSM

# SALES AGREEMENT

October 27, 2003

CANTOR FITZGERALD &
CO.

135 East 57th StreetNew York,
NY 10022

Dear Sirs/Ladies:

Magnum Hunter Resources,  Inc., a Nevada  corporation (the "Company"),  confirms its agreement (this  "Agreement") with Cantor
Fitzgerald & Co. ("CF&Co"), as follows:

1.   Issuance and Sale
of Shares. The Company agrees that, from time to time during the term of this
Agreement, on the terms and subject to the conditions set forth herein, it will issue and
sell through CF&Co, acting as agent and/or principal, up to 5,000,000 shares (the
Shares) of the Companys common stock, $0.002 par value
(Common Stock). Notwithstanding anything to the contrary contained
herein, the parties hereto agree that compliance with the limitations set forth in this
Section 1 on the number and aggregate sale price of Shares issued and sold under this
Agreement shall be the sole responsibility of the Company, and CF&Co shall have no
obligation in connection with such compliance. The issuance and sale of Shares through
CF&Co will be effected pursuant to the Registration Statement (as defined below) filed
by the Company and declared effective by the Securities and Exchange Commission (the
Commission).

2.   Placements.
Each time that the Company wishes to issue and sell Shares hereunder (each, a
Placement), it will notify CF&Co of the proposed terms of such
Placement. If CF&Co wishes to accept such proposed terms (which it may decline to do
for any reason in its sole discretion) or, following discussions with the Company, wishes
to accept amended terms, CF&Co will issue to the Company a written notice setting
forth the terms that CF&Co is willing to accept, including without limitation the
number of Shares (Placement Shares) to be issued, the manner(s) in
which sales are to be made, the date or dates on which such sales are anticipated to be
made, any minimum price below which sales may not be made, and the capacity in which
CF&Co may act in selling Shares hereunder (as principal, agent or both) (a
Placement Notice), the form of which is attached hereto as Schedule
1. The amount of compensation to be paid by the Company to CF&Co shall be three
percent (3%) of the first $25,000,000 of gross proceeds and two percent (2%) of gross
proceeds in excess of $25,000,000. The terms set forth in a Placement Notice will not be
binding on the Company or CF&Co unless and until the Company delivers written notice
of its acceptance of all of the terms of such Placement Notice (an
Acceptance); provided, however, that neither the Company nor CF&Co will be
bound by the terms of a Placement Notice unless the Company delivers to CF&Co an
Acceptance with respect thereto prior to 4:30 p.m. (New York time) on the Business Day (as
defined below) following the Business Day on which such Placement Notice is delivered to
the Company. It is expressly acknowledged and agreed that neither the Company nor
CF&Co will have any obligation whatsoever with respect to a Placement or any Placement
Shares unless and until CF&Co delivers a Placement Notice to the Company and the
Company accepts such Placement Notice by means of an Acceptance, and then only upon the
terms specified therein and herein. In the event of a conflict between the terms of this
Agreement and the terms of a Placement Notice, the terms of the Placement Notice will
control.

3.   Sale of Placement
Shares by CF&Co. Subject to the terms and conditions of this Agreement, upon the
Acceptance of a Placement Notice, and unless the sale of the Placement Shares described
therein has been suspended or otherwise terminated in accordance with the terms of this
Agreement, CF&Co will use its commercially reasonable efforts consistent with its
normal trading and sales practices to sell such Placement Shares up to the amount
specified, and otherwise in accordance with the terms of such Placement Notice. CF&Co
will provide written confirmation to the Company no later than the opening of the Trading
Day next following the Trading Day on which it has made sales of Placement Shares
hereunder setting forth the number of Placement Shares sold on such day, the compensation
payable by the Company to CF&Co with respect to such sales, and the Net Proceeds (as
defined below) payable to the Company. CF&Co may sell Placement Shares by any method
permitted by law deemed to be an at the market offering as defined in Rule 415
of the Securities Act of 1933, as amended (the Act), including without
limitation sales made directly on the New York Stock Exchange (the
Exchange), on any other existing trading market for the Common Stock or
to or through a market maker. CF&Co may also sell Placement Shares in privately
negotiated transactions. The Company acknowledges and agrees that (i) there can be no
assurance that CF&Co will be successful in selling Placement Shares, and (ii)
CF&Co will incur no liability or obligation to the Company or any other person or
entity if it does not sell Placement Shares for any reason other than a failure by
CF&Co to use its commercially reasonable efforts consistent with its normal trading
and sales practices to sell such Placement Shares as required under this Section 3. For
the purposes hereof, Trading Day means any day on which Common Stock is
purchased and sold on the principal market on which the Common Stock is listed or quoted.

4.   Suspension of
Sales. The Company or CF&Co may, upon notice to the other party in writing or by
telephone (confirmed immediately by verifiable facsimile transmission), suspend any sale
of Placement Shares; provided, however, that such suspension shall not affect or impair
either partys obligations with respect to any Placement Shares sold hereunder prior
to the receipt of such notice. The Company agrees that no such notice shall be effective
against CF&Co unless it is made to one of the individuals named on Schedule 2
hereto, as such Schedule may be amended from time to time.

5.  Settlement.

(a)  Settlement of Placement
Shares. Unless otherwise specified in the applicable Placement Notice, settlement for
sales of Placement Shares will occur on the third (3rd) Business Day (or such
earlier day as is industry practice for regular-way trading) following the date on which
such sales are made (each a Settlement Date). The amount of proceeds to
be delivered to the Company on a Settlement Date against the receipt of the Placement
Shares sold (Net Proceeds) will be equal to the aggregate sales price
at which such Placement Shares were sold, after deduction for (i) CF&Cos
commission, discount, or other compensation for such sales payable by the Company pursuant
to Section 2 hereof, (ii) any other amounts due and payable by the Company to CF&Co
hereunder pursuant to Section 7(h) hereof, and (iii) any transaction fees imposed by any
governmental or self-regulatory organization in respect of such sales.

(b)  Delivery of Shares.
On or before each Settlement Date, the Company will, or will cause its transfer agent to,
electronically transfer the Placement Shares being sold by crediting CF&Cos or
its designees account at The Depository Trust Company through its Deposit Withdrawal
Agent Commission System or by such other means of delivery as may be mutually agreed upon
by the parties hereto and, upon receipt of such Placement Shares, which in all cases shall
be freely tradable, transferable, registered shares in good deliverable form, CF&Co
will deliver the related Net Proceeds in same day funds delivered to an account designated
by the Company prior to the Settlement Date. If the Company defaults in its obligation to
deliver Placement Shares on a Settlement Date, the Company agrees that in addition to and
in no way limiting the rights and obligations set forth in Section 9(a) hereto, it will
(i) hold CF&Co harmless against any loss, claim, damage, or expense (including
reasonable out-of-pocket fees and expenses of external counsel), as incurred, arising out
of or in connection with such default by the Company and (ii) pay to CF&Co any
commission, discount, or other compensation to which it would otherwise have been entitled
absent such default.

6.  Representations and Warranties of the Company. The Company represents and warrants to, and agrees with, CF&Co that:

(a)  The Common Stock is
registered pursuant to Section 12(b) of the Exchange Act (as hereinafter defined) and the
Company has filed all reports, schedules, forms, statements and other documents required
to be filed by it with the Commission (the Commission Documents) for at
least two (2) years, and all of such filings have been made on a timely basis. The Common
Stock is currently listed on the Exchange under the trading symbol MHR. The
Company meets the requirements of Form S-3 under the Act and the rules and regulations
thereunder (Rules and Regulations), including but not limited to the
transactions requirements for a primary offering. The Company has filed a registration
statement on Form S-3 (Registration Statement No. 333-[ ]) with respect to an aggregate of
$238,325,000 of securities of the Company, including the Shares to be offered through
CF&Co, which was declared effective by the Commission on [ ] (as amended or
supplemented, the Registration Statement). The Registration Statement,
including the form of base prospectus contained therein (the Base
Prospectus) and the form of prospectus in the Registration Statement relating
specifically to the Shares to be offered through CF&Co (the Prospectus
Supplement), was prepared by the Company in conformity with the requirements of
the Act and the Rules and Regulations. The Prospectus Supplement, together with the Base
Prospectus and any amendment thereto and all documents incorporated therein by reference,
are referred to herein as the Prospectus. Any amendment or supplement
to the Registration Statement or Prospectus required by this Agreement will be so prepared
and filed by the Company, and the Company will use its best efforts to cause it to become
effective as soon as reasonably practicable. No stop order suspending the effectiveness of
the Registration Statement has been issued, and no proceeding for that purpose has been
instituted or threatened by the Commission. Copies of all filings made by the Company
under the Act and all Commission Documents that were filed with the Commission on or two
years prior to the date of this Agreement have either been delivered to CF&Co or made
available to CF&Co on the Commissions Electronic Data Gathering, Analysis, and
Retrieval system (EDGAR). Any reference herein to the Registration Statement,
the Prospectus, or any amendment or supplement thereto shall be deemed to refer to and
include the documents incorporated (or deemed to be incorporated) by reference therein,
and any reference herein to the terms amend, amendment or
supplement with respect to the Registration Statement or Prospectus shall be
deemed to refer to and include the filing after the execution hereof of any document with
the Commission deemed to be incorporated by reference therein.

(b)  Each part of the
Registration Statement, when such part became or becomes effective, and the Prospectus, on
the date of filing thereof with the Commission and at each Settlement Date, conformed or
will conform with the requirements of the Act and the Rules and Regulations; each part of
the Registration Statement, when such part became or becomes effective, did not or will
not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not misleading;
and the Prospectus, on the date of filing thereof with the Commission and at each
Settlement Date, did not or will not include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; except that the foregoing
shall not apply to statements or omissions in any such document made in reliance on
information furnished to the Company by CF&Co specifically stating that it is intended
for use in the Registration Statement, the Prospectus, or any amendment or supplement
thereto.

(c)  The documents incorporated
by reference in the Registration Statement or the Prospectus, or any amendment or
supplement thereto (the Disclosure Documents), when they became
effective under the Act or were filed with the Commission under the Securities Exchange
Act of 1934, as amended (the Exchange Act), as the case may be,
conformed with the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder, and none of such documents contained
an untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective or are filed with
the Commission, as the case may be, will conform to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein not
misleading; except that the foregoing will not apply to statements or omissions in any
such document made in reliance on information furnished to the Company by CF&Co
specifically stating that it is intended for use in any such document.

(d)  The consolidated financial
statements and financial schedules of the Company and each of the subsidiaries of the
Company listed on Schedule 3 hereto (collectively, the
Subsidiaries, and each, individually, a Subsidiary),
together with the related notes set forth or incorporated by reference in the Registration
Statement and Prospectus, have been and will be prepared in accordance with Regulation S-X
under the Act and with generally accepted accounting principles consistently applied at
the times and during the periods involved (except (i) as may be otherwise indicated in
such financial statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or summary
statements) and fairly present and will fairly present the financial position of the
Company as of the dates thereof and the results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal year-end
adjustments).

(e)  The Company has been duly
incorporated and is validly existing as a corporation in good standing under the laws of
the State of Nevada with full power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement and Prospectus; and
the Company is duly qualified as a foreign entity to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except where the
failure, individually or in the aggregate, to be so qualified and be in good standing
would not have a material adverse effect on (i) the consolidated business, operations,
properties, financial condition, reputation, or results of operations of the Company and
its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform its
obligations under this Agreement and consummate the transactions contemplated hereunder
(collectively, a Material Adverse Effect).

(f)  Each Subsidiary of the
Company, if any, has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation, has corporate power
and authority to own, lease and operate its properties and conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to be so qualified would not have a Material Adverse
Effect.

(g)  Each of the Company and its
Subsidiaries has good and marketable title to all of the properties and assets owned by
it, free and clear of all liens, charges, claims, security interests or encumbrances
(collectively, Encumbrances), other than Encumbrances that (1) are
pursuant to (a) the Fourth Amended and Restated Credit Agreement, dated as of March 15,
2002, by and among the Company, as the borrower, the various financial institutions that
are or may become parties thereto, Deutsche Bank Trust Company Americas (formerly named
Bankers Trust Company), individually, as administrative agent, as collateral agent, and as
letter of credit issuing bank, CIBC, Inc., individually and as syndication agent, and BNP
Paribas, a French bank acting through its Houston Agency, individually and as
documentation agent, as amended to time to time; (b) the Master Lease Agreement between
General Electric Capital Corporation and Magnum Hunter Production, Inc. and (c) liens on
assets of Redhead Energy, Inc. (Redhead) securing indebtedness of
Redhead, (2) are under operating agreements, unitization and pooling arrangements and
crude oil and gas sales contracts that secure payment of amounts not yet due and payable
and which are of a nature and scope customary in connection with similar oil and gas
drilling and producing operations, or (3) individually or in the aggregate, would not have
a Material Adverse Effect. Each of the Company and its Subsidiaries has possession under
all leases to which it is party as lessee and all leases to which the Company or any of
its Subsidiaries is a party are valid and binding and no material default has occurred and
is continuing thereunder, and no event or circumstance that with the passage of time or
giving of notice, or both, would constitute such a material default has occurred and is
continuing, and, to the best knowledge of the Company, no defaults by the landlord exist
under any such leases. Except to the extent described in the Prospectus, the leases,
options to lease, drilling concessions or other arrangements held by each of the Company
and its Subsidiaries reflect in all material respects the right of the Company and its
Subsidiaries to develop, exploit and explore their properties. The Company and each of its
Subsidiaries have conducted such title investigations and have acquired their interests in
oil and gas leases in such manner as is customary in the oil and gas industry for the
respective regions in which the property subject to such leases is located. The Company
and each of its Subsidiaries have complied in all material respects with the terms of oil
and gas leases in which each purports to own an interest, and no claim of any sort has
been asserted by any person or entity adverse to the rights of the Company or any of its
Subsidiaries as lessee or sublessee under any of such leases or questioning its rights to
the continued possession of the leased premises under any such lease, except with respect
to claims which do not materially adversely affect the use made and proposed to be made of
such oil and gas leases by the Company or any of its Subsidiaries. The concessions,
reservations, licenses, permits and rights to hydrocarbons held by the Company and each of
its Subsidiaries are valid, subsisting and enforceable, except where such failure to be
valid, subsisting or enforceable would not have a Material Adverse Effect on the use made
and proposed to be made of such oil and gas leases.

(h)  The Company has an
authorized capitalization as set forth in its most recent Annual Report on Form 10-K and
will have an authorized capitalization as set forth in the Prospectus as amended or
supplemented, and all of the issued shares of capital stock of the Company have been duly
and validly authorized and issued and are fully paid and non-assessable and have been
issued in compliance with all applicable federal and state securities laws; and all of the
issued shares of capital stock of each Subsidiary of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable and the shares of such
Subsidiary are owned directly or indirectly by the Company, and are held free and clear of
all Encumbrances, other than as described in the Disclosure Documents.

(i)  The Shares have been duly
authorized and, when issued, delivered and paid for pursuant to this Agreement, will be
validly issued and fully paid and non-assessable, free and clear of all Encumbrances and
will be issued in compliance with all applicable federal and state securities laws; the
capital stock of the Company, including the Placement Shares, conforms to the description
thereof contained in the Registration Statement and the Placement Shares will conform to
the description thereof contained in the Prospectus as amended or supplemented. Neither
the stockholders of the Company, nor any other person or entity has any preemptive rights
or rights of first refusal with respect to the Placement Shares or other rights to
purchase or receive any of the Shares or any other securities or assets of the Company,
and no person has the right, contractual or otherwise, to cause the Company to issue to
it, or register pursuant to the Act, any shares of capital stock or other securities or
assets of the Company upon the issuance or sale of the Placement Shares.

(j)  Neither the Company nor any
of its Subsidiaries has sustained since the date of the latest audited financial
statements included in its most recent Annual Report on Form 10-K (and after the date
hereof included or incorporated by reference in the Prospectus) any material loss or
interference with the business of the Company and its Subsidiaries, taken as a whole,
including without limitation, from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or governmental action, order
or decree; subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) neither the Company nor any of its
Subsidiaries has incurred any liabilities or obligations, direct or contingent, or entered
into any transactions, not in the ordinary course of business, that are material to the
Company and its Subsidiaries taken as a whole, and (ii) since the date of the latest
audited financial statements included or incorporated by reference in the Prospectus,
there has not been any material change, on a consolidated basis, in the authorized capital
stock of the Company and its Subsidiaries, any material increase in the short-term debt or
long-term debt of the Company and its Subsidiaries, on a consolidated basis, or any
Material Adverse Effect, or any development reasonably likely to cause a Material Adverse
Effect.

(k)  On the date hereof, and
except as set forth in the Prospectus, there is no claim, litigation or administrative
proceeding or inquiry pending, or, to the Companys knowledge, threatened against the
Company or any of its Subsidiaries, or, to the Companys knowledge, against any
officer, director or employee of the Company or any such Subsidiary in connection with
such persons employment therewith that, individually or in the aggregate, could have
a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to
or subject to the provisions of, any order, writ, injunction, judgment or decree of any
court or government agency or instrumentality which could have a Material Adverse Effect.

(l)  There are no legal or
governmental proceedings, contracts or documents of the Company or any of its Subsidiaries
that are required to be described in or filed as exhibits to the Commission Documents,
Registration Statement or any of the documents incorporated by reference therein by the
Act or the Exchange Act or by the rules and regulations of the Commission thereunder that
have not been so described or filed as required.

(m)  All necessary action has
been duly and validly taken by the Company to authorize the execution, delivery and
performance of this Agreement. This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors rights generally and by general equitable principles (whether applied in a
proceeding in law or equity).

(n)  Neither the Company nor any
of its Subsidiaries is in violation of any provisions of its charter, bylaws or any other
governing document as amended and in effect on and as of the date hereof or in default
(and no event has occurred which, with notice or lapse of time or both, would constitute a
default) under any indenture, mortgage, deed of trust, loan or credit agreement or any
provision of any instrument or contract to which it is a party or by which it is bound
that, individually or in the aggregate, would have a Material Adverse Effect.

(o)  Executing and delivering
this Agreement and the issuance and sale of the Shares and the compliance by the Company
with all of the provisions of this Agreement and the consummation of the transactions
contemplated herein will not result in (i) a breach or violation of any of the terms and
provisions of, or constitute a default under, any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan or credit agreement or
other agreement or instrument to which the Company or any of its Subsidiaries is a party
or by which any of them is bound or to which any of the property of the Company or any of
its Subsidiaries is subject, (ii) a violation of the Companys charter or by-laws, or
any statute or any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its Subsidiaries or any of its properties
or (iii) the creation of any Encumbrance upon any assets of the Company or of any of its
Subsidiaries or the triggering, solely as a result of the Companys execution and
delivery of this Agreement, of any preemptive or anti-dilution rights or rights of first
refusal or first offer, or any similar rights (whether pursuant to a poison
pill provision or otherwise), on the part of holders of the Companys
securities or any other person. Neither the Company nor any of its Subsidiaries or
affiliates, nor any person acting on its or their behalf, has issued or sold any shares of
Common Stock or securities or instruments convertible into, exchangeable for and/or
otherwise entitling the holder thereof to acquire shares of Common Stock which would be
integrated with the offer and sale of the Shares hereunder, including, without limitation,
for purposes of any applicable stockholder approval provisions, including, without
limitation, under the rules and regulations of any exchange or automated quotation system
on which any of the securities of the Company are listed or designated.

(p)  The Company and its
Subsidiaries have not violated and are in compliance with all laws, statutes, ordinances,
regulations, rules and orders of any foreign, federal, state or local government and any
other governmental department or agency, and any judgment, decision, decree or order of
any court or governmental agency, department or authority, except for such violations or
noncompliance which, individually or in the aggregate, would not have a Material Adverse
Effect.

(q)  The Company and its
Subsidiaries possess such licenses, permits, consents, orders, certificates or
authorizations issued by the appropriate federal, state, foreign or local regulatory
agencies or judicial or governmental bodies that are necessary to conduct their business
as described in the Prospectus, except for licenses, permits, consents, orders,
certificates, authorizations, approvals, franchises or rights, the absence of which,
individually or in the aggregate, would not have a Material Adverse Effect; the Company
and its Subsidiaries have not received any notice of proceedings or investigations
relating to the revocation or modification of any such licenses, permits, consents,
orders, certificates, authorizations, approvals, franchises or rights which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect. No consent, approval, authorization, permit, or order of, or
filing with, any court or governmental agency or body is required for the issue and sale
of the Shares and the consummation by the Company of the transactions contemplated by this
Agreement, except the filing with the Commission of the Registration Statement (including
the Prospectus) and amendments and supplements to the Registration Statement and
Prospectus related to the issue and sale of the Shares and such consents, approvals,
authorizations, registrations or qualifications as have already been obtained or made or
as may be required under state securities or Blue Sky laws.

(r)  Each of the Company and the
Subsidiaries maintains liability, casualty and other insurance (subject to customary
deductions and retentions) adequate for the conduct of its respective business and with
responsible insurance companies against such risks of the types and in the amounts
customarily maintained by independent oil companies of comparable size to the Company
engaged in the acquisition, development and exploration of oil and gas properties and
related assets (which may include self-insurance in comparable form to that maintained by
such responsible companies); neither the Company nor any of its Subsidiaries has received
notice from any insurer or agent of such insurer that substantial capital improvements or
other expenditures will have to be made in order to continue such insurance; all such
insurance is outstanding and in full force and effect.

(s)  On the date hereof, and
after the date hereof other than as set forth in the Prospectus, the Company and each of
its Subsidiaries have obtained all environmental permits, licenses and other
authorizations required by federal, state, foreign and local law in order to conduct their
businesses as described in the Prospectus, except where the failure to have such permits,
licenses and other authorizations would not have a Material Adverse Effect; the Company
and each of its Subsidiaries are conducting their businesses in compliance with such
permits, licenses and authorizations and with applicable environmental laws, except where
the failure to be in compliance would not have a Material Adverse Effect; and, except as
described in the Prospectus, the Company is not in violation of any federal, state,
foreign or local law or regulation relating to the storage, handling, disposal, release or
transportation of hazardous or toxic materials except for such violations or noncompliance
which, individually or in the aggregate, would not have a Material Adverse Effect.

(t)  Neither the Company nor any
of its Subsidiaries has been notified or is otherwise aware that it is liable with respect
to obligations under the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, any applicable existing federal, state, local or international
laws and regulations relating to protection of human health or the environment or imposing
liability or standards of conduct concerning any Hazardous Material
(Environmental Laws), and it is not aware of any facts or circumstances
which could reasonably be expected to result in any such liability. The Company and the
Subsidiaries are in compliance with all applicable existing Environmental Laws, except for
such instances of non-compliance which would not have a Material Adverse Effect. The term
Hazardous Material means (i) any hazardous substance as defined by
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, (ii) any hazardous waste as defined by the Resource Conservation and
Recovery Act, as amended, (iii) any petroleum or petroleum product, (iv) any
polychlorinated biphenyl and (v) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material, waste or substance regulated under or within the meaning of any
other Environmental Law. To the best of the Companys knowledge, no disposal, release
or discharge of Hazardous Material has occurred on, in, at or about any of the
facilities or properties of the Company or any of its Subsidiaries. Except as described in
the Prospectus to the best of the Companys knowledge: (i) there has been no storage,
disposal, generation, transportation, handling or treatment of hazardous substances or
solid wastes by the Company or any of its Subsidiaries (or to the knowledge of the
Company, any of its predecessors in interest) at, upon or from any of the property now or
previously owned or leased by the Company or any of its Subsidiaries in violation of any
applicable law, ordinance, rule, regulation, order, judgment, decree or permit or which
would require remedial action which has not been taken, under any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit, except for such violations
and failures to take remedial action which, individually or in the aggregate, would not
have a Material Adverse Effect; (ii) there has been no material spill, disposal,
discharge, leak, emission, injection, escape, dumping or release of any kind onto such
property or into the environment surrounding such property by the Company or any of its
Subsidiaries of any solid waste or Hazardous Materials, except for such spills, disposals,
discharges, leaks, emissions, injections, escapes, dumping or releases which, individually
or in the aggregate, would not have a Material Adverse Effect.

(u)  The information provided by
the Company or any of its Subsidiaries to the Petroleum Consultants (as hereinafter
defined) for the preparation of the estimates of reserves in the reserve reports for the
oil and gas properties of the Company prepared by DeGolyer and MacNaughton and Cawley
Gillespie & Associates, Inc., independent petroleum consultants (collectively the
Petroleum Consultants), were at the respective times of delivery
thereof to the Petroleum Consultants complete and accurate in all material respects.
CF&Co has received from each Petroleum Consultant a true and correct copy of its
reserve report with respect to the Companys interests at December 31, 2002 and
December 31, 2001(each a Reserve Report), and each of the
Reserve Reports and the letters from each of the Petroleum Consultants to the Company with
respect thereto have been reviewed, and accepted as having a reasonable basis, by the
Company and have been included in the Prospectus in good faith by the Company. Except as
expressly stated in the Prospectus, information in the Prospectus regarding estimates of
reserves, future net cash flows and present values of proved reserves comply in all
material respects with the applicable requirements of Rule 4-10 of Regulation S-X and
Industry Guide 2 under the Act. Nothing has come to the Companys attention since the
delivery of the most recent reserve reports which has caused the Company to believe that
the information contained therein is inaccurate in any material respect. The Company has
disclosed to CF&Co (1) any oil and gas properties of the Company or any of its
Subsidiaries covered by the most recent reserve reports which have been sold since the
date of such reserve reports and (2) anyoil and gas properties of the Company or
any of its Subsidiaries that have not been previously included in such reserve reports.

(v)  Deloitte & Touche LLP,
which has audited the financial statements of the Company and its Subsidiaries included in
the Prospectus, is, to the Companys best knowledge, an independent public accountant
as required by the Act and the Rules and Regulations.

(w)  No forward looking
statement within the meaning of Section 27A of the Act and Section 21E of the Exchange Act
contained in the Commission Documents or Registration Statement has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good faith.

(x)  The Company and each of its
Subsidiaries own or possess sufficient legal rights to all patents, trademarks, service
marks, tradenames, copyrights, trade secrets, licenses, information and proprietary rights
and processes necessary for their respective businesses as now conducted without any
conflict with, or infringement of, the rights of others, except where the failure to own
or possess such intellectual property rights, individually or in the aggregate, would not
have a Material Adverse Effect.

(y)  Neither the Company nor any
entity that is or was a member of the Companys controlled group (within the meaning
of Section 412(n)(6) of The Internal Revenue Code of 1986, as amended (the
Code)) has any direct, contingent or secondary liability under Title IV
of The Employee Retirement Income Security Act of 1974 or Section 412 of the Code.

(z)  On each Settlement Date and
each Filing Date (as defined in Section 7(m) below), the Company shall be deemed to have
confirmed (i) the accuracy and completeness, as of such date, of each representation and
warranty made by it in this Agreement, as if each such representation and warranty were
made on and as of such date, and (ii) that the Company has complied with all of the
agreements to be performed by it hereunder at or prior to such date.

(aa)  The Company is not a party
to any agreement with an agent or underwriter for any other at-the-market or
continuous equity transaction.

(bb)  The Company acknowledges
and agrees that CF&Co has informed the Company that CF&Co may, to the extent
permitted under the Act and the Exchange Act, purchase and sell shares of Common Stock for
its own account while this Agreement is in effect provided that (i) no such purchase or
sales shall take place while a Placement Notice is in effect (except to the extent
CF&Co. may engage in sales of Placement Shares purchased or deemed purchased from the
Company as a riskless principal or in a similar capacity) and (ii) the Company
shall not be deemed to have authorized or consented to any such purchases or sales by
CF&Co.

7.  Covenants of the Company. The Company covenants and agrees with CF&Co that:

(a)  After the date of this
Agreement, with regard to the filing of the Registration Statement with the Commission,
and until such Registration Statement is declared effective, and during the period in
which a prospectus relating to the Shares is required to be delivered by CF&Co under
the Act, the Company will notify CF&Co promptly of the time when any subsequent
amendment to the Registration Statement has been filed with the Commission and has become
effective or any subsequent supplement to the Prospectus has been filed and of any request
by the Commission for any amendment or supplement to the Registration Statement or
Prospectus or for additional information; it will prepare and file with the Commission,
promptly upon CF&Cos request, any amendments or supplements to the Registration
Statement or Prospectus that, in CF&Cos opinion, may be necessary or advisable
in connection with the distribution of the Shares by CF&Co (provided, however that the
failure of CF&Co to make such request shall not relieve the Company of any obligation
or liability hereunder, or affect CF&Cos right to rely on the representations
and warranties made by the Company in this Agreement); the Company will not file any
amendment or supplement to the Registration Statement or Prospectus unless a copy thereof
has been submitted to CF&Co a reasonable period of time before the filing and
CF&Co has not reasonably objected thereto (provided, however that the failure of
CF&Co to make such objection shall not relieve the Company of any obligation or
liability hereunder, or affect CF&Cos right to rely on the representations and
warranties made by the Company in this Agreement); and it will furnish to CF&Co at the
time of filing thereof a copy of any document that upon filing is deemed to be
incorporated by reference in the Registration Statement or Prospectus; and the Company
will cause each amendment or supplement to the Prospectus to be filed with the Commission
as required pursuant to the applicable paragraph of Rule 424(b) of the Rules and
Regulations or, in the case of any document to be incorporated therein by reference, to be
filed with the Commission as required pursuant to the Exchange Act, within the time period
prescribed.

(b)  The Company will advise
CF&Co, promptly after it receives notice or obtains knowledge thereof, of the issuance
or threatened issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose; and it will promptly use its commercially reasonable
efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a
stop order should be issued.

(c)  Within the time during
which a prospectus relating to the Shares is required to be delivered by CF&Co under
the Act, the Company will comply with all requirements imposed upon it by the Act and by
the Rules and Regulations, as from time to time in force, and will file on or before their
respective due dates all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c),
14, 15(d) or any other provision of or under the Exchange Act. If during such period any
event occurs as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend or supplement the
Registration Statement or Prospectus to comply with the Act, the Company will promptly
notify CF&Co to suspend the offering of Shares during such period and the Company will
promptly amend or supplement the Registration Statement or Prospectus (at the expense of
the Company) so as to correct such statement or omission or effect such compliance.

(d)  The Company will use its
best efforts to cause the Shares to be listed on the Exchange and to qualify the Shares
for sale under the securities laws of such jurisdictions as CF&Co designates and to
continue such qualifications in effect so long as required for the distribution of the
Shares; provided that the Company shall not be required in connection therewith to qualify
as a foreign corporation or to file a general consent to service of process in any
jurisdiction.

(e)  The Company will furnish to
CF&Co and its counsel (at the expense of the Company) copies of the Registration
Statement, the Prospectus (including all documents incorporated by reference therein) and
all amendments and supplements to the Registration Statement or Prospectus that are filed
with the Commission during the period in which a prospectus relating to the Shares is
required to be delivered under the Act (including all documents filed with the Commission
during such period that are deemed to be incorporated by reference therein), in each case
as soon as reasonably practicable and in such quantities as CF&Co may from time to
time reasonably request and, at CF&Cos request, will also furnish copies of the
Prospectus to each exchange or market on which sales of Shares may be made.

(f)  The Company will furnish to
CF&Co for a period of two (2) years from the date of this Agreement such information
as reasonably requested by CF&Co regarding the Company or its Subsidiaries.

(g)  The Company will make
generally available to its security holders as soon as practicable, but in any event not
later than 15 months after the end of the Companys current fiscal quarter, an
earning statement covering a 12-month period that satisfies the provisions of Section
11(a) of the Act and Rule 158 of the Rules and Regulations.

(h)  The Company, whether or not
the transactions contemplated hereunder are consummated or this Agreement is terminated,
will pay all expenses incident to the performance of its obligations hereunder, including,
but not limited to, expenses relating to (i) the preparation, printing and filing of the
Registration Statement and each amendment and supplement thereto, of each Prospectus and
of each amendment and supplement thereto, (ii) the preparation, issuance and delivery of
the Shares, (iii) the fees and disbursements of the Companys counsel and accountants
and the reasonable fees and expenses of CF&Cos counsel in connection with
negotiating this agreement and performing its obligations hereunder, (iv) the
qualification of the Shares under securities laws in accordance with the provisions of
Section 7(d) of this Agreement, including filing fees and any reasonable fees or
disbursements of counsel for CF&Co in connection therewith, (v) the printing and
delivery to CF&Co of copies of the Prospectus and any amendments or supplements
thereto, and of this Agreement, (vi) the fees and expenses incurred in connection with the
listing or qualification of the Shares for trading on the Exchange, or (vii) filing fees
and expenses, if any, of the Commission and the National Association of Securities
Dealers, Inc. Corporate Finance Department.

(i)  The Company will use the
Net Proceeds as described in the Prospectus and, in any case, for general corporate
purposes only, in the ordinary course of its business consistent with past practices, and
without limiting the generality of the foregoing, shall not use such proceeds to make a
loan to any employee , officer, director or stockholder of the Company (other than loans
made to new employees as a condition of employment), to repay any loan or other obligation
of the Company to any such person or to repurchase or pay a dividend on shares of Common
Stock or other securities of the Company (in any such case, regardless of whether such
loan or payment was authorized by the Companys Board of Directors prior to the date
hereof).

(j)  Without the written consent
of CF&Co, the Company will not, directly or indirectly, offer to sell, sell, contract
to sell, grant any option to sell or otherwise dispose of any shares of Common Stock
(other than the Shares offered pursuant to the provisions of this Agreement), or
securities convertible into or exchangeable for Common Stock, warrants or any rights to
purchase or acquire, Common Stock during the period beginning on the fifth
(5th) Trading Day immediately prior to the date on which any Acceptance of a
Placement Notice is delivered to CF&Co hereunder and ending on the fifth
(5th) Trading Day immediately following the final Settlement Date with respect
to Shares sold pursuant to such Placement Notice; and will not directly or indirectly in
any other at-the-market or continuous equity transaction offer to sell, sell,
contract to sell, grant any option to sell or otherwise dispose of any shares of Common
Stock (other than the Shares offered pursuant to the provisions of this Agreement) or
securities convertible into or exchangeable for Common Stock, warrants or any rights to
purchase or acquire, Common Stock prior to the later of the termination of this Agreement
and the sixtieth (60th) day immediately following the final Settlement Date
with respect to Shares sold pursuant to such Placement Notice; provided, however, that
such restrictions will not be required in connection with the Companys issuance or
sale of (i) Common Stock, options to purchase shares of Common Stock or Common Stock
issuable upon the exercise of options, pursuant to any employee or director stock option
or benefits plan, stock ownership plan or dividend reinvestment plan (but not shares
subject to a waiver to exceed plan limits in its stock purchase plan) of the Company now
in effect, and (ii) Common Stock issuable upon conversion of securities or the exercise of
warrants, options or other rights in effect or outstanding, and disclosed in writing to
CF&Co.

(k)  The Company will, at any
time during the term of this Agreement, as supplemented from time to time, advise
CF&Co immediately after it shall have received notice or obtain knowledge thereof, of
any information or fact that would alter or affect any opinion, certificate, letter or
other document provided to CF&Co pursuant to this Agreement.

(l)  The Company will cooperate
with any due diligence review conducted by CF&Co or its agents, including, without
limitation, providing information and making available documents and senior corporate
officers, as CF&Co may reasonably request; provided, however, that the Company shall
be required to make available documents and senior corporate officers only (i) at the
Companys principal offices and (ii) during the Companys ordinary business
hours.

(m)  The Company agrees that on
such dates as the Rules and Regulations shall require, the Company will (i) file a
prospectus supplement with the Commission under the applicable paragraph of Rule 424(b)
under the Act (each and every filing under Rule 424(b), a Filing Date),
which prospectus supplement will set forth, within the relevant period, the amount of
Shares sold through CF&Co, the Net Proceeds to the Company and the compensation
payable by the Company to CF&Co and (ii) deliver such number of copies of each such
prospectus supplement to each exchange or market on which such sales were effected as may
be required by the rules or regulations of such exchange or market.

(n)  On the date that the
Registration Statement is declared effective, on each Filing Date and each time that (i)
the Registration Statement shall be amended or the Prospectus supplemented (other than a
supplement filed pursuant Rule 424(b) under the Act that contains solely the information
confirmed to the Company by CF&Co pursuant to Section 7(m) above) or (ii) there
is filed with the Commission any document incorporated by reference into the Prospectus,
the Company shall furnish or cause to be furnished to CF&Co forthwith a certificate
dated the date of filing with the Commission of such supplement, or other document, or the
date of the effectiveness of the Registration Statement or such amendment, as the case may
be, in the form attached hereto as Exhibit 8(h) to the effect that the representations and
warranties made by the Company in this Agreement are true and correct on such date as
though made at and as of such date (except that such statements shall be deemed to relate
to the Registration Statement and the Prospectus as amended and supplemented to such time)
and that the Company has complied with all of the agreements to be performed by it at or
prior to such date.

(o)  On the date that the
Registration Statement is declared effective and each time that (i) the Registration
Statement is amended or the Prospectus supplemented (other than a supplement filed
pursuant Rule 424(b) under the Act that contains solely the information confirmed to the
Company by CF&Co pursuant to Section 7(m) above) or (ii) there is filed with the
Commission any document incorporated by reference into the Prospectus, the Company shall
furnish or cause to be furnished forthwith to CF&Co and to counsel to CF&Co a
written opinion of Fulbright & Jaworski L. L. P., counsel to the Company
(Company Counsel), or other counsels satisfactory to CF&Co, dated
the date of effectiveness of the Registration Statement or amendment, or the date of
filing with the Commission of such supplement or other document, as the case may be, in
form and substance satisfactory to CF&Co and its counsel, in substantially the forms
attached hereto as Exhibits 8(e)(1) and 8(f)(1) respectively (for the date of
effectiveness of the Registration Statement) and Exhibits 8(e)(2) and 8(f)(2) respectively
(for subsequent dates), but modified as necessary to relate to the Registration Statement
and the Prospectus as amended and supplemented to the time of delivery of such opinion.

(p)  On the date that the
Registration Statement is declared effective and each time that the Registration Statement
is amended or the Prospectus supplemented to include additional amended financial
information or there is filed with the Commission any document incorporated by reference
into the Prospectus which contains additional amended financial information, the Company
shall cause its independent accountants reasonably satisfactory to CF&Co, forthwith to
furnish CF&Co letters (the Comfort Letters), dated the date of
effectiveness of the Registration Statement or such amendment, or the date of filing of
such supplement or other document with the Commission, as the case may be, in form and
substance satisfactory to CF&Co, (i) confirming that they are independent public
accountants within the meaning of the Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of Regulation
S-X of the Commission, (ii) stating, as of such date, the conclusions and findings of such
firm with respect to the financial information and other matters ordinarily covered by
accountants comfort letters to underwriters in connection with
registered public offerings (the first such letter, the Initial Comfort
Letter) and (iii) updating the Initial Comfort Letter with any information
which would have been included in the Initial Comfort Letter had it been given on such
date and modified as necessary to relate to the Registration Statement and the Prospectus,
as amended and supplemented to the date of such letter.

(q)       
          At any time during the term of this Agreement, the Company will deliver copies
          of each of the most recent reserve reports prepared by the Petroleum Consultants
          or any other independent petroleum consultants hired by the Company or any of
          its Subsidiaries (the Current Reserve Reports) to CF&Co
          as soon as reasonably practicable after the delivery thereof to the Company.

(r)       
          The Company will not, directly or indirectly, (i) take any action designed to
          cause or result in, or that constitutes or might reasonably be expected to
          constitute, the stabilization or manipulation of the price of any security of
          the Company to facilitate the sale or resale of the Shares or (ii) sell, bid
          for, or purchase the Shares, or pay anyone any compensation for soliciting
          purchases of the Shares other than CF&Co.

8.   Conditions to
CF&Cos Obligations. The obligations of CF&Co hereunder with respect to a
Placement will be subject to the continuing accuracy and completeness of the
representations and warranties made by the Company herein, to the due performance by the
Company of its obligations hereunder, to the completion by CF&Co of a due diligence
review satisfactory to CF&Co in its reasonable judgment, and to the continuing
satisfaction (or waiver by CF&Co in its sole discretion) of the following additional
conditions:

(a)  The Registration Statement
shall have become effective and shall be available for the resale of (i) all Placement
Shares issued pursuant to all prior Placements and not yet sold by CF&Co and (ii) all
Placement Shares contemplated to be issued by the Placement Notice relating to such
Placement.

(b)  None of the following
events shall have occurred and be continuing: (i) receipt by the Company of any request
for additional information from the Commission or any other federal or state governmental
authority during the period of effectiveness of the Registration Statement, the response
to which would require any amendments or supplements to the Registration Statement or the
Prospectus; (ii) the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose; (iii) receipt by the Company of any
notification with respect to the suspension of the qualification or exemption from
qualification of any of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; (iv) the occurrence of any event that
makes any statement made in the Registration Statement or the Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any material
respect or that requires the making of any changes in the Registration Statement, related
prospectus or documents so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading,
and that in the case of the Prospectus, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading; and (v) the Companys reasonable determination
that a post-effective amendment to the Registration Statement would be appropriate.

(c)  CF&Co shall not have
advised the Company that the Registration Statement or Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact that in CF&Cos opinion
is material, or omits to state a fact that in CF&Cos opinion is material and is
required to be stated therein or is necessary to make the statements therein not
misleading.

(d)  Except as contemplated in
the Prospectus, or disclosed in the Companys reports filed with the Commission prior
to the date of this Agreement, there shall not have been any material change, on a
consolidated basis, in the authorized capital stock of the Company and its Subsidiaries,
or any Material Adverse Effect, or any development that would reasonably be expected to
cause a Material Adverse Effect, or a downgrading in or withdrawal of the rating assigned
to any of the Companys securities by any rating organization or a public
announcement by any rating organization that it has under surveillance or review its
rating of any of the Companys securities, the effect of which, in the case of any
such action by a rating organization described above, in the sole judgment of CF&Co
(without relieving the Company of any obligation or liability it may otherwise have), is
so material as to make it impracticable or inadvisable to proceed with the offering of the
Placement Shares on the terms and in the manner contemplated in the Prospectus.

(e)  CF&Co shall have
received the opinion of Company Counsel required to be delivered pursuant Section 7(o) on
or before the date on which such delivery of such opinion is required pursuant to Section
7(o).

(f)  CF&Co shall have
received the Comfort Letter required to be delivered pursuant to Section 7(p) on or before
the date on which such delivery of such letter is required pursuant to Section 7(p).

(g)  CF&Co shall have
received the certificate required to be delivered pursuant to Section 7(n) on or
before the date on which delivery of such certificate is required pursuant to Section
7(n).

(h)  CF&Co shall have
received a letter (the Reserve Letters) from each of the Petroleum
Consultants in form and substance reasonably satisfactory to CF&Co, stating, as of
such date that (1) the Current Reserve Reports prepared by them were true and correct as
of the date thereof and nothing has come to their attention since the dates thereof which
caused them to believe that the information contained therein is inaccurate in any
material respect and (2) the information set forth in the Registration Statement and
Prospectus, as amended or supplemented, summarizing their Current Reserve Reports
constitutes a fair summary of such Current Reserve Reports.

(i)  The Shares shall have been
duly listed, subject to notice of issuance, on the Exchange, and trading in the Common
Stock shall not have been suspended on such market.

(j)  On each date on which the
Company is required to deliver a certificate pursuant to Section 7(n), the Company shall
have furnished to CF&Co such appropriate further information, certificates and
documents as CF&Co may reasonably request. All such opinions, certificates, letters
and other documents will be in compliance with the provisions hereof. The Company will
furnish CF&Co with such conformed copies of such opinions, certificates, letters and
other documents as CF&Co shall reasonably request.

(k)  There shall not have
occurred any event that would permit CF&Co to terminate this Agreement pursuant to
Section 11(a).

9.  
Indemnification and Contribution.

(a)  The Company agrees to
indemnify and hold harmless CF&Co, the directors, officers, partners, employees and
agents of CF&Co and each person, if any, who (i) controls CF&Co within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, or (ii) is controlled by or is
under common control with CF&Co (a CF&Co Affiliate) from and
against any and all losses, claims, liabilities, expenses and damages (including, but not
limited to, any and all investigative, legal and other expenses reasonably incurred in
connection with, and any and all amounts paid in settlement of, any action, suit or
proceeding between any of the indemnified parties and any indemnifying parties or between
any indemnified party and any third party, or otherwise, or any claim asserted), as and
when incurred, to which CF&Co, or any such person, may become subject under the Act,
the Exchange Act or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages arise out of
or are based, directly or indirectly, on (i) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration Statement
or the Prospectus, or in any application or other document executed by or on behalf of the
Company or based on written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Shares under the securities laws thereof or filed
with the Commission, (ii) the omission or alleged omission to state in such document a
material fact required to be stated in it or necessary to make the statements in it not
misleading or (iii) any breach by any of the indemnifying parties of any of their
respective representations, warranties and agreements contained in this Agreement;
provided that this indemnity agreement shall not apply to the extent that such loss,
claim, liability, expense or damage arises from the sale of the Shares pursuant to this
Agreement and is caused directly by an untrue statement or omission made in reliance on
and in conformity with information relating to CF&Co and furnished in writing to the
Company by CF&Co expressly stating that such information is intended for inclusion in
any document described in clause (a)(i) above. This indemnity agreement will be in
addition to any liability that the Company might otherwise have.

(b)  CF&Co agrees to
indemnify and hold harmless the Company and its directors and each officer of the Company
who signed the Registration Statement, and each person, if any, who (i) controls the
Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act or
(ii) is controlled by or is under common control with the Company (a Company
Affiliate) against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendments thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information and relating to CF&Co
furnished to the Company by CF&Co expressly stating that such information is intended
for use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).

(c)  Any party that proposes to
assert the right to be indemnified under this Section 9 will, promptly after receipt of
notice of commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 9, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all papers
served, but the omission so to notify such indemnifying party will not relieve the
indemnifying party from (i) any liability that it might have to any indemnified party
otherwise than under this Section 9 and (ii) any liability that it may have to any
indemnified party under the foregoing provision of this Section 9 unless, and only to the
extent that, such omission results in the forfeiture of substantive rights or defenses by
the indemnifying party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will be
entitled to participate in and, to the extent that it elects by delivering written notice
to the indemnified party promptly after receiving notice of the commencement of the action
from the indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party, and after notice from the indemnifying party to the indemnified party
of its election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and except for
the reasonable costs of investigation subsequently incurred by the indemnified party in
connection with the defense. The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of such counsel will
be at the expense of such indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2) the
indemnified party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or potential
conflict exists (based on advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the indemnifying party will
not have the right to direct the defense of such action on behalf of the indemnified
party) or (4) the indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving notice of the commencement
of the action, in each of which cases the reasonable fees, disbursements and other charges
of counsel will be at the expense of the indemnifying party or parties. It is understood
that the indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to practice in
such jurisdiction at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying party
promptly as they are incurred. An indemnifying party will not, in any event, be liable for
any settlement of any action or claim effected without its written consent. No
indemnifying party shall, without the prior written consent of each indemnified party,
settle or compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated by this Section 9
(whether or not any indemnified party is a party thereto), unless such settlement,
compromise or consent includes an unconditional release of each indemnified party from all
liability arising or that may arise out of such claim, action or proceeding.
Notwithstanding any other provision of this Section 9(c), if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel for which it is entitled to reimbursement pursuant to this
Section 9(c), such indemnifying party agrees that it shall be liable for any settlement
effected without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into, and (iii) such indemnifying party shall
not have reimbursed such indemnified party in accordance with such request prior to the
date of such settlement; provided that an indemnifying party shall not be liable for any
such settlement effected without its consent if such indemnifying party, at least five
days prior to the date of such settlement, (1) reimburses such indemnified party in
accordance with such request for the amount of such fees and expenses of counsel as the
indemnifying party believes in good faith to be reasonable and (2) provides written notice
to the indemnified party that the indemnifying party disputes in good faith the
reasonableness of the unpaid balance of such fees and expenses.

(d)  In order to provide for
just and equitable contribution in circumstances in which the indemnification provided for
in the foregoing paragraphs of this Section 9 is applicable in accordance with its terms
but for any reason is held to be unavailable from the Company or CF&Co, the Company
and CF&Co will contribute to the total losses, claims, liabilities, expenses and
damages (including any investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or proceeding or
any claim asserted, but after deducting any contribution received by the Company from
persons other than CF&Co, such as persons who control the Company within the meaning
of the Act, officers of the Company who signed the Registration Statement and directors of
the Company, who also may be liable for contribution) to which the Company and CF&Co
may be subject in such proportion as shall be appropriate to reflect the relative benefits
received by the Company, on the one hand, and CF&Co, on the other hand. The relative
benefits received by the Company, on the one hand, and CF&Co, on the other hand, shall
be deemed to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total compensation (before
deducting expenses) received by CF&Co from the sale of Shares on behalf of the
Company. If, but only if, the allocation provided by the foregoing sentence is not
permitted by applicable law, the allocation of contribution shall be made in such
proportion as is appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand, and
CF&Co, on the other hand, with respect to the statements or omission which resulted in
such loss, claim, liability, expense or damage, or action in respect thereof, as well as
any other relevant equitable considerations with respect to such offering. Such relative
fault shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or CF&Co, the intent of
the parties and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and CF&Co agree that it would not
be just and equitable if contributions pursuant to this Section 9(d) were to be determined
by pro rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, liability, expense, or damage, or action
in respect thereof, referred to above in this Section 9(d) shall be deemed to include, for
the purpose of this Section 9(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action or claim
to the extent consistent with Section 9(c) hereof. Notwithstanding the foregoing
provisions of this Section 9(d), CF&Co shall not be required to contribute any amount
in excess of the commissions received by it under this Agreement and no person found
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9(d), any person who controls a party to
this Agreement within the meaning of the Act, and any officers, directors, partners,
employees or agents of CF&Co, will have the same rights to contribution as that party,
and each officer of the Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the provisions hereof. Any
party entitled to contribution, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim for contribution may be made under
this Section 9(d), will notify any such party or parties from whom contribution may be
sought, but the omission to so notify will not relieve that party or parties from whom
contribution may be sought from any other obligation it or they may have under this
Section 9(d) except to the extent that the failure to so notify such other party
materially prejudiced the defenses of the party from whom contribution is sought. Except
for a settlement entered into pursuant to the last sentence of Section 9(c) hereof, no
party will be liable for contribution with respect to any action or claim settled without
its written consent if such consent is required pursuant to Section 9(c) hereof.

10.   Representations
and Agreements to Survive Delivery. All representations and warranties of the Company
herein or in certificates delivered pursuant hereto shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of CF&Co,
any controlling persons, or the Company (or any of their respective officers, directors or
controlling persons), (ii) delivery and acceptance of the Shares and payment therefor or
(iii) any termination of this Agreement.

11.  
Termination.

(a)  CF&Co shall have the
right by giving notice as hereinafter specified at any time to terminate this Agreement if
(i) any Material Adverse Effect, or any development that has actually occurred and that is
reasonably expected to cause a Material Adverse Effect has occurred which, in the
reasonable judgment of CF&Co, may materially impair the investment quality of the
Shares, (ii) the Company shall have failed, refused or been unable, at or prior to any
Settlement Date, to perform any agreement on its part to be performed hereunder, or (iii)
any other condition of CF&Cos obligations hereunder is not fulfilled. Any such
termination shall be without liability of any party to any other party except that the
provisions of Section 7(f), Section 7(h), Section 7(j), Section 9, Section 10, Section 16
and Section 17 hereof shall remain in full force and effect notwithstanding such
termination. If CF&Co elects to terminate this Agreement as provided in this Section,
CF&Co shall provide the required notice as specified herein.

(b)  The Company shall have the
right, by giving twenty (20) days notice as hereinafter specified, to terminate this
Agreement in its sole discretion at any time following the period of twelve (12) months
after the date of this Agreement. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 7(f), Section 7(h), Section
7(j), Section 9, Section 10, Section 16 and Section 17 hereof shall remain in full force
and effect notwithstanding such termination.

(c)  CF&Co shall have the
right, by giving twenty (20) days notice as hereinafter specified, to terminate this
Agreement in its sole discretion at any time following the period of twelve (12) months
after the date of this Agreement. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 7(f), Section 7(h), Section
7(j), Section 9, Section 10, Section 16 and Section 17 hereof shall remain in full force
and effect notwithstanding such termination.

(d)  This Agreement shall remain
in full force and effect unless terminated pursuant to Section 11(a), (b) or (c) above or
otherwise by mutual agreement of the parties; provided that any such termination by mutual
agreement shall in all cases be deemed to provide that Section 7(f), Section 7(h), Section
7(j), Section 9, Section 10, Section 16 and Section 17 shall remain in full force and
effect.

(e)  Any termination of this
Agreement shall be effective on the date specified in such notice of termination; provided
that such termination shall not be effective until the close of business on the date of
receipt of such notice by CF&Co or the Company, as the case may be. If such
termination shall occur prior to the Settlement Date for any sale of Placement Shares,
such Placement Shares shall settle in accordance with the provisions of this Agreement.

12.   Notices. All
notices or other communications required or permitted to be given by any party to any
other party pursuant to the terms of this Agreement shall be in writing and if sent to
CF&Co, shall be delivered to CF&Co at Cantor Fitzgerald & Co., 135 East 57
Street, New York, New York 10022, fax no. (212) 829-4972, Attention: Marc Blazer, Managing
Director, ITD-Investment Banking, with a copy to Stephen Merkel, General Counsel at the
same address, with a copy to Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York,
NY 10178, fax no. (212) 309-6273, Attention: Christopher T. Jensen; or if sent to the
Company, shall be delivered to Magnum Hunter Resources, Inc., 600 East Las Colinas
Boulevard, Suite 1100, Irving, Texas, 75039, fax no. (972) 443-6483, Attention: Chief
Financial Officer, with a copy to Morgan Johnston, Senior Vice President and General
Counsel at the same address, fax no. (972) 443-6470, with a copy to Fulbright &
Jaworski L. L. P., 2200 Ross Avenue, Suite 2800, Dallas, Texas 75201-2784, fax no. (214)
855-8200, Attention: David E. Morrison. Each party to this Agreement may change such
address for notices by sending to the parties to this Agreement written notice of a new
address for such purpose. Each such notice or other communication shall be deemed given
(i) when delivered personally or by verifiable facsimile transmission (with an original to
follow) on or before 4:30 p.m., eastern time, on a Business Day or, if such day is not a
Business Day, on the next succeeding Business Day, (ii) on the next Business Day after
timely delivery to a nationally-recognized overnight courier and (iii) on the BusinessDay actually received if deposited in the U.S. mail (certified or registered mail,
return receipt requested, postage prepaid). For purposes of this Agreement,
BusinessDay shall mean any day on which the Exchange and commercial
banks in the city of New York are open for business.

13.   Successors and
Assigns. This Agreement shall inure to the benefit of and be binding upon the Company
and CF&Co and their respective successors and the affiliates, controlling persons,
officers and directors referred to in Section 9 hereof. References to any of the parties
contained in this Agreement shall be deemed to include the successors and permitted
assigns of such party. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective successors and
permitted assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement. Neither party may assign
its rights or obligations under this Agreement without the prior written consent of the
other party (such consent not to be unreasonably withheld or delayed), provided, however,
that CF&Co may assign its rights and obligations hereunder to an affiliate of
CF&Co without obtaining the Companys consent.

14.   Adjustments for
Stock Splits. The parties acknowledge and agree that all share related numbers
contained in this Agreement shall be adjusted to take into account any stock split, stock
dividend or similar event effected with respect to the Shares.

15.   Entire Agreement;
Amendment; Severability. This Agreement (including all schedules and exhibits attached
hereto and placement notices issued pursuant hereto) constitutes the entire agreement and
supersedes all other prior and contemporaneous agreements and undertakings, both written
and oral, among the parties hereto with regard to the subject matter hereof. Neither this
Agreement nor any term hereof may be amended except pursuant to a written instrument
executed by the Company and CF&Co. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions contained herein shall not be affected or
impaired thereby.

16.   Applicable Law;
Consent to Jurisdiction. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York without regard to the
principles of conflicts of laws. Each party hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts sitting in the City of New
York, borough of Manhattan, for the adjudication of any dispute hereunder or in connection
with any transaction contemplated hereby, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is improper. Each
party hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof (certified or
registered mail, return receipt requested) to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.

17.   Waiver of Jury
Trial. The Company and CF&Co each hereby irrevocably waives any right it may have
to a trial by jury in respect of any claim based upon or arising out of this agreement or
any transaction contemplated hereby.

18.   Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument.
Delivery of an executed Agreement by one party to the other may be made by facsimile
transmission.

If
the foregoing correctly sets forth the understanding between the Company and CF&Co,
please so indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement between the Company and CF&Co.

| | Very truly yours,MAGNUM HUNTER RESOURCES, INC. By:  __________________________          Gary C. Evans          Chairman, President and Chief Executive          Officer
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ACCEPTED as of the datefirst-above written:                                                                                                                            
| | CANTOR FITZGERALD & CO. By:  __________________________          Stephen Merkel          Executive Managing Director &          General Counsel