EXHIBIT 10.4
                                                               
Oil and Gas Agreement
Memo of Understanding
Sep30/97

                           MEMORANDUM OF UNDERSTANDING

         The  contracting  parties have assessed the progress on  fulfillment of
the  undertakings  under the  Memorandum of the  Agreement,  signed on May 27th,
1997, and have stated as follows :

First :           The here  above referred Agreement has not been satisfactorily
                  fulfilled due  to the fact that ERHC/PFC could not fulfill its
                  financial commitments;

Second :          Problems   related to maritime boundary  delimitation of DRSTP
                  has been  referred to has the main reason to prevent  ERHC/PFC
                  to pay the  concession  fees in the amount of  USD5,000,000.00
                  (five  million  United  States  Dollars) to the  Government of
                  DRSTP, taking into account the legal status of the former as a
                  public company

         Due the  interest of taking  actions to  implement  the  agreement  the
parties agree as follows :

a)       ERHC/PFC  will provide to the  Government of the DRSTP the draft of the
         law of its maritime boundary delimitation and the suitable maps related
         thereto,  acceptable for initial filling and according to the rules and
         regulations of the United  Nations,  the Gulf of Guinea  Commission and
         the United Nations Convention on the Law of the Sea (UNCLOS II), within
         fifteen days from the herein under mentioned date, for the governmental
         review.

         The  maps  will be  drawn  up  using  the  maximum  allowable  maritime
         territory under the UNCLOS II and taking into account the boundaries of
         the surrounding countries.

b)       The  Government  of the  DRSTP  will  approve  the law  concerning  its
         maritime boundary delimitation and related maps no later than the third
         week of November, 1997.

c)       ERHC/PFC,  upon  notification  that  the law on the  maritime  boundary
         delimitation  has entered  into force,  will assist the  Government  in
         several ways, including in filling the documents set up in paragraph a)
         in the General  Secretary of the United  Nations and the Gulf of Guinea
         Commission, two weeks after such notification.


d)       ERHC/PFC, upon the filing of the law and relevant maps   on    maritime
         boundary
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Oil and Gas Agreement
Memo of Understanding
Sep30/97

         delimitation  in the General  Secretary  of the United  Nations and the
         Gulf of Guinea Commission,  will transfer the required  concession fees
         in the amount of USD 5,000,000.00  (five million United States Dollars)
         to the Government of the DRSTP, within three days.

e)       The time-frame for the Plan of Action may be   amended  by agreement of
         both parties, based on new information provided by ERHC/PFC

f)       ERHC/PFC will enter into final negotiation for the   shooting   of  two
         dimensional seismic survey on last quarter of the 1997.

g)       ERHC/PFC  will notify the  Government  of the DRSTP the progress of the
         negotiation  with seismic  companies  by second week of October,  1997.
         Within  the  period  from   October  to  December,   1997,   ERHC  will
         re-evalutate all existing data, using the latest  technology,  and will
         present a report to the Government by the end of the year.

h)       Based on the new processed data, a Plan of Action will be set up     by
         both parties,  anticipated by first week of February, 1998.

i)       ERHC/PFC will provide to the Government of DRSTP a monthly report.  The
         parties also agree that the Technical  Commissions  thereof should meet
         every four month for the  purposes of analysis  and  assessment  on the
         progress of fulfillment of the binding undertaking.

j)       ERHC/PFC will provide the Government of the DRSTP the   technical   and
         financial assistance for the following purposes (provided    that those
         expenses are previously submitted and approved by ERHC)

                  - to draw up the draft of rules and regulations including
                  the ones concerning the environmental issues, the
                  hydrocarbon exploration and exploitation,

                  - to negotiate the maritime boundary delimitation with
                  the  surrounding countries,

                  - to pay all  expenses  arising from the trips and fees due to
                  the  United  Nations  Organizations  and the  Gulf  of  Guinea
                  Commission  with regard to the  filling of  maritime  boundary
                  delimitation legal documents,

                  - to pay the fees, if any, with regards to the
                  international  arbitration on settlement of the maritime
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                  boundary    delimitation dispute,

                  - to finance the functioning of the technical
                  commission  appointed by the Government of the
                  DRSTP, according  to the budget to be approved by
                  both parties,

                  - to provide financial assistance related to the attendance of
                  international  events  previously  selected by both parties on
                  petroleum related matters.


k)       This memorandum of Understanding will enter into force on the date of
         signature.


         Signed on 30th day of September 1997.


                                      On behalf of the Government
                                              of the DRSTP

                                    /s/ Raul Braganca Neto
                                 --------------------------------------
                                           Raul Braganca Neto
                                           The Prime Minister



                                         On behalf of ERHC/PFC
                                         /s/ Noreen G. Wilson
                                        -----------------------
                                            Noreen G. Wilson