EXHIBIT 10.125

                           OPERATING AGREEMENT


                              ALLEGHENY AREA
                          Green Canyon 254, et al


               OUTER CONTINENTAL SHELF - GULF OF MEXICO
                         OFFSHORE LOUISIANA


                       ENSERCH EXPLORATION, INC.,
                     READING & BATES DEVELOPMENT CO.,
                       MOBIL OIL CORPORATION, AND
            MOBIL OIL EXPLORATION & PRODUCING SOUTHEAST INC.


                                October 17, 1995 

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                         TABLE OF CONTENTS

ARTICLE 1     CONTRACT APPLICATION  . . . . . . . . . . . . . . . . . . . .
  1.1   Application in General  . . . . . . . . . . . . . . . . . . . . . .
  1.2   Application to the Contract Area  . . . . . . . . . . . . . . . . .

ARTICLE 2 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.1   Additional Testing, Coring, or Logging. . . . . . . . . . . . . . .
  2.2   Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.3   Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.4   Annual Operating Plan . . . . . . . . . . . . . . . . . . . . . . .
  2.5   Appraisal Operations  . . . . . . . . . . . . . . . . . . . . . . .
  2.6   Appraisal Well  . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.7   Authorization for Expenditure (AFE) . . . . . . . . . . . . . . . .
  2.8   Confidential Data . . . . . . . . . . . . . . . . . . . . . . . . .
  2.9   Contract Area . . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.10  Cost(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.11  Deepen or Deepening . . . . . . . . . . . . . . . . . . . . . . . .
  2.12  Deeper Drilling . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.13  Designated Prospect(s)  . . . . . . . . . . . . . . . . . . . . . .
  2.14  Development Operations  . . . . . . . . . . . . . . . . . . . . . .
  2.15  Development Phase . . . . . . . . . . . . . . . . . . . . . . . . .
  2.16  Development Plan  . . . . . . . . . . . . . . . . . . . . . . . . .
  2.17  Development Well  . . . . . . . . . . . . . . . . . . . . . . . . .
  2.18  Disproportionate Spending Settlement  . . . . . . . . . . . . . . .
  2.19  Election  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.20  Exploratory Operations  . . . . . . . . . . . . . . . . . . . . . .
  2.21  Exploratory Well  . . . . . . . . . . . . . . . . . . . . . . . . .
  2.22  Fabrication AFE . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.23  Facilities  . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.24  Final Design AFEs . . . . . . . . . . . . . . . . . . . . . . . . .
  2.25  General Matters . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.27  Hydrocarbon(s)  . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.28  Initial Exploratory Well  . . . . . . . . . . . . . . . . . . . . .
  2.29  Integrated Project Team (IPT) . . . . . . . . . . . . . . . . . . .
  2.30  Joint Account . . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.31  Lease(s)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.32  Non-Consent Operations  . . . . . . . . . . . . . . . . . . . . . .
  2.33  Non-Operating Party . . . . . . . . . . . . . . . . . . . . . . . .
  2.34  Non-Participating Party . . . . . . . . . . . . . . . . . . . . . .
  2.35  Non-Participating Party's Share . . . . . . . . . . . . . . . . . .
  2.36  Objective Depth . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.37  Operator  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.38  Participating Interest. . . . . . . . . . . . . . . . . . . . . . .
  2.39  Participating Party . . . . . . . . . . . . . . . . . . . . . . . .
  2.40  Producible Reservoir  . . . . . . . . . . . . . . . . . . . . . . .
  2.41  Producible Well . . . . . . . . . . . . . . . . . . . . . . . . . .
  2.42  Production System . . . . . . . . . . . . . . . . . . . . . . . . .
        2.42.1   Subsea Production System . . . . . . . . . . . . . . . . .
        2.42.2   Initial Production System  . . . . . . . . . . . . . . . .
        2.42.3   Subsequent Production System . . . . . . . . . . . . . . .
  2.43  Sidetrack or Sidetracking . . . . . . . . . . . . . . . . . . . . . 
  2.44  Subsequent Exploratory, Appraisal or Development Operation  . . . .
  2.45  Well Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
  2.46  Withdrawing Party . . . . . . . . . . . . . . . . . . . . . . . . .
  2.47  Working Interest  . . . . . . . . . . . . . . . . . . . . . . . . .

  ARTICLE 3 EXHIBITS  . . . . . . . . . . . . . . . . . . . . . . . . . . . 
  3.1   Exhibits  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  ARTICLE 4 SELECTION OF OPERATOR . . . . . . . . . . . . . . . . . . . . .
  4.1   Designation of the Operator . . . . . . . . . . . . . . . . . . . .
  4.2   Substitute Operator . . . . . . . . . . . . . . . . . . . . . . . .
  4.3   Resignation of Operator . . . . . . . . . . . . . . . . . . . . . .
  4.4   Removal of Operator . . . . . . . . . . . . . . . . . . . . . . . .
        4.4.1 Removal Upon Assignment . . . . . . . . . . . . . . . . . . .
        4.4.2 Removal for Cause by Vote . . . . . . . . . . . . . . . . . .
  4.5   Selection of Successor Operator . . . . . . . . . . . . . . . . . .
  4.6   Effective Date of Resignation or Removal  . . . . . . . . . . . . .
  4.7   Delivery of Property  . . . . . . . . . . . . . . . . . . . . . . .

  ARTICLE 5 RIGHTS AND DUTIES OF OPERATOR . . . . . . . . . . . . . . . . .
  5.1   Exclusive Right to Operate  . . . . . . . . . . . . . . . . . . . .
  5.2   Workmanlike Conduct . . . . . . . . . . . . . . . . . . . . . . . .
  5.3   Drilling  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  5.4   Liens and Encumbrances  . . . . . . . . . . . . . . . . . . . . . .
  5.5   Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  5.6   Reports to Government Agencies  . . . . . . . . . . . . . . . . . .
  5.7   Information to Participating Parties  . . . . . . . . . . . . . . .
  5.8   Completed Well Information  . . . . . . . . . . . . . . . . . . . .
  5.9   Information to Non-Participating Parties  . . . . . . . . . . . . .
  5.10  Cost Information  . . . . . . . . . . . . . . . . . . . . . . . . .
  5.11  Managing Production . . . . . . . . . . . . . . . . . . . . . . . .
        5.11.1   Compensation . . . . . . . . . . . . . . . . . . . . . . . 
   
ARTICLE 6     EXPENDITURES AND SECURITY RIGHTS  . . . . . . . . . . . . . .
  6.1   Basis of Charges to the Parties . . . . . . . . . . . . . . . . . .
  6.2   Authorization for Expenditure and Supplemental AFE  . . . . . . . .
        6.2.1 Required Authorization  . . . . . . . . . . . . . . . . . . .
        6.2.2 AFE Overrun Notice  . . . . . . . . . . . . . . . . . . . . .
        6.2.3 Supplemental AFE for Cost Overruns for Wells  . . . . . . . .
        6.2.4 Supplemental AFE for Cost Overruns on Integrated Project Team
              AFE . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
        6.2.5 Supplemental AFE for Cost Overruns on Final Design AFE  . . .
        6.2.6 Supplemental AFE for Cost Overruns on Fabrication AFE . . . .
        6.2.7 Supplemental AFE for Cost Overruns on All Other AFEs  . . . .
        6.2.8 Supplemental AFE for Cost Overruns for All Supplemented AFEs  
        6.2.9 Further Operations During a Force Majeure . . . . . . . . . .
  6.3   Security Provisions   . . . . . . . . . . . . . . . . . . . . . . .
  6.4   Financing Statement and Recording of this Agreement . . . . . . . .
  6.5   Unpaid Charges . . .  . . . . . . . . . . . . . . . . . . . . . . .
  6.6   Contributions by Non-Delinquent Parties . . . . . . . . . . . . . .
  6.7   Default . . . . . . .   . . . . . . . . . . . . . . . . . . . . . .
  6.8   Carved-out Interests  . . . . . . . . . . . . . . . . . . . . . . . 

  ARTICLE 7 CONFIDENTIALITY OF DATA . . . . . . . . . . . . . . . . . . . .
  7.1   Confidentiality Obligation  . . . . . . . . . . . . . . . . . . . .
        7.1.1 Exceptions to Confidentiality . . . . . . . . . . . . . . . .
        7.1.2 Permitted Disclosures . . . .   . . . . . . . . . . . . . . .
        7.1.3 Limited Releases to Offshore Scout Association  . . . . . . .
              7.1.3.1 Well Location . . . . . . . . . . . . . . . . . . . .
              7.1.3.2 Well Operations . . . . . . . . . . . . . . . . . . .
              7.1.3.3 Well Completion Information . . . . . . . . . . . . .
        7.1.4   Continuing Confidentiality Obligation . . . . . . . . . . .
  7.2   Ownership of Confidential Data  . . . . . . . . . . . . . . . . . .
        7.2.1 Well Log and Data Trades  . . . . . . . . . . . . . . . . . .
        7.2.2 Ownership of Non-Consent Data . . . . . . . . . . . . . . . .
  7.3   Access to the Lease and Rig . . . . . . . . . . . . . . . . . . . .
  7.4   Development of Proprietary Information and/or Technology  . . . . .
  7.5   News Releases . . . . . . . . . . . . . . . . . . . . . . . . . . .

  ARTICLE 8 VOTING, ELECTIONS, AND NOTICES  . . . . . . . . . . . . . . . .
  8.1   Overall Supervision of Business Affairs . . . . . . . . . . . . . .
        8.1.1 General Matter Vote . . . . . . . . . . . . . . . . . . . . .
        8.1.2 Elections . . . . . . . . . . . . . . . . . . . . . . . . . .
  8.2   Voting Procedures on General Matters and Elections  . . . . . . . .
        8.2.1 Voting Interest . . . . . . . . . . . . . . . . . . . . . . .
        8.2.2 Vote Required . . . . . . . . . . . . . . . . . . . . . . . .
        8.2.3 Second Opportunity for an Election  . . . . . . . . . . . . .
  8.3   Response Time for General Matters and Elections . . . . . . . . . .
        8.3.1 Well Operation Proposal . . . . . . . . . . . . . . . . . . .
        8.3.2 Production System Construction  . . . . . . . . . . . . . . .
        8.3.3 Other AFE Related Operations  . . . . . . . . . . . . . . . .
        8.3.4 Other Proposals . . . . . . . . . . . . . . . . . . . . . . .
        8.3.5 Failure to Respond  . . . . . . . . . . . . . . . . . . . . .
        8.3.6 Suspensions of Production . . . . . . . . . . . . . . . . . .
        8.3.7 Standby Charges . . . . . . . . . . . . . . . . . . . . . . .
  8.4   Meetings of the Parties . . . . . . . . . . . . . . . . . . . . . .
  8.5   Designation of Representatives  . . . . . . . . . . . . . . . . . .
  8.6   Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  8.7   Giving and Responding to Notices  . . . . . . . . . . . . . . . . .
  8.8   Content of Notice . . . . . . . . . . . . . . . . . . . . . . . . .
  8.9   Agent for Mobil Entities  . . . . . . . . . . . . . . . . . . . . .
  8.10  Votes by Affiliates . . . . . . . . . . . . . . . . . . . . . . . .

  ARTICLE 9 GEOPHYSICAL OPERATIONS  . . . . . . . . . . . . . . . . . . . .
  9.1   Geophysical Operations  . . . . . . . . . . . . . . . . . . . . . .
        9.1.1 Conduct of Proprietary Geophysical Operations . . . . . . . .
        9.1.2 Group-Shoot and Speculative Seismic Surveys . . . . . . . . .

  ARTICLE 10 EXPLORATORY OPERATIONS . . . . . . . . . . . . . . . . . . . .
  10.1  Application . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  10.2  Proposal of Exploratory Operations  . . . . . . . . . . . . . . . .
        10.2.1 Well Plan's Minimum Specifics  . . . . . . . . . . . . . . .
        10.2.2 Pre-Spud Technical Meeting and Revision of Well Plan . . . .
        10.2.3 Timely Operation . . . . . . . . . . . . . . . . . . . . . .
        10.2.4 Exploratory Operations Costs . . . . . . . . . . . . . . . .
        10.2.5 AFE Overruns and Substitute Well . . . . . . . . . . . . . .
  10.3  Subsequent Exploratory Operations at Objective Depth  . . . . . . . 
        10.3.1 Response to Operator's Proposals . . . . . . . . . . . . . .
        10.3.2 Counterproposals . . . . . . . . . . . . . . . . . . . . . .
        10.3.3 Approval of Subsequent Exploratory Operations by All Parties 
        10.3.4 Approval of Subsequent Exploratory Operations by Fewer Than 
                 All Parties  . . . . . . . . . . . . . . . . . . . . . . .
        10.3.5 Subsequent Exploratory Operations If Not Approved  . . . . .
  10.4  Deeper Drilling . . . . . . . .   . . . . . . . . . . . . . . . . .
  10.5  Plugging and Abandoning Costs . . . . . . . . . . . . . . . . . . .
  10.6  Conclusion of Exploratory Operations  . . . . . . . . . . . . . . .
  10.7  Subsurface Team . . . . . . . . . . . . . . . . . . . . . . . . . .

  ARTICLE 11 APPRAISAL OPERATIONS . . . . . . . . . . . . . . . . . . . . .
  11.1  Proposal of Appraisal Operations  . . . . . . . . . . . . . . . . .
        11.1.1 Well Plan's Minimum Specifics  . . . . . . . . . . . . . . . 
        11.1.2 Pre-Spud Technical Meeting and Revision of Well Plan . . . .
        11.1.3 Timely Operation . . . . . . . . . . . . . . . . . . . . . .
        11.1.4 AFE Overruns and Substitute Well . . . . . . . . . . . . . .
  11.2  Subsequent Appraisal Operations at Objective Depth  . . . . . . . .
        11.2.1 Response to Operator's Proposals . . . . . . . . . . . . . .
        11.2.2 Counterproposals . . . . . . . . . . . . . . . . . . . . . .
        11.2.3 Approval of Subsequent Appraisal Operations by All Parties .
        11.2.4 Approval of Subsequent Appraisal Operations by Fewer . . . .
                 Than All Parties . . . . . . . . . . . . . . . . . . . . .
        11.2.5 Subsequent Appraisal Operations If Not Approved  . . . . . .
  11.3  Election by Non-Participating Parties in Deepening or 
        Sidetracking Appraisal Operations . . . . . . . . . . . . . . . . .
  11.4  Deeper Drilling . . . . . . . . . . . . . . . . . . . . . . . . . .
        11.4.1 Limited Participation in Deeper Drilling . . . . . . . . . .
        11.4.2 Multiple Completion Alternatives Above and Below the Deepest
                 Producible Reservoir . . . . . . . . . . . . . . . . . . .
        11.4.3 Completion Attempts At or Above the Deepest Producible
                 Reservoir  . . . . . . . . . . . . . . . . . . . . . . . .
  11.5  Plugging and Abandoning Costs . . . . . . . . . . . . . . . . . . .

  ARTICLE 12 DEVELOPMENT PLAN . . . . . . . . . . . . . . . . . . . . . . .
  12.1  Phased Development Plans  . . . . . . . . . . . . . . . . . . . . .
  12.2  Proposal of Integrated Project Team . . . . . . . . . . . . . . . .
  12.3  Integrated Project Team Election  . . . . . . . . . . . . . . . . .
  12.4  Proposal of a Development Plan  . . . . . . . . . . . . . . . . . .
        12.4.1 Alternative Development Plans  . . . . . . . . . . . . . . .
  12.5  Content of the Development Plan . . . . . . . . . . . . . . . . . .
  12.6  Approval of a Development Plan  . . . . . . . . . . . . . . . . . .
        12.6.1 Amended Approval Requirement for Development Plans . . . . .
  12.7  Final Design AFE  . . . . . . . . . . . . . . . . . . . . . . . . .
        12.7.1 Response to Final Design AFE . . . . . . . . . . . . . . . .
  12.8  Fabrication AFE . . . . . . . . . . . . . . . . . . . . . . . . . .
        12.8.1 Response to Fabrication AFE  . . . . . . . . . . . . . . . .
  12.9  Minor Modifications and Revisions to Development Plans  . . . . . .
        12.9.1 Minor Modifications to Development Plans . . . . . . . . . .
        12.9.2 Revisions to Development Plans   . . . . . . . . . . . . . .
  12.10 Major Modifications to Development Plans  . . . . . . . . . . . . .
  12.11 Supplemental AFE for Cost Overruns on Fabrication AFE . . . . . . .
  12.12 Termination of a Development Plan . . . . . . . . . . . . . . . . .
  12.13 Timely Operations for Initial Production Systems  . . . . . . . . . 
  12.14 Expansion, Modification, or Repair of an Initial Production System  
  12.15 Subsequent Development Phases . . . . . . . . . . . . . . . . . . .
  12.16 Access to Existing Facilities . . . . . . . . . . . . . . . . . . .
  12.17 Non-Consent Operations in Subsequent Development Phases . . . . . .
  12.18 Annual Operating Plan . . . . . . . . . . . . . . . . . . . . . . .
        12.18.1 Development and Submission of the Annual Operating Plan . . 
        12.18.2 Review of the Annual Operating Plan . . . . . . . . . . . .
        12.18.3 Content of Annual Operating Plan  . . . . . . . . . . . . .
                12.18.3.1   Capital Budget  . . . . . . . . . . . . . . . . 
                12.18.3.2   Expense Budget  . . . . . . . . . . . . . . . . 
                12.18.3.3   Operator Forecasts and Informational Items  . . 
        12.18.4 Effect of the Annual Operating Plan . . . . . . . . . . . .

  ARTICLE 13 DEVELOPMENT OPERATIONS . . . . . . . . . . . . . . . . . . . .
  13.1  Proposal of Development Operations  . . . . . . . . . . . . . . . .
        13.1.1 Operator's Counterproposal . . . . . . . . . . . . . . . . .
        13.1.2 AFE Overruns and Substitute Wells  . . . . . . . . . . . . .
        13.1.3 Timely Operations  . . . . . . . . . . . . . . . . . . . . .
  13.2  Subsequent Development Operations at Objective Depth  . . . . . . .
        13.2.1 Response to Operator's Proposal  . . . . . . . . . . . . . .
        13.2.2 Counterproposals . . . . . . . . . . . . . . . . . . . . . .
        13.2.3 Approval of Subsequent Development Operations by All Parties 
        13.2.4 Approval of Subsequent Development Operations as a General 
                 Matter by Fewer Than All Parties . . . . . . . . . . . . .
  13.3  Election by Non-Participating Parties in Deepening or Sidetracking 
              Operations  . . . . . . . . . . . . . . . . . . . . . . . . .
  13.4  Deeper Drilling . . . . . . . . . . . . . . . . . . . . . . . . . .
        13.4.1 Limited Participation in Deeper Drilling . . . . . . . . . .
        13.4.2 Multiple Completion Alternatives Above and Below the Deepest
                 Producible Reservoir . . . . . . . . . . . . . . . . . . .
        13.4.3 Completion Attempts At or Above the Deepest Producible
                 Reservoir  . . . . . . . . . . . . . . . . . . . . . . . .
  13.5  Plugging and Abandoning Costs . . . . . . . . . . . . . . . . . . .

  ARTICLE 14 USE OF/AND ADDITIONAL FACILITIES AND GATHERING SYSTEMS . . . .
  14.1  Approval of Additional Facilities . . . . . . . . . . . . . . . . .
  14.2  Expansion, Modification or Repair of an Existing Production System  
  14.3  Use of Production System Located on a Designated Prospect . . . . .
  14.4  Approval of Additional Facilities on a Designated Prospect  . . . .
  14.5  Contract Area Production  . . . . . . . . . . . . . . . . . . . . .

  ARTICLE 15 DISPOSITION OF PRODUCTION  . . . . . . . . . . . . . . . . . .
  15.1  Facilities to Take in Kind . . . . . . . . . . . . . . . .  . . . .
  15.2  Duty to Take in Kind  . . . . . . . . . . . . . . . . . . . . . . . 
  15.3  Failure to Take in Kind . . . . . . . . . . . . . . . . . . . . . .
        15.3.1 Failure to Take Oil  . . . . . . . . . . . . . . . . . . . .
        15.3.2 Failure to Take Gas  . . . . . . . . . . . . . . . . . . . .
        15.3.3 Operator's Disposition of Oil for Non-Taking Party . . . . .
        15.3.4 Operator's Purchase of Oil of Non-Taking Party . . . . . . .
        15.3.5 No Obligation to Market Share  . . . . . . . . . . . . . . .
  15.4  Expenses of Delivery in Kind  . . . . . . . . . . . . . . . . . . .

ARTICLE 16    NON-CONSENT OPERATIONS  . . . . . . . . . . . . . . . . . . .
  16.1  Conduct of Non-Consent Operations . . . . . . . . . . . . . . . . .
        16.1.1 Indemnity for Non-Consent Operations . . . . . . . . . . . .
        16.1.2 Cost Information . . . . . . . . . . . . . . . . . . . . . .
        16.1.3 Non-Consent Operations in Producible Well  . . . . . . . . .
        16.1.4 Non-Consent Operations in Producible Reservoirs  . . . . . .
        16.1.5 Multiple Completions . . . . . . . . . . . . . . . . . . . .
  16.2  Acreage Forfeiture Provisions . . . . . . . . . . . . . . . . . . .
        16.2.1 Exploratory Operations   . . . . . . . . . . . . . . . . . .
        16.2.2 Initial Production System  . . . . . . . . . . . . . . . . .
        16.2.3 Costs of Prior Operations  . . . . . . . . . . . . . . . . .
  16.3  Notices and Orders  . . . . . . . . . . . . . . . . . . . . . . . .
  16.4  Non-Consent Operations to Maintain a Designated Prospect  . . . . .
        16.4.1 Acreage Forfeiture in the Entire Designated Prospect . . . .
        16.4.2 Acreage Forfeiture in a Portion of the Designated Prospect 
        16.4.3 Limitations on Acreage Forfeiture  . . . . . . . . . . . . .
  16.5  Percentage Recoupment for Non-Consent Operations  . . . . . . . . .
        16.5.1 Non-Consent Subsequent Exploratory Operations  . . . . . . .
        16.5.2 Non-Consent Appraisal Operations . . . . . . . . . . . . . .
        16.5.3 Non-Consent Geophysical Operations, Integrated Project Team 
                 and/or Final Design AFE  . . . . . . . . . . . . . . . . .
        16.5.4 Non-Consent Development Operations . . . . . . . . . . . . .
        16.5.5 Non-Consent Subsequent Production System and Facilities  . .
        16.5.6 Additional Production Recoupment . . . . . . . . . . . . . .
        16.5.7 Recoupment From Hydrocarbon Production . . . . . . . . . . .
  16.6  Reversion of Interests to Non-Participating Party . . . . . . . . .
        16.6.1 Dry Hole Reversion . . . . . . . . . . . . . . . . . . . . .
        16.6.2 Deepening a Non-Consent Well . . . . . . . . . . . . . . . .
  16.7  Operations From a Subsequent Non-Consent Production System  . . . .
  16.8  Allocation of Production System Costs to Non-Consent Operations . .
        16.8.1 Investment Charges . . . . . . . . . . . . . . . . . . . . .
        16.8.2 Operating and Maintenance Charges  . . . . . . . . . . . . .
        16.8.3 Payments . . . . . . . . . . . . . . . . . . . . . . . . . .
  16.9  Underinvestment of Costs  . . . . . . . . . . . . . . . . . . . . .
        16.9.1 Settlement of Underinvestments . . . . . . . . . . . . . . .
        16.9.2 Cash Settlement of Underinvestment   . . . . . . . . . . . .

  ARTICLE 17 WITHDRAWAL . . . . . . . . . . . . . . . . . . . . . . . . . .
  17.1  Withdrawal.   . . . . . . . . . . . . . . . . . . . . . . . . . . .
  17.2  Limitations on Withdrawal . . . . . . . . . . . . . . . . . . . . .
        17.2.1 During an Emergency . . . .  . . . . . . . . . . . . . . . .
        17.2.2 Current Operations and Voting  . . . . . . . . . . . . . . .
        17.2.3 Prior Expenses . . . . . . . . . . . . . . . . . . . . . . .
        17.2.4 Confidentiality  . . . . . . . . . . . . . . . . . . . . . .

  ARTICLE 18 ABANDONMENT AND SALVAGE  . . . . . . . . . . . . . . . . . . .
  18.1  Abandonment of Wells  . . . . . . . . . . . . . . . . . . . . . . .
  18.2  Facilities and Platform Salvage and Removal Costs:  . . . . . . . .
  18.3  Approval Not Required . . . . . . . . . . . . . . . . . . . . . . .
  18.4  Abandonment Operations Required by Governmental Authority . . . . . 

  ARTICLE 19 RENTALS, ROYALTIES AND MINIMUM ROYALTIES . . . . . . . . . . .
  19.1  Overriding Royalties and Burdens on Production  . . . . . . . . . .
        19.1.1 Subsequent Creation of Overriding Royalty  . . . . . . . . .
        19.1.2 Subordination of Overriding Royalties  . . . . . . . . . . .
  19.2  Payment of Rentals and Royalties  . . . . . . . . . . . . . . . . .
        19.2.1 Non-Participation in Payments  . . . . . . . . . . . . . . .
        19.2.2 Royalty Payments . . . . . . . . . . . . . . . . . . . . . .
        19.2.3 Federal Environmental Tax  . . . . . . . . . . . . . . . . .

  ARTICLE 20 TAXES  . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  20.1  Internal Revenue Provision: . . . . . . . . . . . . . . . . . . . .
  20.2  Other Taxes and Assessments . . . . . . . . . . . . . . . . . . . .
        20.2.1 Property Taxes . . . . . . . . . . . . . . . . . . . . . . .
        20.2.2 Production and Severance Taxes . . . . . . . . . . . . . . .

  ARTICLE 21 INSURANCE AND BONDS  . . . . . . . . . . . . . . . . . . . . .
  21.1  Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  21.2  Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  ARTICLE 22 LIABILITY, CLAIMS, LAWSUITS AND ALTERNATE DISPUTE RESOLUTION .
  22.1  Individual Obligations  . . . . . . . . . . . . . . . . . . . . . .
  22.2  Notice of Claim or Lawsuit  . . . . . . . . . . . . . . . . . . . .
  22.3  Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  22.4  Defense of Claims and Lawsuits  . . . . . . . . . . . . . . . . . .
  22.5  Liability for Damages . . . . . . . . . . . . . . . . . . . . . . .
  22.6  Indemnification for Non-Consent Operations  . . . . . . . . . . . .
  22.7  Damage to Reservoir, Loss of Reserves and Profits . . . . . . . . .
  22.8  Non-Essential Personnel . . . . . . . . . . . . . . . . . . . . . .

  ARTICLE 23 FARM-INS AND CONTRIBUTIONS . . . . . . . . . . . . . . . . . .
  23.1  Contributions From Third Parties  . . . . . . . . . . . . . . . . .
        23.1.1 Cash Contributions   . . . . . . . . . . . . . . . . . . . .
        23.1.2 Acreage Contributions  . . . . . . . . . . . . . . . . . . .
        23.1.3 Data Contributions   . . . . . . . . . . . . . . . . . . . .
  23.2  Restricted Bidding  . . . . . . . . . . . . . . . . . . . . . . . .
  23.3  Area of Mutual Interst . . . . .  . . . . . . . . . . . . . . . . .
        23.3.1 Notification Required  . . . . . . . . . . . . . . . . . . .
        23.3.2 Right of Participation . . . . . . . . . . . . . . . . . . .
        23.3.3 Election Period If Operations Are Not Required . . . . . . .
        23.3.4 Election Period If Operations Are Required . . . . . . . . .
        23.3.5 Assignments . . . . .  . . . . . . . . . . . . . . . . . . .
        23.3.6 Operating Agreement . . .  . . . . . . . . . . . . . . . . .
        23.3.7 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . .
        23.3.8 Conflicting Agreements . . . . . . . . . . . . . . . . . . .
        23.3.9 Bidding Agreement . . . .  . . . . . . . . . . . . . . . . .

ARTICLE 24SUCCESSORS, ASSIGNS, AND SALE OF INTEREST . . . . . . . . . . . .
  24.1  Successors and Assigns . . . . . .  . . . . . . . . . . . . . . . .
  24.2  Effective Date of Transfer . .  . . . . . . . . . . . . . . . . . .
  24.3  Transferee Bound . . . . . .  . . . . . . . . . . . . . . . . . . .
  24.4  Assignments and Transfers of Working Interests  . . . . . . . . . .
        24.4.1 Exceptions to Prior Written Notice . . . . . . . . . . . . .
        24.4.2 Effective Date of Assignments  . . . . . . . . . . . . . . .
        24.4.3 Minimum Transfer of Interest . . . . . . . . .   . . . . . .
        24.4.4 Form of Assignments . . . . . . . . . . . .  . . . . . . . .
        24.4.5 Limited Warranty. . .  . . . . . . . . . . . . . . . . . . .
  24.5  Preferential Right to Purchase  . . . . . . . . . . . . . . . . . .
        24.5.1 Notice of Proposed Transaction . . . . . . . . . . . . . . .
        24.5.2 Exercise of Preferential Right to Purchase . . . . . . . . .
        24.5.3 Transactions Not Affected by the Preferential Right to
                 Purchase . . . . . . . . . . . . . . . . . . . . . . . . .
        24.5.4 Completion of the Transaction  . . . . . . . . . . . . . . .
        24.5.5 Special Circumstances Preferential Rights toPurchase . . . .

  ARTICLE 25 FORCE MAJEURE  . . . . . . . . . . . . . . . . . . . . . . . .
  25.1  Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . .

  ARTICLE 26 ADMINISTRATIVE PROVISIONS  . . . . . . . . . . . . . . . . . .
  26.1  Term of Agreement . . . . . . . . . . . . . . . . . . . . . . . . .
  26.2  Time Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  26.3  Waiver of Right to Partition  . . . . . . . . . . . . . . . . . . .
  26.4  Compliance With Laws and Regulations  . . . . . . . . . . . . . . .
        26.4.1 Applicable Law . . . . . . . . . . . . . . . . . . . . . . .
        26.4.2 Severance of Invalid Provisions  . . . . . . . . . . . . . .
        26.4.3 Fair and Equal Employment  . . . . . . . . . . . . . . . . .
  26.5  Construction and Interpretation of This Agreement . . . . . . . . .
        26.5.1 Headings for Convenience . . . . . . . . . . . . . . . . . .
        26.5.2 Gender and Number  . . . . . . . . . . . . . . . . . . . . .
        26.5.3 Independent Representation . . . . . . . . . . . . . . . . .
  26.6  Integrated Agreement  . . . . . . . . . . . . . . . . . . . . . . .
  26.7  Execution of Documents  . . . . . . . . . . . . . . . . . . . . . .
        26.7.1 Binding Effect . . . . . . . . . . . . . . . . . . . . . . .
        26.7.2 Corporate Authority  . . . . . . . . . . . . . . . . . . . .
        26.7.3 Further Assurances . . . . . . . . . . . . . . . . . . . . .
        26.7.4 Multiple Counterparts  . . . . . . . . . . . . . . . . . . .


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                              OPERATING AGREEMENT

                                 ALLEGHENY AREA

                     OUTER CONTINENTAL SHELF GULF OF MEXICO

                               OFFSHORE LOUISIANA

        THIS AGREEMENT is  made effective as of the 1st day of May, 1995, by
  and between  ENSERCH EXPLORATION,  INC., READING &  BATES DEVELOPMENT CO.,
  MOBIL OIL CORPORATION   AND  MOBIL  OIL EXPLORATION &  PRODUCING SOUTHEAST
  INC., the signers hereof, herein referred to collectively as "Parties" and
  individually as "Party."

        WHEREAS, the Parties are co-owners of one or more of the OCS oil and
  gas Leases, identified in Exhibit "A-2" (Description of Leases) and desire
  to  provide  for  the  sharing  of  Costs,  risks  and  benefits   in  the
  exploration,  development, appraisal, and operation of  these Leases lying
  within the Contract Area for the production of Hydrocarbons.

        NOW, THEREFORE, in  consideration of the premises and of  the mutual
  promises exchanged and contained within this Agreement, the Parties  agree
  to explore, appraise, develop and operate the Leases in the Contract  Area
  according to the following provisions:


                                   ARTICLE 1
                              CONTRACT APPLICATION

  1.1   Application in General:  This Agreement applies  to the exploration,
        appraisal, development and operation of  the Leases in the  Contract
        Area for the production of Hydrocarbons therefrom.

  1.2   Application  to the  Contract Area:  This Agreement  and all  of its
        Exhibits shall apply to the entire Contract Area and shall be deemed
        a separate  agreement as  to  each of  the Designated  Prospects  as
        defined  in Article  2 below.   If  an MMS  approved unit  is formed
        comprising any of the Leases herein, each  of the Parties shall  use
        its best efforts to enter into a unit operating agreement containing
        the  same terms  and provisions  as this  Agreement.   Regardless of
        which Leases are contained in any approved unit, if at all possible,
        the new  unit operating  agreement  shall continue  to be  deemed  a
        separate agreement  as to  each  Designated Prospect.   All  of  the
        rights and obligations in and under the Lease(s) comprising each  of
        the Designated Prospects, and all property and the right to  produce
        Hydrocarbons from each of the Designated Prospects shall be owned by
        the  Parties  in  accordance  with and  subject  to  the  terms  and
        provisions of this Agreement.

                                  ARTICLE 2
                                 DEFINITIONS

  As  used in  this  Agreement (or  in  the Exhibits  attached  hereto), the
  initially  capitalized  terms   listed  below  shall  have  the  following
  meanings:

  2.1   Additional  Testing, Coring,  or Logging:    shall mean  any testing
        (excluding  production  testing),  coring  or  logging  which is  in
        addition to that approved by virtue of any previously approved AFE.

  2.2   Affiliate:  shall mean any corporation, limited liability company or
        partnership (including a  limited partnership) or other entity owned
        or controlled by a Party to this Agreement.  The term "Affiliate" of
        a Party includes any parent corporation, partnership or other entity
        that directly or indirectly owns or controls fifty percent (50%)  or
        more of the outstanding stock (or other interests) having the  right
        to  vote for  directors  of  a Party  to  this Agreement,  and  also
        includes any other corporation, partnership or other entity in which
        the parent  corporation of  a Party directly or  indirectly owns  or
        controls fifty (50%) of the voting stock (or other interests) in the
        other corporation, partnership or other entity. 

        -  Ownership or control by a Party is deemed to exist if a Party  to
           this  Agreement directly  or  indirectly owns  or  controls fifty
           percent (50%) or more of the outstanding stock of the corporation
           having  the right  to vote  for directors  of the  corporation or
           fifty percent (50%)  or more of the interests in  the partnership
           or other entity.

        -  The stock (or  interests in a partnership or other  entity) owned
           or  controlled by  a  Party  shall include  all stock  (or  other
           interests)  directly or  indirectly  owned or  controlled  by any
           other  corporation,   partnership  or   other  entity  owned   or
           controlled by a Party to this Agreement.

  2.3   Agreement:   shall  mean this ALLEGHENY  AREA   Operating Agreement,
        together with its attached Exhibits set out in Article 3.1 hereof.

  2.4   Annual Operating Plan:  shall mean the operational plan and estimate
        of  Costs  for  operations  in  the next  ensuing  calendar  year as
        described in Article 12.18 (Annual Operating Plan).  This is not the
        Unit Operating Plan  as required in  Article IX of the  Green Canyon
        254 Unit Agreement.

  2.5   Appraisal Operations:  shall mean all operations conducted  within a
        Designated  Prospect   subsequent  to   Exploratory  Operations  and
        proposed pursuant to  Article 11.0 (Appraisal Operations). The terms
        Appraisal   Operations  and   Appraisal  Well   are  interchangeable
        throughout this Agreement unless the context requires otherwise.

  2.6   Appraisal  Well:   shall mean  any well  proposed and drilled  as an
        Appraisal Operation.

  2.7   Authorization  for  Expenditure  (AFE):    shall  mean  any  written
        proposal in sufficient detail as required in Article 8.8 (Content of
        Notice)  made by a Party  for the purpose of describing an operation
        being proposed  and estimating the  Costs to be incurred.   The AFE,
        when  executed by  a  Party,  evidences  that  Party's  Election  to
        participate in the  proposed operation and grants  the Operator  the
        authority to commit or expend funds, pursuant to this Agreement, for
        the  account of the  Participating Parties.  Any  AFE which proposes
        more than  one operation  shall be considered  a separate  AFE as to
        each operation  only  for those  operations for  which  Parties  are
        permitted separate Elections under the terms of this Agreement.

  2.8   Confidential  Data:     shall  mean  all  proprietary   geophysical,
        geological, geochemical,  drilling  or  engineering  data  owned  or
        developed by the Parties relating to operations conducted within the
        Contract Area including  data owned or developed by any  Party prior
        to the  effective  date of  this Agreement.    The term  shall  also
        include (but may not be limited to):

        -  certain commercial, contractual or financial information;
   
        -  analyses,  compilations, maps,  models, interpretations  or other
           documents that reflect or incorporate Confidential Data;

        -  both originals and copies of geological and geophysical data, and
           well logs; and

        -  all  other  subsurface,  seismic  and  related  data acquired  or
           derived from operations conducted pursuant to this Agreement.

        The provisions of  this Agreement with respect  to Confidential Data
        shall not be applicable to  "Confidential Information" as that  term
        is defined in  Exhibit "G" (Integrated Project  Team and  Technology
        Sharing).

  2.9   Contract Area:  shall mean the OCS Leases described in Exhibit "A-2"
        (Description of  Leases) which  are graphically  depicted in Exhibit
        "A-1"  (Contract Area  and Designated  Prospect Outlines) as  to all
        depths. 

  2.10  Cost(s):  shall mean the monetary amount of all expenses incurred by
        the  Operator and the  Participating Parties for (or  on account of)
        any and all operations  conducted pursuant to this  Agreement.   The
        terms   expenses ,    expenditures ,  and    Costs   may   be   used
        interchangeably in this Agreement. 

  2.11  Deepen or  Deepening:  shall mean any operation to drill an existing
        well (including  sidetracking a well)  deeper than the stratigraphic
        equivalent  of the  deepest  formation previously  authorized  to be
        encountered in such well.

  2.12  Deeper  Drilling:   shall  mean the  drilling  of a  well below  the
        deepest Producible Reservoir  penetrated by a Producible Well within
        the same Designated Prospect.

  2.13  Designated  Prospect(s):    shall  mean  those  Leases  or  portions
        thereof,  grouped as the  prospect areas described in  Exhibit "A-1"
        (Contract Area  and Designated  Prospect Outlines)  attached hereto.
        The Parties intend  that the boundaries of  the Designated Prospects
        shall  each cover  as large  an  area as  is  practical using  sound
        geological and geophysical principles. The Designated Prospect areas
        shall  be  periodically  reviewed by  the  Parties, and,  based upon
        drilling results  and/or other information  obtained, may be amended
        by the unanimous agreement of the Parties during such review.

  2.14  Development  Operations:    shall  mean  all  operations   conducted
        pursuant to a Development Plan.

  2.15  Development  Phase:   shall mean  Development  Operations associated
        with the  installation of a Production System  within the Designated
        Prospect.

  2.16  Development Plan:   shall mean the plan for installing  a Production
        System and developing and producing Hydrocarbons from the Designated
        Prospect as described in Article 12 (Development Plan).  This is not
        the Development Plan  as required  by the  MMS under  30 CFR  250.34
        Section  (a) nor  the  DOCD  required under  30 CFR  250.34  Section
        (d)(1).

  2.17  Development Well:  shall mean any well proposed within a  Designated
        Prospect subsequent to  the approval of a Development Plan  for such
        Designated Prospect.

  2.18  Disproportionate  Spending  Settlement:   shall  mean  the financial
        settlement  of all or  a portion  of the percentage recoupment  by a
        Non-Participating Party paying a disproportionate amount of Costs in
        the  next ensuing  operation  in which  the  Non-Participating Party
        makes an Election to participate.

  2.19  Election:   shall mean  either: (i)  a written decision  by a  Party
        either  to participate or  to become a Non-Participating  Party in a
        proposed operation (including the AFE associated with the operation)
        or (ii) a  failure of a Party to respond  within the time limits set
        out  in Article 8  (Voting, Elections, and Notices)  or elsewhere as
        provided herein.   An  Election  to participate  is evidenced  by  a
        Party's  execution of  the  AFE.   An  Election not  to  participate
        (become a Non-Participating Party) is evidenced either by a  Party's
        written  response  against  a proposal  or  such Party's  failure to
        timely execute the AFE within  the time limits set out in Article 8,
        or elsewhere herein, as applicable.

  2.20  Exploratory Operations:   shall  mean all  operations (including any
        subsequent Exploratory  Operation) conducted by  one or more Parties
        in the drilling, testing and completing of the first well (including
        a substitute  well for such well)  in a Designated  Prospect.   With
        respect to  the Green  Canyon 254 Designated  Prospect, the  Enserch
        Exploration, Inc.  Green Canyon  254  OCS-G 7049  #5 Well  shall  be
        deemed an Exploratory Operation. 

  2.21  Exploratory Well:   shall mean any well  proposed and drilled  as an
        Exploratory Operation by one or more of the Parties hereunder.   The
        terms    Exploratory   Operations    and   Exploratory    Well   are
        interchangeable  in  this  Agreement  unless  the  context  requires
        otherwise.

  2.22  Fabrication AFE:   shall  mean the individual AFEs  as described  in
        Article 12.8 (Fabrication AFE) collectively submitted pursuant to an
        approved   Development  Plan   for  the   procurement,  fabrication,
        construction and installation of a Production System.

  2.23  Facilities:    shall mean  all  production  processing  and handling
        equipment beyond the wellhead connections  installed for the benefit
        of  a  Designated  Prospect(s)  to  handle  or  service  Hydrocarbon
        production  from  such  Designated  Prospect(s).    Facilities  also
        include (but are  not limited to) the flowlines and  gathering lines
        that transport the Hydrocarbons  from the wellhead to the processing
        and  treating   equipment  but   exclude  pipelines   used  to  move
        Hydrocarbons to shore.

  2.24  Final Design AFEs:  shall mean the individual detailed design  AFEs,
        collectively  submitted  pursuant to  an  approved  Development Plan
        pursuant to Article 12.5 (Content of the Development Plan).

  2.25  General Matters:   shall mean any  matter decided by  a vote  of the
        Parties in accordance with Article 8.2 (Voting Procedures on General
        Matters and Elections).   A proposal as a General Matter may  or may
        not include an AFE.  If the  nature of the proposal requires that an
        AFE be  submitted with  the proposal, an affirmative  vote for  such
        proposal shall  be evidenced by a  Party s execution of the  AFE for
        the proposal.

  2.26  Geophysical Operations: shall  mean all  operations associated  with
        the  acquisition of geophysical  data over any part  of the Contract
        Area pursuant to Article 9 (Geophysical Operations).

  2.27  Hydrocarbon(s):   shall mean  the oil and gas  and associated liquid
        and gaseous  by-products   which  may be  produced from  a  wellbore
        located on a Designated Prospect.

  2.28  Initial Exploratory Well:   Deleted.

  2.29  Integrated Project Team (IPT):  shall mean the group of  management,
        supervisory,  technical, and  support  personnel  from  the  Parties
        assigned to assist the  Operator with  preparing a Development  Plan
        for  each   Designated  Prospect  and   for  the  planning,  design,
        engineering,  and  installation  of  a  Production  System for  each
        Designated  Prospect   as  further  provided   for  in  Exhibit  "G"
        (Integrated Project Team and Technology Sharing).  The IPT shall  be
        formed pursuant to Article 12 (Development Plan).

  2.30  Joint Account:  shall  mean the  account maintained by the  Operator
        showing the charges paid  and credits received in the conduct of the
        operations hereunder and  which are to  be shared by the  Parties as
        provided in this Agreement.

  2.31  Lease(s):  shall mean each of the OCS federal oil and gas Leases (or
        portion  thereof) identified  on Exhibits  "A-1" (Contract  Area and
        Designated  Prospect  Outlines) and  "A-2"  (Description  of Leases)
        attached hereto.

  2.32  Non-Consent   Operations:     shall  mean   Exploratory  Operations,
        Appraisal Operations,  Development Operations or other operations or
        matters for  which an  AFE is  approved and,  for which  one or more
        Parties, having the contractual right to do so, makes an Election or
        is deemed  to  have made  an  Election  not to  participate  in  the
        proposed  operation or  matter and  where the  Participating Parties
        proceed to  conduct the  operation  at their  sole Cost,  risk,  and
        benefit     pursuant  to  provisions   of  Article  16  (Non-Consent
        Operations).

  2.33  Non-Operating Party:   shall mean  for each Designated Prospect  any
        Party to  this Agreement  other than the Operator  (or a  substitute
        Operator).

  2.34  Non-Participating  Party:   shall mean  any Party to  this Agreement
        who,  having the contractual right to do so, makes an Election or is
        deemed to have made an Election  not to  participate in the proposed
        operation  and who is subject to the provisions  of Article 16 (Non-
        Consent Operations).

  2.35  Non-Participating Party's  Share:   shall mean the  share of Working
        Interest,  Costs and  rights to  produce  Hydrocarbons  that a  Non-
        Participating Party  would have assumed or  received if  all Parties
        had made an Election to participate in the proposed operation.

  2.36  Objective Depth:   shall  mean, for any  well, the  shallower of the
        total footage to be drilled  (as measured in true vertical depth) or
        the penetration  by the drill  bit of a depth sufficient  to test to
        the  stratigraphic  equivalent  of the  base  of the  deepest target
        formation or interval.   Said depth, formation or interval (together
        with a  bottomhole location) shall be set forth in the proposed Well
        Plan and AFE.

  2.37  Operator:    shall  mean  the  Party  identified  in  Exhibit   A-3"
        (Operator Designations)  designated to  conduct all  operations in a
        particular  Designated  Prospect   pursuant  to the  terms  of  this
        Agreement.  The term shall also refer to any successor or substitute
        Operator selected  pursuant to Article  4.2 (Designation of Operator
        for Development  Operations), Article 4.3  (Substitute Operator)  or
        Article 4.6 (Selection of Successor Operator).

  2.38  Participating  Interest:     shall  mean  a   Participating  Party's
        interest  of   participation  in  the   Costs,  risks  and  benefits
        (including  rights  to  Hydrocarbons)  of   an  operation  conducted
        pursuant to this Agreement; that is, the proportion that the Party's
        Working  Interest bears  to the  total Working  Interest of  all the
        Participating  Parties in  any  operation (unless  a  different Cost
        sharing basis has  been agreed upon by the Participating  Parties in
        such operation).

  2.39  Participating Party:   shall mean a Party  who makes an  Election to
        participate  in sharing  the  Costs, risks  and  benefits (including
        rights to  Hydrocarbons) of an operation  conducted pursuant to this
        Agreement.  If the Parties have agreed upon a different Cost sharing
        arrangement, those Parties shall be considered Participating Parties
        for all purposes of this Agreement.

  2.40  Producible Reservoir:   shall  mean a  Hydrocarbon accumulation into
        which a Producible Well has been drilled and which is separated from
        and not in oil or  gas communication with any other accumulation and
        identified  as a  Hydrocarbon  bearing accumulation  expected  to be
        developed under any Development  Plan or any other accumulation from
        which Hydrocarbons are ultimately produced.

  2.41  Producible  Well:  shall  mean a well producing  Hydrocarbons or, if
        not producing, a well that  shall meet, according to  either the MMS
        or the Participating  Parties, the  well producibility criteria  set
        forth  in Title  30  CFR  250.11 (effective  May  31, 1988)  or  any
        succeeding order issued by an appropriate governmental authority.

  2.42  Production System:  shall mean an offshore structure (whether fixed,
        compliant,  subsea,  or  floating)  and  all  associated  components
        thereof  including  drilling   components  thereon,  the  associated
        Facilities as defined in Article 2.23, and risers which are used for
        the production of Hydrocarbons  from the Designated Prospect.   This
        term shall also include the following defined terms: 

        2.42.1   Subsea  Production System:  shall mean  an  offshore subsea
                 structure  (i.e., where  multiple  wells or  a  single well
                 could be  utilized) or template  and the components thereof
                 (including  flow  lines  and  control  systems)  which  are
                 attached to  the seafloor for  use in obtaining Hydrocarbon
                 production from a well not drilled from a Production System
                 and routed to the Production System;

        2.42.2   Initial Production System: shall mean the Production System
                 for the Designated  Prospect included in the first approved
                 Development Plan;

        2.42.3   Subsequent  Production  System:    shall  mean  any new  or
                 expanded Production System  proposed after the installation
                 of  the  Initial  Production  System   for  the  Designated
                 Prospect.

  2.43  Sidetrack   or  Sidetracking:      shall  mean   any   operation  to
        directionally  control and/or intentionally deviate a  well so as to
        change the  bottomhole location  to another  bottomhole location not
        deeper than  the stratigraphic equivalent  of the original Objective
        Depth, unless such  intentional deviation is done  to straighten the
        hole,   drill  around   junk   or  to   overcome   other  mechanical
        difficulties.

  2.44  Subsequent Exploratory,  Appraisal or Development Operation:   shall
        mean  any   operation  conducted   subsequent   to  its   respective
        Exploratory,  Appraisal,  or  Development Well  having  reached  its
        Objective Depth, but  prior to the plugging and abandonment  of such
        Exploratory, Appraisal or Development Well.

  2.45  Well  Plan:    shall  mean a  plan  for  any  proposed  Exploratory,
        Appraisal  or  Development    Well  which  contains   at  least  the
        information  defined   in  Article   10.2.1  (Well  Plan's   Minimum
        Specifics).

  2.46  Withdrawing  Party:   shall mean  a Party  that withdraws  from this
        Agreement under the conditions defined in Article 17.1 (Withdrawal),
        or   is  deemed  to  have  withdrawn  under  Article  16.2  (Acreage
        Forfeiture Provisions).

  2.47  Working  Interest:   shall  mean  the interests  of the  Parties  as
        reflected  on Exhibit   A   (Working Interests  of the  Parties  and
        Representatives) as such interest may be adjusted from time to  time
        pursuant to the terms and provisions of this Agreement.

                                   ARTICLE 3
                                    EXHIBITS

  3.1   Exhibits:  All  references in  this Agreement to  "Exhibits" without
        further  qualification  shall mean  the  Exhibits  listed  below and
        attached to this  Agreement.  Each of the Exhibits listed  below are
        made a  part of this Agreement and shall be deemed incorporated into
        the body  of this Agreement  by this reference, as  completely as if
        the full text of each Exhibit were contained within the text of this
        Agreement.  If the provisions of any  of the Exhibits conflict  with
        any provisions of  this Agreement, the provisions of  this Agreement
        shall prevail with exception  of Exhibits "C ,  D , and  G" ,  where
        the conflicting  provisions of  Exhibits   C ,  D ,   and   G   will
        prevail.

              Exhibit "A"     Working   Interests   of   the   Parties    and
                              Representatives
              Exhibit "A-1"   Contract Area and Designated Prospect Outlines
              Exhibit "A-2"   Description of Leases
              Exhibit "A-3"   Operator Designations
              Exhibit "A-4"   Area of Mutual Interest Outline
              Exhibit "B"     Offshore Insurance Provisions
              Exhibit "C"     Accounting Procedure
              Exhibit "D"     Gas Balancing Agreement
              Exhibit "E"     Equal  Employment  Opportunity   Provision  and
                              Certification of Nonsegregated Facilities
              Exhibit "F"     News Release Guidelines
              Exhibit "G"     Integrated Project Team and Technology Sharing
              Exhibit "H"     Production Handling
              Exhibit "J"     Security Instruments
              Exhibit "K"     Joint Bidding Agreement

                                  ARTICLE 4
                             SELECTION OF OPERATOR

  4.1   Designation of the Operator:   The Party designated on Exhibit "A-3"
        (Operator  Designations)  will be  the  Operator  of  the associated
        Designated  Prospect and  shall conduct  all operations  within such
        Designated  Prospect for  the Joint  Account of  the Parties.   This
        designation of  operatorship is subject to  approval by the Minerals
        Management Service (MMS) and  the Parties agree to  promptly execute
        and file such documents as may be required to  gain approval of this
        designation of operatorship.

  4.2   Substitute Operator:   If  the Operator  becomes a Non-Participating
        Party in  a Non-Consent Operation,  any Participating  Party may  be
        selected  by  the  Participating  Parties as  a  General Matter  and
        designated as  the substitute Operator  for the Designated Prospect,
        with  the same  authority,  rights,  obligations and  duties  as the
        Operator, except when:

        (a)   the drilling and  other contracts for equipment and Facilities
              to  be   utilized  on   the  Non-Consent   Operation  are  not
              assignable; or

        (b)   the  operation is  conducted  from a  Production  System being
              operated by the Operator.

        If  no  substitute  Operator  is  designated  by  the  Participating
        Parties, then the  Operator, at its option, shall conduct  such Non-
        Consent  Operations at  the  sole  risk, Costs  and expense  of  the
        Participating  Parties.    If  the  Operator   conducts  Non-Consent
        Operations on behalf of the Participating Parties (when the Operator
        is  a  Non-Participating  Party),  the  Operator  shall furnish  the
        Participating Parties an  estimate of the Costs  of the  Non-Consent
        Operation.  The Operator shall not be required to  proceed with such
        Non-Consent Operations unless and  until the Costs thereof have been
        advanced to  it by the  Participating Parties,  to the end that  the
        Operator need not  expend any of its  own funds for such Non-Consent
        Operation.   If  a Non-Consent  Operation conducted by  a substitute
        Operator  is completed  or results  in a  producing well,  said well
        shall  be turned over  to the Operator for  future operations within
        thirty (30) days of completion of such operations.

  4.3   Resignation of Operator:   The  Operator may resign  at any  time by
        giving  written  notice  to  the  Parties;  provided,  however,  the
        Operator shall not resign during a Force Majeure situation described
        in Article 25.1 (Force Majeure).  If the Operator  no longer owns an
        interest in   the Designated Prospect, the Operator shall  be deemed
        to have  resigned without  any action  by the  Non-Operating Parties
        other than the selection of a successor Operator.

  4.4   Removal of Operator:  The Operator may be removed either as a result
        of an  assignment of  all  or a  portion of  the Operator's  Working
        Interest in  such Designated  Prospect or for good  cause under  the
        following circumstances.

        4.4.1 Removal Upon  Assignment:   If  the Operator  assigns   a  ten
              percent  (10%) or  greater  Working Interest  in  a Designated
              Prospect  (excluding any  interest  assigned to  an Affiliate)
              which   reduces  the   Operator's  Working  Interest   in  the
              Designated  Prospect  to less  than  the  Working  Interest of
              another Non-Operating Party (and in Mobil s case, the combined
              Mobil ownership), whether accomplished  by single or  multiple
              assignments, then the  Operator may be removed by vote  of the
              Parties as a General  Matter.  Provided however,  the Operator
              shall not be removed solely  on the basis of a reduced Working
              Interest when  the  reduced Working  Interest is  equal to  or
              larger than the next largest Working Interest of a Party  (and
              in  Mobil s  case,   the  combined  Mobil  ownership)  in  the
              Designated Prospect.

        4.4.2 Removal for Cause by Vote:  The Operator shall resign upon the
              unanimous vote of the  Non-Operating Parties in the event this
              is a two or three-party Agreement or the  majority vote of the
              Non-Operating Parties if the Agreement applies to four  (4) or
              more Parties, if:

              (a)   the Operator  commits an  event of  default as hereafter
                    defined  and  fails to  commence  to  cure  such default
                    within thirty  (30) days after  receiving notice of such
                    default.  An  event of default is defined as  a material
                    breach  of  this  Agreement  and  includes,  but is  not
                    limited to  failure to  pay timely  contract invoices as
                    they become  due, failure to keep  the property  free of
                    liens (except as  provided herein), or a failure  to pay
                    properly in accordance with Exhibit  C .

              (b)   the  Operator  commits an  act  of  gross  negligence or
                    willful misconduct; or,

              (c)   the  Operator  is   unable  to  meet  the  standards  of
                    operation  contained   in  Articles   5.2   (Workmanlike
                    Conduct),     5.3  (Drilling),  and   5.6  (Reports   to
                    Government Agencies).

  4.5   Selection of Successor Operator:  Upon resignation or removal of the
        Operator, a successor Operator shall be selected by the Parties as a
        General Matter.   If the resigned or  removed Operator fails to vote
        or votes only  to succeed itself, then the successor  Operator shall
        be selected  as a General  Matter after  excluding the  vote of  the
        resigned  or  removed Operator.   In  the event  there are  only two
        Parties to this Agreement, the Non-Operating Party shall  become the
        Operator.

  4.6   Effective Date  of  Resignation or  Removal:    The  resignation  or
        removal of the Operator shall become effective  at 7:00 a.m. on  the
        first  day of the month following a period of ninety (90) days after
        said notice,  unless a longer period  of time is required  to obtain
        approval by the Minerals Management Service.  Prior to the successor
        Operator's  assumption  of  the   Operator's  duties,  the  previous
        Operator (the  "outgoing Operator")  shall continue  to exercise its
        authorities and meet  its duties as Operator.   Upon selection  of a
        successor Operator,  the  outgoing Operator  shall be  bound by  the
        terms of this  Agreement as a Non-Operating Party.   The resignation
        or removal of the outgoing Operator shall not prejudice any  rights,
        obligations or liabilities which accrued during the  period when the
        outgoing Operator acted  as the Operator.  If the  outgoing Operator
        resigns  or is  removed, it  shall be entitled  to charge  the Joint
        Account for  the reasonable  Costs incurred  in connection  with the
        change of operatorship.

  4.7   Delivery of  Property:   On  the effective  date of  resignation  or
        removal of the Operator, the outgoing Operator shall deliver to  the
        successor Operator possession  of everything relating to  operations
        hereunder and co-owned by the Parties, including  all funds relating
        to  the  Joint   Account,  all  co-owned  equipment,  materials  and
        appurtenances used  in conducting operations  and all books, records
        and inventories  relating to operations  hereunder (other than those
        books, records  and inventories maintained  by the outgoing Operator
        as  the owner  of  a Working  Interest).   Upon  such delivery,  the
        outgoing  Operator shall  be discharged  from all future  rights and
        obligations as  the Operator.   The outgoing  Operator shall further
        use its reasonable  efforts to  transfer to the  successor Operator,
        effective as of  the effective date of such resignation  or removal,
        its rights as the Operator under all contracts exclusively  relating
        to  operations hereunder and the successor Operator shall assume all
        obligations  of the  Operator thereunder.    As soon  as practicable
        after the effective date of such resignation or removal, the Parties
        shall audit  the Joint Account and  conduct an inventory  of all co-
        owned property, and such  inventory shall be used  in the return  of
        and  the accounting  for  the  co-owned property   by  the  outgoing
        Operator.   All  Costs incurred  in connection  with such  audit and
        inventory shall be charged to the Joint Account.

                                  ARTICLE 5
                         RIGHTS AND DUTIES OF OPERATOR

  5.1   Exclusive  Right  to Operate:    Except as  otherwise provided,  the
        Operator  shall have  the exclusive  right and  duty to  conduct (or
        cause to be  conducted) all  operations pursuant to  this Agreement.
        With  the exception of  any team formed pursuant  to this Agreement,
        the number  of employees  or  contractors used  by the  Operator  in
        conducting operations  hereunder, their selection,  and the hours of
        labor  and   the  compensation  for   services  performed  shall  be
        determined by the Operator,  and all  such employees or  contractors
        shall  be  the   employees  or  contractors,  respectively,  of  the
        Operator.  The  Operator shall contract for and employ  any drilling
        rigs,  tools, machinery,  equipment, materials,  supplies,  vessels,
        services, consultants,   and personnel  reasonably necessary for the
        Operator to conduct the operations  provided for in this  Agreement.
        Except with the unanimous consent of all Parties, Operator shall not
        contract out to a third party the operation of the Production System
        or any  platform provided,  however, such operations by  any of  the
        Mobil Entities, as Operator, may be performed by Mobil Exploration &
        Producing U.S. Inc.,  as agent for the  Mobil Entitles or  any Mobil
        affiliate.

  5.2   Workmanlike Conduct:  The Operator shall conduct all operations in a
        proper  and  workmanlike  manner  in  accordance  with  methods  and
        practices customarily used  in sound oil and gas field  practice and
        with that degree of diligence reasonably and ordinarily exercised by
        an experienced prudent operator  engaged in a similar activity under
        the same or similar circumstances.  The Operator shall not be liable
        to the  Parties for  losses sustained or liabilities  incurred as  a
        result  of its actions as  the Operator,  except such as  may result
        from its  gross negligence or willful  misconduct.  Unless otherwise
        provided, Operator shall consult with the Parties and keep them  all
        informed of all important matters.

  5.3   Drilling:  The Operator  may have all drilling operations  conducted
        by  qualified and  responsible independent  contractors who  are not
        affiliated  with the  Operator  and are  employed  under competitive
        contracts.  A competitive contract is a contract  containing current
        terms,  rates  and provisions  that  do not  exceed those  generally
        prevailing on the OCS in the Gulf of Mexico for operations involving
        drilling  rigs   of  an   equivalent  type,   operating  in  similar
        environments, and  equipped to  the Operator's  standard  conditions
        which are capable  of drilling the proposed well(s) within  the time
        schedule for  the operations  to  be conducted.   The  Operator  may
        employ  its  equipment, personnel,  drilling  rig,  workover  rig or
        snubbing unit in  the conduct of such operations in  accordance with
        Exhibit  "C" (Accounting Procedure) or pursuant  to a written agree-
        ment  among the Participating Parties.  If the Operator's equipment,
        personnel, drilling rig, workover  rig or snubbing unit are employed
        in conducting operations under this  Agreement, the terms, rates and
        provisions for use shall be consistent with then current competitive
        contracts prevailing  in the  OCS in the deepwater  Gulf of  Mexico.
        The Participating  Parties  may  acquire  by  purchase or  lease,  a
        drilling rig as  part of the Production System and in  this instance
        the Costs to the Joint Account shall be as stated in Exhibit  C .

  5.4   Liens and Encumbrances:  The Operator shall  use reasonable  efforts
        to  keep  the  Leases,  Production  Systems,  Facilities  and  other
        equipment and any Hydrocarbons free from all liens and encumbrances,
        except those provided for in Article 6.3 (Security Provisions) which
        might  arise  by  reason of  the  operations  conducted  under  this
        Agreement.

  5.5   Records:   The  Operator shall  keep  accurate  books, accounts  and
        records of  operations hereunder  in compliance  with the Accounting
        Procedure in  Exhibit "C" (Accounting  Procedure).  Unless otherwise
        provided for  in this  Agreement, all records of  the Joint  Account
        shall be available to a Non-Operating Party at all reasonable  times
        during the Operator's normal office hours pursuant to the provisions
        contained in Exhibit "C".

  5.6   Reports to Government  Agencies:  The Operator shall make  timely to
        all governmental authorities reports  that it has a  duty to make as
        Operator  and   shall  furnish  copies  of   such  reports   to  the
        Participating  Parties.   The  Operator  shall  give  timely written
        notice  to   the  Parties   of  litigation   and/or   administrative
        proceedings of which it has notice affecting any Designated Prospect
        or operations hereunder.

  5.7   Information  to  Participating Parties:   The  Operator shall,  in a
        timely  manner,  furnish  each  Participating  Party  the  following
        information  pertaining to  each well  being drilled  (provided such
        information was obtained or received by Operator):

        (a)   copy of the application for permit to drill and all amendments
              thereto;

        (b)   daily  drilling and  workover reports;  daily mud  checks, mud
              logs, lithological, and Hydrocarbon information;  daily casing
              and  cement  tallies  and  cumulative  Costs  incurred on  the
              operation;

        (c)   complete report of all core analysis;

        (d)   copies of  any logs  or surveys as run  (including a  complete
              "library tape" of the digitally recorded data);

        (e)   copies of well  test results, bottomhole pressure surveys, gas
              and condensate analyses or similar information;

        (f)   copies of reports made to and notices or orders received  from
              regulatory agencies;

        (g)   48  hours  advance   notice  of  logging,  coring  or  testing
              operations  (or,  if conditions  do  not  permit  such advance
              notice, as much advance notice as is reasonably possible);

        (h)   upon   written  request,  and  if  sufficient  quantities  are
              available, samples of cutting  and sidewall cores marked as to
              depth, to be packaged and shipped at expense of the requesting
              Party;

        (i)   copies of the drilling prognosis;

        (j)   if conventional cores are taken, the requesting Party shall be
              allowed access to inspect and evaluate said cores; and

        (k)   samples of  gas, condensate and  oil, if sufficient quantities
              are available.

        Upon  written request, the Operator shall use its reasonable efforts
        to  furnish  to  a  requesting  Participating  Party any  additional
        available information  (including a complete  slabbed section of all
        recovered  cores,  if  requested  and  available),  acquired by  the
        Operator  for  the Participating  Parties,  not otherwise  furnished
        under  this  Article   (not  including  any  derivative  information
        independently developed  at Operator's sole Cost  and expense).  The
        Costs  of  gathering   and  furnishing  such   additional  available
        information shall be charged to the requesting Participating Party.

  5.8   Completed  Well Information:   Operator shall,  in a  timely manner,
        furnish  to  each  Participating  Party  the  following  information
        pertaining to each completed well:

        (a)   monthly report of production and injection;

        (b)   copies of  reports made to regulatory agencies;

        (c)   report on status of wells not producing and not abandoned;

        (d)   Hydrocarbon status report;

        (e)   bottomhole pressure data;

        (f)   composite of  all logs run  (e.g., TDT, Carbon-Oxygen, Spinner
              Surveys, Casing Collar, etc.); and,

        (g)   reports of inventory.

  5.9   Information  to  Non-Participating  Parties:    The  Operator  shall
        furnish  to   each  Non-Participating  Party   copies  of  all  non-
        confidential  reports   made  to   regulatory  agencies.     A  Non-
        Participating  Party shall  be entitled  to receive  the information
        specified  in  Article  5.7  and  5.8  only  after  fulfilling   the
        requirements specified  in Article  16 (Non-Consent  Operations).  A
        Party which has permanently relinquished all of its Working Interest
        in either the Contract Area or a specific Designated Prospect, shall
        not be entitled to receive any information specified in Article  5.7
        and 5.8 above with respect to such relinquished interest.

  5.10  Cost Information:    Within one  hundred  twenty  (120)  days  after
        completion of  a Non-Consent  Operation, the  Operator shall furnish
        all Parties an itemized statement of the Cost of such operations and
        an inventory of the equipment pertaining thereto or, at its  option,
        the Operator  in lieu  of an  itemized statement of  such Costs  may
        submit a detailed  statement of monthly billings.  For  the purposes
        of  calculating recoupment  of Costs  pursuant to  Article 16  (Non-
        Consent  Operations), the  Operator shall  furnish to all  Parties a
        quarterly statement showing operating expenses and the proceeds from
        the  sale  of  Hydrocarbon  production  from  the  wells  from which
        recoupment is being made.

  5.11  Managing Production:  All    Parties  shall  comply with  the  COPAS
        Operator/Producer Roles  and  Responsibilities  Guidelines  (October
        1993) ( OPRR Guidelines ) and shall cooperate  and use due diligence
        to avoid  gas imbalances resulting in  Pipeline Penalties  under the
        provisions  of  the  transportation   tariffs  of  any  transporting
        pipelines.    Notwithstanding anything  in  this  Article  5  to the
        contrary, the Parties shall use the OPRR Guidelines to determine the
        allocation  of penalties among  the Parties.  The  Operator shall be
        solely  responsible  and  liable  for  and  shall  protect,  defend,
        indemnify and hold  all other Parties harmless from and  against any
        Pipeline Penalties allocated to the Operator in accordance with this
        Article 5.11.  Each of the other Parties shall be solely responsible
        and liable  for and  shall protect, defend, indemnify  and hold  the
        Operator harmless  from and against  Pipeline Penalties allocated to
        such Party in accordance with this Article 5.11.

        5.11.1      Compensation: The Parties hereto recognize that Operator
                    may be performing  penalty avoidance  services for  Non-
                    Operators, implementing  procedures to  avoid  penalties
                    and  will be  subject  to additional  risk  of incurring
                    penalties.   Operator may  be performing  these services
                    and incurring this additional risk without compensation.
                    The Parties agree that in the event Operator and one  or
                    more  Non-Operators enter  into  a  subsequent Operating
                    Agreement(s)  within  the  Area  of  Mutual  Interest as
                    identified on  Exhibit  A-4  hereof and  such  Agreement
                    provides   that   its   operator   will   be  separately
                    compensated for performing these services  and incurring
                    such risk,  then Operator shall  have the right to  have
                    this Agreement  amended ( Amendment ) to  provide for an
                    identical  fee which  shall be effective  retroactive to
                    the  effective date of such Non-Operator s participation
                    under this Agreement on the date of such Amendment.  The
                    Amendment  shall  be    applicable  only  to  such  Non-
                    Operator s  share  of  production hereunder.    Operator
                    shall  notify   the  affected   Non-Operator(s)  of  its
                    election and shall  forward a copy of  the Amendment  to
                    such Party.   The  Amendment shall  be effective without
                    further action  of the Parties to  this Agreement.  Non-
                    Operator(s) shall  pay Operator the  fee provided in the
                    Amendment for past  production within sixty (60) days of
                    receipt of such Amendment and Operator shall continue to
                    receive such fee in accordance with the Amendment.  This
                    Agreement may be  further amended as set  forth above in
                    the event  other Non-Operators, acting as  operator, are
                    parties  to  operating  agreements  with   Operator  and
                    separately  receive payment for performing such services
                    and incurring  such risks.   In any  event, the Operator
                    (or any Non-Operator, acting as Operator) shall keep the
                    other Parties apprised  of any and all penalty avoidance
                    services being performed.

                                  ARTICLE 6
                        EXPENDITURES AND SECURITY RIGHTS

  6.1   Basis of Charges to the Parties:   Except as otherwise provided, the
        Operator  shall pay  all  Costs of  operations  hereunder  and  each
        Participating Party  shall reimburse the  Operator, in proportion to
        its  Participating Interest, for  the Costs of each  such operation.
        The  Operator shall  have the  right  to require  each Participating
        Party to advance its respective  share of estimated expenditures, as
        provided in Exhibit "C" (Accounting  Procedure).  Funds received  by
        the Operator under this Agreement may be commingled with  Operator's
        own funds.   All  charges, credits  and accounting for  expenditures
        shall be made pursuant to Exhibit "C".

  6.2   Authorization  for  Expenditure  and Supplemental  Authorization For
        Expenditure:  The Operator shall not make any single expenditure  or
        undertake  any  project  or  operation  costing  Two  Hundred  Fifty
        Thousand  Dollars ($250,000)  or more,  unless an  Authorization for
        Expenditure (AFE) has either:   (1) been included in  a proposal for
        an operation and approved by the Participating Parties through their
        Election to  participate  in  the  operation,  or (2)  received  the
        approval  of  the  Parties as  a  General  Matter.   For  any single
        expenditure or project costing  in excess of Fifty  Thousand Dollars
        ($50,000),  but  less   than  Two  Hundred  Fifty  Thousand  Dollars
        ($250,000), the Operator  need not submit an AFE, but  shall furnish
        written  information  describing  the  expenditure  to  each of  the
        Participating  Parties.     In  the   event  of  an   emergency  and
        notwithstanding the  foregoing, the  Operator shall  be empowered to
        immediately  make  such expenditures  for the  Joint Account  of the
        Participating Parties as, in its opinion as a reasonable and prudent
        Operator, are  required to  deal with the emergency.   The  Operator
        shall report to the Participating Parties,  as promptly as possible,
        the nature of the emergency and action taken.

        6.2.1 Required Authorization:   Prior to  making any expenditure for
              the Joint  Account of  less than  Two  Hundred Fifty  Thousand
              Dollars ($250,000) that requires the utilization of a drilling
              or workover rig, the Operator shall obtain the approval of the
              Parties as a General Matter.

        6.2.2 AFE  Overrun Notice:   Operator shall  provide an  AFE overrun
              notice to all Participating Parties whenever it appears (based
              upon  Operator's reasonable  estimate)  that the  actual total
              Costs  associated  with  any  separate  AFE  will  exceed  the
              original AFE by more than ten percent (10%).  

        6.2.3 Supplemental AFE for  Cost Overruns for Wells:  If  during the
              drilling  of   Exploratory   Wells,   Subsequent   Exploratory
              Operations, Appraisal Wells,  subsequent Appraisal Operations,
              Development  Wells, or  subsequent Development  Operations, it
              appears  (based upon Operator's reasonable  estimate) that the
              actual Costs will exceed the latest approved AFE for the  well
              by   twenty-five  percent   (25%)  or   two  million   dollars
              ($2,000,000),  whichever  is  less,  Operator  shall  submit a
              supplemental  AFE  to the  Participating  Parties  to  make an
              Election as to  their further participation in  the well  AFE.
              Any  Participating  Party  which becomes  a  Non-Participating
              Party as  to such  further operation under  this Article 6.2.3
              shall be subject to the provisions  of Article 16 (Non-Consent
              Operations).

        6.2.4 Supplemental AFE for  Cost Overruns on Integrated Project Team
              AFE:    If   it  appears  (based  upon  Operator's  reasonable
              estimate) that  the actual Integrated  Project Team Costs will
              exceed the latest approved AFE by twenty-five percent (25%) or
              two million dollars  ($2,000,000), whichever is less, Operator
              shall submit  a supplemental AFE  to the Participating Parties
              to make an  Election as to their further participation  in the
              Integrated Project  Team AFE.   Any  Participating Party which
              becomes a Non-Participating Party as to such further operation
              under this Article 6.2.4 shall be subject to the provisions of
              Article 16.5.3 (Non-Consent Geophysical Operations, Integrated
              Project Team and/or  Final Design AFE) only for the  amount of
              such supplement.

        6.2.5 Supplemental AFE for Cost Overruns on Final Design AFE:  If it
              appears (based  upon Operator's reasonable  estimate) that the
              actual  design Costs  will  exceed the  latest  approved Final
              Design  AFE  by  twenty-five  percent  (25%)  or five  million
              dollars ($5,000,000), whichever is less, Operator shall submit
              a supplemental  AFE to  the Participating  Parties to  make an
              Election as to their further participation in the Final Design
              AFE.     Any   Participating  Party   which  becomes   a  Non-
              Participating Party  as to  such further  operation under this
              Article 6.2.5  shall be subject  to the provisions of  Article
              16.5.3 (Non-Consent Geophysical Operations, Integrated Project
              Team  and/or Final  Design AFE)  only for  the amount  of such
              supplement.

        6.2.6 Supplemental AFE for Cost Overruns on Fabrication AFE:  If  it
              appears (based  upon Operator's reasonable  estimate) that the
              actual Costs associated  with any separate AFE submitted under
              the   Fabrication  AFE   will   exceed  the   latest  approved
              Fabrication AFE  by twenty-five  percent (25%)  or ten million
              dollars  ($10,000,000),  whichever  is  less,  Operator  shall
              submit a supplemental AFE to the Participating Parties to make
              an  Election   as  to  their   further  participation  in  the
              Fabrication AFE.  Any Participating Party which becomes a Non-
              Participating Party  as to  such further  operation under this
              Article 6.2.6 shall  be subject  to the provisions  of Article
              16.2 (Acreage Forfeiture Provisions).

        6.2.7 Supplemental  AFE for Cost Overruns on All Other  AFEs:  If it
              appears (based upon Operator's  reasonable estimate) that  the
              actual  Costs will  exceed the  latest  approved  AFE for  the
              operation by  twenty-five percent (25%) or two million dollars
              ($2,000,000),  whichever  is  less,  Operator  shall submit  a
              supplemental  AFE  to the  Participating  Parties  to  make an
              Election as  to their further  participation in the operation.
              Any  Participating  Party  which  becomes  a Non-Participating
              Party as to  such further operation under  this Article  6.2.7
              shall be  subject, if applicable, to the provisions of Article
              16  (Non-Consent  Operations)  only  for  the  amount of  such
              supplement.

        6.2.8 Supplemental AFE for  Cost Overruns for All Supplemented AFEs:
              If it appears (based upon Operator s reasonable estimate) that
              the actual Costs  associated with any already supplemented AFE
              will   exceed   the   revised   total   (original   plus   all
              supplementals) AFE by twenty-five percent (25%) or two million
              dollars ($2,000,000), whichever is less, Operator shall submit
              another supplemental AFE to the Participating Party(s) to make
              an Election as to their future  participation in such project.
              Any  Participating  Party  which becomes  a  Non-Participating
              Party as to such further operation under such project shall be
              subject  to the  appropriate  Non-Consent  provisions  of  the
              supplemental  AFE provision  applicable  thereto as  set forth
              hereinabove.

        6.2.9 Further Operations During a Force Majeure:  No Party shall  be
              allowed  to make an  Election not to participate  in a further
              operations  under Articles  6.2.3  (Supplemental AFE  for Cost
              Overruns for Wells), 6.2.4 (Supplemental AFE for Cost Overruns
              on Integrated  Project Team AFE),  6.2.5 (Supplemental AFE for
              Cost Overruns  on Final  Design AFE),  6.2.6 (Supplemental AFE
              for Cost Overruns on Fabrication AFE), 6.2.7 (Supplemental AFE
              for Cost Overruns  on All  Other AFEs) or  6.2.8 (Supplemental
              AFE for  Cost Overruns  for All Supplemented AFES)   during  a
              Force Majeure or other emergency as described in Article  25.1
              (Force Majeure),  but may make its Election not to participate
              after termination of such emergency.

  6.3   Security   Provisions:  Notwithstanding  anything  to  the  contrary
        contained in this  Agreement, it is understood and agreed  that: (a)
        each  Non-Operator hereby  mortgages, pledges,  and  hypothecates to
        Operator and each  other Non-Operator  and grants Operator  and each
        other  Non-Operator  a security  interest  in,  and  Operator hereby
        mortgages, pledges, and hypothecates to each Non-Operator and grants
        each  Non-Operator a  security  interest in,  all right,  title, and
        interest of each such  Non-Operator and Operator, as applicable, now
        or  hereafter acquired in and to: (i) the oil and gas leases located
        within  each and  every   Designated Prospect  in the  Contract Area
        ( the Designated  Prospect Leases ); (ii)  all surface or subsurface
        machinery,  equipment, fixtures,  inventory, facilities,  and  other
        property of whatever  kind, character  or nature,  now or  hereafter
        located  on  the  Designated  Prospect  Leases or  held  for  use in
        connection with the Designated Prospect Leases or in connection with
        the   operation   hereof,  or   the  treating,   handling,  storing,
        transportation,  processing,  marketing  or  sales  of Hydrocarbons,
        including without limitation, all oil wells, gas wells, water wells,
        injection wells, casing, tubing, tubular goods, rods, pumping units,
        engines,   Christmas     trees,  platforms,   derricks,  separators,
        compressors, flow lines, tanks, gas systems (for gathering, treating
        or compression)  pipe lines,  chemicals,  solutions, water  systems,
        power  plants,   transformers,  starters   and  controllers,  tools,
        telegraph,  telephone, loading  racks, loading  docks,  and shipping
        facilities,  but  not  the  Production  System,  (collectively,  the
         Equipment );  (iii)  Hydrocarbons  which  are  produced   from  the
        Designated  Prospect  Leases,  all  products  processed or  obtained
        therefrom,  and  all  inventory  thereof  upon  extraction from  the
        wellhead;  (iv) all  contract rights  and other  general intangibles
        related to the Designated Prospect  Leases, the operation thereof or
        the  treating,   handling,  storing,   transportation,   processing,
        marketing or sales  of Hydrocarbons, or under which the  proceeds of
        Hydrocarbons arise or  are evidenced or governed;  (v) all  accounts
        resulting  from the  sale of  Hydrocarbons at  the wellhead  and all
        other   accounts,  contract   rights,   operating   rights,  general
        intangibles, chattel paper, documents,  and instruments arising from
        or by virtue  of any transaction related to the  Designated Prospect
        Leases, the Equipment, or the Hydrocarbons: (vi) all proceeds of the
        foregoing or payments in lieu of Hydrocarbons, whether such proceeds
        or payments are goods, money, documents, instruments, chattel paper,
        securities, accounts, general intangibles, fixtures or other  assets
        (all of the aforesaid properties,  rights and interest of  Operator,
        herein  called  the  Operator s  Property ,  and  all  the aforesaid
        properties, rights  and interests of  each Non-Operator with respect
        to each Non-Operator, herein called such  Non-Operator s Property ).
        The liens and  security interests granted by  each Party in favor of
        the other Party  secures the payment and performance of  all present
        and future obligations,  liabilities, and indebtedness of each party
        under  this Agreement  together with  interest  thereon at  the rate
        provided  in the  Accounting Procedure  (attached hereto  as Exhibit
         C ),  now or  hereafter arising,  up to  the Limit  (as hereinafter
        defined) for each Party  as hereinafter set forth (as to each party,
        the  Secured Obligations).  Any party (not an original signatory  to
        this  Agreement  or  the  Leases)  whether  by  assignment,  merger,
        mortgage, operation  of law  or otherwise, shall be  deemed to  have
        taken  such interest  subject to  the liens  and security  interests
        granted  by  this   Article  6.3  as  to  all   Secured  Obligations
        attributable to  such interest  being acquired, whether  or not such
        Secured Obligations arose before or after such interest is acquired.
        Each Party hereunder shall be entitled to exercise all of the rights
        and remedies of a mortgagee of immovable or real property and/or  of
        a secured  party under applicable  Louisiana law, including but  not
        limited to Chapter 9 of  the Louisiana Commercial Laws.   R.S. 10:9-
        101, et  seq.  If  Operator seeks to enforce the  liens and security
        interests granted to it hereunder against any Non-Operator, Operator
        shall  have the  right to  appoint a  keeper of  such Non-Operator s
        Property, or any part thereof, pursuant to the terms and  provisions
        of La.  R.S. 9:5131 et seq.  and 9:5136 et  seq.  If  a Non-Operator
        seeks  to enforce  the liens  and security  interests granted  to it
        hereunder  against  Operator  or  another  Non-Operator,  such  Non-
        Operator shall have the right to appoint a keeper  of the Operator s
        Property, or any part thereof, or of the Non-Operator s Property, or
        any  part  thereof,  as  applicable,   pursuant  to  the  terms  and
        provisions  of La.  R.S. 9:5131  et seq.  and 9:5136  et  seq.   The
        maximum  amount of  the  Secured  Obligations of  each Party  to  be
        secured hereunder that may be outstanding at any time (the   Limit )
        is fixed at ten million dollars ($10,000,000) with reference to each
        Non-Operator, and ten  million dollars ($10,000,000) with  reference
        to Operator.

  6.4   Financing Statement and Recording of this  Agreement: To perfect the
        security interests  grated here under, the  Parties hereto  agree to
        execute  simultaneously  herewith  and  cause to  be  filed  in  the
        appropriate filing offices, this Agreement and a financing statement
        on  form UCC-1,  as  in the  form  attached  hereto as  Exhibit   J 
        (Security  Instruments).    The  Parties  shall  have  a  continuing
        obligation to  execute additional financing  statements to  continue
        such  perfection and  to accurately  reflect the  current properties
        covered by  this Agreement.    The  Parties hereto  further agree to
        execute and  thereafter register,  file  or record  or cause  to  be
        registered,  filed  or  recorded  in  any  appropriate  governmental
        office, this  Agreement and any  document or instrument supplemental
        to  or confirmatory  of this  Agreement, which  may be  necessary or
        desirable for the continued  validity, perfection or priority of the
        rights of the Parties under this Agreement.   

  6.5   Unpaid  Charges: In the event of the failure of any Party to pay its
        share of the Costs when due as provided in this  Agreement, Operator
        (or  the  Non-Operator with  the  largest  Working  Interest  in the
        Designated Prospect to which such failure applies if Operator is  in
        default of the  payment of  costs hereunder), at  any time  and from
        time to time, shall be entitled to  collect and receive the proceeds
        from  the sale  of all  or any  part  of such  Party s share  of the
        Hydrocarbons from the Leases, including the proceeds from previously
        executed sales  contracts made by or for such delinquent Party.  All
        sums so collected shall be applied against the delinquent or  unpaid
        expenses due from such Party, the  balance of such proceeds, if any,
        to be paid to the  Party or other person entitled thereto.  Operator
        may likewise take any other credit due any such delinquent Party and
        apply  the  same  against  sums  due  from  such  Party  under  this
        Agreement.   Except  to the  extent they  conflict with  the options
        granted  to a  non-defaulting Party  in  Article 6.7  (Default), the
        rights granted to Operator in this Article shall not be construed as
        exclusive  remedies  but  shall  be  in  addition   to  all  rights,
        privileges  and remedies  afforded Operator  by other  provisions of
        this Agreement and by law or equity.  Service of a true copy of this
        Agreement upon  any purchaser  of all  or any  part of  a delinquent
        Party s share of the  Hydrocarbons from the Leases  shall constitute
        written authorization on the part of such delinquent Party for  such
        purchaser to pay the proceeds from such sale to the Operator (or the
        Non-Operator  with the  largest Working  Interest in  the Designated
        Prospect to which such failure applies if the Operator is in default
        on the payment of costs hereunder) during such delinquency, and such
        purchaser  shall  be  considered  as having  been  notified of  such
        authorization prior  to the  time of such  service.   The books  and
        records kept by Operator  with respect to operations hereunder shall
        constitute  conclusive proof  for purposes  of this  Article  of the
        existence  or nonexistence  of any such  delinquency insofar  as the
        right of Operator (or the Non-Operator) to collect the proceeds from
        the sale  of  all or  any part  of  the Hydrocarbons  is  concerned,
        subject,  however, to  all rights  of inspection,  verification, and
        audit provided  for in this Agreement.   The exercise of  the rights
        granted in this Article shall not in anyway affect the obligation of
        any  delinquent Party  to make  royalty payments.   If  the Operator
        fails to  pay its  share of  the Costs,  the Non-Operator  shall  be
        afforded  the same remedy and rights as provided  to the Operator in
        this Article 6.

  6.6   Contributions by  Non-Delinquent Parties:  If any  Party neglects or
        fails to  pay its  share of Costs incurred  hereunder within  ninety
        (90) days after rendition of billing therefor by Operator, the other
        Parties  (including  Operator)  shall  advance  to   Operator  their
        respective  proportionate part  of  the Costs  and expenses  of such
        defaulting  Party.    Parties  so  advancing  the  unpaid Costs  and
        expenses  of  any  such  defaulting  Party shall  bear  the  cost of
        collecting  any   payments  in  proportionate   part  and  shall  be
        reimbursed by  the Operator  in  like fashion  upon receipt  by  the
        Operator of any past due amounts owing by any such defaulting Party.
        Any interest collected by Operator in such connection shall likewise
        be  applied  to  such  reimbursement.   Any  Party  so  advancing  a
        defaulting Party s  Costs and expenses  shall be  subrogated to  the
        lien and  rights appurtenant  thereto herein given  Operator or  any
        other Party.

  6.7   Default:    If any  Party (including the Operator) fails  to pay, as
        provided above and in Exhibit  C , its share of any Cost which it is
        obligated to make under any provision of this Agreement, and if such
        default  continues  for  a  period  of  thirty  (30) days  following
        delivery by Operator (or by any Non-Operator in case of a default by
        Operator) of notice of such  default to such Party, then at any time
        after the expiration  of such 30-day notice period the  Operator (or
        any Non-Operator if the Operator  is the Party in  default) shall be
        entitled to the remedies in (a) and (b) or (a) and (c)below:

        (a)   Operator  (or any  Non-Operator if  Operator is  the Party  in
              default) may  suspend by  written  notice any  or all  of  the
              rights  of the  defaulting  Party granted  by  this Agreement,
              without prejudice to the right  of the non-defaulting Party to
              continue to  enforce the  obligations of  the defaulting Party
              under this Agreement.   The rights of a defaulting  Party that
              may  be  suspended  hereunder  at  the election  of  the  non-
              defaulting  Parties  shall  include,  without  limitation, the
              right  to  elect  to  participate  in  any  further  operation
              regarding the  well or  subject operation  proposed under this
              Agreement to which the default relates; and 

        (b)   Operator (or  any Non-Operator  if Operator  is  the Party  in
              default)  may sue  to  collect  the  amounts  in  default  and
              attorney fees  together with all damages suffered  by the non-
              defaulting Parties as a  result of the default, plus  interest
              accruing on  the amounts  recovered from  the date  of default
              until the date of collection at the rate specified in  Exhibit
              "C"  hereto and  to enforce the  liens and  security interests
              granted under Article 6.3; or 

        (c)   Operator (or any Non-Operator if the Operator is the Party  in
              default)  may  deliver a  written Notice  of Non-Participation
              Election to the defaulting Party at any time after the default
              occurs with the following effect:

              (i)   If the billing is for the drilling of a  new well or the
                    plugging  back,   reworking  or   deepening   (including
                    sidetracking) of a dry hole or a well not then producing
                    in   paying  quantities,  or   for  the   completion  or
                    recompletion of  any well, the  defaulting Party will be
                    conclusively  deemed to have elected  not to participate
                    in  the  subject operation  subsequent  to  the  time of
                    default and to be a Non-Participating Party with respect
                    thereto under  the  Article which  is applicable to  the
                    operation, notwithstanding any  Election to  participate
                    theretofore made.

              (ii)  Until  the delivery  of such Notice  of Nonparticipation
                    Election to the  defaulting Party, such Party shall have
                    the  right to  cure  its default  by paying  the  unpaid
                    billing plus interest at  the rate set forth in  Exhibit
                     C  hereto.   Any interest relinquished pursuant to this
                    Article shall be  owned by the non-defaulting Parties in
                    proportion  to their  interests, and  the non-defaulting
                    Parties shall  be liable  to contribute  their shares of
                    the defaulted amount.

        Notwithstanding the other provisions of  this paragraph, if a  Party
        fails to pay part or all of  its share of Costs hereunder because of
        a legitimate disagreement  as to the appropriateness of part  or all
        of  the  billing   in  question,  and  if  such  Party   makes  such
        disagreement  and the  grounds therefor  known  to  the Operator  in
        writing  prior to the  due date  of such billing and  timely tenders
        payment  of all  undisputed amounts,  then such  Party shall  not be
        subject to sub-paragraph (a) or (c) of Section 6.7.

  6.8   Carved-out  Interests:  Except for  those  which are  set  forth  in
        Exhibit  A-2   (Description of Leases)  hereof,  agreements creating
        any overriding  royalty, production payment, net  proceeds interest,
        carried interest  or any  other  interest carved  out of  a  Working
        Interest  in  a  Lease(s)  shall  specifically  make such  interests
        inferior to  the rights of the  Parties to this  Agreement.   If any
        Party whose Participating Interest is so encumbered does not pay its
        share of expenses, and the proceeds from the sale of its Hydrocarbon
        production under Article  6.3 (Security Provisions) are insufficient
        for that  purpose, the  security rights provided for  herein may  be
        applied  against the  carved-out interests  with which  such Working
        Interest is  burdened.  In such  event, the rights  of the  owner of
        such  carved-out  interest shall  be  subordinated  to  the security
        rights  granted by Article 6.3.   Additionally, in the event a Party
        elects not to  participate in any operation hereunder and  becomes a
        Non-Participating Party pursuant hereto, then and in that event, the
        Participating  Parties  shall  acquire  the  interest  of such  Non-
        Participating Party with respect to such Election, free and clear of
        any and all obligations created under or pursuant to any  carved-out
        interest as described above.

                                  ARTICLE 7
                            CONFIDENTIALITY OF DATA

  7.1   Confidentiality Obligation:  The Parties agree that all Confidential
        Data  acquired or obtained  by any Party shall  be kept confidential
        during the  term of this Agreement  and for an  additional period of
        two (2)  years after the termination of this Agreement.   Each Party
        agrees to  maintain the  secrecy of the Confidential  Data using  at
        least the  standard of care  it normally uses in  protecting its own
        confidential information  and trade secrets.   The Confidential Data
        shall  be  made  available  to  each  Participating  Party  for  its
        exclusive use.   During the confidentiality period, the Confidential
        Data shall  not be  disclosed to any third  party (unless  disclosed
        under  an   "exception  to  confidentiality"   or  as  a  "permitted
        disclosure", as set out in Article 7.1.1 or 7.1.2, respectively).

        7.1.1 Exceptions to Confidentiality:  The confidentiality obligation
              shall  not  apply  to  the  extent that  particular  items  of
              Confidential Data:

                    (a)   are now or later become part of the  public domain
                          (other  than  as a  result  of a  wrongful act  or
                          omission by the Party disclosing  the Confidential
                          Data); or

                    (b)   are now or later become available to a Party on  a
                          non-confidential basis from a source, other than a
                          Party  hereto,   that  is   legally  permitted  to
                          disclose the item of Confidential Data; or

                    (c)   were known to  a Party on a non-confidential basis
                          prior to the disclosure  of the Confidential  Data
                          to it  under the  terms of  this  Agreement or  to
                          which such  Party was  otherwise entitled  at  the
                          time of disclosure; or

                    (d)   is  independently   developed  by   employees   or
                          contractors   of  a  Party    whose  employees  or
                          contractors  have not  had access  to Confidential
                          Data.

        7.1.2 Permitted  Disclosures:   The Operator  may disclose  items of
              Confidential Data to such third parties as may be necessary in
              connection  with  the  operation  of  a  Designated  Prospect,
              provided such  third parties are bound by written agreement to
              keep secret  the Confidential  Data for a period  of time  not
              less  than is set forth in Article 7.1 of this Agreement (or a
              lesser period if  agreed by all Parties).  The  Operator shall
              promptly inform the other Parties hereto of the names of  such
              third  parties  and   list  the  items  of  Confidential  Data
              disclosed.  Notwithstanding  anything herein  to the  contrary
              and  subject to the restrictions  that:   (i) the Confidential
              Data shall not be removed from the custody and premises of the
              Party   making  such  disclosure,  excepting  disclosure  made
              pursuant to items (1) and (5) below;  and (ii) that such third
              party be bound by written agreement not to use or disclose the
              Confidential  Data except  for the  express purpose  for which
              such  disclosure is  to be  made, any  Party may  disclose, in
              whole or in part, the Confidential Data:

                    (1)   to  any  Affiliate  of  such  Party provided  such
                          Affiliate  shall be  bound by  the confidentiality
                          provision contained herein; or

                    (2)   to  any   bona   fide   financially   responsible,
                          prospective   assignee  of  any  portion  of  such
                          Party's  Working  Interest   (including  but   not
                          limited to  an  entity with  whom a  Party or  its
                          Affiliates is  conducting bona  fide  negotiations
                          directed toward a merger, consolidation or a  sale
                          of  a  Party's   or  an   Affiliate's  shares   or
                          substantially all of its assets in the OCS Gulf of
                          Mexico),  provided that the disclosing Party shall
                          give all other  Parties to this Agreement not less
                          than  fifteen (15)  days  advance  written  notice
                          specifying the extent  to which that Party intends
                          to   disclose  the   Confidential   Data   to  the
                          prospective   assignee  and   the  name   of  such
                          prospective assignee; or

                    (3)   to  any  potential   contractors  or  professional
                          consultants engaged by  or on behalf of such Party
                          and acting in  that capacity where such disclosure
                          is essential to such contractor's  or consultant's
                          work; or

                    (4)   to any bank  or other financial institution to the
                          extent  appropriate to a Party arranging financing
                          for its obligations under this Agreement; or,

                    (5)   to the  extent required by the terms of any Lease,
                          or  by  law,  order,  decree,  regulation  or rule
                          (including  without  limitation,   those  of   any
                          regulatory  agency,  securities  commission, stock
                          exchange, judicial  or administrative proceeding).
                          If a  Party is  legally compelled  to disclose any
                          Confidential  Data  such   Party  shall   promptly
                          provide  all  other   Parties  to  this  Agreement
                          written notice  of such  proceedings  so that  the
                          non-disclosing Parties may seek a protective order
                          or other remedy.  A disclosing Party shall furnish
                          only such Confidential Data as is legally required
                          and  will  use its  reasonable  efforts to  obtain
                          confidential treatment for  any Confidential  Data
                          disclosed; or,

                    (6)   to an entity desiring to transport and/or purchase
                          Hydrocarbons produced hereunder for the purpose of
                          making Hydrocarbon  reserve  estimates  and  other
                          technical evaluations.

        7.1.3 Limited Releases to  Offshore Scout Association:  The Operator
              may disclose the following well information at weekly Offshore
              Oil Scout meetings:

              7.1.3.1     Well Location:
                          (a)         proposed surface location;
                          (b)         surveyed surface location with X & Y;
                          (c)         proposed bottom hole location;
                          (d)         KB and water depth;
                          (e)         OCS number and well number; and
                          (f)         actual bottom hole  location (must  be
                                      reported within two  weeks of reaching
                                      total depth of the well).

              7.1.3.2     Well Operations:
                          (a)         rig move in date;
                          (b)         spud date;
                          (c)         weekly drilling depth, MW;
                          (d)         casing depths, cement, EMWs;
                          (e)         mud  weight,  sidewall  cores,  cores,
                                      RFTs (only that they were taken);
                          (f)         logs (only the depths and type run);
                          (g)         date total depth is reached; and
                          (h)         date rig is released.

              7.1.3.3     Well Completion Information:
                          (a)         any Media Release or public  filing of
                                      well  completion  information  will be
                                      furnished at weekly Scout meetings.

        7.1.4 Continuing Confidentiality  Obligation:  Any  Party who ceases
              to  own  a  Working  Interest  in  the   Contract  Area  shall
              nonetheless  remain  bound  by  the  confidentiality  and  use
              obligations  of this  Agreement  as to  any  Confidential Data
              obtained through this Agreement.

  7.2   Ownership of Confidential Data:  Except as otherwise provided for in
        this Article,  all Confidential  Data  produced as  a result  of  an
        operation  hereunder  shall be  the  property  of  all Participating
        Parties in that  operation.  Any Non-Participating  Party shall have
        no rights in or access to Confidential Data produced or derived from
        a Non-Consent  Operation unless and until the  provisions of Article
        16 (Non-Consent Operations) are satisfied.

        7.2.1 Well Log and Data Trades:  Any Participating Party may propose
              the exchange or  trade of any  co-owned Confidential  Data for
              other  similar data  and information  owned by a  third party.
              The  approval of  such  exchange  or trade  shall  require the
              unanimous approval  of the Participating  Parties who own such
              data.    Upon approval  of  such trade  by  all  Participating
              Parties, the Operator  shall consummate such exchange or trade
              with the third party.  The Operator shall promptly provide all
              Participating Parties copies of the third-party  data obtained
              along with copies of any agreement relating to such exchange.

        7.2.2 Ownership of  Non-Consent Data:    When the  Non-Participating
              Party  becomes  a Participating  Party  in  the  operation, as
              provided   herein,  such  non-consent  Confidential  Data  and
              information previously  withheld from  such  Non-Participating
              Party shall thereafter become co-owned by such Party.

  7.3   Access to the Lease and Rig:  Each Participating Party's  authorized
        representatives including those related to financing arrangements of
        the  Production  System shall  have  access  to  any  drilling  rig,
        Production  System  or Facility  serving  a  Designated  Prospect to
        observe  and inspect operations  and wells in which  it participates
        (and the  records and other data pertaining thereto).  Access by the
        Participating  Party  to  any  drilling  rig,  Production System  or
        Facility serving a Designated Prospect shall be arranged through the
        Operator twenty-four (24) hours in advance (or, if conditions do not
        permit, as  much advance  notice as is reasonably  possible).   Each
        Party's access will  be at its sole Cost,   risk and expense  and at
        reasonable  times and  provided  such access  does  not unreasonably
        interfere with the operations being conducted.

  7.4   Development  of  Proprietary  Information  and/or  Technology:   The
        ownership,  use,  treatment   and  disclosure  of  any   proprietary
        information  and/or  technology  specific  to  drilling  technology,
        production technology, production structure and Facilities and their
        transportation and  installation, pipelines, flowlines and  offshore
        oil  and gas transportation  which are charged to  the Joint Account
        shall be handled in accordance with  Exhibit "G" (Integrated Project
        Team and Technology Sharing).

  7.5   News Releases: Except  to the  extent required by  the terms  of any
        Lease, or  by law,  order,  decree,  regulation or  rule  (including
        without  limitation, those  of  any  regulatory  agency,  securities
        commission, stock exchange, judicial or  administrative proceeding),
        the Parties shall use  reasonable efforts to unanimously agree  upon
        the  timing and  content of  releases to  the news  media concerning
        operations covered  by this  Agreement.  However, in  the event  the
        Parties  cannot  unanimously agree  upon  either  the  timing and/or
        content of the news  release within five (5)  days of such  proposed
        news release, then such timing and/or content shall require approval
        as a  General Matter.  Failing  General Matter  approval of  a  news
        release,  such  news release  may  be prepared  in  accordance  with
        Exhibit "F" (News Release Guidelines).

                                  ARTICLE 8
                         VOTING, ELECTIONS, AND NOTICES

  8.1   Overall  Supervision of  Business Affairs:    The activities  of the
        Parties under this Agreement  that are not within  the scope of  the
        Operator s  authority  to  unilaterally  decide  under  Article  5.0
        (Rights and Duties  of Operator) or Article  6.2 (Authorization  for
        Expenditure)  shall be divided into the following broad classes:

        8.1.1 General  Matter Vote:  General Matters  for which  a  vote for
              approval  is required  prior  to action,  but  no accompanying
              Election regarding participation is required,  or;

        8.1.2 Elections: Proposed operations for which an Election regarding
              participation is  required for such  operation. (An example of
              such  an  operation  is an  Election  for  a  Fabrication  AFE
              proposed pursuant  to a  previously approved  Development Plan
              under Article 12.8  (Fabrication AFE)  without the requirement
              for approval as a General Matter.)

        The  Parties shall decide  and take action upon  all General Matters
        and Elections in accordance with the provisions of this Article 8.

  8.2   Voting  Procedures  on  General  Matters  and  Elections:     Unless
        otherwise  provided, any  General  Matter or  Election shall require
        the approval  of the Parties and  shall be decided by a  vote of the
        Parties as follows:

        8.2.1 Voting  Interest:   Each Party  shall have  a  voting interest
              equal  to its  Working Interest in  a Designated  Prospect or,
              with  respect to  a Non-Consent  Operation, its  Participating
              Interest in such operation, as applicable.

        8.2.2 Vote Required:  The Parties  shall attempt to reach  unanimous
              agreement  regarding  proposals  requiring  approval   of  the
              Parties.   However,  in  the  event  that the  Parties  cannot
              unanimously  agree,  (except  as  otherwise  provided in  this
              Agreement),  a   General  Matter   shall  be   decided  by  an
              affirmative vote of: one  (1) or more of the Parties having  a
              combined voting interest of fifty percent (50%) or more.

              For  General Matters  where  an  AFE is  not required  with  a
              proposal, a  Party shall  evidence its  vote for  approval  in
              writing.   A Party  failing to  vote, or respond  timely to  a
              General  Matter, shall  be  deemed to  have voted  against the
              proposal.

        8.2.3 Second  Opportunity  for  an Election:    Upon approval  of  a
              proposal which requires an Election, any Party who either: (i)
              elected not to  approve the proposal; or (ii) failed  to elect
              shall  have forty  eight (48)  hours (exclusive  of Saturdays,
              Sundays and federal holidays) from receipt of  notice from the
              Operator that a proposal has been approved, to respond with  a
              second  Election  as to  its  participation  in  the proposal.
              Failure to  respond in  a  timely manner  shall be  deemed  an
              Election  not to  participate.    When a  drilling rig  is  on
              location  and  standby  charges  are  accumulating,  the  time
              permitted  for such  a response  shall not  exceed forty-eight
              (48) hours  (inclusive of Saturday,  Sunday or legal holidays)
              or longer period  if such requesting Party agrees to  bear one
              hundred  percent   (100%)  of  all standby  charges  for  said
              extended period.

  8.3   Response Time  for General  Matters and Elections:  After receipt of
        notice pursuant this Article 8, the Parties shall either: (i) submit
        their vote  in response  to a General Matter  proposal as  described
        under  Article 8.1.1, or (ii)  make an Election if the proposal does
        not require  a vote as  a General Matter as  described under Article
        8.1.2.  The Operator shall give prompt notice of the results of such
        voting  or  Elections to  each Party.    Unless  specified otherwise
        herein, the response times required for each type of proposal  shall
        be as follows:

        8.3.1 Well  Operation Proposal:   When  any proposed  well operation
              does  not require  construction of  a Production  System, each
              Party shall respond with its Election within thirty  (30) days
              after receipt  of the  proposal.   When a drilling  rig is  on
              location and standby  charges are accumulating, an Election in
              response to the proposal shall be made within forty-eight (48)
              hours after  receipt of the  proposal (exclusive of Saturdays,
              Sundays  and  federal   holidays  or  longer  period  if  such
              requesting Party  agrees to bear one hundred percent (100%) of
              all standby  charges for said  extended period); provided that
              the  forty-eight (48)  hour  provision of  this  Article 8.3.1
              shall not apply to  a new well (other  than a substitute well)
              proposed   under  Articles   10.2  (Proposal   of  Exploratory
              Operations), 11.1 (Proposal  of Appraisal Operations)  or 13.1
              (Proposal of Development Operations).

        8.3.2 Production  System  Construction:    Elections  involving  the
              construction and  installation of  a Production  System  shall
              require a response within  one hundred eighty (180) days after
              receipt of the Fabrication AFE.

        8.3.3 Other AFE  Related Operations:   Except  as otherwise provided
              for  in Articles  8.3.1  and  8.3.2, the  response time  to  a
              proposed operation will  depend upon the AFE gross expenditure
              amount.  Response times will be as follows:

                    (a)   AFE   of     $250,000  or   more  but   less  than
                          $10,000,000 response will  be made  within  thirty
                          (30) days after receipt of said proposal.

                    (b)   AFE  of   $10,000,000  or   more  but   less  than
                          $50,000,000 response will  be  made  within  sixty
                          (60) days after receipt of said proposal.

                    (c)   AFE of $50,000,000  or more response will  be made
                          within one hundred eighty (180) days after receipt
                          of said proposal.

        8.3.4 Other Proposals:   For  all other  proposals requiring notice,
              each Party shall  respond with an Election within  thirty (30)
              days after receipt of the proposal.

        8.3.5 Failure  to Respond:   Failure  of any  Party to respond  to a
              proposal within  the required period shall be  an Election not
              to participate in the proposed operation.

        8.3.6 Suspensions  of  Production:   Anything  in  this  Article 8.3
              notwithstanding, if the  MMS grants a Suspension of Production
              (an "SOP") or a Suspension of Operations (an "SOO") for all or
              any part  of the Designated Prospect,  shorter time limits set
              forth  as  requirements of  the  SOP/SOO  shall  supersede the
              longer time  periods for a  Party's Election  as provided  for
              under this Agreement.

        8.3.7 Standby Charges: Unless otherwise agreed between the  Parties,
              the  Participating  Parties  in  a  prior  operation shall  be
              responsible for  standby  charges  accrued until  all  Parties
              having  a  right to  do so,  have made  an election  to either
              participate  or  not  participate  in  a  subsequent  proposed
              operation.    All standby  charges  accruing  after  the final
              Election  regarding  the  subsequent operation  has  been made
              shall be  the responsibility  of the  Participating Parties in
              the subsequent operation.

  8.4   Meetings of the Parties: In addition to the annual meeting  required
        by Article  12.18 (Annual Operating Plan),  meetings of  the Parties
        shall  be called  by the  Operator  upon its  own  motion or  at the
        request of  any Party.   Except in the case of  emergency, or except
        when agreed by unanimous consent, no meeting shall be called on less
        than ten  (10) days  (exclusive of  Saturdays, Sundays  and  federal
        holidays) advance notice, and such notice shall include an agenda of
        the meeting.   The representative of the Operator shall  be chairman
        of each  meeting  and shall  take minutes  of  each meeting.    Only
        matters set out in the agenda for the meeting shall be considered at
        the  meeting unless unanimously agreed to by all the Parties to this
        Agreement.   A Party  may add  items to  the agenda  by providing at
        least five (5)  days advance written  notice to all Parties  of such
        additional items.

  8.5   Designation  of  Representatives:   The names  and addresses  of the
        representatives who  are authorized to represent and bind each Party
        with respect  to voting  on General Matters  or Elections hereunder,
        are set  forth in Article  II of Exhibit "A"   (Working Interests of
        the Parties  and Representatives)  attached hereto.   The designated
        representatives  may  be  changed  by  written notice  to  the other
        Parties in  accordance with  Article 8.7  (Giving and  Responding to
        Notices).

  8.6   Elections:  An Election to participate in an Exploratory  Operation,
        an Appraisal Operation or  a Development Operation shall include  an
        Election to participate  in all necessary expenditures for drilling,
        testing, logging and  plugging/abandonment to the Objective Depth as
        set  out  in  the  Well  Plan.  An  Election  to  participate  in  a
        Development  Well shall also  include an Election to  participate in
        all necessary expenditures  through the installation of the wellhead
        if set forth in the Well Plan.

  8.7   Giving  and  Responding  to Notices:    All  notices  and  responses
        (including notices/proposals of General Matters, Elections) shall be
        made in  writing and  delivered to the  designated representative in
        person  or by  facsimile  transmission (followed  by  a  phone  call
        confirming receipt), U.S. mail, overnight express or courier.   When
        a drilling rig is on location and standby charges are  accumulating,
        all  notices   and  responses  shall  be   given  by  telephone  and
        immediately confirmed in  writing.  Any notices  and responses shall
        be effective  only when received by  the Party to  whom such notice,
        proposal or  response is  directed except as  otherwise provided  in
        this Article 8.7.   Any notice or response transmitted  by facsimile
        shall  be deemed given  and received only after  the receiving Party
        has confirmed  receipt of  such facsimile.  Any  notice or  response
        transmitted by  overnight express or courier  shall be  deemed given
        and received twenty-four (24) hours (exclusive of Saturdays, Sundays
        and federal holidays) after such notice or response is deposited  or
        transmitted.   Any  notice  or  response by  U.S. mail  (other  than
        overnight express)  shall be  deemed given  and  received five  days
        (exclusive  of Saturdays,  Sundays and  federal holidays)  after the
        notice or response is deposited in the mail.

  8.8   Content of  Notice:  Any notice  which requires a response  within a
        time period shall indicate which of the response times specified  in
        Article  8.3 (Response  Time for General  Matters and  Elections) is
        required.  If a notice proposes  a well operation, the  notice shall
        include the following information:

        (a)   the type of  well operation being proposed, i.e., Exploratory,
              Appraisal or Development Operation(s);

        (b)   any Well Plan applicable to for the proposed operation; and

        (c)   an AFE showing the estimated Costs of the operation, including
              all  necessary  expenditures  associated  with  the  drilling,
              testing and completing or abandoning the well.

        If  the  notice  proposes  a  Production  System, Subsea  Production
        System, Subsequent Production System or Facilities, the notice shall
        include the following information:

        (a)   the type of system or Facilities being proposed; and

        (b)   description of  same, including  location, estimated  Costs of
              operation,   including   design,   engineering,   fabrication,
              transportation and installation.

  8.9   Agent for Mobil Entities: 

        (a)   For all purposes of this Agreement, except for any Designation
              of  Operator recognized by the MMS,  Mobil Oil Corporation and
              Mobil Oil Exploration & Producing Southeast Inc., collectively
              herein the   Mobil Entities ,  agree that  Mobil Exploration &
              Producing U.S. Inc. shall be the true and lawful agent  of the
              Mobil  Entities hereunder with respect  to all  of the rights,
              powers and duties of the individual Mobil Entities, including,
              without limitation,  the giving  and receiving  of notices and
              taking any action on  behalf of the individual Mobil Entities.
              Mobil   Exploration  &   Producing   U.S.  Inc.   accepts  and
              acknowledges  this  relationship  and agrees  to  perform same
              hereunder.

        (b)   Enserch Exploration, Inc.  and Reading & Bates Development Co.
              shall be entitled to and agrees to  treat any notice given  or
              action taken by Mobil Exploration & Producing U.S. Inc., as  a
              notice from or an action by the Mobil Entities.  

  8.10  Votes by Affiliates: For purposes of this Article 8 it is understood
        and agreed that the interest of the  Mobil Entities, as well as  any
        of its or their Affiliates which subsequently become a Party to this
        Agreement,  shall  be  aggregated  and  combined,  for all  purposes
        hereof, including  but not  limited to notice,  voting, Election and
        approval purposes, as  if the  Mobil Entities  constituted a  single
        Party  to this Agreement.   Similarly, each  of Enserch Exploration,
        Inc. and its Affiliates or Reading &  Bates Development Co. and  its
        Affiliates  shall  be  aggregated  and  combined,  for all  purposes
        hereof,   including but not limited to notice , voting, Election and
        approval  purposes,  should  any  of  their   respective  Affiliates
        subsequently  become a Party  to this Agreement.    Such aggregation
        and combination shall not extend to any  assignee or transferee to a
        non-Affiliate permitted  under the terms  of Article 24 (Successors,
        Assigns and Sale of Interest).  

                                  ARTICLE 9
                             GEOPHYSICAL OPERATIONS

  9.1   Geophysical Operations:  Any Party may propose to acquire or process
        geophysical surveys  (other than  shallow  hazard surveys,  velocity
        surveys  or  other  similar  well  bore  geophysical operations)  to
        evaluate  all or  any portion (s)  of the Contract Area  at any time
        during the term  of this  Agreement. These  geophysical surveys  may
        consist  of  either  conducting   proprietary   surveys,  purchasing
         speculative   surveys  from  vendors,  or  participating in   group
        shoot   surveys. Geophysical  Operations  are not  to  be considered
        Exploratory,  Appraisal,  or  Development   Operations  and  may  be
        conducted simultaneously with Exploratory, Appraisal, or Development
        Operations.

        9.1.1 Conduct  of Proprietary Geophysical Operations:   The Operator
              shall   conduct  all   proprietary  geophysical   surveys  (or
              processing) for the account of the Participating Parties based
              upon their Participating  Interest share of the  Costs of  the
              surveys.  The Operator shall provide the Participating Parties
              with copies  of all  field data  and support  documentation as
              appropriate for any and  all seismic  data collected from  the
              geophysical survey.   The  Operator shall  obtain all licenses
              and/or  permits from  all  governmental agencies  necessary to
              support  the   surveys.  The  ownership  of   any  proprietary
              geophysical data  derived from  a proprietary  survey shall be
              limited  to the  field  tapes,  i.e.,  raw  data  and  initial
              processing  (not including  re-processed or  interpreted data)
              and owned on the basis of the Parties  Participating Interests
              in the  survey.   If the  geophysical data  is acquired  by  a
              geophysical contractor  instead of through  the Operator, then
              wherever  in   this  Article  the  word    Operator   appears,
               Contractor  shall be substituted therefor.  If a Party elects
              not to participate in a proprietary geophysical survey, then a
              Participating Party shall  elect to either :  (i) proceed with
              the  Geophysical  Operation  with  the  interest  of the  Non-
              Participating Party shared by the Participating Parties on the
              basis of their  respective Working Interests, unless otherwise
              agreed,  or  (ii)  change   its  Election  to  become  a  Non-
              Participating Party. A  Non-Participating Party  shall not  be
              entitled to any geophysical data obtained from the proprietary
              geophysical survey  unless the Non-Participating Party  agrees
              to become an  underinvested Party per terms of  Article 16.5.3
              (Geophysical Operations,  Integrated Project Team and/or Final
              Design AFE).

        9.1.2 Group-Shoot and  Speculative  Seismic  Surveys:   The  Parties
              shall make a good  faith effort to coordinate the  acquisition
              of any new group-shoot or speculative seismic surveys covering
              one or  more of  the Leases  within the  Contract Area.   This
              shall  enable all Parties  who desire to acquire  such data to
              take  advantage of  group  rates available  from  most seismic
              contractors  and will allow  each Party a license  to use such
              data.  For  such seismic  data purchases covering  the Leases,
              the  acquiring  Parties shall  mutually  agree  upon  the Cost
              shares  of  the  total  licensing fee  (rather  than on  their
              Working Interest shares). 

                                  ARTICLE 10
                             EXPLORATORY OPERATIONS

  10.1  Application:   Exploratory  Operations  shall  mean  all  operations
        (including any subsequent Exploratory Operation) conducted by one or
        more  of  the  Parties  hereunder  in  the   drilling,  testing  and
        completing of the  first well (including a substitute well for  such
        well) in  a Designated  Prospect  as described  in this  Article  10
        (Exploratory  Operations).   The  Costs,  risks  and  obligations of
        Exploratory Operations conducted  in accordance with this  Agreement
        shall  be  borne  by  the Parties  as  provided  in  Article  10.2.4
        (Exploratory Operations Costs) below.

  10.2  Proposal of  Exploratory  Operations:   Any  Party  may  propose  to
        conduct  an Exploratory  Operation within  a Designated  Prospect by
        giving notice  of the  proposal (along with the  associated AFE  and
        Well  Plan) to  all other  Parties.   If all  the  Parties elect  to
        participate  in drilling  the  proposed Exploratory  Well,  Operator
        shall commence the proposed well in accordance with this Article  10
        and drill same at their Cost and risk.  No Exploratory Well shall be
        drilled by any  Party hereto on any Designated Prospect  without the
        approval of one or more Parties having a combined voting interest of
        fifty percent (50%)  or more except, however: (a) subsequent  to the
        beginning of the last two (2) years of the primary term of any Lease
        within  such Designated Prospect  having a primary term  of five (5)
        years (regardless of whether the lease has a primary term which will
        extend to eight (8) years) or (b) subsequent to the beginning of the
        last  three (3) years  of any Lease within  such Designated Prospect
        having a primary term of ten  (10) years upon which there is no well
        agreed  to  be drilled  by  at least  a  fifty percent  (50%) voting
        interest,  any  one or  more  of  the Parties  hereto  may  drill an
        Exploratory Well upon such Lease  upon its Election.   If fewer than
        all the  Parties  elect to  participate in  and  agree to  bear  one
        hundred percent (100%) of the Cost and risk of drilling the proposed
        well or conducting a  proposed operation, Operator shall drill  such
        well or conduct such  operation, provided that a Participating Party
        may, subject to  Article 4.2, take over the operation  as substitute
        Operator in the event Operator does  not elect to participate.   The
        Operator   (or  substitute   operator)   shall  then   commence  the
        Exploratory Operation at the sole Cost and risk of the Participating
        Parties.   Except as  provided in  Article 16.2  (Acreage Forfeiture
        Provisions) and  Article 16.4 (Non-Consent  Operations to Maintain a
        Designated Prospect), Costs  of a Non-Consent  Exploratory Operation
        will  be  recouped   in  accordance  with  Article  16  (Non-Consent
        Operations).

        10.2.1      Well Plan's Minimum Specifics:   The  Well Plan for  any
                    Exploratory Well and any proposed Subsequent Exploratory
                    Operation   will   include   at   least   the  following
                    information:

                    (a)   the surface and target bottomhole locations;

                    (b)   the expected  spud date and  the anticipated  time
                          necessary   to   conclude   drilling,  evaluation,
                          completion and/or abandonment operations;

                    (c)   the true vertical  depth to be drilled, along with
                          the  specified Objective  Depth (and  other target
                          zones to be penetrated);

                    (d)   the proposed drilling plan,  including the  casing
                          program    and   any    anticipated   Sidetracking
                          operations;

                    (e)   details of any coring, logging or other evaluation
                          operations to be conducted; and

                    (f)   information  concerning  the  drilling rig  to  be
                          used, including day rates, water depth rating  and
                          other  limitations   relevant  to   the   drilling
                          operations to be conducted.

        10.2.2      Pre-Spud Technical  Meeting and  Revision of  Well Plan:
                    Subsequent to the approval of the Exploratory Operation,
                    but  prior  to  commencing  such  Exploratory Operations
                    (other than a substitute  operation), the  Participating
                    Parties shall meet  for a  Pre-Spud  Technical Meeting .
                    The  purpose of the  meeting is to review  the Well Plan
                    describing  the  specific  operations  planned  for  the
                    Exploratory   Well.   Any   proposed  revision   to  the
                    operations specified  in the original  Well Plan and AFE
                    shall  require mutual  agreement  of  the  Participating
                    Parties.  Any such  revision to the  Well Plan  shall be
                    evidenced  by the  signature to  an amended AFE  for the
                    proposed  Exploratory  Operation.  In  the   absence  of
                    agreement upon  a revised  Well Plan,  the original Well
                    Plan and AFE shall stand as approved.  Any revisions  to
                    the  original  Well Plan  or  AFE  by  the Participating
                    Parties shall  not give  any Non-Participating  Party an
                    additional  opportunity to  make an Election  unless the
                    Objective Depth  is  changed or  the  target  bottomhole
                    location  is changed  by more  than three  hundred (300)
                    feet, in  which case the  Exploratory Operation shall be
                    proposed anew to  all Parties having the right  to elect
                    thereon.

        10.2.3      Timely  Operation:    A  proposed  Exploratory Operation
                    shall be commenced within  one hundred eighty (180) days
                    from  the date  upon which  it is  approved except  as a
                    result of Force  Majeure as set forth in   Article 25.1.
                    If operations have not commenced in a timely manner, the
                    approved   Exploratory   Operation   shall   be   deemed
                    withdrawn,  with  the  effect  as  if  the   Exploratory
                    Operation had  never been approved.   If an approved Ex-
                    ploratory Operation  is deemed withdrawn  due to lack of
                    timely  commencement of  operations, any  Costs incurred
                    during said  one hundred  eighty (180)  day period which
                    are  attributable to the proposed  operation shall still
                    be  chargeable   to  the  Participating   Parties.    An
                    Exploratory Operation shall be deemed to have  commenced
                    on the date the  rig arrives on location or, if the  rig
                    is already  on location,  the date  when actual drilling
                    operations  for the  proposed Exploratory  Operation are
                    begun.

        10.2.4      Exploratory  Operations  Costs:   The  Costs,  risks and
                    obligations associated with  drilling, testing,  logging
                    and  abandoning  (whether  permanent  or  temporary)  an
                    Exploratory Well, any substitute well and any subsequent
                    Exploratory  Operations  shall  be  borne  by  the  Par-
                    ticipating Parties in  proportion to their Participating
                    Interest in such Exploratory Operation.

        10.2.5      AFE Overruns  and Substitute  Well:   The Operator shall
                    timely  commence an  Exploratory Operation  and continue
                    the operation with  due diligence to the Objective Depth
                    subject to  (i)  a  supplemental  AFE s  being  required
                    pursuant to Article 6.2  (Authorization for  Expenditure
                    and  Supplemental Authorization For Expenditure) or (ii)
                    the   Operator  encountering   mechanical  difficulties,
                    uncontrolled  influx  of   subsurface  water,   abnormal
                    pressures, pressured or heaving  shale, salt, granite or
                    other  practicably  impenetrable   substances  or  other
                    similar  conditions prevailing in  the hole  that render
                    further drilling impracticable.  If the Exploratory Well
                    is  abandoned due  to  the  conditions  described  under
                    10.2.5  (ii),  then the  Operator  or  any Participating
                    Party may propose a substitute well (with the associated
                    AFE  and Well Plan), and each Participating Party in the
                    abandoned  Exploratory  Well  shall  make   an  Election
                    whether to participate in the  proposed substitute well.
                    The Operator (or substitute Operator) shall commence the
                    substitute well at the sole Cost and risk of the Parties
                    making an  Election to participate.  Any Party who makes
                    an Election  not to  participate in  either (i)  or (ii)
                    above shall be subject to the provisions of Article 16.2
                    (Acreage  Forfeiture Provisions) or Article 16.5.1 (Non-
                    Consent Subsequent Exploratory Operations), whichever is
                    applicable.

  10.3  Subsequent Exploratory Operations at Objective Depth:  After (i) the
        Exploratory  Well (or  its  substitute)  has  been  drilled  to  its
        Objective Depth, (ii) all operations in the controlling AFE and Well
        Plan have been completed or terminated (except plug and abandon) and
        (iii)  all  logs  and  test  results have  been  distributed  to the
        Participating  Parties, the  Operator,  shall  promptly  notify  the
        Participating  Parties of  the Operator's  proposal for  one of  the
        following operations:

        (a)   conduct  Additional   Testing,  Coring   or  Logging  of   the
              formations encountered prior to setting production casing;
        (b)   Sidetrack the well bore to core the formations encountered; 
        (c)   Deepen the well to a new Objective Depth (however, if a casing
              string is required  to Deepen the well, then option  "d" shall
              precede Deepening the well);
        (d)   Sidetrack the  well to another  bottomhole location not deeper
              than the  stratigraphic equivalent  of the original  Objective
              Depth;
        (e)   conduct production testing;
        (f)   conduct on the well other operations not listed herein;
        (g)   complete the well at Objective Depth in the objective zone  or
              formation;
        (h)   plug back  the well  and attempt a completion  in a  shallower
              zone or formation;
        (i)   temporarily abandon the well; or
        (j)   permanently plug and abandon the well.

        10.3.1      Response  to Operator's  Proposals:   Within forty-eight
                    (48) hours (exclusive of  Saturdays, Sundays and federal
                    holidays)  after  receipt  of  Operator's   proposal  to
                    conduct Subsequent  Exploratory  Operations,  or  longer
                    period  if  such  requesting Party  agrees  to bear  one
                    hundred percent (100%) of  all standby  charges for said
                    extended period, each Participating Party  shall respond
                    to  the Operator's  proposal by  making its  Election to
                    participate  in  Operator's  proposal  or  by  making  a
                    counterproposal.   Failure of  a Participating  Party to
                    respond to  a proposal  (except a proposal  to plug  and
                    abandon) shall be  deemed an Election not to participate
                    in  the  Operator's  proposal  and  to  become   a  Non-
                    Participating Party from that point.

        10.3.2      Counterproposals:   If  a Participating  Party  makes  a
                    counterproposal  for Subsequent  Exploratory Operations,
                    the other Participating Parties shall have an additional
                    twenty-four    (24)    hours    to   respond    to   all
                    counterproposals.     If   conflicting   proposals   for
                    Subsequent Exploratory Operations  are made,  preference
                    for voting  shall be given first to operation (a) above,
                    next to operation (b) above, and so forth.  If different
                    depths   or  locations   are  proposed   for  Subsequent
                    Exploratory Operations, preference shall be given to the
                    shallowest depth (or the bottomhole location nearest the
                    existing  well  bore)  and  then  to  other   depths  or
                    bottomhole  locations  in  descending (or  more distant)
                    order.    After  a  decision  to  conduct  a  Subsequent
                    Exploratory  Operation   is  made  and  the   Subsequent
                    Exploratory  Operation  is   commenced,  the   remaining
                    proposals  for  other  types of  subsequent  Exploratory
                    Operations shall be deemed withdrawn.  At the completion
                    of  the Subsequent  Exploratory Operation,  the Operator
                    shall   again   submit    proposal(s)   for   Subsequent
                    Exploratory Operations  to  the  Participating  Parties,
                    through the procedure  provided herein, until  such time
                    as the well is plugged and abandoned.

        10.3.3      Approval  of  Subsequent  Exploratory Operations  by All
                    Parties:     If  the  proposed  Subsequent   Exploratory
                    Operation is approved by all then-Participating Parties,
                    the Operator (or substitute Operator) shall commence the
                    Subsequent Exploratory Operation at the Cost(s) and risk
                    of the Participating Parties.

        10.3.4      Approval of  Subsequent Exploratory Operations by  Fewer
                    Than  All  Parties:     If  a  proposal  for  Subsequent
                    Exploratory Operations  (except a proposal  to plug  and
                    abandon), is approved by at  least a fifty percent (50%)
                    interest   but  by  fewer  than  all  then-Participating
                    Parties,  then  the  Operator (or  substitute  Operator)
                    shall conduct the operation at the sole Cost and risk of
                    the  Participating Parties.  Any Non-Participating Party
                    in a  Subsequent Exploratory Operation  shall be subject
                    to Article   16.5.1(Non-Consent  Subsequent  Exploratory
                    Operations).  A Non-Participating Party in a  Subsequent
                    Exploratory Operation  shall be relieved  of the  Costs,
                    risks  and  obligations  of the  Subsequent  Exploratory
                    Operation, except  as  to its  share  of  the  Costs  of
                    plugging  and  abandoning the  Exploratory  Well  in its
                    then-current condition.  No operation shall be performed
                    on the well unless deemed by the Operator to be safe and
                    the well bore is in a condition to perform the  proposed
                    operation.

        10.3.5      Subsequent Exploratory Operations  If Not Approved:   If
                    no proposed  Subsequent Exploratory Operation (except  a
                    proposal to  plug and abandon)  receives approval by the
                    Participating Parties  having a voting interest  of   at
                    least fifty percent  (50%), then prior to an Exploratory
                    Wells   being   plugged  and  abandoned,  Operator   (or
                    substitute Operator) shall  conduct at the sole Cost and
                    risk   of  the   Participating  Parties,   the  proposed
                    Subsequent Exploratory Operation  receiving the  largest
                    percentage of  Participating interest   approval, and in
                    the event of conflicting  Elections  between two (2)  or
                    more  Subsequent  Exploratory   Operations,  by  Parties
                    having equal interests,   then preference shall be given
                    first to operation (a) then (b) and  so on, as set forth
                    in  Article 10.3  (Subsequent Exploratory  Operations at
                    Objective Depth).   Any Non-Participating  Party in such
                    subsequent  Exploratory  Operation  shall be  subject to
                    Article   16  (Non-Consent   Operations).     Such  Non-
                    Participating Party shall be relieved of the Costs, risk
                    and  obligation of the Subsequent Exploratory Operation,
                    except  as to  its share  of the  Costs of  plugging and
                    abandoning  the  Exploratory  Well in  its  then-current
                    condition.   No operation shall be performed on the well
                    unless  deemed by the  Operator to be safe  and the well
                    bore is in a condition to perform the operation.

  10.4  Deeper Drilling:   A  proposal to drill  an Exploratory  Well to  an
        Objective Depth below the deepest Producible Reservoir penetrated by
        a Producible Well  or to reenter and Deepen an  existing Exploratory
        Well to  an Objective Depth below  the deepest  Producible Reservoir
        penetrated by  a Producible Well shall require unanimous approval of
        the Parties.

  10.5  Plugging and Abandoning Costs: Upon the conclusion of all operations
        set forth in an Exploratory Operation s Well Plan and all Subsequent
        Exploratory  Operations on such well, or  if the Operator encounters
        mechanical  difficulties  or  impenetrable  conditions,  which  make
        further  drilling impracticable,  then the  Operator may  propose to
        plug and abandon the well.  Upon approval of the well abandonment by
        the Participating Parties having a voting interest of at least fifty
        percent (50%) or, failing approval, the Operator deems the well bore
        not to be safe or in a condition to perform operations, the Operator
        shall  commence the  plugging  and  abandonment of  the well.    The
        Participating Parties in the original  operation shall pay all Costs
        of  plugging  and   abandoning  the  Exploratory  Well  (except  any
        increased  plugging and  abandoning Costs  associated solely  with a
        Subsequent   Exploratory  Operation   conducted  as   a  Non-Consent
        Operation).  The Participating Parties in any  Non-Consent Operation
        shall be responsible for the increased plugging and abandoning Costs
        attributable to the Non-Consent Operation.

  10.6  Conclusion of Exploratory Operations:   Exploratory Operations shall
        cease in  any  Designated Prospect  after  the  abandonment  of  the
        Exploratory Well, whether permanent or temporary, and the release of
        the rig from the Exploratory Well (including any substitute well).

  10.7  Subsurface  Team:  Within sixty  (60) days after rig  release of the
        Exploratory  Well, the Parties  shall form a subsurface  team.  Each
        Party shall be entitled to  have at least one  (1) representative on
        the subsurface team. Each Party shall be responsible for designating
        its  representative(s)   for  the   subsurface  team.     A  Party's
        representatives for the subsurface team may be changed at any  time.
        The salaries, burdens,  benefits, other compensation and expenses of
        each subsurface team member shall be the responsibility of the Party
        employing or  providing the  subsurface team  member.  The  Operator
        shall serve as the  coordinator for the subsurface team.  Members of
        the subsurface  team  will work  independently at  office  locations
        provided by the Party designating such member.  The responsibilities
        of  the subsurface  team shall  include  but not  be limited  to the
        following items:

        -     making recommendations for Appraisal Operations,

        -     evaluating potential Producible Reservoirs within a Designated
              Prospect, and;

        -     advising  the  Integrated  Project Team  regarding  subsurface
              matters so  the Integrated  Project Team  can more effectively
              assist the Operator in the preparation of the Development Plan
              pursuant to Article 12 (Development Plan).

        The subsurface team will meet as it deems necessary to carry out the
        above activities.   Once  the  subsurface team  is formed,  it  will
        remain in  existence until  the  expiration  or dissolution  of  the
        Designated Prospect.

                                  ARTICLE 11
                              APPRAISAL OPERATIONS

  11.1  Proposal  of Appraisal Operations:  After  completion of Exploratory
        Operations any Party may  propose to conduct an Appraisal  Operation
        within a Designated Prospect by giving notice of the proposal (along
        with the associated AFE and Well Plan) to all other Parties.  If all
        the Parties  agree to participate in drilling the proposed Appraisal
        Well, Operator shall  commence the proposed well  in accordance with
        this Article 11 and drill same at their Cost and risk.  No Appraisal
        Well shall be drilled by any Party hereto on any Designated Prospect
        without the approval of one or more Parties having a combined voting
        interest  of  fifty percent  (50%)  or  more  except,  however:  (a)
        subsequent to the beginning of the last two (2) years of the primary
        term of any  Lease within such Designated Prospect having  a primary
        term  of five  (5)  years (regardless  of  whether the  Lease  has a
        primary term which extends to eight  (8) years); (b) the  last three
        (3) years of the  primary term of any  Lease within such  Designated
        Prospect having  a primary term which has been extended to eight (8)
        years; or (c)  subsequent to  the beginning  of the  last three  (3)
        years of any Lease within such Designated Prospect having a  primary
        term of ten (10) years upon which  there is no well being  reworked,
        drilled, or agreed to be drilled by  at least a fifty percent  (50%)
        voting interest, any one or more of the Parties  hereto may drill an
        Appraisal Well upon such Lease upon its Election.  If fewer than all
        the  Parties elect to participate in  and agree to bear  100% of the
        Cost and risk of drilling the proposed well or conducting a proposed
        operation, Operator shall drill such well or conduct such operation,
        provided  that a  Participating Party may,  subject to  Article 4.2,
        take over the operation as substitute Operator in the event Operator
        does not  elect to  participate.  Costs of  a Non-Consent  Appraisal
        Operation will  be  recouped in  accordance with  Article  16  (Non-
        Consent Operations).   The formation  of an Integrated Project  Team
        may occur concurrently with Appraisal Operations.

        11.1.1      Well Plan's  Minimum Specifics:   The Well Plan for  the
                    Appraisal   Operation   shall   include  at   least  the
                    information set forth under Article 10.2.1  (Well Plan's
                    Minimum Specifics).

        11.1.2      Pre-Spud Technical  Meeting and  Revision of  Well Plan:
                    The Pre-spud Technical  Meeting and Revision of the Well
                    Plan shall  be in accordance with  Article 10.2.2  (Pre-
                    Spud Technical  Meeting and Revision  of Well Plan). The
                    Well  Plan for  an Appraisal  Operation shall  be deemed
                    automatically revised with each Sidetracking, Deepening,
                    or additional  Operations approved by the  Participating
                    Parties.

        11.1.3      Timely Operation:   A proposed Appraisal Operation shall
                    be  commenced within one hundred eighty  (180) days from
                    the date upon  which it is approved. Except as  a result
                    of Force Majeure (Article 25.1), if operations  have not
                    commenced  in a  timely manner,  the  approved Appraisal
                    Operation shall be deemed withdrawn, with the  effect as
                    if the Appraisal Operation had never been approved.   If
                    an approved Appraisal  Operation is deemed withdrawn due
                    to lack of  timely commencement of operations, any Costs
                    incurred during said one hundred eighty (180) day period
                    which  are attributable to the  proposed operation shall
                    still be  chargeable to the Participating  Parties.   An
                    Appraisal Operation  for the  drilling  of an  Appraisal
                    Well shall be  deemed to have commenced on the  date the
                    rig arrives  on location  or, if the rig  is already  on
                    location, the date  when actual drilling operations  are
                    begun.

        11.1.4      AFE Overruns  and Substitute  Well:   The Operator shall
                    timely commence an Appraisal  Operation and continue the
                    operation  with due  diligence  to the  Objective Depth,
                    subject  to  (i)   a  supplemental  AFE  being  required
                    pursuant  to   Article   6.2   or  (ii)   the   Operator
                    encountering   mechanical   difficulties,   uncontrolled
                    influx  of   subsurface   water,   abnormal   pressures,
                    pressured or  heaving  shale,  salt,  granite  or  other
                    practicably impenetrable  substances  or  other  similar
                    conditions  prevail  in  the  hole  that render  further
                    drilling  impracticable.    If  the  Appraisal  Well  is
                    abandoned  due to the conditions described under Section
                    11.1.4  (ii),  then  the Operator  or  any Participating
                    Party may propose a substitute well (with the associated
                    AFE and Well Plan), and  each Participating Party in the
                    abandoned Appraisal Well  will make an  Election whether
                    to  participate in  the proposed  substitute well.   The
                    Operator  (or  substitute  Operator) shall  commence the
                    substitute well at the sole Cost and risk of the Parties
                    making  an Election  to participate.   Costs  of a  Non-
                    Consent substitute well  will be recouped in  accordance
                    with Article 16 (Non-Consent Operations).

  11.2  Subsequent Appraisal Operations at  Objective Depth:  After (i)  the
        Appraisal Operation has  been drilled  to its Objective  Depth, (ii)
        all  operations in  the  controlling  AFE and  Well Plan  have  been
        completed or terminated (except plug and abandon) and (iii) all logs
        and test results have been distributed to the Participating Parties,
        the Operator  shall promptly notify the  Participating Parties  (and
        Non-Participating Party(ies) in the case of a proposal under Section
        11.2 (c) and (d), if applicable) of the Operator's  proposal for one
        of the following operations:

        (a)   conduct   Additional  Testing,   Coring  or  Logging   of  the
              formations encountered prior to setting production casing;
        (b)   Sidetrack the well bore to core the formations encountered;
        (c)   Sidetrack  the well to another bottomhole  location not deeper
              than the  stratigraphic equivalent  of the  original Objective
              Depth;
        (d)   Deepen the well to a new Objective Depth;
        (e)   conduct production testing;
        (f)   complete the well at the Objective Depth in the objective zone
              or formation;
        (g)   plug back  the well  and attempt a completion  in a  shallower
              zone or formation;
        (h)   conduct on the well other operations not listed herein;
        (i)   temporarily abandoning the well; or
        (j)   permanently plug and abandon the well.

        11.2.1      Response  to Operator's  Proposals:   Within forty-eight
                    (48) hours (exclusive  of Saturdays, Sundays and federal
                    holidays)  after  receipt   of  Operator's  proposal  to
                    conduct  subsequent  Appraisal   Operations,  or  longer
                    period  if  such requesting  Party  agrees  to  bear one
                    hundred percent (100% ) of all standby  charges for said
                    extended  period,     the  Participating  Parties  shall
                    respond  to  the   Operator's  proposal  by  making  its
                    Election   to   Operator's    proposal   or   making   a
                    counterproposal.   Failure of  a Participating Party  to
                    respond to  a proposal  (except a  proposal to  plug and
                    abandon) shall be deemed an Election not  to participate
                    in  the  Operator's   proposal  and  to  become  a  Non-
                    Participating Party from that point.

        11.2.2      Counterproposals:    If a  Participating  Party makes  a
                    counterproposal for  a subsequent  Appraisal  Operation,
                    the other Participating Parties shall have an additional
                    twenty-four    (24)    hours    to   respond    to   all
                    counterproposals.     If   conflicting   proposals   for
                    subsequent Appraisal Operations are made, preference for
                    voting shall be given first to operation (a) above, next
                    to  operation (b)  above,  and so  forth.   If different
                    depths   or  locations   are  proposed   for  subsequent
                    Appraisal  Operations,  preference  for voting  shall be
                    given  to the shallowest depth (or  the location nearest
                    the  existing  well  bore)  and  then  other  depths  or
                    locations in descending (or more distant) order.   After
                    a decision  to conduct a subsequent  Appraisal Operation
                    is  made  and  the  subsequent  Appraisal  Operation  is
                    commenced,  the remaining proposals  for other  types of
                    subsequent  Appraisal   Operations   shall   be   deemed
                    withdrawn.     At  the  completion   of  the  subsequent
                    Appraisal  Operation,  the  Operator shall  again submit
                    proposal(s) for  subsequent Appraisal Operations to  the
                    Participating Parties,  through the  procedure  provided
                    herein, until  such  time as  the well  is  plugged  and
                    abandoned.

        11.2.3      Approval  of  Subsequent  Appraisal  Operations  by  All
                    Parties:  If the proposed subsequent Appraisal Operation
                    is  approved  by  all then  Participating  Parties,  the
                    Operator  (or  substitute  Operator) shall  commence the
                    subsequent  Appraisal Operation at the  Cost(s) and risk
                    of the Participating Parties.

        11.2.4      Approval  of  Subsequent  Appraisal Operations  by Fewer
                    Than  All  Parties:    If  a  proposal   for  Subsequent
                    Appraisal Operations  (except  a  proposal to  plug  and
                    abandon), is  approved  by the  Election of    at  least
                    fifty percent (50%)  interest of the then  Participating
                    Parties'  interest,   but    by   fewer  than  all  then
                    Participating  Parties, then the Operator (or substitute
                    Operator) shall  conduct the operation  at the sole Cost
                    and  risk  of  the  Participating  Parties.    Any  Non-
                    Participating  Party in a Subsequent Appraisal Operation
                    shall be subject to Article 16 (Non-Consent Operations).
                    A  Non-Participating  Party  in a  Subsequent  Appraisal
                    Operation shall  be  relieved of  the Costs,  risks  and
                    obligations  of  the   Subsequent  Appraisal  Operation,
                    except  as to  its share  of the  Costs of  plugging and
                    abandoning   the  Appraisal  Well  in  its  then-current
                    condition.   No operation shall be performed on the well
                    unless  deemed by the  Operator to be safe  and the well
                    bore   is  in  a  condition  to   perform  the  proposed
                    operation.

        11.2.5      Subsequent Appraisal Operations  If Not Approved:  If no
                    proposed  Subsequent  Appraisal   Operation  (except   a
                    proposal   to  plug  and  abandon)  receives  sufficient
                    election to be approved by at least fifty  percent (50%)
                    interest of the  then participating Parties, then  prior
                    to  an  Appraisal  Well  being  plugged  and  abandoned,
                    Operator  (or substitute Operator) shall  conduct at the
                    sole  Cost and  risk of  the Participating  Parties, the
                    Subsequent Appraisal  Operation  receiving  the  largest
                    percentage of   Participating interest  approval, and in
                    the event of equal elections  between two (2) or more of
                    such  proposed  Appraisal  Operations,  then  preference
                    shall  be given first  to operation (a) then  (b) and so
                    on,  as set forth in Article  11.2 (Subsequent Appraisal
                    Operations at  Objective Depth).  Any  Non-Participating
                    Party in such  Subsequent Appraisal  Operation shall  be
                    subject to  Article 16  (Non-Consent Operations).   Such
                    Non-Participating Party shall  be relieved of the Costs,
                    risk   and  obligation   of  the   subsequent  Appraisal
                    Operation,  except  as  to its  share  of the  Costs  of
                    plugging and abandoning the Appraisal Well in  its then-
                    current condition.   No operation  shall be performed on
                    the  well unless deemed  by the Operator to  be safe and
                    the  well   bore  is  in  a  condition  to  perform  the
                    operation.

  11.3  Election by  Non-Participating Parties in  Deepening or Sidetracking
        Appraisal  Operations:   If  an  Appraisal Well  is drilled  to  its
        initial Objective Depth and does not appear to result in a well that
        will  qualify as a  Producible Well, and if  any Participating Party
        proposes to either (i) Deepen said Appraisal Well, or (ii) Sidetrack
        said Appraisal Well,  then, as provided in Article  11.2 (c) or (d),
        the  Operator shall notify each original  Non-Participating Party of
        the  proposal.   Each original  Non-Participating Party  may respond
        with an Election regarding such a proposal to Deepen or Sidetrack by
        notifying the Operator of its Election within forty-eight (48) hours
        (exclusive  of  Saturdays,  Sundays  and  federal   holidays)  after
        receiving the Operator's notice, or longer period if such requesting
        Party agrees  to bear  one  hundred percent  (100%) of  all  standby
        charges for  said extended  period.   Any original Non-Participating
        Party  making  an  Election  to  participate  in  the  Deepening  or
        Sidetracking  of   an  Appraisal   Well  shall   be  deemed  to   be
        underinvested in an amount  equal to its share of the Cost  incurred
        in  such Non-Consent  Well (including but  not limited  to drilling,
        testing, logging or coring) prior to such Deepening or Sidetracking.
        The Parties that  participated in drilling to  the initial Objective
        Depth will  be deemed overinvested in that amount, and all Costs for
        operations under  this Agreement  that would  otherwise be allocated
        proportionately  to such overinvested Parties shall  be allocated to
        the underinvested Parties until all overinvestments are  eliminated.
        Any  original   Non-Participating  Party  making   an  Election   to
        participate in the  Deepening or  Sidetracking of an  Appraisal Well
        shall remain a Non-Participating Party in the Appraisal Well to  the
        initial Objective Depth until the Costs recoverable under Article 16
        (Non-Consent    Operations),   less    any   payments    through   a
        Disproportionate   Spending   Settlement    and/or   Article    16.9
        (Underinvestment  of  Costs), have  been  recouped  by  the original
        Participating Parties.

  11.4  Deeper  Drilling:   A  proposal to  drill  an Appraisal  Well  to an
        Objective Depth below the deepest Producible Reservoir penetrated by
        a  Producible Well shall  require approval of the  Parties having at
        least a  fifty percent (.50%) voting interest and  shall be  further
        subject to the following provisions.

        11.4.1      Limited Participation in Deeper Drilling:  If a proposal
                    is approved  pursuant to  Article 11.4  above, any Party
                    may either;  (a) make an Election to participate in  the
                    proposed Deeper Drilling operation; (b) make an Election
                    not  to  participate  in  the  proposed Deeper  Drilling
                    operation;  or  (c)   make  an  Election  to  limit  its
                    participation  to drilling  to the  base of  the deepest
                    Producible  Reservoir  to  be penetrated  by  the Deeper
                    Drilling operation.

                    A Party making an Election to limit its participation in
                    a  Deeper  Drilling  Appraisal  Well  to the base of the
                    deepest    Producible    Reservoir    shall   bear   its
                    Participating  interest  share  of  the Cost and risk of
                    drilling  (including  abandonment)  to  the base of  the
                    deepest Producible Reservoir.   If  a  Party  makes   an
                    Election  not  to  participate  in  the  proposed Deeper
                    Drilling, the proposed Deeper Drilling operations  shall
                    be  conducted  pursuant  to  Article   16   (Non-Consent
                    Operations).

        11.4.2      Multiple  Completion  Alternatives  Above and  Below the
                    Deepest  Producible Reservoir:   If  a Non-Participating
                    Party in  a Deeper Drilling  operation below the deepest
                    Producible Reservoir considers the well to be capable of
                    producing at or above the  deepest Producible Reservoir,
                    and  has indicated a  desire to complete the  well at or
                    above the  deepest  Producible  Reservoir,  any  further
                    Deeper Drilling operations shall  be  conducted  subject
                    to  the following provisions:

              (a)   Multiple Completions:  If all the  Participating Parties
                    in the well agree that a multiple well completion(s) are
                    possible and practicable  involving (i) a  completion at
                    or  above the  deepest Producible  Reservoir and  (ii) a
                    completion below  the deepest Producible Reservoir,  the
                    Participating Parties  in the Deeper Drilling  operation
                    shall bear 100% of the Costs of drilling to an Objective
                    Depth below the deepest Producible Reservoir that are in
                    excess of the  original Costs to drill  and complete the
                    well in the deepest Producible Reservoir.

              (b)   Single Completions:  If all the Participating Parties in
                    the well do not agree that multiple well completions are
                    possible  or practicable, the Non-Participating Party in
                    the   Deeper   Drilling   operation  shall   be   deemed
                    overinvested in the original well in an amount  equal to
                    the  Non-Participating  Party's  Share of  the  original
                    Costs  of drilling  the well  to the  deepest Producible
                    Reservoir.    The Participating  Parties  in  the Deeper
                    Drilling  operation  shall  assume  their  proportionate
                    share  of  the  Non-Participating Party's  Share  of the
                    Costs of other operations conducted under this Agreement
                    until all overinvestments are eliminated.

              (c)   Overinvestments   for   Single    Completions:       The
                    Participating Parties as to the depths below the deepest
                    Producible  Reservoir shall be deemed overinvested in an
                    amount equal  to the Non-Participating Party's  Share of
                    the well's Cost down to the deepest Producible Reservoir
                    at the  first occurrence of the following events:

                    (i)   the well  is not a  Producible Well in the  deeper
                          depths and the well is plugged back to a shallower
                          zone; or,

                    (ii)  the well is completed as a Producible Well  in the
                          deeper depths, but Hydrocarbon production from the
                          deeper zone is later depleted prior to Non-Consent
                          Recoupment   (attributable   to   Deeper  Drilling
                          operation)  and  the well  is  plugged  back  to a
                          shallower zone; or,

                    (iii) the well  is completed as a Producible Well in the
                          deeper depths  and the Participating Parties  have
                          recovered  the  applicable  Non-Consent Recoupment
                          (attributable to  the Deeper  Drilling  operation)
                          from Hydrocarbon production from the deeper zone.

                    The  overinvestment shall be depreciated at  the rate of
                    one-half percent (.50%) per month from the date the Deeper
                    Drilling operation commences to the earlier of  the date
                    of  (i), (ii)  and  (iii) above,  but  such depreciation
                    shall not reduce the overinvestment below  forty percent
                    (40.0%)  of  the  original  overinvestment.    The  Non-
                    Participating Parties  in the Deeper Drilling  operation
                    shall   assume   their   proportionate  share   of   the
                    Participating  Party's  Share  of  the  Costs  of  other
                    operations  conducted  under  this Agreement  until  all
                    overinvestments are eliminated.

        11.4.3      Completion Attempts At or  Above the Deepest  Producible
                    Reservoir:    If   a  well  drilled  below  the  deepest
                    Producible Reservoir is  not completed for production in
                    the  deeper depths,  then  the Participating  Parties in
                    said well down to the deepest Producible Reservoir shall
                    have a  right to  utilize the well for  completion in  a
                    Producible  Reservoir.    The Participating  Parties  in
                    drilling below the deepest Producible  Reservoir in said
                    well  shall  bear  the  Costs  (including  plugging back
                    Costs) necessary  to place the  well in proper condition
                    for completion in  a Producible  Reservoir.   If a  well
                    drilled   below  the  deepest  Producible  Reservoir  is
                    damaged  to the extent that it  is rendered incapable of
                    being  completed and  produced at  or above  the deepest
                    Producible  Reservoir  in  that well,  the Participating
                    Parties  in  the  Deeper  Drilling  operation  shall  be
                    obligated, at their sole  Cost and risk, to restore  the
                    well  to  its  condition prior  to  the Deeper  Drilling
                    operations below the  deepest Producible Reservoir.  The
                    Participating Parties  in the Deeper Drilling  Operation
                    shall  be  obligated  to  pay  for  the  entire  Cost of
                    redrilling the  well if the damage  cannot be  repaired.
                    Both the Participating Parties in the  original drilling
                    operation  and the Participating  Parties in  the Deeper
                    Drilling operation shall be Participating Parties in the
                    completion attempt in the shallower formation.

  11.5  Plugging and Abandoning Costs: Upon the conclusion of all operations
        set  forth in an  Appraisal Operations Well Plan  and all Subsequent
        Appraisal Operations on  such well,  or if  the Operator  encounters
        mechanical  difficulties  or  impenetrable  conditions,  which  make
        further  drilling impracticable,  then the  Operator may  propose to
        plug and abandon the well.  Upon approval of the well abandonment by
        the Participating Parties having a voting interest of at least fifty
        percent (50%) or failing approval, the Operator deems the well  bore
        not to be safe or in a condition to  perform further operations, the
        Operator shall  commence the plugging and  abandonment of  the well.
        The Participating  Parties in the  original operation shall pay  all
        Costs of  plugging and  abandoning the  Appraisal  Well (except  any
        increased  plugging and  abandoning Costs  associated solely  with a
        Subsequent   Appraisal   Operation   conducted  as   a   Non-Consent
        Operation).  The Participating Parties in any  Non-Consent Operation
        shall be responsible for the increased plugging and abandoning Costs
        attributable to the Non-Consent Operation.

                                   ARTICLE 12 
                                DEVELOPMENT PLAN

  12.1  Phased  Development  Plans:    The  results  of  Exploratory  and/or
        Appraisal  Operations may  justify  the development  of one  or more
        Producible Reservoirs  within a Designated Prospect.   The  Operator
        shall prepare for the approval  of the Parties a Development Plan in
        order to pursue such development of a Designated Prospect.  In order
        to provide  for the  orderly preparation  of  the Development  Plan,
        unless  otherwise mutually  agreed by all  the Parties,  the Parties
        shall form  an  Integrated  Project  Team  subject to  Article  12.2
        (Proposal  of  Integrated  Project  Team)  whose  duties   are  more
        specifically  set forth in Exhibit "G"  (Integrated Project Team and
        Technology Sharing)  and which shall  be charged with assisting  the
        Operator in  the preparation  of a Development Plan  and in  design,
        engineering,  fabrication,  transportation  and installation  of the
        Initial Production  System and Facilities.  In view of the Costs and
        scope  of  Development  Operations for  a  Designated Prospect,  the
        Parties  may agree to divide Development  Operations into an initial
        Development  Phase and  one or  more subsequent  Development Phases.
        Each Development Phase shall be centered upon the installation of  a
        new  or expanded  Production System  for a  Designated Prospect.   A
        separate  Development Plan  shall be  prepared for  each Development
        Phase, and each  Development Plan  shall be developed,  approved and
        implemented pursuant to this Article 12.

  12.2  Proposal  of Integrated Project  Team:  The Operator  shall have the
        exclusive  right to  submit  a  proposal for  the formation  of  the
        Integrated Project  Team  during  the  first  six (6)  month  period
        following  rig  release  for  an Exploratory  Well  on  any  of  the
        Designated  Prospects.    However,  if  an  Appraisal  Operation  is
        approved by the  Parties prior to the  proposal for the formation of
        the Integrated  Project  Team,  the  Operator's  exclusive  proposal
        period  shall be extended until six (6) months  after rig release of
        the  last  approved  Appraisal Operation  on  any of  the Designated
        Prospects.   If  Operator  fails  to propose  the formation  of  the
        Integrated  Project  Team during  its exclusive  proposal period(s),
        then,  after   expiration  of  the   Operator's  exclusive  proposal
        period(s), any  Party may  propose the  formation of the  Integrated
        Project Team.

  12.3  Integrated Project Team  Election:  A proposal for the  formation of
        the  Integrated Project Team  shall not require the  approval of the
        Parties as a General Matter.  Each  Party shall have an Election  as
        to its  participation in  the AFE for the  Integrated Project  Team,
        pursuant to  Article 8.3.3  (Other  AFE  Related Operations).    The
        formation and administration of the Integrated Project Team shall be
        handled in  accordance with Exhibit "G" (Integrated Project Team and
        Technology Sharing) with  the Costs  of the Integrated  Project Team
        being charged in accordance with Exhibit "C" (Accounting Procedure).
        A Party which makes an Election not to participate in the Integrated
        Project Team shall become a Non-Participating Party as to the  costs
        of  the  Integrated  Project  Team  and  shall  be  subject  to  the
        provisions  of Article  16.5.3 (Non-Consent  Geophysical Operations,
        Integrated  Project  Team   and/or  Final  Design  AFE).     A  Non-
        Participating Party  shall not  have access to the  data or  studies
        prepared by  the Integrated Project  Team until satisfaction of  the
        requirements of Article 16.5.3.

  12.4  Proposal  of  a  Development  Plan:   The  Operator  shall  have the
        exclusive  right  for  a period  of  twelve  (12)   months  from the
        formation  of the  Integrated Project Team  to submit  a Development
        Plan for  the review  and  approval of  the Parties,  such  proposed
        Development  Plan to be  based upon the work  and recommendations of
        the Integrated Project Team.  If Operator has begun preparation of a
        Development Plan during the first  six (6) months of the twelve (12)
        month period,  but the  Development Plan will not  be completed  and
        submitted  by  the end  of  the  Operator's  exclusive  period,  the
        Operator may request  an extension of the exclusive period  to allow
        completion of the work in progress.  Any request for extension shall
        include a  report of the progress  to date  and specify  a date  for
        submission  of the Development  Plan not more than  three (3) months
        from the expiration of the exclusive submission period.  The Parties
        may grant  an extension by a  General Matter vote.   If  the Parties
        mutually  agree not  to form  an Integrated  Project Team,  then the
        Operator shall  have the  exclusive right  to propose a  Development
        Plan for a period  of twelve (12) months following completion of the
        Exploratory Operations or Appraisal Operations, whichever is later.

        12.4.1      Alternative Development Plans:  If a Development Plan is
                    not timely submitted by the Operator or  the Development
                    Plan submitted by  the Operator is not approved pursuant
                    to Article  12.6  (Approval of  a Development  Plan)  or
                    12.6.1 (Amended  Approval  Requirement  for  Development
                    Plans) below, then  any Party  shall have the  option to
                    submit a Development  Plan.  Development  Plans proposed
                    after  expiration  of  the Operator's  exclusive  period
                    shall be considered  for approval by the  Parties in the
                    order in which the Development Plans are submitted.

  12.5  Content of  the Development  Plan:   Any  Development Plan  proposed
        under this  Agreement shall contain sufficient  detail to  allow the
        Parties to adequately evaluate the scope, timing, Costs and capacity
        of  the  proposed  Development  Plan  and  Production  System.   All
        Development  Plans submitted  shall include  at least  the following
        information:

        (a)   Initial  Production  System:    Description  of   the  Initial
              Production System including:

              (i)   the type  of Production  System proposed  (i.e., tension
                    leg  well  jacket,  floating production  system,  etc.),
                    including    the     Production    System's    location,
                    configuration  (i.e.,  number  of well  slots  or subsea
                    tiebacks) and production capacity;

              (ii)  a description of the Facilities, including the gathering
                    and   pipeline   system   necessary  to   transport  the
                    Hydrocarbons from the well heads to shore;

              (iii) a project execution  plan which includes a time schedule
                    for  designing, contracting,  fabricating, constructing,
                    transporting, installing, commissioning, and start-up;

              (iv)  the estimated date of initial Hydrocarbon production and
                    the  estimated  daily  rate  of  Hydrocarbon  production
                    thereafter; and,

              (v)   the estimated Costs of the  Production System not in the
                    form of an AFE;

        (b)   Producible Reservoirs:    A  description  of  the  Hydrocarbon
              bearing geological formations  expected to be  developed under
              the Development Plan along with the general area and depth  of
              sands or reservoirs to be  developed by the Production System,
              and  wellstream  characteristics  for  use  in  designing  the
              Production System;

        (c)   Recoverable Reserves:    An  estimated  range  of  recoverable
              reserves for the proposed Development Plan;

        (d)   Predrilling   Operations:      A  reasonable   description  of
              predrilling operations,  if any,  planned in  support of later
              development,  including an  estimate of  the timing,  Cost and
              location of each predrilling operation;

        (e)   Development Wells:   A reasonable  description of drilling and
              completion  plans  for  all  Development  Wells, including  an
              estimate of the timing, Cost and location of each well.

        (f)   Other Data: Provided  such information is available, any other
              information  reasonably necessary to perform  an evaluation of
              the  technical  and  economic   feasibility  of  the   Initial
              Production System provided for in the Development Plan.

  12.6  Approval of a Development Plan:  The Operator shall have ninety (90)
        days to obtain unanimous approval of the Parties for any Development
        Plan proposal submitted by the Operator during its exclusive period.
        If either (i) the  Operator fails to gain the unanimous approval  of
        the Parties or (ii) the Operator fails to submit a Development Plan,
        the Parties shall have a period of  ninety (90) days commencing with
        either  the expiration  of  the Operator's  exclusive period  or the
        failure  to   obtain  approval  in  which   either  the   Operator's
        Development Plan or an alternate Development Plan may be unanimously
        approved by the Parties.

        12.6.1      Amended Approval Requirement for Development Plans:   If
                    a  Development  Plan is  not  unanimously approved  upon
                    conclusion  of the  ninety (90)  day period  provided in
                    Article  12.6   above,  then  the  unanimous   agreement
                    requirement, provided  for under  Article 12.6  shall be
                    amended to provide:

                    (i)   during    this     amended    approval    process,
                          consideration for approval by the Parties shall be
                          given first  and simultaneously to any  previously
                          proposed Development Plan;

                    (ii)  for   a   twelve   (12)  month   period  following
                          expiration of the two (2) separate ninety (90) day
                          plus  ninety  (90)  day  periods,  approval  of  a
                          Development  Plan shall  be  by the  Parties  as a
                          General Matter.  No  new  alternative  Development
                          Plan shall  be submitted  during the  last six (6)
                          months of this twelve (12) month period; and

                    (iii) if  a  Development Plan  is  not  approved,  as  a
                          General  Matter,  during  the  twelve  (12)  month
                          period,  then   the  Development  Plan  shall   be
                          approved according to the following:

                    (a)  If there is only  one Development Plan submitted and
                         such Development Plan  receives an affirmative  vote
                         of  at  least  forty  percent (40%)  of  the  voting
                         interest,  such Development  Plan  shall  be  deemed
                         approved by the Parties;

                    (b)   If there  are two  (2)  or more  Development  Plans
                         submitted and  two (2)  receive  an affirmative vote
                         of at  least  forty  percent  (40%)  of  the  voting
                         interest,  then the  Development Plan  receiving the
                         largest affirmative vote shall be deemed approved by
                         the Parties.

                    (c)  If  there  are two  (2)  or  more Development  Plans
                         submitted  and  one  Development  Plan  receives  an
                         affirmative vote of at  least forty percent (40%) of
                         the  voting  interest,  and  the  other  Development
                         Plan(s) receives  an affirmative  vote of  less than
                         forty percent (40%) of the voting interest, then the
                         Development Plan receiving  the affirmative vote  of
                         at least forty percent (40%) of the voting  interest
                         shall be deemed approved by the Parties;

                    (d)  If two (2) competing  Development Plans each receive
                         an affirmative  vote of  forty percent  (40%) voting
                         interest, the Parties will use reasonable efforts to
                         diligently  pursue  a  compromise Development  Plan,
                         failing  which then  the Development  Plan submitted
                         first shall be deemed approved by the Parties.

  12.7  Final Design AFE:   No later than six  (6) months from the date  the
        Development  Plan is  approved  as provided  in Article  12.6 above,
        Operator shall  submit to all Parties  the Final Design  AFE for the
        Initial Production System for their Election.  Such Final Design AFE
        shall  include a Cost  estimate for design which  shall include both
        the  Cost  of   Operator  and  Non-Operator  staff  time  (including
        Affiliate employees) and the Cost of contract labor and services for
        the design and testing necessary to adequately define the system for
        the bidding of  fabrication.  The Final  Design AFE may also include
        the Cost  of long-delivery equipment items  which must  be purchased
        before  the start  of fabrication  and construction.   Operator  may
        provide other additional documents as necessary to allow the Parties
        to adequately evaluate the Final Design AFE. 

        12.7.1   Response to Final Design  AFE: Each Party shall respond  as
                 to its Election in the Final Design AFE proposal within the
                 time frame as described in Article 8 (Voting,  Notices, and
                 Elections).  If  all  the  Parties  make  an   Election  to
                 participate  in the  Final  Design AFE,  then  the Operator
                 shall proceed  with  the Final  Design AFE  for  the  Joint
                 Account of the Parties. If a Party makes an Election not to
                 participate in  the Final  Design  AFE,  then each  of  the
                 Participating Parties shall  elect to  either: (i)  proceed
                 with the  Final Design  AFE with the interest  of the  Non-
                 Participating Party shared  by the Participating Parties on
                 the  basis  of their  respective Working  Interests, unless
                 otherwise agreed in writing, or (ii) change its Election to
                 become  a Non-Participating  Party.  All  risk,  Cost,  and
                 expense  shall be  borne  in proportion  to  the respective
                 interests   of   the   Participating  Parties.   Any   Non-
                 Participating  Party shall  be  subject to  the Non-Consent
                 provisions  as  set forth  in  Article  16.5.3 (Non-Consent
                 Geophysical  Operations,   Integrated  Project  Team/and/or
                 Final Design AFE).

  12.8  Fabrication  AFE:  No later than six (6) months from the date of the
        last Election  for the Final Design AFE as provided  in Article 12.7
        above, unless such additional time is necessary due to circumstances
        beyond Operator's  control, Operator shall  submit a Fabrication AFE
        for the Initial Production System to all Parties for their Election.
        The  Fabrication AFE shall  consist of separate AFEs  for each major
        component  in the construction, fabrication and  installation of the
        Initial  Production System  identified in  the  approved Development
        Plan and Final Design AFE.  If  the Operator does not timely  submit
        the  Fabrication AFE, any Party may submit a Fabrication AFE for the
        Development Plan.   The Fabrication AFE shall consist of  a separate
        AFE  for: (i)  the structural components  of the  Initial Production
        System, (ii)  the equipment  and  Facilities to  be located  on  the
        Designated Prospect  (or  located off  the Designated  Prospect  but
        serving the Designated  Prospect), and (iii) any  pipelines or other
        Facilities  for  handling  Hydrocarbon  production.    The  Election
        regarding the Fabrication AFE shall be a single Election and  not an
        Election as to the individual AFEs comprising the Fabrication AFE. 

        12.8.1   Response to  Fabrication AFE:  The Parties shall make their
                 Election as to  the Fabrication AFE within  the time period
                 as   described   in   Article  8.3.2   (Production   System
                 Construction).   Development  Wells  shall  be  subject  to
                 separate  AFEs  and  shall  not  be  included   within  the
                 Fabrication  AFE.  If  all the Parties make  an Election to
                 participate in the Fabrication AFE, then the Operator shall
                 proceed  to  design,  fabricate, construct,  transport  and
                 install the Initial Production System for the Joint Account
                 of the Parties. By making an Election to participate in the
                 Fabrication AFE,  each Participating Party  commits to  pay
                 its Participating  Interest share  of the  Costs, risks and
                 liabilities of  the Initial Production System as set out in
                 the Fabrication AFE.  Each Non-Operator Participating Party
                 shall  have  the   option  to  attend  regularly  scheduled
                 meetings   between   the   Operator  and   any  contractors
                 constructing  the Initial  Production System  or Facilities
                 specified in the  Fabrication AFE as well as visits  to the
                 construction sites. Any Non-Participating  Party  shall  be
                 subject to Article 16.2 (Acreage Forfeiture Provisions) and
                 the  Participating  Parties   shall  elect  to either:  (i)
                 proceed with the Fabrication  AFE with the interest of  the
                 Non-Participating Party shared by the Participating Parties
                 on the basis  of their respective Working Interests, unless
                 otherwise agreed, or (ii)  change its Election to become  a
                 Non-Participating Party.   The Working Interest of the Non-
                 Participating Party shall  be shared  by the  Participating
                 Parties   in  accordance   with  Article   16.2.2  (Initial
                 Production System).

  12.9  Minor  Modifications  and   Revisions  to  Development  Plans:    In
        implementing  the  Development  Plan, the  Operator  may make  minor
        modifications and revisions  to the Development Plan  subject to the
        following:  

        12.9.1   Minor Modifications  to Development  Plans:   The  Operator
                 may,  without the  approval  of the  Participating Parties,
                 make minor  modifications  to a  Development Plan  if  such
                 minor modifications  are both  necessary and reasonable  to
                 accomplish  the  Development Plan.  For  purposes  of  this
                 paragraph,  a minor modification shall  mean a modification
                 which does not cause the estimated Cost of any separate AFE
                 submitted  under the  Fabrication AFE  to increase  by more
                 than  twenty-five  percent  (25%)  or  Two Million  Dollars
                 ($2,000,000), whichever  is less,  and does  not change the
                 type of Production System, the number of Development Wells,
                 the   capacity  of   the  Facilities  or   the  Hydrocarbon
                 transmission system  of the  Development Plan.  Such  minor
                 modifications also shall  not materially change the risk or
                 timing of the Development  Plan nor any prior Elections  of
                 the Parties.

        12.9.2   Revisions to Development Plans :  A Development Plan may be
                 revised as needed to accommodate new data,  interpretations
                 or  other  changes not  covered  by  Article  12.9.1 (Minor
                 Modifications to  Development Plans)  or  by Article  12.10
                 (Major  Modifications  to  Development  Plans).    Any such
                 revision  pursuant  to this  Article  12.9.2  shall require
                 approval as a General Matter.  The Operator shall provide a
                 copy of the revised Development Plan to all Parties, except
                 in  the case  when the Development  Plan is   automatically
                 revised as a result of a Development Operation not included
                 in the then  current Development  Plan being approved  as a
                 General  Matter as  provided in  Article 13.1  (Proposal of
                 Development Operations).

  12.10 Major  Modifications  to   Development  Plans:  The  Operator  shall
        promptly  notify   the  Participating   Parties  whenever  a   major
        modification to a Development Plan  is anticipated and shall furnish
        to  the Participating Parties the Operator's  proposal to modify the
        Development Plan (and associated AFE's) along with the basis for the
        proposal and estimated Costs.  Approval of major modifications shall
        require the unanimous affirmative vote of all  Participating Parties
        in accordance  with Article 12.6.    A  major modification shall  be
        deemed to have occurred when:

        (i)   the  type  of  the Production System is  materially changed or
              the capacity is changed by ten percent (10%) or more; or

        (ii)  the number of  well slots of the Production System  is changed
              by at least twenty-five percent (25%); or

        (iii) the  type of Hydrocarbon transmission system is changed (e.g.,
              pipeline vs. barge, etc.). 

        If  the  major  modification is  approved  by all  the Participating
        Parties, then the  Operator shall  immediately advise any  Party who
        made an Election not to  participate in the Fabrication  AFE for the
        original  approved  Development   Plan  and  provide  the   modified
        Development  Plan  to  such  Non-Participating  Party.     Any  Non-
        Participating Party shall have the right for a period of  forty-five
        (45) days, after  receipt of the modified Development Plan  from the
        Operator,  in  which  to  make  an Election  to  participate  in the
        modified Development  Plan.  Any  Non-Participating Party s Election
        to participate in the modified Development Plan shall be subject  to
        a Disproportionate Spending  Settlement in  an amount  equal to  one
        hundred percent  (100%) of  such Non-Participating  Party's share of
        the  actual Costs  incurred  for  the Development  Plan.   The  Non-
        Participating Party  who makes  an Election  to  participate in  the
        modified Development Plan shall be an underinvested Party until such
        underinvestment  is  eliminated.   The  Participating  Parties shall
        deliver to  the Non-Participating  Party who  makes  an Election  to
        participate in  the modified Development Plan  an assignment  of one
        hundred  percent  (100%) of  such  Non-Participating  Party's former
        Working Interest in the  Designated Prospect, the wells therein  and
        production therefrom within  thirty (30) days after  full payment is
        received.   If the major modification  is approved,  the Development
        Plan (and  any associated  AFE's) shall be deemed  modified and  the
        Operator  shall carry  out the  modified Development  Plan.   In the
        event  a major  modification is  not approved  by all  Participating
        Parties,  the  Operator  shall continue  to  implement the  approved
        Development Plan.

  12.11 Supplemental AFE for Cost Overruns on  Fabrication AFE:  Shall be as
        provided for in Article 6.2.6 (Supplemental AFE for Cost Overruns on
        Fabrication AFE).

  12.12 Termination of a  Development Plan:  Any proposed termination  of an
        approved Development  Plan  may only  be accomplished  by  unanimous
        consent of the Participating Parties.

  12.13 Timely Operations for Initial Production Systems: The Operator shall
        commence, or cause to be commenced, the construction of  the Initial
        Production System in any Designated  Prospect(s) within one (1) year
        from  the last  Party's  Election  for the  Fabrication AFE.    Such
        construction shall be deemed timely commenced on the date the  major
        fabrication contract for the Production System is awarded.  If  such
        construction has not commenced in a timely manner, then the approved
        Fabrication AFE shall be deemed withdrawn with  the effect as if the
        Fabrication   AFE   had   never   been   submitted.      The   above
        notwithstanding, if the MMS grants a "Suspension of Production" or a
        "Suspension   of  Operations"   (an   "SOP/SOO")  for   an  approved
        Development Plan, any shorter time  limits set forth as requirements
        of  the SOP/SOO shall supersede the  corresponding longer time limit
        set forth in this Agreement or the Development Plan.

  12.14 Expansion, Modification, or Repair of an Initial  Production System:
        Subsequent  to the  installation  of the  Initial  Production System
        described  and  approved  in  the   first  Development  Plan  for  a
        Designated   Prospect,   any  Party   may  propose   the  expansion,
        modification or repair of any existing Production System in which it
        has  participated  by written  notice  to  the  other  Participating
        Parties in such Production System.  Such proposal shall be presented
        in accordance  with Articles 12.18 (Annual  Operating Plan)  and 8.3
        (Response Time for General Matters and Elections) for approval as  a
        General  Matter.    If  approved as  a General  Matter,  it will  be
        binding  on  all Participating  Parties  in  the  Initial Production
        System and Operator shall proceed with such project for the  benefit
        of  the  Joint  Account  and  all  Cost, risk  and  expense  of such
        operation   shall  be   borne  in   proportion  to   the  respective
        Participating  Parties' Working Interest in  such Initial Production
        System  unless  otherwise  agreed.  This  Article  12.14  shall  not
        constitute  a limit on a Party's right to install its own Facilities
        under  Article 15 (Disposition  of  Production).   The provisions of
        this  Article  12.14  shall  not  apply  to  subsequent  Development
        Phase(s).

  12.15 Subsequent Development Phases:   At any time after the  last Party's
        Election  under  the Fabrication  AFE  for  the  Initial Development
        System,  any   Participating  Party   may   propose  an   additional
        Development  Phase(s)  and  the  installation  of  a  subsequent  or
        expanded  Production  System(s).   Upon  proposal  of  a  Subsequent
        Development Phase,  the Operator shall  propose the formation of  an
        Integrated Project  Team  to prepare  a  Development  Plan  for  the
        Subsequent  Development Phase.  The preparation  and approval of the
        Development Plan for a Subsequent Development Phase shall follow the
        same procedures specified in this Article 12 for the preparation and
        approval of the initial Development Plan.

  12.16 Access to Existing Facilities:  Development Operations in subsequent
        Development  Phases  shall   have  reasonable  access  (on  a  space
        available  basis)   to  gathering,  processing  and   transportation
        Facilities installed for previous Development Phases.

  12.17 Non-Consent Operations  in Subsequent Development  Phases:  If fewer
        than all  Parties make  an Election to participate  in a  Subsequent
        Development  Phase,  the  Operator (or  substitute  Operator)  shall
        conduct Development  Operations in the  Subsequent Development Phase
        for  the account of the Participating Parties and at their sole Cost
        and risk.   The Participating  Parties shall conduct  the Subsequent
        Development Operations in the Subsequent Development Phase  with the
        benefit of  the non-consent provisions specified in Article 16 (Non-
        Consent Operations).    A Non-Participating  Party in  a  Subsequent
        Development Phase shall  not be entitled to any information  or data
        from  any  Development Operation  associated  with  such Development
        Phase,  unless  the Non-Participating  Party  makes  an  Election to
        participate  in  such  operations  of  the  Subsequent   Development
        pursuant to  Article 16.7 (Operations  From a Subsequent Non-Consent
        Production  System).   Any Non-Participating  Party in  a Subsequent
        Development Phase may retain its Working Interest in  the Designated
        Prospect  corresponding   to  a  Development  Phase   in  which   it
        participated.   However,  such a  Non-Participating Party  shall not
        unreasonably interfere with Development Operations in the Subsequent
        Development  Phase (and shall  not make any claim  for drainage upon
        the Participating  Parties in the Subsequent  Development Phase,  so
        long  as the Subsequent Development Phase  is conducted according to
        prudent  operating  practices).   In  all  events, the  sequence and
        conduct of Development  Operations in a Subsequent Development Phase
        shall  be controlled by the Participating  Parties in the Subsequent
        Development Phase Operation.  Hydrocarbon production volumes between
        Phases shall  be measured on the  basis of well tests  and operating
        expenses  between Phases  allocated  upon the  basis  of Hydrocarbon
        production volume throughput.

  12.18 Annual Operating Plan:  Beginning in the year in which a Development
        Plan is approved for a Designated Prospect, and each subsequent year
        thereafter,  the Operator  shall develop  an Annual  Operating Plan.
        The  Annual Operating Plan process  will be used (i)  as a reporting
        mechanism  by  which the  Operator  will  inform  the  Non-Operating
        Parties of results of the previous year's activities, (ii) to review
        ongoing operations  and (iii)  to  forecast activities,  anticipated
        Hydrocarbon  production  volumes,  operating  expenses  and  capital
        expenditures  for the  remainder of  the current  year and  the next
        succeeding calendar year.

        12.18.1  Development and  Submission of  the Annual  Operating Plan:
                 Prior to  May 1 of each  year, the Operator will  conduct a
                 meeting  with  the  Non-Operating  Parties  to  review  the
                 results of  the  previous year.   The  Operator  will  also
                 provide  the  Non-Operating  Parties with  its  anticipated
                 activities  for the current and following  year and solicit
                 input  regarding  these  activities from  the Non-Operating
                 Parties.  After this meeting, the Operator will prepare and
                 submit  its proposed  draft for  the Annual  Operating Plan
                 prior to June 1 of each year.

        12.18.2  Review  of the  Annual Operating  Plan:   The Non-Operating
                 Parties   will  provide  suggested  changes,  additions  or
                 deletions to  the Annual Operating Plan to the Operator and
                 all other  Parties prior  to July  15 of  each year.    The
                 Operator will then make any changes it deems  necessary and
                 submit the Annual Operating Plan no later than October 1 of
                 each year.
 
        12.18.3  Content  of Annual  Operating Plan:   The  Annual Operating
                 Plan  will  include an  estimated  capital  budget, expense
                 budget and Operator's anticipated forecast as follows:

           12.18.3.1.  Capital  Budget:   The  Annual  Operating  Plan  shall
                       contain an estimated capital budget that  includes the
                       following:

                    (a)  a  list of  proposed wells  to be  drilled including
                         their  anticipated  order,  drilling  time,  depths,
                         locations,   objective   sands,    type   of    well
                         (Development,  Appraisal,  etc.),  purpose  of  well
                         (production, injection, etc.) and estimated Costs;

                    (b)  capital  workovers,  which shall  be defined  as any
                         workover operation conducted to recomplete a well to
                         a  new zone  or install  artificial lift,  listed by
                         well, with their estimated Cost;

                    (c)  other capital projects requiring a gross expenditure
                         greater  than  three  million dollars  ($3,000,000).
                         The term "capital project" shall include addition of
                         new  equipment,  expansion or  upgrades  of existing
                         equipment; and

                    (d)  an estimated total amount (in aggregate) for capital
                         projects.

           12.18.3.2   Expense  Budget:   The  Annual  Operating  Plan  shall
                       contain an estimated expense budget that  includes the
                       following:

                    (a)  expense  workovers, which  shall be  defined as  any
                         anticipated   workover  operation  which  is  not  a
                         capital  workover (such  as repair  work  or reworks
                         within the  same zone),  listed by well,  with their
                         estimated Cost;

                    (b)  all expense projects  requiring a gross  expenditure
                         greater  than  three  million dollars  ($3,000,000).
                         The  term  "expense project"  shall  include repair,
                         replacement, inspection and maintenance  of existing
                         equipment;

                    (c)  an estimated total amount (in aggregate) for expense
                         projects; and

                    (d)  estimated    Operations   and    Maintenance   (O&M)
                         expenditures for  the  year  may  be  shown  in  the
                         aggregate.   O&M expenses shall include the ongoing,
                         everyday  expenditures  necessary  to   operate  the
                         field.

        12.18.3.3   Operator Forecasts  and Informational Items:   The Annual
                    Operating Plan  shall contain  the Operator's  reasonable
                    forecasts  and   projections  (but   are  recognized   as
                    forecasts and projections only)  including the  following
                    information:

                 (a)   production forecasts;

                 (b)   injection forecasts;

                 (c)   fuel and flare gas forecasts;

                 (d)   scheduled  or planned  downtime  exceeding  three  (3)
                       days;

                 (e)   data collection programs; and

                 (f)     other areas deemed of significance by the Operator.

        12.18.4  Effect of  the Annual Operating Plan:  The Annual Operating
                 Plan  shall  be primarily  for  informational and  planning
                 purposes  and   shall  not   obligate  any   Party  to  any
                 expenditures or constitute an Election to participate in or
                 a proposal of any specific  operation.  However, the Annual
                 Operating Plan  is recognized as the  Operator's effort  to
                 forecast  and plan  for  activities during  the  year while
                 providing for  input from the Non-Operators.   Pursuant  to
                 the  terms and conditions of this  Agreement, any Party may
                 make proposals  for operations which were  not included  in
                 the Annual Operating Plan.  Approval of any such operation,
                 under  the terms provided in Article  8 (Voting, Elections,
                 and Notices),  shall be deemed a modification to the Annual
                 Operating Plan.

                                  ARTICLE 13
                             DEVELOPMENT OPERATIONS

  13.1  Proposal of Development Operations:  It is the intent of the Parties
        to proceed with development of the Contract Area in accordance  with
        the  approved Development Plan.   Any  Party  may propose to conduct
        specific  Development   Operations  which   were  included   in  the
        Development Plan by giving notice of the proposal and the associated
        Well Plan, which  shall include at least  the information set out in
        Article 10.2.1 (Well Plan's Minimum Specifics), and AFE to all other
        Parties.    Each  Development  Operation  included  in  an  approved
        Development Plan shall  not require  approval as  a General  Matter.
        The Operator (or substitute Operator) shall commence the Development
        Operation  at  the  sole Cost  and  risk of  the  Parties  making an
        Election  to  participate.    Costs  of  a  non-consent  Development
        Operation will  be  recouped in  accordance with  Article  16  (Non-
        Consent Operations).   Any    Participating Party   may  propose  to
        conduct  specific Development Operations which were  not included in
        the Development Plan.   However, such a proposal shall  also specify
        that it is not for an operation included in the Development Plan.  A
        proposal for a Development Operation not included in the Development
        Plan  shall require approval  as a General Matter  and, if approved,
        such  Development Operation  not  included in  the  Development Plan
        shall  automatically  revise  the Development  Plan.   However,  the
        provisions  of this  Article 13  (Development Operations)  shall not
        apply to  the proposal  for  the Initial  Production System  in  the
        Designated  Prospect.    The  Initial  Production  System  shall  be
        proposed  as a  part  of  the Development  Plan in  accordance  with
        Article 12 (Development Plan) of this Agreement.

        13.1.1   Operator's Counterproposal:  If a Non-Operating Party makes
                 a  proposal   that  was  not  included   in  the   approved
                 Development Plan and such proposal is approved as a General
                 Matter with the Operator being the non-approving Party, the
                 Operator shall have the option to:

              (a)   make  an  Election   to  participate  in   the  operation
                    proposed by the Non-Operating Party;

              (b)   become  a   Non-Participating  Party   pursuant  to   the
                    provisions of Article 16 (Non-Consent Operations); or,

              (c)   make  a  counterproposal within  the  applicable response
                    time  that  attempts  to  satisfy  the  same  or  similar
                    objectives (in  terms of  timing and  development of  the
                    Designated Prospect) as would the  Non-Operating  Party's
                    proposal.

                 The  Operator's counterproposal, if approved  as  a  General
                 Matter, shall have the effect of voiding  the  Non-Operating
                 Party's  proposal.   A  Party  making  an  Election  not  to
                 participate  in  the Operator's counterproposal shall become
                 a Non-Participating Party in  the Operator's counterproposal
                 shall become a  Non-Participating  Party  in  the  operation 
                 subject  to  Article  16  (Non-Coinsent Operations).  If the
                 Operator's counterproposal  is  not approved, Operator shall
                 make  its  Election  and  commence  the  originally proposed
                 operation in a timely manner.

        13.1.2   AFE Overruns  and  Substitute Wells:   The  Operator  shall
                 timely  commence a  Development Operation and  continue the
                 drilling of such  well with due diligence  to its Objective
                 Depth or until (i) a supplemental AFE is  required pursuant
                 to   Article   6.2   (Authorization  for   Expenditure  and
                 Supplemental  Authorization for  Expenditure)) or  (ii) the
                 Operator  encounters mechanical  difficulties, uncontrolled
                 influx of  subsurface water, abnormal pressures,  pressured
                 or  heaving  shale,  salt,  granite  or  other  practicably
                 impenetrable substances or other similar conditions prevail
                 in the hole that render further drilling impracticable.  If
                 the  Development Well  is abandoned  due to  the conditions
                 described  under Section 13.1.2 (ii), then  the Operator or
                 any Participating Party may propose a substitute well (with
                 the  associated AFE and Well Plan),  and each Participating
                 Party  in  the abandoned  Development  Well  shall  make an
                 Election whether to participate in the  proposed substitute
                 well.  The Operator (or substitute Operator) shall commence
                 the  substitute well  at  the  sole Cost  and risk  of  the
                 Parties making an Election to participate.  Costs of a Non-
                 Consent  substitute Development  Well  will be  recouped in
                 accordance with Article 16 (Non-Consent Operations).

        13.1.3   Timely Operations:  A proposed Development Operation except
                 as  provided   in   Article   12.13  (not   requiring   the
                 installation  of a  Production System)  shall be  commenced
                 within  one hundred  eighty (180) days  from the  date upon
                 which the last applicable Election to participate was made.
                 Except as  a result  of Force  Majeure  (Article 25.1),  if
                 operations  have  not  been  timely  commenced  within  one
                 hundred eighty  (180) days from the last Election date, the
                 proposal and Elections  shall be deemed withdrawn, with the
                 effect  as if  the proposal  and Elections  had never  been
                 made.  If a  proposal is  deemed withdrawn due  to lack  of
                 timely  commencement  of  operations,  any  Costs  incurred
                 during  said one hundred eighty (180)  day period which are
                 attributable  to  the  proposed  operation  shall still  be
                 chargeable  to the  Participating  Parties.   A Development
                 Operation  for the drilling of a  Development Well shall be
                 deemed to  have commenced  on the date the  rig arrives  on
                 location  or, if the  rig is already on  location, the date
                 when actual drilling operations are begun.

  13.2  Subsequent  Development  Operations at  Objective  Depth:    After a
        Development  Well  (or its  substitute)  has  been  drilled  to  its
        Objective Depth  as set forth in  the Well  Plan (and  all logs  and
        evaluations have been distributed to the Participating Parties), the
        Operator  shall promptly  notify  the Participating  Parties  of the
        Operator's proposal for one of the following operations:

        (a)   conduct  Additional   Testing,  Coring   or  Logging   of  the
              formations encountered prior to setting production casing;
        (b)   complete the well at the Objective Depth in the objective zone
              or formation;
        (c)   Sidetrack  the well to another bottomhole  location not deeper
              than the  stratigraphic equivalent  of the  original Objective
              Depth;
        (d)   plug back  the well  and attempt a completion  in a  shallower
              zone or formation;
        (e)   Deepen the well to a new Objective Depth;
        (f)   conduct other operations on the well not listed;
        (g)   temporarily abandon the well; or
        (h)   permanently plug and abandon the well.

        13.2.1   Response to  Operator's Proposal:   Within forty-eight (48)
                 hours   (exclusive  of   Saturdays,  Sundays   and  federal
                 holidays) after  receipt of Operator's proposal  to conduct
                 Subsequent Development Operations, or longer period if such
                 requesting Party agrees  to bear one hundred percent (100%)
                 of all  standby   charges for  said  extended period,  each
                 Participating  Party   shall  respond  to  the   Operator's
                 proposal  by   making  its   Election  to   participate  in
                 Operator's  proposal   or  by  making  a   counterproposal.
                 Failure  of a Participating Party to  respond to a proposal
                 (except a proposal to plug and abandon) shall be deemed  an
                 Election not to participate in the Operator's  proposal and
                 to become a Non-Participating Party from that point.

        13.2.2   Counterproposals:    If   a  Participating  Party  makes  a
                 counterproposal for Subsequent  Development Operations, the
                 other   Participating  Parties  shall  have  an  additional
                 twenty-four (24) hours to respond thereto.   If conflicting
                 proposals for  Subsequent Development Operations are  made,
                 preference for voting shall be given first to operation (a)
                 above, next  to operation  (b)  above, and  so forth.    If
                 different depths  or locations are  proposed for Subsequent
                 Development Operations,  preference shall  be given to  the
                 shallowest depth (or the location nearest the existing well
                 bore) and then other depths or locations in  descending (or
                 more  distant)  order.    After  a decision  to  conduct  a
                 Subsequent Development Operation is made and the Subsequent
                 Development Operation is commenced, the remaining proposals
                 for other types  of Subsequent Development Operations shall
                 be deemed withdrawn.   At the completion  of the Subsequent
                 Development  Operation,  the  Operator shall  again  submit
                 proposal(s)  for Subsequent  Development Operations  to the
                 Participating  Parties,  through   the  procedure  provided
                 herein,  until  such  time  as  the  well  is  plugged  and
                 abandoned.

        13.2.3   Approval   of  Subsequent  Development  Operations  by  All
                 Parties:   If the proposed Subsequent Development Operation
                 is  approved by  all Parties,  the Operator  (or substitute
                 Operator)  shall   commence  the   Subsequent   Development
                 Operation  at the  Cost(s)  and risk  of  the Participating
                 Parties.

        13.2.4   Approval of Subsequent  Development Operations as a General
                 Matter  by Fewer  Than  All  Parties:   If a  proposal  for
                 Subsequent  Development  Operations  (except a  proposal to
                 plug and abandon), is approved as a General Matter by fewer
                 than  all  Parties,  then the  Operator  shall conduct  the
                 operation at  the sole Cost and  risk of  the Participating
                 Parties.    Any  Non-Participating  Party  in a  Subsequent
                 Development Operation shall  be subject to Article 16 (Non-
                 Consent  Operations).    A  Non-Participating  Party  in  a
                 Subsequent Development  Operation shall be relieved  of the
                 Costs, risks and obligations of the  Subsequent Development
                 Operation, except as to its share of the Costs of  plugging
                 and abandoning  the Development  Well  in its  then-current
                 condition.  No  operation shall  be performed  on the  well
                 unless deemed by the Operator to  be safe and the well bore
                 is in a condition to perform the proposed operation.

  13.3  Election  by Non-Participating Parties in  Deepening or Sidetracking
        Operations:    If  a  Development  Well is  drilled  to  its initial
        Objective  Depth and does not appear  to result in a  well that will
        qualify  as  a Producible  Well,  and  if  any  Participating  Party
        proposes  to  either  (i)  Deepen  said  Development  Well  or  (ii)
        Sidetrack said Development  Well, then  as provided in  Article 13.2
        (c)  or   (e),  the  Operator  shall   notify  each   original  Non-
        Participating   Party  of   the  proposal.     Each   original  Non-
        Participating Party may  respond with  an Election regarding  such a
        proposal to  Deepen or  Sidetrack by notifying the  Operator of  its
        Election  within  forty-eight (48)  hours  (exclusive  of Saturdays,
        Sundays and federal holidays) after receiving the Operator's notice,
        or longer period if such requesting Party agrees to bear one hundred
        percent (100%) of all standby rig charges for said extended  period.
        Any  original   Non-Participating  Party   making  an  Election   to
        participate in such Deepening or  Sidetracking of a Development Well
        shall be deemed to be underinvested in an amount  equal to its share
        of the  Cost incurred  in such Non-Consent Well  (including but  not
        limited to  drilling,  testing, logging  or  coring)  prior  to  the
        Deepening  or  Sidetracking.    The  Parties  that  participated  in
        drilling to  the initial Objective Depth will be deemed overinvested
        in  that amount, and  all Costs for operations  under this Agreement
        that would otherwise be allocated to such overinvested Parties shall
        be allocated to  the underinvested Parties until all overinvestments
        are eliminated.    Any original  Non-Participating Party  making  an
        Election  to  participate  in the  Deepening  or Sidetracking  of  a
        Development  Well  shall  remain a  Non-Participating  Party in  the
        Development Well  to the  Initial Objective  Depth  until the  Costs
        recoverable under  Article  16  (Non-Consent Operations),  less  any
        payments  through  a  Disproportionate  Spending  Settlement  and/or
        Article 16.9 (Underinvestment  of Costs), have been  recouped by the
        original Participating Parties.

  13.4  Deeper  Drilling:   A proposal  to drill  a  Development Well  to an
        Objective Depth below the deepest Producible Reservoir penetrated by
        a Producible Well  or to reenter and Deepen an  existing Development
        Well to an  Objective Depth  below the deepest  Producible Reservoir
        penetrated by a Producible Well shall require approval as a  General
        Matter and shall be further subject to the following provisions.

        13.4.1   Limited Participation in Deeper Drilling:  If a proposal is
                 approved pursuant  to Article  13.4, any  Party may either;
                 (a) make an Election to participate in the proposed  Deeper
                 Drilling operation; (b) make an Election not to participate
                 in the proposed Deeper  Drilling operation; or (c)  make an
                 Election to limit its participation to drilling to the base
                 of the deepest Producible Reservoir to be penetrated by the
                 Deeper Drilling operation.

                 A Party  making an  Election to limit its  participation in
                 a deeper  Development  Well   to   the  base of the deepest
                 Producible Reservoir shall bear its  Participating Interest
                 share  of  the  Cost  and  risk  of   drilling   (including
                 abandonment)  to  the  base  of   the   deepest  Producible
                 Reservoir.  If a Party makes an Election not to participate
                 in  the  proposed  Deeper  Drilling,  the  proposed  Deeper
                 Drilling  operations shall be conducted pursuant to Article
                 16 (Non-Consent Operations).

        13.4.2   Multiple   Completion  Alternatives  Above  and  Below  the
                 Deepest Producible Reservoir:  If a Non-Participating Party
                 in a Deeper Drilling operation below the deepest Producible
                 Reservoir considers  the well to be capable of producing at
                 or above the deepest Producible Reservoir, and has indicated
                 a desire to complete the  well  at  or  above  the  deepest
                 Producible Reservoir, any further Deeper Drilling operations
                 shall be conducted subject to the following provisions:

              (a)   Multiple  Completion:   If all  the Participating Parties
                    in the well agree  that a multiple well completion(s)  is
                    possible and  practicable involving  (i) a completion  at
                    or  above the  deepest Producible  Reservoir  and (ii)  a
                    completion below  the deepest  Producible Reservoir,  the
                    Participating Parties  in the  Deeper Drilling  operation
                    shall bear 100%  of the Costs of drilling to an Objective
                    Depth below the deepest Producible Reservoir  that are in
                    excess of the original  Costs to  drill and complete  the
                    well in the deepest Producible Reservoir.

              (b)   Single Completions:  If all the  Participating Parties do
                    not agree  that multiple well completions are possible or
                    practicable, the  Non-Participating Party  in the  Deeper
                    Drilling  operation shall  be deemed  overinvested in the
                    original   well  in   an  amount   equal   to  the   Non-
                    Participating  Party's Share  of  the original  Costs  of
                    drilling the  well to the  deepest Producible  Reservoir.
                    The  Participating   Parties  in   the  Deeper   Drilling
                    operation shall assume their  proportionate share of  the
                    Non-Participating Party's  Share of  the  Costs of  other
                    operations  conducted  under  this  Agreement  until  all
                    overinvestments are eliminated.

              (c)   Overinvestments    for     Single    Completions:     The
                    Participating Parties  as to the depths below the deepest
                    Producible Reservoir shall be  deemed overinvested in  an
                    amount  equal to the  Non-Participating Party s  Share of
                    the well s Cost down to the  deepest Producible Reservoir
                    at the first of the following events:

                 (i)     the  well is  not a  Producible Well  in  the deeper
                         depths and the well  is plugged back to  a shallower
                         zone; or,

                 (ii)    the well is  completed as a  Producible Well in  the
                         deeper depths, but  Hydrocarbon production from  the
                         deeper zone is  later depleted prior to  Non-Consent
                         Recoupment   (attributable    to   Deeper   Drilling
                         operation)  and  the  well  is  plugged  back  to  a
                         shallower zone; or,

                 (iii)   the well is  completed as a  Producible Well in  the
                         deeper  depths  and the  Participating  Parties have
                         recovered  the   applicable  Non-Consent  Recoupment
                         (attributable to the Deeper Drilling operation) from
                         Hydrocarbon production from the deeper zone.

                 The overinvestment shall be depreciated at the rate of one-
                 half  percent (.50%) per month  from  the date  the  Deeper
                 Drilling operation  commences to the earlier of the date of
                 (i),  (ii)  and  (iii) above,  but  such depreciation shall
                 not reduce the  overinvestment below forty  percent (40.0%)
                 of  the  original  overinvestment.   The  Non-Participating
                 Parties in the Deeper Drilling operation shall assume their
                 proportionate share of  the Participating Party's Share  of
                 the  Costs   of  other  operations   conducted  under  this
                 Agreement until all overinvestments are eliminated.

        13.4.3   Completion  Attempts  At or  Above  the Deepest  Producible
                 Reservoir:   If a well drilled below the deepest Producible
                 Reservoir  is not  completed for  production in  the deeper
                 depths, then the Participating Parties in said well down to
                 the deepest  Producible  Reservoir shall  have a  right  to
                 utilize the well  for completion in a Producible Reservoir.
                 The  Participating Parties  in drilling  below the  deepest
                 Producible  Reservoir in  said  well shall  bear  the Costs
                 (including plugging back Costs) necessary to place the well
                 in  proper  condition   for  completion  in   a  Producible
                 Reservoir.   If a well drilled below the deepest Producible
                 Reservoir is  damaged to  the extent  that  it is  rendered
                 incapable  of being completed and produced  at or above the
                 deepest    Producible   Reservoir   in   that   well,   the
                 Participating  Parties  in  the Deeper  Drilling  operation
                 shall be obligated, at their sole Cost and risk, to restore
                 the  well to  its  condition prior  to the  Deeper Drilling
                 operations  below the  deepest  Producible Reservoir.   The
                 Participating  Parties  in  the Deeper  Drilling  Operation
                 shall be obligated to pay for the entire Cost of redrilling
                 the  well if  the  damage  cannot be  repaired.   Both  the
                 Participating  Parties in  the original  drilling operation
                 and  the  Participating  Parties  in  the  Deeper  Drilling
                 operation shall be Participating  Parties in the completion
                 attempt in the shallower formation.

  13.5  Plugging and Abandoning  Costs: At the conclusion  of all operations
        set forth  in a  Development  Well s Well  Plan and  all  Subsequent
        Development Operations  on such well  or if the Operator  encounters
        mechanical  difficulties  or  impenetrable  conditions,  which  make
        further  drilling impracticable,  then the  Operator may  propose to
        plug and abandon the well.  Upon approval of the well abandonment as
        a General Matter  by the  Participating Parties, the  Operator shall
        commence   the  plugging   and  abandonment  of   the  well.     The
        Participating Parties in the original operations shall pay all Costs
        of  plugging  and  abandoning  the  Development  Well   (except  any
        increased  plugging and  abandoning Costs  associated solely  with a
        Subsequent   Development  Operation   conducted  as   a  Non-Consent
        Operation).  The  Participating Parties in any Non-Consent Operation
        shall be responsible for the increased plugging and abandoning Costs
        attributable to the Non-Consent Operation.

                                  ARTICLE 14
             USE OF/AND ADDITIONAL FACILITIES AND GATHERING SYSTEMS

  14.1  Approval  of  Additional  Facilities:  Any  Party  may  propose  the
        installation of additional Facilities by notice to the other Parties
        together  with   information  adequate  to   describe  the  proposed
        Facilities and their estimated Costs.  Except as provided in Article
        15.1 (Facilities  to Take In  Kind), the installation of  additional
        Facilities  shall  require  approval  as  a  General  Matter.   Upon
        approval as a General Matter, the Operator shall proceed to  install
        the  Facilities  as  approved,  provided,  in the  judgment  of  the
        Operator, it does  not interfere  with continuing operations  on the
        Contract Area.  The installation of any additional  Facilities shall
        be at the sole Cost and risk of the Participating Parties.  Any Non-
        Participating Party shall be subject to Article  16.5.5 (Non-Consent
        Subsequent Production  System and  Facilities).   This Article shall
        only apply  to Facilities  which were not included  in the  approved
        Development Plan.

  14.2  Expansion, Modification or  Repair of an Existing Production System:
        Deleted.  Refer to Article 12.14.

  14.3  Use  of Production  System Located  on a  Designated Prospect:   The
        Participating Parties hereto with respect to a particular Production
        System shall have priority use of the co-owned capacity   for use in
        operating  and  developing  a  Designated  Prospect  pursuant to  an
        approved   Development  Plan.     Use   of  the   Production  System
        attributable  to  a  particular  Designated  Prospect  for  handling
        production  coming from  outside   such Designated  Prospect may  be
        granted only if Production System Capacity as defined in Exhibit  H 
        attached hereto is available beyond  the requirements of an approved
        Development Plan  for  developing a  Designated Prospect.    Use  of
        excess capacity  from a  Production System shall be  subject to  the
        following priority of usage:

        a. First priority  to Hydrocarbon production   from Leases that  are
           co-owned   by the  Participating  Parties  and that  are  located
           inside the Designated Prospect(s) for which the Production System
           was installed pursuant to an approved Development Plan..

        b. Second  priority  to   Hydrocarbon production from  Lease(s) that
           are co-owned  by  all  of   the  Participating Parties   in   the
           Production   System   and   that  are    outside  the  Designated
           Prospect(s) for  which   the   Production  System  was  installed
           pursuant to an approved Development Plan, but from  a  Designated
           Prospect within the  Contract Area.
 
        c. Third  priority to Hydrocarbon production from  Lease(s) that are
           co-owned  by   less  than   all,  but  at  least   one,  of   the
           Participating  Parties  in  the Production  System  and that  are
           located  outside  the   Designated  Prospect(s)  for  which   the
           Production   System  was   installed  pursuant  to   an  approved
           Development Plan,  but from  a Designated  Prospect(s) within the
           Contract Area.

        d. Fourth  priority to hydrocarbon production from  a lease in which
           less than all Parties have an ownership interest and in which the
           other Party(ies) was offered an interest but declined pursuant to
           the  AMI provisions  of Article  23.3 (Area  of Mutual  Interest)
           hereof.
    
        e. Fifty priority to hydrocarbon production owned by a Participating
           Party coming from outside the Contract Area.

        f. Sixth priority to  hydrocarbon production owned by third parties.

        Priority  "a",   b ,  c ,    d   and  "e" shall  require  no further
        approval by the Participating  Parties.  Priority "f" shall  require
        unanimous  approval  by  all  the  Participating  Parties   in  such
        Production System.   In the event that unanimous approval  cannot be
        reached by the Participating  Parties under priority "f" each  Party
        shall  be entitled to use its  share of excess capacity  as it deems
        appropriate.  Exhibit  H   attached hereto shall apply to the use of
        excess capacity by one or more of the Parties or third parties.

  14.4  Approval of  Additional Facilities on a  Designated Prospect:   This
        Article shall only apply to Facilities which are to  be located on a
        Designated Prospect  and which  were not  included  in the  approved
        Development  Plan.   Any  Party  may  propose  the  installation  of
        additional or  expanded Facilities for  a Designated Prospect beyond
        those  specified in  the Development  Plan by  giving notice  to the
        other  Participating Parties together  with information  adequate to
        describe the proposed Facilities and their estimated Costs.   Except
        as  provided in  Article  15.1  (Facilities to  Take In  Kind),  the
        installation  of  additional  Facilities  on  the Production  System
        beyond the scope of the Development Plan shall require the  approval
        of  the  Participating   Parties  as  a  General   Matter,  and  the
        availability of  sufficient deck space and  buoyancy to  support the
        proposed  additional Facilities.  Upon approval,  the Operator shall
        proceed to install the additional Facilities for the benefit of  the
        Participating  Parties  provided  that,  in  the  judgment   of  the
        Operator, the additional Facilities do not interfere with continuing
        operations on  a  Designated Prospect.    The  installation  of  any
        additional Facilities  shall be  at the  sole Cost and  risk of  the
        Participating Parties.  Any Non-Participating Party shall be subject
        to  Article 16.5.5  (Non-Consent  Subsequent Production  System  and
        Facilities)

  14.5  Contract Area  Production:  Notwithstanding any  other provision  of
        this  Agreement to the contrary, production  from Leases co-owned by
        the Participating  Parties in any Designated  Prospect shall  at all
        times  have first  preference  to use  all  of the  capacity of  the
        Production System (in  whole or in its several parts)  installed for
        such Designated  Prospect(s), over any production  from outside  the
        Contract Area.  

                                  ARTICLE 15
                           DISPOSITION OF PRODUCTION

  15.1  Facilities  to Take in Kind: Any  Party shall have the  right at its
        sole risk and  expense to construct Facilities for taking  its share
        of  production in kind, provided that such Facilities at the time of
        installation do  not  interfere with  continuing operations  on  the
        Contract Area.    During the  construction  and  operation  of  such
        Facilities, the Party responsible for the construction  or operation
        shall indemnify and  defend the other Parties against any  claims or
        liabilities which may result from such construction or operation and
        such Party shall be responsible for any damages or losses  sustained
        by the other Parties as a result of the construction or operation of
        such Facilities.

  15.2  Duty  to Take in Kind: Each Party  has the right and duty to take in
        kind or separately dispose of its share of the  oil and gas produced
        and saved from the Leases and Contract Area.

  15.3  Failure  to Take  in Kind:  If any  Party fails  to take in  kind or
        dispose of its share of production, the following will apply:

        15.3.1   Failure to Take Oil: If any Party fails to  take in kind or
                 dispose  of its  share of  oil, Operator  shall either  (a)
                 purchase the oil in accordance with 15.3.4 or (b) sell  the
                 oil to others in accordance with 15.3.3.

        15.3.2   Failure to Take Gas: If any Party fails to  take in kind or
                 dispose of its share of gas, then Exhibit "D" shall apply.

        15.3.3   Operator s  Disposition of  Oil  for Non-Taking  Party: All
                 contracts  obtained by  Operator  for the  sales of  a non-
                 taking Party s share of oil to a third party  shall be at a
                 price not less than the price Operator is receiving for its
                 own  share of production  for the contract period.   A non-
                 taking Party  receiving  such price  acknowledges  that  it
                 represents fair market value for the product sold.

        15.3.4   Operator s Purchase of Oil of Non-Taking Party: If Operator
                 purchases the  oil of  a Party failing  to take  in kind or
                 dispose of its share, Operator will pay the average of  the
                 following postings for  oil of  the same kind,  gravity and
                 quality;  Scurlock  Permian   Corporation  South  Louisiana
                 Eugene  Island (Onshore),  Texaco Trading  & Transportation
                 Inc. s  South  Louisiana Sour  (onshore),  and  EOTT Energy
                 Corp. South  Louisiana Sour  (Eugene Island Onshore),  less
                 transportation,  separation and storage fees incurred prior
                 to delivery to the posting point.  If for any reason any of
                 these three postings is unavailable, the Parties will agree
                 on three postings for averaging.

              If Operator  contracts to sell a  non-taking Party s  share of
              oil  and/or  condensate,  such sales  shall  be only  for such
              reasonable periods of time as are consistent with the needs of
              the industry, but in  no event shall any contract for the sale
              of  oil and/or condensate be  for a period  in excess of three
              (3) months.

              Operator  shall  deduct  transportation and  other  reasonable
              marketing costs associated  with a purchase or sale of  a non-
              taking Party s oil.

        15.3.5   No   Obligation  to  Market   Share:  Unless   required  by
                 governmental authority  or by  judicial  process, no  Party
                 shall be forced to share an available market with any other
                 Party.

  15.4  Expenses of  Delivery in  Kind:  Any cost  incurred by  Operator  in
        making delivery of any  Party s share of oil, or disposing of  same,
        shall be borne by such Party.

                                  ARTICLE 16
                            NON-CONSENT OPERATIONS

  16.1  Conduct of Non-Consent  Operations: If any Party makes or  is deemed
        to have made  an Election to become a Non-Participating Party  in an
        operation, the  proposed  operation shall  be conducted  as  a  Non-
        Consent Operation.  If the Participating Parties timely commence the
        Non-Consent Operation, then the  Non-Participating Parties shall  be
        subject to either the acreage forfeiture provisions of  Article 16.2
        (Acreage Forfeiture  Provisions) or 16.4  (Non-Consent Operations to
        Maintain a  Designated Prospect), or  the Cost recoupment provisions
        of  Article 16.5 (Percentage Recoupment for Non-Consent Operations),
        each  reflecting  the  increased  risks  and Costs  assumed  by  the
        Participating Parties.  Any operation that invokes the provisions of
        this Article 16 must be proposed and  conducted in good faith  using
        cost estimates  and Objective  Depths which  are reasonable for  the
        Designated Prospect considering  the geological and geophysical data
        available at the time  of the proposal.   If any proposed  operation
        requires approval  as  a  General  Matter,  such approval  shall  be
        obtained prior to the Participating Parties proceeding with the Non-
        Consent  Operation.   The  Operator (or  substitute  Operator) shall
        conduct  any Non-Consent Operation  at the sole risk  and expense of
        the Participating Parties  in the  Non-Consent Operation.   Any Non-
        Consent  Operations  shall not  unreasonably  jeopardize,  hinder or
        interfere with  operations conducted by all Parties (unless the Non-
        Consent Operation will  maintain all or a portion of  the Designated
        Prospect  under Article 16.4 (Non-Consent Operations  to Maintain  a
        Designated Prospect)).

        16.1.1   INDEMNITY   AND  WAIVER  FOR  NON-CONSENT  OPERATIONS:  THE
                 INDEMNITY AND WAIVER FOR NON-CONSENT OPERATIONS SHALL BE AS
                 PROVIDED  FOR IN  ARTICLES  22.6 (INDEMNIFICATION  FOR NON-
                 CONSENT OPERATIONS) AND  22.7 (DAMAGE TO RESERVOIR, LOSS OF
                 RESERVES AND PROFITS).

        16.1.2   Cost  Information:  The Costs of  any Non-Consent Operation
                 shall  be  borne   by  the  Participating  Parties  in  the
                 proportion that their  Participating Interests bear  to the
                 sum  of  all  Participating  Interests  in the  Non-Consent
                 Operation  (unless  otherwise  agreed by  the Participating
                 Parties).    The Costs  of  a  Non-Consent  Operation shall
                 include the Costs of maintaining the drilling  equipment on
                 site  during  the  notice period  for  an Election  or vote
                 pursuant  to Article  8  (Voting, Elections,  and  Notices)
                 including  any response  times and  no part  of such  Costs
                 shall  be  borne by  the  Non-Participating  Parties unless
                 otherwise provided.   Within one  hundred twenty (120) days
                 after completion of  a Non-Consent Operation, the  Operator
                 shall furnish  all the Parties an itemized statement of the
                 Cost of the  Non-Consent Operation and an  inventory of the
                 equipment pertaining thereto.   The Operator shall  furnish
                 to  the  Parties  a  monthly  statement  showing operating,
                 maintenance  and other  expenses  attributable to  the Non-
                 Consent  Operations,  and  the revenues  from  the sale  of
                 Hydrocarbon  production   for  the  preceding  month   from
                 operations  subject  to  recoupment under  this  Article 16
                 (Non-Consent  Operations).  The Non-Operating Parties shall
                 furnish  the Operator any revenue or  price information for
                 their take  in kind  production.    In accounting  for  the
                 revenues    from   Non-Consent    Operations,   Hydrocarbon
                 production  need  not be  separately  metered,  but  may be
                 determined upon the basis of monthly well tests.

        16.1.3   Non-Consent   Operations  in  Producible  Well:     Once  a
                 Producible   Well  has   been  completed   and   placed  on
                 production, Non-Consent  Operations shall not be  conducted
                 in  that  well unless  approved  by  all  the Participating
                 Parties  in such well,  unless such well is  not capable of
                 producing from its current completion(s).

        16.1.4   Non-Consent  Operations in  Producible Reservoirs:   Unless
                 otherwise agreed by all Parties, Non-Consent Operations for
                 a  Development  Well  shall     not  be  conducted  in  any
                 Producible  Reservoir previously penetrated by a Producible
                 Well drilled from  or producing through the same Production
                 System  serving  the  proposed  Non-Consent  Well  and  the
                 Producible Well unless such Producible Reservoir shall have
                 been designated as an Objective Depth or completion zone in
                 the well proposal.

        16.1.5   Multiple Completions:  Non-Consent Operations shall  not be
                 conducted in any existing well  having multiple completions
                 unless:

              (a)   each  of the  multiple completions are  owned by the same
                    Parties in the same proportion; or,

              (b)   none  of  the previous  well  completions are  capable of
                    producing; or,

              (c)   all  Participating Parties  in  the well  containing  the
                    multiple   completions   consent   to  such   Non-Consent
                    Operation(s).

              For the purposes of this Article 16, each completion shall  be
              considered as a separate well.

  16.2  Acreage Forfeiture Provisions: In view of the  significantly greater
        risks associated  with   Exploratory   Operations  for each  of  the
        remaining undrilled Designated Prospects(s), and the Fabrication AFE
        for the  Initial  Production System,  the Parties  agree  that  upon
        timely commencement  of such operations,  the Participating  Parties
        shall be entitled to an  assignment of the Non-Participating Party's
        right, title and interest (including operating rights) in all of the
        Leases comprising a Designated Prospect.  Within thirty (30) days of
        the timely  commencement  of such  Non-Consent Operation,  the  Non-
        Participating Party(s)  shall execute  and deliver  an assignment of
        its interest to the Participating Parties, with no  reimbursement by
        and  at no cost to the  Participating Parties.  If  an assignment is
        made  pursuant to this  Article 16.2, such assignment  shall be free
        and clear of the interests contemplated in Article  19.1 (Overriding
        Royalties and  Burdens on Production)   and Article 6.8  (Carved-Out
        Interests)  and  then each  Participating  Party  shall  accept  its
        Participating   Interest  share  of  the  Non-Participating  Party's
        assigned  interest, unless  otherwise agreed.   Except  as otherwise
        provided in  Article 16.4.3 (Limitations  on Acreage Forfeiture) and
        Article  12.10 (Major Modifications to Development  Plans), the Non-
        Participating Party's Election  not to participate in an Exploratory
        Operation, or the Fabrication AFE  for the Initial Production System
        or  a supplemental AFE pursuant to  Article 6.2.6. (Supplemental AFE
        for Cost  Overruns  on  Fabrication  AFE)  shall require  such  Non-
        Participating  Party to  relinquish  and permanently  assign  to the
        Participating   Party(s)   one  hundred   percent  (100%)   of  Non-
        Participating Party s right, title and interest in and to all of the
        Leases comprising the Designated Prospect, any wells drilled thereon
        and any Production System attributable thereto.

        16.2.1   Exploratory  Operations:    If  one  or more  Participating
                 Party(s) proceed with timely operations for the Exploratory
                 Well on  a Designated Prospect  as a Non-Consent Operation,
                 the  Non-Participating Party(s)  in either  the Exploratory
                 Well  or  any  supplemental  AFE  for  that  well,    shall
                 relinquish  and assign  to the  Participating  Party(s) one
                 hundred  percent  (100%)  of the  Non-Participating Party's
                 right, title  and interest  in  and to  all of  the  Leases
                 comprising the  Designated Prospect, and  any wells drilled
                 thereon.

        16.2.2   Initial Production  System:  If one  or more  Participating
                 Party(s)  proceed with  timely operations  for  the Initial
                 Production System as authorized in the Fabrication AFE as a
                 Non-Consent Operation, the Non-Participating Party(s) shall
                 relinquish  and assign  to  the Participating  Party(s) one
                 hundred  percent  (100%)  of the  Non-Participating Party's
                 right, title  and interest  in  and to  all of  the  Leases
                 comprising the Designated  Prospect, and any wells  drilled
                 thereon.     If pursuant  to  Article  6.2.6  the  Operator
                 submits  a  supplemental  Fabrication AFE,  a Participating
                 Party  must  submit  its  Election  within  the  applicable
                 response time  set out  in  Article  8.3.3 either  to:  (a)
                 approve the supplemental Fabrication AFE or (b) not consent
                 to the  supplemental Fabrication AFE (and be subject to the
                 acreage forfeiture provisions  of this Article 16.2 with no
                 reimbursement  by   and  at  no  cost   to  the   remaining
                 Participating Parties,  as if  that Party  had not approved
                 the  Fabrication AFE).   If any Party fails  to approve the
                 supplemental Fabrication AFE within the applicable response
                 time, such Party  shall be deemed to have not  consented to
                 the supplemental Fabrication AFE .  Any such approval shall
                 not  prejudice  a  Party s  right  to  withdraw  under  the
                 provisions of Article 17.   

        16.2.3   Costs  of Prior  Operations:   Any  Non-Participating Party
                 subject to a non-consent provision shall remain  liable for
                 its share of previously incurred Costs for operations where
                 it  was a  Participating Party  and there  shall be  no re-
                 allocation  of previously  incurred Costs  due to  the Non-
                 Participating Party's election or assignment. 

  16.3  Notices and Orders:  If the Operator is required  by notice or order
        (including  SOPs  and   SOOs)  from  any  government  agency  having
        jurisdiction  over the  Contract Area  to either  drill or  rework a
        well, or conduct other operations to maintain all or  a portion of a
        Designated Prospect, the Operator shall immediately furnish  each of
        the Parties with a copy of such order or notice.

  16.4  Non-Consent  Operations  to Maintain  a  Designated  Prospect:   The
        following provisions are applicable if: 

        (a)   an  operation is  required, pursuant to  a governmental agency
              order,  notice, regulation,  SOO or  SOP requirement  or Lease
              obligation,  to maintain  all or any  portion of  a Designated
              Prospect; or

        (b)   a proposal is made for an operation within the final  eighteen
              (18)  months  of the  primary  term of  a Lease  which  has no
              Producible Well and such Lease is not  held by a unit, SOO  or
              SOP,

        then such operation must be timely commenced and shall be  conducted
        pursuant to  this Article  16.4.  The  response time  for a proposal
        made hereunder shall be the earlier of: 

        (c)   the response  time provided  in Article  8 (Voting, Elections,
              and Notices); or,

        (d)   one hundred eighty   (180) days before the deadline  under the
              order,  notice, regulation,  SOO or  SOP requirement  or Lease
              obligation, whichever is earlier.  

        If the  proposal requires  approval  as a  General Matter  and  such
        approval is not obtained within the applicable response period, then
        any Party  who made  an Election to participate  in the  Non-Consent
        Operation may proceed with such operation after giving notice to the
        other  Parties.  The other Parties will have fifteen (15) days after
        receipt of the notice to make an Election. 

        16.4.1   Acreage Forfeiture  in the Entire  Designated Prospect:  If
                 it is  necessary to drill or rework a well or conduct other
                 operations to maintain the entire Designated Prospect, then
                 each Non-Participating  Party in the Non-Consent  Operation
                 shall    relinquish   and   permanently   assign   to   the
                 Participating Parties  one hundred  percent (100%)  of  the
                 Non-Participating  Party's Working  Interest in  the entire
                 Designated   Prospect   within   thirty  (30)   days  after
                 commencement of such well or other operation. 

        16.4.2   Acreage Forfeiture in a Portion of the Designated Prospect:
                 If  a well is  drilled or reworked or  other operations are
                 conducted in order to maintain  a portion of the Designated
                 Prospect, then  each Non-Participating  Party in  the  Non-
                 Consent Operation  shall relinquish and permanently  assign
                 to the Participating Parties one hundred percent  (100%) of
                 the  Non-Participating  Party's  Working  Interest  in  the
                 affected portion  of the Designated  Prospect within thirty
                 (30)  days  after   commencement  of  such  well  or  other
                 operation.    If a  Party  forfeits  its  Working  Interest
                 pursuant to this Article 16.4.2, then such Party shall have
                 no further rights under this Agreement as to the portion of
                 the Designated Prospect  forfeited.  All  remaining Parties
                 shall  amend this Agreement  to provide for   the change of
                 ownership on Exhibit  A  as to the forfeited portion of the
                 Designated   Prospect  and   this  Agreement   shall  apply
                 separately to such operational area.

        16.4.3   Limitations  on  Acreage  Forfeiture:   Notwithstanding the
                 foregoing,  if more than  one well is drilled  or more than
                 one operation is conducted, any of which would maintain the
                 entire  Designated Prospect or the affected  portion of the
                 Designated Prospect,  an assignment  shall not be  required
                 from any  Participating Party  in any  such  well or  other
                 operation.   In  addition, no  Party shall  be required  to
                 relinquish  or assign  all  or any  portion of  its Working
                 Interest in the Designated Prospect if the order, requiring
                 the  well or other operation, is  appealed and successfully
                 overturned.

  16.5  Percentage  Recoupment  for  Non-Consent  Operations:    Except   as
        provided  in Articles 16.2 (Acreage Forfeiture  Provisions) and 16.4
        (Non-Consent Operations to Maintain a Designated Prospect), upon the
        timely  commencement  of   any  Non-Consent  Operation,   each  Non-
        Participating Party's Working  Interest in the Non-Consent Operation
        along with the right to produce Hydrocarbon therefrom shall be owned
        by and  vested in  each Participating Party in  the proportion  that
        each  Participating  Party's Working  Interest  bears  to  the total
        Working  Interest  of   all  Participating  Parties  (unless   other
        proportions are agreed in writing  by the Participating Parties) for
        as long  as the Non-Consent Operation  originally proposed  is being
        conducted or Hydrocarbon production is obtained from the Non-Consent
        Operation  subject  to   Non-Consent  Articles   16.6.1  (Dry   Hole
        Reversion) and 16.6.2  (Deepening a Non-Consent Well).  Subject   to
        Article  16.6  such  Working  Interest,  and  rights  and  title  to
        Hydrocarbon  production shall revert to each Non-Participating Party
        when   all  Participating  Parties  have  recouped   from  the  Non-
        Participating    Party's   former  Working   Interest  and  proceeds
        from  production associated  with  that Working  Interest  an amount
        equal  to the  product of  such Participating  Party s share  of the
        Costs  of the  Non-Consent  Operation multiplied  by  the recoupment
        percentage for each operation  set out below.  The Non-Participating
        Party's Share of the  Non-Consent Operation shall be reduced (to the
        extent  of  the Non-Participating Party's prior Working Interest) by
        any  third-party  cash  contribution  credited  to  the  Non-Consent
        Operation. Upon  recoupment  by the  Participating  Parties  of  the
        recoupment  percentage,  the  Working  Interest  forfeited   by  the
        Non-Participating  Parties  in  the  Non-Consent  Operation,,  shall
        revert  to  the  former  Non-Participating  Party  and  the   former
        Non-Participating  Party  shall  become a Participating Party in the
        Non-Consent Operation.

        16.5.1   Non-Consent  Subsequent   Exploratory  Operations:      The
                 recoupment amount  for Non-Consent  Subsequent  Exploratory
                 Operations shall be  the Non-Participating Party's share of
                 the   Costs  of   the  Subsequent   Exploratory  Operations
                 conducted   including,  but  not  limited  to,  evaluating,
                 Deepening,      Sidetracking,   completing,   recompleting,
                 equipping, and plugging back of  the Subsequent Exploratory
                 Operation multiplied by  one thousand percent (1000%).

        16.5.2   Non-Consent Appraisal Operations:   The recoupment for Non-
                 Consent Appraisal Operations shall be the Non-Participating
                 Party's  Share  of   the  Costs  of  drilling,  evaluating,
                 Deepening,   Deeper  Drilling,   Sidetracking,  completing,
                 recompleting,  equipping,  and plugging  back  and  of  the
                 Appraisal  Operation  multiplied  by four  hundred  percent
                 (400%). 

        16.5.3   Non-Consent Geophysical Operations, Integrated Project Team
                 and/or Final Design AFE:  A Party making an Election not to
                 participate in a Geophysical Operations, Integrated Project
                 Team and/or Final Design AFE will be an underinvested Party
                 in an  amount equal  to two hundred percent  (200%) of  the
                 amount such Party  would have  paid had it  participated in
                 such  AFE  pursuant  to  Article  16.9  (Underinvestment of
                 Costs).   As an underinvested  Party, the Non-Participating
                 Party  will  be responsible  for  all  Costs  of subsequent
                 operations and/or AFE under this Agreement (in  addition to
                 Costs  associated with  such Party's  Working Interest)  in
                 which  the  Non-Participating Party  makes  an Election  to
                 participate, which would otherwise be the responsibility of
                 the  Parties  making  an Election  to  participate in  such
                 Geophysical  Operations,  Integrated  Project  Team  and/or
                 Final Design AFE, until the underinvestment is eliminated.

        16.5.4   Non-Consent  Development  Operations:   The  recoupment for
                 Non-Consent  Development  Operations  (including workovers)
                 shall  be the Non-Participating Party's Share  of the Costs
                 of  drilling,  evaluating,   Deepening,  Deeper   Drilling,
                 Sidetracking,  completing,   recompleting,  equipping,  and
                 plugging back the Development Operation multiplied by three
                 hundred percent (300%).

        16.5.5   Non-Consent Subsequent  Production System  and  Facilities:
                 The  recoupment for  any non-consent  Subsequent Production
                 System or Facilities shall be the Non-Participating Party's
                 Share of the  Cost of designing, fabricating and installing
                 the Subsequent  Production System or Facilities,  including
                 the Cost  of an injection or  disposal well,  multiplied by
                 two hundred percent (200%).

        16.5.6   Additional  Production Recoupment:    In  addition  to  the
                 percentage  recoupment set  forth  above for  various  Non-
                 Consent  Operations,  the  Participating Parties  shall  be
                 entitled to recoup:

              (a)   two  hundred  percent  (200%)  of  the  Non-Participating
                    Party's  Share  of the  Cost  of Facilities  necessary to
                    carry out the Non-Consent Operation; plus,

              (b)   one  hundred  percent  (100%)  of  the  Non-Participating
                    Party's Share of the  Cost of using any Production System
                    already installed  for the Designated Prospect  for which
                    the   Non-Participating   Party   has   a   Participating
                    Interest; plus,

              (c)   one  hundred  percent  (100%)  of  the  Non-Participating
                    Party's  Share  of   the  Cost  of  operating   expenses,
                    maintenance  Costs, royalties,  and severance, gathering,
                    production  taxes and  other governmental  fees based  on
                    production.

        16.5.7   Recoupment  From Hydrocarbon Production:   Recoupment for a
                 Non-Consent  Operation which  results in  a discovery  of a
                 Producible Reservoir or extension of an existing Producible
                 Reservoir shall be made from the following portions  of the
                 Non-Participating Party's Share of Hydrocarbon production:

              (a)   Subsequent  Exploratory  Operations, Appraisal  Wells, or
                    Development  Wells:  Recoupment  shall be  taken from one
                    hundred percent (100%) of  the Non-Participating  Party's
                    Share of all Hydrocarbon production from  the Non-Consent
                    Operation  (if  the well  is  completed  for  Hydrocarbon
                    production), and  from fifty  percent (50%)  of the  Non-
                    Participating  Party's  Share  of Hydrocarbon  production
                    from all wells subsequently drilled and  completed in the
                    Producible  Reservoir  discovered  by  said   Non-Consent
                    Operations  or   the  extended  portion  of  an  existing
                    Producible  Reservoir  discovered  by  said   Non-Consent
                    Operation and in which the Non-Participating  Party has a
                    Participating Interest.

              (b)   Non-Consent    Subsequent    Production    Systems    and
                    Facilities:  Recoupment  shall be taken from  one hundred
                    percent (100%)  of the Non-Participating Party's share of
                    Hydrocarbon production  from all wells  which are drilled
                    from and/or  produced through  the Subsequent  Production
                    System  or   Facilities  and/or   wells  benefited   from
                    injection or disposal wells.

              The interest shall revert to each Non-Participating Party only
              after the Participating Parties have completely recouped, from
              Hydrocarbon production, the amounts specified herein.

  16.6  Reversion of  Interests to Non-Participating Party:  Subject to  the
        provisions   of   Article   16.5.7  (Recoupment   from   Hydrocarbon
        Production), a  Non-Participating Party's Working  Interest which is
        subject  to  recoupment  from future  Hydrocarbon  production  shall
        revert to the  Non-Participating Party  upon the  occurrence of  the
        first of the following events:

        -  the Non-Consent Operation results in a dry hole; or,

        -  hydrocarbon production ceases prior to complete recoupment by the
           Participating Parties; or,

        -  the Participating  Parties propose to Deepen  below the  original
           Objective Depth if the original operation resulted in a dry hole;
           or,

        -  upon complete recoupment.

        16.6.1   Dry Hole Reversion:  If a Non-Consent Operation, other than
                 a   Non-Consent  Operation  under  Articles  16.2  (Acreage
                 Forfeiture Provisions)  and 16.4 (Operations to  Maintain a
                 Designated Prospect),  results in a dry  hole and  fails to
                 obtain Hydrocarbon production or, if Hydrocarbon production
                 ceases prior to  complete recoupment  by the  Participating
                 Parties,  then   the  Non-Participating   Party's   Working
                 Interest which  has been relinquished shall  revert to  the
                 Non-Participating Party.   However, all Non-Consent  Wells,
                 Production  Systems, any  Facilities and rights  to produce
                 from  a  Producible Reservoir  under  Article 16.5.7  shall
                 remain vested  in the Participating Parties.   Any  salvage
                 value in excess of complete recoupment shall be credited to
                 all Parties according to their Working Interest and without
                 regard to their participation status.

        16.6.2   Deepening a Non-Consent Well:  If a Non-Participating Party
                 makes  an   Election  to  participate   in  the   Deepening
                 operation, then the Participating  Parties shall be  deemed
                 overinvested to the extent of the Non-Participating Party's
                 Share of Costs  in the original Non-Consent Operation (less
                 any  amount recouped  by the  Participating Parties  out of
                 production   or   through   a   Disproportionate   Spending
                 Settlement).   If  the Participating Parties  have recouped
                 the Cost of the well at the time they  desire to Deepen the
                 well  then  the Non-Participating  Party  will  not  be  an
                 underinvested Party in the Deepening of the well.  However,
                 in  such case,  the Participating  Parties in  the original
                 well shall still  be permitted complete recoupment from the
                 other wells  in  the  Producible Reservoir,  discovered  or
                 extended  by  the  original  well  as  provided in  Article
                 16.5.7(a)  (Subsequent  Exploratory  Operations,  Appraisal
                 Wells  or Development Wells),  until the  total non-consent
                 amount   to  be  recouped  has  been   recovered  from  the
                 Producible Reservoir.

  16.7  Operations  From a  Subsequent Non-Consent  Production System:   Any
        Party  who made  an  Election  not to  participate in  a  Subsequent
        Production System may make an  Election to participate in operations
        from such  Subsequent  Production System.   If  a  Non-Participating
        Party makes an Election to participate in such operations, then  the
        Non-Participating Party may reduce  the percentage recoupment amount
        through  a   Disproportionate  Spending  Settlement  in   subsequent
        Development  Operations  conducted  from the  Subsequent  Production
        System.   Any Disproportionate Spending  Settlement amounts shall be
        subtracted from the recoupment entitled to the Participating Parties
        in the Subsequent Production System pursuant to Article 16.5.5 (Non-
        Consent Subsequent Production System and Facilities).

  16.8  Allocation of Production System Costs to Non-Consent Operations:  In
        the event  a Non-Consent  Well is  proposed to  be drilled  from  or
        produced through a  Production System owned by all the  Parties, the
        rights of Participating Parties to use the Production System for the
        proposed Non-Consent Well and the Costs therefore shall be based  on
        the following:

        16.8.1   Investment  Charges:   If a  Non-Consent Well  will utilize
                 either a Production System and/or Subsea  Production System
                 owned by all  the Parties, the Non-Participating Parties in
                 such well shall be deemed to be the overinvested Parties in
                 such Production  Systems to  the extent  the  Participating
                 Parties in such well would have paid a charge for the right
                 to  use  the  Production  System  and/or  Subsea Production
                 System and its Facilities as follows:

              (a)   The Participating Parties in  such well shall pay a  one-
                    time slot usage fee  covering its  use of the  Production
                    System in  an amount  equal to  two percent  (2%) of  the
                    Cost  of  the  Production System,  the  Subsea Production
                    System   and  its  Facilities   to  the   owners  of  the
                    Production  System (to  be shared  in  proportion to  the
                    owner's Working  Interest in the Production System).  For
                    purposes of the  slot usage fee,  the total  Cost of  the
                    Production System shall  be reduced by .41667%  per month
                    commencing  upon the  first monthly  anniversary  date of
                    when  the  Production  System  was  installed  and  every
                    monthly anniversary thereafter  until the  total Cost  of
                    the  Production System is  reduced to twenty-five percent
                    (25%) of the  original Cost.   The Cost  of additions  to
                    the  Production  System  shall be  reduced  in  the  same
                    manner commencing  upon  the  first  monthly  anniversary
                    after  the addition  is installed.    If the  Non-Consent
                    Well is  abandoned, the right of Participating Parties to
                    use that Production  System slot  shall terminate  unless
                    such Parties  commence  drilling a  substitute well  from
                    the same slot within ninety (90)  days after abandonment.
                    The slot  usage fee shall  not apply to  a slot which  is
                    deemed to be "surplus."  A slot may be deemed surplus  by
                    the unanimous consent  of all Parties owning  an interest
                    in the Production System.

              (b)   If Hydrocarbon  production from  the Non-Consent  Well is
                    handled  through  Facilities owned  by  all Parties,  the
                    Participating  Parties shall  pay to  the  owners of  the
                    Facilities a sum  equal to that portion of the total Cost
                    of  such Facilities  which one  well bears  to  the total
                    number  of  wells which  the  Facilities are  designed to
                    accommodate.

        16.8.2   Operating  and  Maintenance  Charges:    The  Participating
                 Parties in a non-consent well shall pay all Costs necessary
                 to connect  their well to the Facilities and the Production
                 System.    The  expense of  operating  and maintaining  the
                 Facilities  and the  Production System  shall be  allocated
                 equally per active completion among all  active completions
                 served.  Subsea Production System operating and maintenance
                 expenses  shall  be  allocated  equally  per  active subsea
                 completion among all  active subsea well completions served
                 by such Subsea Production System.

        16.8.3   Payments:   The payment of sums  pursuant to Article 16.8.1
                 (Investment  Charges)  shall  not  be  a  purchase   of  an
                 additional interest in the Production System or Facilities.
                 Such  payments shall be included in  the total amount which
                 the  Participating Parties  are entitled  to recoup  out of
                 Hydrocarbon production from the  Non-Consent Well, but only
                 to the extent of actual  Costs.  Such charges shall be paid
                 by the Participating Parties in such well by allocating (in
                 addition to any  other Costs  allocated to them  under this
                 Agreement) all  Costs attributable to tangible,  intangible
                 and other cost categories that would otherwise be allocated
                 to the  Non-Participating Parties until all  overinvestment
                 is eliminated.

  16.9  Underinvestment of Costs:   A  Non-Participating Party shall  not be
        liable for settling any underinvestment of its share of the Costs of
        a Non-Consent Operation unless, having the right to do so under this
        Agreement,  the Non-Participating Party makes a  revised Election to
        become  a Participating  Party.  Unless  otherwise provided  in this
        Agreement, a Non-Participating Party has the right to make a revised
        Election to  become  a Participating  Party    under  the  following
        Articles:

        (a) Article 9.1.1 (Conduct of Propriety Geophysical Operations);

        (b) Article 11.3 (Election by Non-Participating Parties in Deepening
            or Sidetracking Appraisal Operations);

        (c) Article 11.4 (Deeper Drilling in Appraisal Operations);

        (d) Article 12.3 (Integrated Project Team Election);

        (e) Article 12.7 (Final Design AFE);

        (f) Article 12.10 (Major Modification to Development Plans);

        (g) Article 13.3 (Election by Non-Participating Parties in Deepening
            or in Development Sidetracking Operations); and

        (h) Article 13.4 (Deeper Drilling in Development Operations).

        16.9.1   Settlement  of  Underinvestments:   Upon  making  a revised
                 Election,   a  Non-Participating  Party  shall  settle  any
                 underinvestment for its share of the Costs in a Non-Consent
                 Operation by either; (a) making a Disproportionate Spending
                 Settlement by bearing all Costs of  all  future  operations
                 until the underinvestment is eliminated, (i.e. one  hundred
                 percent (100%) of the Non-Participating  Party's  share  of 
                 the  Costs  of the  original operation)  or, (b) making  an
                 immediate  cash  settlement  to the original  Participating
                 Parties in the full  amount  of  the  underinvestment.  The
                 original Participating Parties in the Non-Consent Operation
                 shall   select  the   manner  of   eliminating  the  under-
                 investment at their sole discretion as a General Matter. 

        16.9.2   Cash Settlement  of Underinvestment:      If there  are  no
                 further proposed  or planned operations  on the  Designated
                 Prospect for  which  Costs would  be allocated  toward  the
                 elimination  of an underinvestment, the underinvested Party
                 shall    pay   any   overinvested   Party   the   remaining
                 underinvested  amount  in  cash.    If  operations  on  the
                 Designated Prospect, for which Costs  are being paid by the
                 underinvested Party  and allocated to the  underinvestment,
                 do not eliminate the underinvestment within two  (2) years,
                 or any  other shorter  period specified  in this Agreement,
                 from the  date the underinvestment accrued,  or upon  final
                 settlement of  this Agreement,  whichever comes  first, the
                 underinvested Party  shall pay  the overinvested  Party the
                 remaining underinvestment  in cash.  Percentage  recoupment
                 for Non-Consent  Operations under Article 16.5  (Percentage
                 Recoupment  for   Non-Consent  Operations)  shall  not   be
                 considered an over/under investment.

                                  ARTICLE 17
                                   WITHDRAWAL

  17.1  Withdrawal.   If a Party wishes  to withdraw from  this Agreement in
        any one  or more  or all  Designated Prospects, it  shall tender  an
        offer to  withdraw to the non-withdrawing  Parties ( Tender ).   The
        Tender shall include an offer to assign to the  other Parties who do
        not desire to withdraw, the following with respect to the Designated
        Prospect(s) to which the withdrawal applies:

        (a)   marketable  title  to   the  Withdrawing  Party's    undivided
              interest  in  the  Production  System    fabricated  for  that
              Designated  Prospect(s)   free  of  burdens  or  encumbrances,
              including  financing  arrangements, at  fair  market value  as
              determined  by   an  independent  appraisal,  as   hereinafter
              described; and, 

        (b)   all  of its  interest in  the Leases,  wells, Facilities,  and
              platforms (except  for the Production  System) in the affected
              Designated  Prospect(s)  without  warranty  but  free  of  any
              overriding  royalty  (except  for overriding  royalty  burdens
              listed in  Exhibit  A ),   or  other burdens or  encumbrances,
              including financing arrangements,  at salvage value,  less the
              cost of plugging and abandonment.  

        If the  Tender is  accepted,  the assignees,  in proportion  to  the
        respective  interests so  acquired, shall pay  the assignor  for its
        interest, the  fair market  value of the undivided  interest in  the
        Production System described in (a) above as determined by the mutual
        agreement of the Parties hereto, provided, that if the Parties  fail
        to agree,  then the  fair  market value  shall be  determined by  an
        independent  appraisal.     Independent  appraisal   shall  mean  an
        appraisal   mutually   agreed  to   by  two   nationally  recognized
        independent  appraisers, one of which appraisers  shall be chosen by
        withdrawing  Party  and one  by  majority  vote  of  Non-withdrawing
        Parties , or, if  such appraisers cannot agree on such appraisal, an
        appraisal arrived at by a third independent appraiser chosen by  the
        mutual  consent of  such  two appraisers,  provided that,  if either
        withdrawing Party or Non-withdrawing Parties   shall fail to appoint
        an  appraiser within (15) days after  a written request to  do so by
        the other, or if such two appraisers cannot  agree on such appraisal
        and fail to  appoint a  third appraiser within (20)  days after  the
        date of the  appointment of the second  of such appraisers, then any
        Party may apply to the American Arbitration Association to make such
        appointment.  In the event such third independent appraiser shall be
        chosen  to  provide   such  appraisal,  unless  the  Parties  agreed
        otherwise, such appraisal  shall be required to be made  within (20)
        days  of such appointment.   An  independent appraisal   of the fair
        market  value of the Production System shall mean an appraisal which
        assumes that the sale  would be an arm s-length transaction  between
        an informed and  willing buyer, under  no compulsion to buy,  and an
        informed and willing seller, under no compulsion to  sell.  The fees
        and expenses  of appraisers for an  independent appraisal,  whenever
        undertaken pursuant to this Agreement, shall be borne equally by all
        the Parties and each Party shall separately bear any fees, costs and
        expenses of  its respective  attorneys and  experts (other than  the
        appraisers  referred  to  above) incurred  in  connection with  such
        independent appraisal.  

        If the  Tender is  accepted,  the assignees,  in proportion  to  the
        respective  interests so  acquired, shall pay  the assignor  for its
        interest, the  salvage value  of the items identified  in (b)  above
        less its share of the estimated cost of salvaging same, plugging and
        abandoning  of wells,  and removal of  all platforms  and Facilities
        (except for  the Production System),  as determined by the  Parties.
        If such withdrawing  Party s interest in such salvage value  is less
        than  such Party s  share of  the estimated  costs, the  withdrawing
        Party  shall pay  the  Operator,   for  the benefit  of the  Parties
        succeeding to its  interest, a sum equal  to the deficiency.  Within
        sixty (60) days after the effective date of the assignment, Operator
        shall  render a  final statement  to the  withdrawing Party  for its
        share of  all expenses, including  any deficiency in salvage  value,
        incurred as  of the first day  of the  month following  the date  of
        receipt  of the notice.   Provided all such  expenses (including any
        deficiency hereunder)  due from the withdrawing Party have been paid
        within thirty (30) days after rendering of such final statement, the
        withdrawing  Party shall  thereafter  be relieved  from  all further
        obligations  and   liabilities  with   respect  to   the  Designated
        Prospect(s).  

        The Tender offer shall  remain open for  thirty (30) days after  the
        receipt by the non-withdrawing Parties of the independent appraisal.
        If  the Tender  is not  accepted in  writing by  the non-withdrawing
        Parties within  such time  period, it shall  be deemed  to have been
        rejected.    If  the  Tender is  accepted,  the  assignment  of  the
        withdrawing  Party s interest shall not relieve  such Party from any
        obligation or liability incurred prior to the first day of the month
        following receipt  of the  assignment by  assignees.   The  assigned
        interest  shall be  owned by  the assignees  in the  proportion that
        their  respective  Participating  Interests  bear  to  the remaining
        Participating Interest.  

        If  the Tender is  not accepted, the withdrawing  Party shall retain
        its  interests in the  property described  in (a) and (b)  above and
        shall be free to  sell such interests in accordance with Article 24,
        except that Article 24.2 titled Preferential Right To Purchase shall
        not apply to  a sale,  which consideration is for a   price equal to
        or greater than the   fair market value  as set out in this  Article
        17.1  of  the  Tender, and  such  sale is    contracted  for by  the
        withdrawing Party within 180 days  after date of the non-withdrawing
        Party s election  not to purchase  the withdrawing Party s interest.
        If the withdrawing Party  has not sold its interest within such time
        period, it may sell subject to the Preferential Right to Purchase or
        submit  a new  Tender to the  non-withdrawing Parties  in accordance
        with this Article.

  17.2  Limitations on Withdrawal: 

        17.2.1   During an  Emergency:   No Party shall be  relieved of  its
                 obligations hereunder  during a blowout, a  fire, or  other
                 emergency,  but   may  withdraw  from  this   Agreement  in
                 accordance  with Article 18.1 (Abandonment  of Wells) after
                 termination  of such emergency,  provided such  Party shall
                 remain liable for  its share  of all costs  associated with
                 the emergency.

        17.2.2   Current Operations and Voting:  Any Party withdrawing prior
                 to completion of  any operations (pursuant to an AFE)  in a
                 Designated  Prospect in  which  it had  previously  made an
                 Election  to participate shall remain fully  liable for its
                 share  of  the AFE.    After  giving  its  notification  of
                 withdrawal, the Withdrawing Party shall not be  entitled to
                 make an  Election to  participate or  vote  on any  General
                 Matter in  the  Designated  Prospect involved,  other  than
                 General Matters  for which the  Withdrawing Party retains a
                 financial responsibility.

        17.2.3   Prior Expenses:   The Withdrawing  Party(ies) shall  remain
                 responsible  for its  Participating  Interest share  of any
                 Costs of operations,  rentals, royalties, taxes, damages or
                 other liability or  expense accruing or commencing prior to
                 the  effective  date  of  the  withdrawal.    Prior  to the
                 effective date of the withdrawal, the Operator shall render
                 an estimate  to the Withdrawing Party(ies) for its share of
                 all  identifiable  expenses  incurred  or  expected  to  be
                 incurred  prior to the effective date  of withdrawal, along
                 with a statement of any deficiency in salvage value.  Prior
                 to  any  withdrawal,  a  Withdrawing  Party,  at  its  sole
                 expense, shall satisfy or provide security satisfactory  to
                 the   remaining   Party(ies)   for  all   obligations   and
                 liabilities it has incurred or are attributable to it prior
                 to the effective date of the withdrawal.   Furthermore, any
                 liens, charges and other encumbrances which the Withdrawing
                 Party(ies) placed (or  caused to be placed)  on its Working
                 Interest prior  to its withdrawal  shall be fully satisfied
                 or released  prior to its  withdrawal (unless the Remaining
                 Parties are willing to accept the Working  Interest subject
                 to such liens).  Provided  all such expenses (including any
                 deficiency in abandonment Costs) have been paid, the notice
                 of withdrawal  and the assignments  shall be effective upon
                 the specified effective date.

        17.2.4   Confidentiality:  A Withdrawing Party shall continue  to be
                 bound  by  the  confidentiality  provisions  of  Article  7
                 (Confidentiality of Data) after the withdrawal, but,  as of
                 the effective date of the withdrawal, shall have no further
                 access  to  technical  information relating  to  operations
                 hereunder.    The   Remaining  Party(ies)  shall   have  no
                 obligation  of confidentiality hereunder to the Withdrawing
                 Party.

                                  ARTICLE 18
                            ABANDONMENT AND SALVAGE

  18.1  Abandonment  of  Wells:   Any  Participating  Party may  propose the
        abandonment of a well which has been drilled hereunder by  notifying
        the other Participating Parties.  No well shall be abandoned without
        the unanimous  consent of  the Participating  Parties therein.   Any
        Party  may propose  the abandonment  of such  well by  notifying the
        Participating  Parties in  writing.   The Participating  Parties not
        consenting to  such abandonment  shall pay  the Parties desiring  to
        abandon  their  proportionate  share  of  the  value  of  the well s
        salvageable material and equipment as determined pursuant to Exhibit
         C   (Accounting Procedure),  less the  current estimated  costs (as
        determined by  the Parties)  of salvaging same and  of plugging  and
        abandoning the well.  

        Each  Party desiring  to abandon  a well  shall assign  to  the non-
        abandoning Parties, in  proportion to their  Participating Interest,
        its  interest  in  such  well and  the  equipment  therein  and  its
        ownership in the  production from such well.  Such  assignment shall
        be without warranty and free of any overriding royalties (except for
        overriding royalty  burdens listed  on Exhibit "A" hereof)   or  any
        other  burdens or  encumbrances.   Any Party  so assigning  shall be
        relieved from  any  further liability  with  respect  to  the  well;
        provided, however, such Party shall remain fully responsible for all
        of  its obligations  incurred prior  to the  time of  the assignment
        provided for herein.  

  18.2  Facilities and  Platform  Salvage  and  Removal  Costs:   Except  as
        otherwise  provided  for herein  regarding  the  disposition  of the
        Production  System,  when  the Parties  owning  other Facilities  or
        another platform, agree that  no further  use will be  made of  such
        Facilities  or platform, they  shall be disposed of  by the Operator
        for the Participating Parties  at the highest bid or removed at  the
        risk and expense  of such Parties.   If a Party purchases Facilities
        or a platform, it will be deemed the owner and assume all risks upon
        acquiring ownership rights in such Facilities or platform.  

  18.3  Approval Not Required:  The Operator may, without prior approval  of
        the  Parties, dispose of  any items of surplus  or obsolete material
        and equipment  if the  current price of new  materials or  equipment
        similar  thereto   is  less   than  One   Hundred  Thousand  Dollars
        ($100,000.00).

  18.4  Abandonment Operations Required by Governmental Authority:  Any well
        abandonment  or  platform/Production System  removal  required by  a
        governmental authority  shall be accomplished by  Operator with  the
        Costs, risks and net proceeds, if any,  to be shared by the  Parties
        owning  such well,  platform or Production  System in  proportion to
        their Participating Interest.

                                  ARTICLE 19
                    RENTALS, ROYALTIES AND MINIMUM ROYALTIES

  19.1  Overriding  Royalties and Burdens  on Production:  If  any Party has
        previously  created  or hereafter  creates  any  overriding royalty,
        production payment,  carried or  reversionary working  interest, net
        profits  interest or other type of  burden on Hydrocarbon production
        in addition  to  the lessor's  royalty stipulated  in  the  Lease(s)
        except for  overriding royalty  interests set  forth in Exhibit   A 
        attached hereto  (an "Overriding  Royalty"), the  Party creating the
        Overriding  Royalty shall  assume and  bear all  obligations of  the
        Overriding Royalty regardless of  that Party's participation  status
        notwithstanding that an  assignment or  relinquishment of  all or  a
        portion  of that Party's  Working Interest is made  to another Party
        under this  Agreement.   The Party  creating the Overriding  Royalty
        shall indemnify and hold all other Parties harmless from any and all
        claims  and  demands  for  payment  asserted by  the  owners  of the
        Overriding Royalty.   Any  such agreements  creating these interests
        shall contain provisions to effect this.

        19.1.1   Subsequent Creation of Overriding Royalty:  Notwithstanding
                 anything  herein  to the  contrary,  if  subsequent  to the
                 execution  of this  Agreement, any  Party should  create an
                 Overriding Royalty,  such subsequently  created  Overriding
                 Royalty shall be made specifically subject to all the terms
                 and provisions  of this Agreement  and shall be subordinate
                 to the rights of the other Parties to this Agreement.

        19.1.2   Subordination of Overriding Royalties:  If the Party owning
                 the Working  Interest from which  the Overriding Royalty is
                 created: (a) fails to  pay when due its share of Costs,  or
                 (b)  withdraws  from this  Agreement,  then the  Overriding
                 Royalty shall  be chargeable with  its pro rata portion  of
                 all  Costs  (equal  to  its  fractional  interest in  gross
                 production) and the security rights created in  Article 6.3
                 (Security  Provisions)  shall  be applicable  against  such
                 Overriding Royalty.   The Operator shall have  the right to
                 enforce the  security rights (and  all other rights granted
                 under this Agreement) against the owners of  the Overriding
                 Royalty for  the purpose of  collecting Costs chargeable to
                 the Overriding Royalty.

  19.2  Payment of  Rentals and  Royalties:   The  Operator shall  make  all
        rental  payments  on  behalf  of  the  Parties  for  the  Designated
        Prospects which it operates.  The Operator shall use reasonable care
        to make proper and timely payment of all rentals, minimum  royalties
        or other  similar payments  accruing under the terms  of the  Leases
        which are included within the applicable Designated Prospect.   Upon
        receipt of proper  evidence of all such payments and  the Operator's
        invoice for its proportionate share of all such payments, each  Non-
        Operating Party  shall reimburse the  Operator for the Non-Operating
        Party's Working Interest share of all such  payments.  In the  event
        Operator fails  to make  proper  payment of  any rental  or  minimum
        royalty or similar payments accruing under the terms of the Lease(s)
        through  mistake  or  oversight where  such  payment is  required to
        continue a Lease in force, then Operator shall not  be liable to the
        other  Parties for any  resulting damages or any  loss which results
        from such nonpayment.

        19.2.1   Non-Participation in Payments:  If any Party elects  not to
                 pay its  share of  any rental,  minimum royalty or  similar
                 payment,  such  Non-Participating  Party shall  notify  the
                 other Parties of its intention not to pay its share of such
                 payment at least sixty (60) days prior to the date on which
                 such payment is  due.   Upon this occurrence,  the Operator
                 shall make such  payment solely for the benefit of  all the
                 Participating Parties.   The Non-Participating Party  shall
                 assign to  the  Participating Parties  all of  its  Working
                 Interest in  the Designated  Prospect or  portion  thereof,
                 maintained by such payment.

        19.2.2   Royalty Payments:  Each Party shall pay or cause to be paid
                 all royalty  and other  amounts payable  out of Hydrocarbon
                 production   actually  taken  from  the  Lease(s)  for  its
                 account.  When  necessary for calculating the recoupment of
                 a  Non-Consent  Well, any  Non-Operating  Party taking  its
                 production  shall advise  the  Operator (in  writing  on or
                 before  the tenth day  of the month following  the month in
                 which the  Hydrocarbon production is  sold or used off  the
                 premises) of the  volumes of  Hydrocarbons it took  and the
                 prices received for such Hydrocarbon production.

        19.2.3   Federal Environmental  Tax:  Each Party  agrees to  pay and
                 bear its proportionate share of  the  Federal Environmental
                 Tax payable on  its share of Hydrocarbon  production or any
                 other  fees being required by the Oil Pollution Act of 1990
                 and any other statutes.  However, should the oil owned by a
                 Party be reported  to the  MMS (or  a successor  regulatory
                 agency)  by  another  Party  in  its  reporting  form,  the
                 reporting Party  shall pay the required fees on all volumes
                 reported and  the non-reporting  Party shall reimburse  the
                 reporting Party for all fees paid on its behalf.

                                  ARTICLE 20
                                    TAXES

  20.1  Internal Revenue Provision:   Each Party elects to be  excluded from
        the  application of all or  any part of the provisions of Subchapter
        K, Chapter 1, Subtitle A, Internal Revenue Code of 1986, as amended,
        or similar provisions of applicable state laws.

  20.2  Other Taxes  and Assessments:   The Operator for  the Joint  Account
        shall file all tax returns and reports required by law and shall pay
        all applicable taxes,  other than income or other taxes  provided in
        Article  20.2.2  (Production and  Severance  Taxes)  or  assessments
        levied with  respect to  operations conducted  under this Agreement.
        The Parties shall  promptly furnish the Operator with copies  of any
        notices, assessments or  tax statements received pertaining to taxes
        to  be paid by the Operator.   The Operator shall  charge each Party
        its  Working Interest share  of all taxes and  assessments paid and,
        upon written request from a Non-Operating Party(ies), provide copies
        of  all tax returns,  reports, tax statements and  receipts for such
        taxes.  The Operator shall not allow any taxes to become delinquent,
        unless such nonpayment is approved as a General Matter.

        20.2.1   Property Taxes:  The  Operator shall render for ad  valorem
                 property  tax purposes  all  personal property  and/or real
                 property  covered by  this Agreement as  may be  subject to
                 such  taxation and  shall pay such  property taxes  for the
                 benefit  of  each  Party.   The  Operator shall  timely and
                 diligently protest  to a final determination  any valuation
                 it deems  unreasonable.   Pending such  determination,  the
                 Operator may  elect  to  pay  under  protest.   Upon  final
                 determination,  the Operator  shall pay  the taxes  and any
                 interest, penalty  or  cost accrued  as a  result  of  such
                 protest.   The Operator shall charge each Party its Working
                 Interest  share  of such  tax payments  including interest,
                 penalties  and  all reasonable  Costs  in  accordance  with
                 Exhibit "C" (Accounting Procedure).

        20.2.2   Production  and Severance Taxes:  Each  Party shall pay, or
                 cause  to be  paid, all  production, excise,  severance and
                 other similar taxes due on any Hydrocarbon production which
                 it received pursuant  to the terms of this Agreement.   Any
                 Party responsible  for such tax  payment shall upon written
                 request from the Operator, provide evidence that such taxes
                 have been paid.

                                  ARTICLE 21
                              INSURANCE AND BONDS

  21.1  Insurance:    The Operator  shall  maintain  the  insurance coverage
        provided  in Exhibit  "B" (Offshore  Insurance  Provisions) attached
        hereto and charge each Party its Working Interest share of  the Cost
        of such coverage.

  21.2  Bonds:   Operator  shall  obtain  and maintain  any and  all  bonds,
        certificates of financial  responsibility and permits required to be
        carried  by any applicable  law, regulation or rule.   Operator will
        require all contractors to obtain and maintain all bonds required to
        be carried by any applicable law, regulation or rule.

                                  ARTICLE 22
                        LIABILITY, CLAIMS AND LAWSUITS 

  22.1  Individual Obligations:  The obligations, duties and  liabilities of
        the  Parties shall  be  several  and not  joint or  collective;  and
        nothing contained  herein shall  ever  be  construed as  creating  a
        partnership,  joint  venture,  association  or  other  character  of
        business entity  recognizable in  law for any purpose.   Each  Party
        shall  hold  all   the  other   Parties  harmless  from   liens  and
        encumbrances on  the Leases  or in  the Contract  Area arising  as a
        result of its acts or omissions.

  22.2  Notice of Claim or Lawsuit:  If a claim is made against any Party or
        if  any  Party  is  sued  on  account  of  any  matter arising  from
        operations hereunder, or on any matter affecting the Leases or  Con-
        tract Area, or if any hearings are held pursuant to operations under
        this Agreement, such Party shall give written notice of the  lawsuit
        or hearing to the other Parties as soon as reasonably practicable.

  22.3  Settlements:   The Operator  may settle any single  damage claim  or
        lawsuit involving  operations hereunder if  the expenditure does not
        exceed  Two  Hundred  and  Fifty  Thousand  Dollars  ($250,000)  per
        occurrence  and if  the payment  is in  complete settlement  of such
        claim or suit.   If the amount required for settlement exceeds  such
        amount,  the Parties  shall determine  the further  handling of  the
        claim  or suit  pursuant  to  Article 22.4  (Defense of  Claims  and
        Lawsuits) below.

  22.4  Defense of Claims and Lawsuits.   The defense of claims and lawsuits
        arising from operations  under this  Agreement which  are likely  to
        exceed  Two  Hundred and  Fifty  Thousand  Dollars  ($250,000.0) per
        occurrence shall  be  handled  by  a  committee of  staff  attorneys
        representing the Participating Parties in the operation out of which
        the claim arose, with Operator's attorney as Chairman.  Suits may be
        settled during  litigation  only  with  the  mutual consent  of  all
        Participating  Parties.    No  charge  shall  be  made  for services
        performed by the  staff attorneys or travel expenses, but  all other
        expenses incurred in the defense of suits, together with the  amount
        paid to discharge  any final judgment, shall be considered  costs of
        operation and  shall be paid  by the Parties in  proportion to their
        Participating Interest  in  the operation  out of  which  the  claim
        arose.   Outside counsel  shall be employed only  with the unanimous
        approval of  the affected Parties.   If it is  agreed that   outside
        counsel is to be employed, the fees and expenses shall be charged to
        the  affected Parties in proportion to  their Participating Interest
        in the operation out of which such claims arose.

  22.5  Liability for Damages:  To the  extent allowed by law, liability for
        losses, damages, Costs, expenses,  claims, liabilities and  lawsuits
        arising  from operations under  this Agreement not covered  by or in
        excess of the insurance carried for the Joint Account shall be borne
        by each  Party in  proportion to its Participating  Interest in  the
        operations  out of  which such  liability arises,  except when  such
        liability results from the gross negligence or willful misconduct of
        a Party(ies), in  which case such Party(ies) shall be  solely liable
        for same.

  22.6  INDEMNIFICATION  FOR  NON-CONSENT  OPERATIONS:    THE  PARTICIPATING
        PARTIES  AGREE  TO  HOLD THE  NON-PARTICIPATING  PARTIES (AND  THEIR
        AFFILIATES,  AGENTS,  INSURERS,  DIRECTORS, OFFICERS  AND EMPLOYEES)
        HARMLESS AND  TO  RELEASE, DEFEND,  INDEMNIFY,    AND  PROTECT  THEM
        AGAINST  ALL CLAIMS,  DEMANDS, LIABILITIES,  INCLUDING ENVIRONMENTAL
        POLLUTION  AND  LIENS  FOR  PROPERTY  DAMAGE  OR   PERSONAL  INJURY,
        INCLUDING SICKNESS AND DEATH, CAUSED BY OR OTHERWISE ARISING OUT  OF
        NON-CONSENT OPERATIONS,  AND ANY LOSS AND  COST INCLUDING  LIENS AND
        ENCUMBRANCES, SUFFERED BY ANY NON-PARTICIPATING PARTY AS AN INCIDENT
        THEREOF, EXCEPT   TO  THE  EXTENT THE  GROSS NEGLIGENCE  OR  WILLFUL
        MISCONDUCT OF  ANY SUCH NON-PARTICIPATING  PARTY CONTRIBUTES TO THAT
        LOSS OR COST.   SHOULD ANY INDEMNITY CONTAINED HEREIN  BE DETERMINED
        TO BE IN VIOLATION OF LAW OR  PUBLIC POLICY, THE PARTIES AGREE  THAT
        SAID INDEMNITY(IES)  SHALL THEN BE ENFORCEABLE  ONLY TO  THE MAXIMUM
        EXTENT ALLOWED BY LAW.

  22.7  DAMAGE TO RESERVOIR, LOSS OF RESERVES AND PROFITS:   NOTWITHSTANDING
        ANYTHING  TO  THE  CONTRARY  CONTAINED  HEREIN,  NO  PARTY  TO  THIS
        AGREEMENT SHALL BE  LIABLE TO ANY OTHER  PARTY TO THIS AGREEMENT AND
        EACH  PARTY RELEASES THE OTHER  PARTIES FROM  CLAIMS FOR LOSS  OF OR
        DAMAGE TO  A RESERVOIR(S),  LOSS  OF HYDROCARBONS,  OR FOR  LOSS  OF
        REVENUES   OR  PROFITS  OR  FOR  OTHER   CONSEQUENTIAL  OR  BUSINESS
        INTERRUPTION  DAMAGES  ARISING  OUT  OF  OR  INCIDENTAL  TO   OR  IN
        CONNECTION WITH THIS AGREEMENT, OR ANY OPERATIONS HEREUNDER, HOWEVER
        CAUSED, INCLUDING NEGLIGENCE,  STRICT LIABILITY OR OTHER LEGAL FAULT
        ON THE PART OF ANY PARTY TO THIS AGREEMENT.

  22.8  NON-ESSENTIAL PERSONNEL:  A PARTY HERETO WHO REQUESTS TRANSPORTATION
        AND/OR ACCESS TO  A PRODUCTION SYSTEM, VESSEL OR ANY  OTHER FACILITY
        UTILIZED  FOR OPERATIONS AND  WHO IS NOT DIRECTLY  INVOLVED WITH THE
        OPERATION UNDER THIS AGREEMENT, AGREES  TO PROTECT AND INDEMNIFY THE
        OTHER PARTIES HERETO AS TO ANY COST, LIABILITY OR JUDGMENT  INCURRED
        AS A RESULT  OF A CLAIM, DEMAND, CAUSE OF  ACTION OR SUIT BROUGHT BY
        SUCH  PERSON  ARISING  OUT OF  SAID  PERSON'S TRANSPORTATION  AND/OR
        ACCESS TO A  PRODUCTION SYSTEM, VESSEL OR ANY FACILITY  UTILIZED FOR
        OPERATIONS.   NOTWITHSTANDING ANYTHING TO THE  CONTRARY HEREIN,  ANY
        SUCH  INDEMNIFICATION  AND/OR PROTECTION  PROVIDED  HEREIN  SHALL BE
        INAPPLICABLE WHERE THE CLAIM DEMAND, CAUSE OF ACTION OR SUIT  ARISES
        OUT OF THE WILLFUL  MISCONDUCT, INTENTIONAL ACT OR GROSS  NEGLIGENCE
        OF THE PARTY SO INDEMNIFIED AND/OR PROTECTED.

                                  ARTICLE 23
                           FARM-INS AND CONTRIBUTIONS

  23.1  Contributions  From Third Parties:   The Parties may  seek to obtain
        support  from  third  parties   for  operations  hereunder   through
        contributions of cash,  acreage or data.   Any Party may  propose to
        seek support  for  such  operations  on  the Contract  Area  through
        contributions from third parties.  Each Party shall notify all other
        Parties of any contribution offers received from third parties.  Any
        proposal or offer from third parties shall be subject to the General
        Matter approval of  the Parties prior to either accepting  the offer
        or  making such  a  proposal.   Upon  General Matter  approval,  the
        Operator, unless otherwise agreed, shall negotiate all contributions
        on behalf of the Parties (with prior consultation of the Parties and
        the  prior agreement of  the cash equivalent value  for any non-cash
        consideration offered or received).  Upon receiving a  response from
        a third party to the Operator's proposal, the Operator shall  notify
        all of  the Parties of the  proposal and its  terms.   Within thirty
        (30) days  of receipt  of the Operator's notice,  the Party's  shall
        vote as a General Matter on the proposal.  If a proposal is approved
        as  a  General Matter,  any Party  shall have  the right  to decline
        participation  in a contribution and be  relieved of any obligations
        and benefits  thereunder.  The  Participating Party(s) shall not  be
        required  to  obtain  the  consent  of  the Non-Participating  Party
        regarding any contribution or trade.

        23.1.1   Cash Contributions :   In the event a cash  contribution is
                 accepted towards  the  drilling of  a well,  in  which  all
                 Parties are  Participating Parties, said cash  contribution
                 shall be  turned over  to the  Operator,  and the  Operator
                 shall credit  the amount of the  cash contribution  against
                 the Costs of the  proposed operation in proportion to  each
                 Party's   Participating  Interest.     In  the   event  the
                 Participating Parties accept a cash contribution toward the
                 drilling  of  a  well  where  fewer than  all  Parties  are
                 Participating  Parties,  the  cash  contribution  shall  be
                 credited among  the Participating Parties in  such well  to
                 the extent  that each  Participating Party  shall receive a
                 portion of  the  contribution  equal to  its  Participating
                 Interest in  the  well.   The cash  contribution  shall  be
                 deducted from the cost of  drilling and completing the well
                 prior to computation of the Recoupment Amount Participating
                 Parties  shall be  entitled to  receive in  accordance with
                 Article 16 (Non-Consent Operations).

        23.1.2   Acreage Contributions:  Any contribution of acreage  toward
                 the drilling  of a well hereunder shall be offered, without
                 warranty  of   title,  to  the  Participating   Parties  in
                 proportion to their Participating Interests.  If all of the
                 Parties  to this Agreement  participate in  accepting their
                 share of the  assignment of the acreage,  the acreage shall
                 become a part of the Contract Area and subject to the terms
                 of this Agreement.  Any  acreage contribution in which less
                 than all  Parties are  Participating Parties  shall, to the
                 extent possible,  be subject to the  terms of  an Operating
                 Agreement  substantially  similar  to this  Agreement,  and
                 shall  apply  separately  to the  acreage  acquired by  the
                 Participating Parties.

        23.1.3   Data  Contributions  :    Contributions  of  geoscience  or
                 engineering  data offered  by third  parties in  support of
                 operations hereunder shall be handled pursuant to Article 7
                 (Confidentiality  of  Data),  and may  be  accepted by  the
                 Participating Parties so long as the confidentiality of any
                 data belonging  to Non-Participating Parties is  preserved.
                 No data owned by a  Non-Participating Party may be included
                 in any  data contribution without the  consent of  the Non-
                 Participating Party.

  23.2  Restricted  Bidding:    If at  any  time  during  the  term  of this
        Agreement,  more than  one  of  the  Parties  are  on  the  list  of
        restricted  joint bidders  for  OCS  lease sales  as issued  by  the
        Minerals  Management Service  pursuant to  30 CFR  256.44, then  the
        Parties agree  to comply with all statutes and regulations regarding
        restricted joint  bidders on the OCS  in effect  during the term  of
        this  Agreement.  In  the case of multiple  restricted bidders being
        Parties to this Agreement, the provisions of this Agreement shall be
        amended to delete  those provisions which would  otherwise require a
        transfer of a leasehold interest prohibited by 30 CFR 256.44(c).

  23.3  Area of  Mutual  Interest: The  geographical confines  of  the  area
        described and outlined in Exhibit A-4  shall hereinafter be referred
        to as the  Area of Mutual Interest .

        23.3.1   Notification  Required: Subject to Articles 23.3.9 (Bidding
                 Agreement),  if   any  Party  hereto  ( Acquiring   Party )
                 acquires either  an  oil and  gas lease  (or  any  interest
                 therein)  or  any  other  mineral  interest covering  lands
                 and/or water  bottoms and/or seabeds  lying within the Area
                 of Mutual  Interest, or if the  Acquiring Party  is offered
                 the  opportunity to  enter  into any  type of  agreement by
                 which such an interest may  be earned or otherwise acquired
                 by conducting drilling, seismic, or other operations on the
                 lands lying  within the Area  of Mutual Interest, then  the
                 Acquiring Party shall  promptly notify the other Parties of
                 such   acquisition  or  such  opportunity.    Any  interest
                 acquired by  a Party hereto in lands outside of the Area of
                 Mutual Interest, however, shall not be subject to the terms
                 of  this Article.   The notification  provided for  in this
                 Article shall contain all  available title information, and
                 copies of  leases, agreements by  which the interests maybe
                 acquired, and  all other pertinent instruments.   It  shall
                 also describe  in  detail  the  cost  and expense  of  such
                 acquisition and any other obligation which may  be incurred
                 pursuant thereto.

        23.3.2   Right  of  Participation:   The  Parties  shall   have  the
                 opportunity  to participate  in any  acquisition hereunder,
                 and in the following proportions:

                 Enserch Exploration, Inc.                          40%
                 Mobil Oil Exploration & Producing Southeast Inc.   40%
                 Reading & Bates Development Co.                    20%

        23.3.3   Election  Period   If  Operations  Are   Not  Required:  If
                 drilling, seismic, or other operations are not  required to
                 acquire the interest,  each Party hereto shall have fifteen
                 (15) days from receipt of notice thereof in which to  elect
                 to participate  in such acquisition.  Failure to notify the
                 acquiring Party  of its election within  fifteen (15)  days
                 shall be deemed and election not to participate.

        23.3.4   Election  Period  If   Operations  Are  Required:  If   the
                 acquisition requires drilling, seismic, or other operations
                 on the lands lying within the Area of Mutual Interest,  the
                 election of a Party to participate in such operations shall
                 be  deemed  an election  to  participate  in  the agreement
                 governing  such  operations,  to  the  extent necessary  to
                 acquire the interest.   No party shall be required  to make
                 such election  more than one hundred  fifty (150)  days nor
                 less  than  fifteen  (15)  days  prior  to commencement  of
                 initial operations.

        23.3.5   Assignments: To receive an  assignment of its proportionate
                 share of the  interest acquired  as a result  of conducting
                 drilling,  seismic,  or  other operations  on  the Area  of
                 Mutual Interest, a Party ( Participating Party ) must have:
                 (1)  participated  in  all  operations  necessary  for  the
                 acquisition of the interest, including, but not limited to,
                 completion operations and also must have paid all costs and
                 expenses incurred in connection therewith; (2) participated
                 in any previous drilling, seismic, or other operations that
                 were  necessary  or  were  a  condition  precedent  to  the
                 operations resulting  in the  acquisition of the  interest;
                 and  (3)   participated  in  accordance  with   the  terms,
                 provisions,  covenants,  and  conditions of  the agreements
                 governing the acquisition of interest.  The Acquiring Party
                 and the Participating Party shall share in  the acquisition
                 in the proportion that each such Party s respective working
                 interest, as set forth in Article 23.3.2 above bears to the
                 sum of the working interests of the Acquiring Party and the
                 Participating  Parties.  On receipt of  an invoice from the
                 Acquiring  Party  setting forth  in  detail  the  cost  and
                 expense of the acquisition, each Participating Party  shall
                 promptly    reimburse   the   Acquiring   Party   for   its
                 proportionate  share thereof.   The  Acquiring  Party shall
                 then  promptly  assign  to   the  Participating  Party  its
                 proportionate interest in the acquisition.

        23.3.6   Operating Agreement: If all Parties to this Agreement elect
                 to  participate in any acquisition, then  any such acquired
                 interest shall thereafter  be subject to this Agreement and
                 the Parties shall amend Exhibits  A-1",  A-2", and  A-3" to
                 reflect the newly acquired leases and Designated Prospects.
                 Future   operations   conducted   on  the   newly  acquired
                 Designated Prospects  shall be governed  by this Agreement.
                 Such amendment shall be effective with the award of a lease
                 or  the effective date  of any such transfer;  and shall be
                 executed by the Parties within  ninety (90) days from lease
                 issuance or the effective date of the transfer  leases.  If
                 less  than   all  Parties  elect  to   participate  in   an
                 acquisition,  the  Acquiring     Parties  will  execute  an
                 agreement substantially in the form of this Agreement.  

              In the event that the lease acquisition involves a third party
              (not a Party to this Agreement), the Parties agree to  utilize
              this form of Agreement  as the starting point for  negotiation
              of a mutually acceptable form  of Operating Agreement with the
              third party.

        23.3.7   Term:  The Area of Mutual Interest  shall be in effect until
                 December 31, 2000.

        23.3.8   Conflicting  Agreements:  The  provisions of  this  Article
                 shall  prevail over any conflicting provisions,  if any, in
                 this Agreement.

        23.3.9   Bidding Agreement:  Attached hereto as  Exhibit "K" is that
                 certain  Bidding  Agreement  dated effective  September  1,
                 1995,  by and  between  Mobil Oil  Exploration  & Producing
                 Southeast Inc.,  Enserch Exploration, Inc.,  and Reading  &
                 Bates Development Company (hereinafter  referred to as  the
                 Bidding  Agreement ), which shall govern the acquisition of
                 leasehold interests within  the Area of Mutual Interest and
                 which  may be acquired at OCS  Lease Sales.  If  there is a
                 conflict between  the provisions  of this  Article 23.3 and
                 the  Bidding  Agreement,  the  provisions  of  the  Bidding
                 Agreement shall control to the extent of such conflict.  It
                 is  the intent of the Parties that with  respect to a lease
                 acquired  as a result of a high bid for which a Party was a
                 Non-Participating Party  under the Bidding Agreement,  such
                 Non-Participating  Party  shall  not  be  offered a  second
                 opportunity to acquire an interest under the terms  of this
                 Article.    If  a  Party  declines  to  participate  in  an
                 acquisition  within the  Area of  Mutual Interest,  it will
                 affect  adversely that  Party s priority  for  handling its
                 production from the affected area.

                                  ARTICLE 24
                   SUCCESSORS, ASSIGNS, AND SALE OF INTEREST

  24.1  Successors and Assigns:    This Agreement shall be binding upon  and
        inure to the benefit of the Parties and their respective  successors
        and assigns and shall constitute a covenant running with the Leases. 
        Each Party shall incorporate in any assignment of an interest in the
        Leases a provision that such interest and the assignment  thereof is
        subject to this Agreement.

        Except  as  otherwise  provided,  for  the  purpose  of  maintaining
        uniformity of ownership in each Designated Prospect, no  Party shall
        sell, encumber, transfer or make other disposition of  its  interest
        in a Designated Prospect and in wells,  Initial  Production  System,
        Subsequent production System, Facilities, and production unless such
        disposition covers either:

        (a)   the entire interest of the Party in a Designated Prospect and
              any  and  all  Leases,  wells,  equipment, Initial Production
              System,   Subsequent   Production   System,   Facilities  and
              production attributable thereto; or

        (b)   an equal undivided interest in a Designated Prospect and  any
              and all Leases, wells, equipment, Initial Production  System,
              Subsequent   Production  System,  Facilities  and  production
              attributable thereto.

        Notwithstanding  the  foregoing, upon notice to the Parties, a Party
        may sell, assign, encumber  or  transfer its interest in the Initial
        Production System or Subsequent Production System in connection with
        any financing or leasing  arrangement covering such Party's interest
        therein.  If a Party's  interest in the Initial Production System or
        Subsequent Production  System  takes  the  form  of  a  right of use
        pursuant to a lease, or some other contractual right,  those  rights
        of use contained in the lease or other contractual  rights  shall be
        transferred at the same  time  and  in  the  same  proportion  as  a
        transfer of a  Parties'  interest in the Designated Prospect, wells,
        equipment,  Facilities  and  production.  Any such financing,  lease
        arrangement  or  contractual  service   agreement   will   be   made
        specifically subject to the terms  and  provisions of this Agreement
        and  the  rights  of  the  Parties  hereunder.  The Parties agree to
        cooperate  with each other for the purpose of allowing each Party to
        obtain  satisfactory   financing,  lease   arrangements  or  service
        agreements covering its interest in the Production System.

   24.2 Effective Date of Transfer:   No sale,  transfer or assignment of an
        interest in a Designated Prospect  permitted under the provisions of
        this Agreement shall be effective  hereunder  until  a duly executed
        counterpart original or a certified copy of the filed  instrument or
        instruments evidencing such change in  ownership  has been delivered
        to  the  Operator,  together  with a like counterpart original of an
        instrument in a  form acceptable  to  Operator in which the assignee
        adopts and ratifies this Agreement.  Any such transfer or assignment
        shall be made effective as of the  first day of a calendar month, or
        if not so  made  effective,  the  instrument or instruments shall be
        considered  effective for all purposes hereof as of the first day of
        the calendar  month  next  following  the date of such instrument or
        instruments.  Upon  receipt  of  such  instrument the Operator shall
        recognize the change  in  interest and shall notify the Parties, but
        the Operator shall not be  responsible for effecting any retroactive
        adjustment with respect  to  any matter between the affected Parties
        arising from any prior accounting under this Agreement by Operator.

   24.3 Transferee Bound:  All such authorized sales, transfers, assignments
        or  conveyances  of  an  interest  in a Designated Prospect and this
        Agreement,  whether  expressly  so  stated or  not, shall operate to
        impose upon any Party acquiring such interest its share of all costs
        and other obligations chargeable  hereunder  to  such  interest  and
        shall likewise operate to give and  grant  to  such  Party acquiring
        such interest  its  proportionate  part  of  all  benefits  accruing
        hereunder.

   24.4 Assignments and Transfers of Working Interests:  All of the  Parties
        to this Agreement agree to give prior written notice to the Operator
        and the other Parties of any proposed assignment, transfer or  other
        disposition  of all  or  a  portion of  a Party's  Working  Interest
        covered by  this Agreement.   Any assignment of  a Working  Interest
        covered by this Agreement shall be made to a financially responsible
        assignee  and shall  be further  subject to  this Agreement  and the
        following provisions:

        24.4.1   Exceptions to  Prior Written  Notice:   Notwithstanding any
                 provision of  this Agreement to  the contrary, an assigning
                 Party shall not be required to provide prior written notice
                 with respect to any of the following:

              (i)   A  Party  seeking  to  mortgage, pledge,  hypothecate  or
                    grant a  security interest  in all  or a  portion of  its
                    Working  Interest   in  the  Leases,  any   equipment  or
                    Facilities or each Party's right  to produce Hydrocarbons
                    from  a   Designated  Prospect.     However,  except   as
                    otherwise provided herein, any  encumbrance arising  from
                    the    financing    transaction   shall    be   expressly
                    subordinated to the rights  of the other Parties to  this
                    Agreement, and  the assigning Party shall ensure that any
                    mortgage or  encumbrance  shall be  without prejudice  to
                    the  terms of this  Agreement and  promptly following the
                    creation  of such  encumbrance,  the Party  creating  the
                    same  shall  deliver   to  the  other  Parties   to  this
                    Agreement a written acknowledgment by the  holder of such
                    encumbrance, in form  and substance satisfactory  to such
                    Parties, confirming such subordination; or,

              (ii)  A  Party  assigning  all  or  an  undivided  part of  its
                    interest to an Affiliate.

        24.4.2   Effective   Date  of  Assignments:    Except  as  otherwise
                 provided  in this  Agreement,  the effective  date  for any
                 assignment shall be at least thirty (30) days but not  more
                 than  one hundred eighty  (180) days after the  date of the
                 written notice.  No assignment, other than those allowed by
                 Article 24.4.1  (Exceptions to Prior Written Notice), shall
                 be  binding  upon  the Parties  unless  and until  (i)  the
                 assignor or  assignee provide all  remaining Parties with a
                 photocopy  of a fully executed assignment,  and an executed
                 MMS Form 1123,  "Designation of Operator" and (ii) evidence
                 of  tender for approval by the  Mineral Management Service.
                 The Parties shall  promptly join in such reasonable actions
                 as  may be  necessary to  secure such  approvals and  shall
                 execute  and  deliver  any  and  all  documents  reasonably
                 necessary  to  effect  any  such  assignment.    Any  costs
                 attributable  to  such  an  assignment  shall  be the  sole
                 obligation of the assignor.

        24.4.3   Minimum Transfer of  Interest:   Unless unanimously  agreed
                 otherwise, any transfer to  a third party shall be  limited
                 to a minimum  Working Interest of   ten percent (10%) in an
                 entire Designated  Prospect.  No  assignment or transfer of
                 any  interest  in  this Agreement  or  any Lease  or  lands
                 subject  to this  Agreement shall  be made  that is  not an
                 equal and  undivided interest  in and to all  of a  Party's
                 interest  in a Designated Prospect and  any and all Leases,
                 wells,  Production  Systems,   Facilities  and   production
                 attributable thereto  unless otherwise provided under  this
                 Agreement.    No  assignment  or  transfer  of any  Working
                 Interest in this Agreement or any Lease or lands subject to
                 this Agreement  shall be  made  that  is not  an  undivided
                 Working Interest in all of a Party's Working Interest in  a
                 Designated Prospect  (unless otherwise provided under  this
                 Agreement).

        24.4.4   Form of Assignments:  Any assignment of any interest in  or
                 subject to this Agreement shall incorporate provisions that
                 the assignment is inferior to and made expressly subject to
                 this  Agreement and  providing  for the  assumption  by the
                 assignee  of   the  performance   of  all   of   assignor's
                 obligations under  this Agreement.   Any  assignment not in
                 compliance  with this  provision shall  be voidable  by the
                 non-assigning Parties.

        24.4.5   Limited  Warranty:   Any transfer  of interest  pursuant to
                 this Article 24 shall require that any  assignment, vesting
                 or  relinquishment of Working Interest  between the Parties
                 under this  Agreement  shall be  made without  warranty  of
                 title.

  24.5  Preferential Right to  Purchase:  Subject to the provisions  of this
        Article,  each Party  shall have  the right  to freely  transfer and
        alienate  its Working Interest.   For the purposes of  this  Article
        24,  Working  Interest  as  to each  Designated Prospect covered  by
        this Agreement shall mean any right, title or interest of a Party in
        and  to  any  Lease,  Production  System,  Facilities, Hydrocarbons,
        platform, equipment or any other property, real or personal, or  any
        other right or interest covered by or created under this  Agreement.
        Any  transfer of all or  any portion of  a Party's Working Interest,
        directly  or   indirectly,  shall   be  subject   to  the  following
        provisions:


        24.5.1   Notice of  Proposed  Transaction:   Should any  Party  (the
                 "Assignor") desire to dispose of all or any portion of  its
                 Working Interest  hereunder (whether  offered  as a  single
                 property  disposition  or   as  part  of  a  multi-property
                 disposition) and  has received a bona  fide offer  (whether
                 from a Party to this Agreement or from a third party) which
                 the Assignor  is willing  to accept for the  sale or  other
                 disposition  of  its  Working  Interest  in   a  Designated
                 Prospect,  each of the remaining Parties  to this Agreement
                 shall have  a prior and preferential  right to  purchase of
                 such Working  Interest.  In  such case, the Assignor  shall
                 promptly  give   prior  written  notice   of  the  proposed
                 transaction  to  the  other Parties.    The notice  of  the
                 proposed  transaction   shall  provide   full   information
                 concerning the transaction including at least:

                 -  the  name  and address of the prospective purchaser  (who
                    must be ready, able and willing to acquire the interest),

                 -  the purchase price or other consideration offered  (which
                    shall  include  the  monetary  equivalent in U.S. Dollars
                    based   upon   the   reasonable   market   value  of  any
                    consideration other than cash), and

                  -  all other pertinent material terms of the offer.

        24.5.2   Exercise of Preferential Right to Purchase  For a period of
                 thirty (30) days from receipt of the notice,  the remaining
                 Parties shall have the prior right and option, but not  the
                 obligation to elect to acquire the Working Interest offered
                 (on  the same terms and conditions,  or on equivalent terms
                 for a non-cash transaction as stated in the notice) without
                 reservations  or conditions.  The Election  to exercise the
                 preferential right  shall be  made by  the exercising Party
                 giving  the  Assignor written  notice  of  its  Election to
                 purchase prior  to the  expiration of  the thirty (30)  day
                 period.  If an Election to purchase preferentially is made,
                 the Assignor  shall  be required  to transfer  the  Working
                 Interest  to  the  Party  at  the price  and  on  the terms
                 specified  in  the  notice.    The  transaction   shall  be
                 concluded within a reasonable time, but no later than sixty
                 (60)  days  after  receipt  of  the  Election  to  purchase
                 preferentially  (plus  a  reasonable  time  to  secure  all
                 necessary governmental approvals).  If more than  one Party
                 elects to  acquire the Working  Interest offered, then each
                 Party shall  acquire a proportion of  the Working  Interest
                 offered equal to  the ratio its own pre-acquisition Working
                 Interest  bears   to  the  total  pre-acquisition   Working
                 Interests of  all acquiring  Parties (unless  the acquiring
                 Parties agree upon  a different ratio).  If only  one Party
                 elects  to acquire  the  Working Interest  offered,  it may
                 require  the  Assignor  to  transfer  all  of  the  Working
                 Interest offered, but may not require the transfer  of less
                 than all Working Interest offered.

        24.5.3   Transactions  Not  Affected by  the  Preferential  Right to
                 Purchase:   This preferential  right to  purchase shall not
                 exist or apply when a Party proposes to:

              (a)   mortgage,  pledge  or  otherwise  encumber  its  interest
                    (including assignments of  proceeds from the sale  of its
                    Hydrocarbon production executed as  further security  for
                    the debt secured by such mortgage); or

              (b)   dispose of its Working Interest by:
                    -  merger, reorganization or consolidation;
                    -  a sale or other transfer to an Affiliate.

        24.5.4   Completion of the  Transaction:   If none of  the remaining
                 Parties   elect  to  exercise  its  preferential  right  to
                 purchase the  Working Interest offered,  the Assignor shall
                 be free to complete  the proposed transaction on the  terms
                 disclosed  in  the   notice.    However,  if  any  proposed
                 transaction  is  not completed  within  one hundred  twenty
                 (120)  days  from  the expiration  of  the thirty  (30) day
                 preferential right Election period  (plus a reasonable time
                 to secure any  necessary governmental approvals) or, if the
                 terms of the proposed  transaction are amended in any  way,
                 the  proposed transaction shall be considered withdrawn and
                 the Working Interest offered shall again be subject  to the
                 preferential  right  to  purchase  as  if   the  originally
                 proposed transaction had never been proposed.

        24.5.5   Special  Circumstances  Preferential  Rights  to  Purchase:
                 Notwithstanding anything to  the contrary contained in this
                 Article 24 or elsewhere in this Agreement, with  respect to
                 any transfer of interest by Reading & Bates Development Co.
                 or its successors or assigns, to Enserch  Exploration, Inc.
                 or its  successors or assigns, made  pursuant to  the terms
                 and  provisions  of  an  agreement  or  agreements  between
                 Reading &  Bates Development  Co. and  Enserch Exploration,
                 Inc.  executed either  prior  to or  contemporaneously with
                 this  Agreement, said  interest will  be either  subject to
                 this Article 24.5  or will be promptly offered for  sale by
                 Enserch Exploration, Inc. to the remaining Parties, and the
                 purchase price for any such transfer shall be determined in
                 the following  manner.   Enserch  Exploration,  Inc.  shall
                 select a duly qualified appraiser, the Parties who maintain
                 a  preferential right  shall jointly  select a  second duly
                 qualified appraiser and the two (2) appraisers  so selected
                 shall  select a third duly qualified  appraiser.  The three
                 (3)  appraisers  shall,  each  independent  of  the  other,
                 determine the fair market value of the interest proposed to
                 be transferred.    The three  (3) determinations  shall  be
                 averaged and  the greater of  the resulting average or  the
                 amount paid, reimbursed or tendered by Enserch Exploration,
                 Inc. for the interest, shall be deemed for all purposes  to
                 be the  purchase  price for  the interest  proposed  to  be
                 transferred hereunder.  

                                  ARTICLE 25
                                 FORCE MAJEURE

  25.1  Force Majeure:    If as  a result  of  Force  Majeure any  Party  is
        rendered unable,  wholly or  in part, to carry  out its  obligations
        under  this Agreement  (except for  the payment  of money)  then the
        obligations  of the Party giving such  notice, so far as  and to the
        extent that  the obligations  are affected  by  such Force  Majeure,
        shall  be  suspended  during the  continuance  of any  inability  so
        caused, but for  no longer period.   In  addition, if as a result of
        Force  Majeure,  the condition  that  any  Non-Consent  Operation be
        timely  commenced  cannot be  met,  then  that  condition  shall  be
        suspended  for the  duration  of the  Force Majeure  event, provided
        notification of  the  Force Majeure  event  is  given  as  hereafter
        specified  to the  Non-Participating  Parties by  the  Participating
        Parties in  the Non-Consent  Operation (who  would benefit from  the
        acreage forfeiture by or percentage  recoupment of the costs against
        the Non-Consenting Party pursuant to Article  16).   For purposes of
        this Agreement,  "Force  Majeure"  shall  be  inclusive of  but  not
        limited  to the following events:  flood, hurricane or other acts of
        God; a fire, blowout, oil spill or other  environmental catastrophe;
        war, civil disturbance, labor  dispute, strike, lockout,  compliance
        with any  law, order,  rule or  regulation,  governmental action  or
        delay  in  granting  permits  or  permit  approvals  as  needed;  by
        inability to secure materials or rig; or by any other cause, whether
        similar or dissimilar,  beyond the  reasonable control  of the  said
        Party.   The  Party claiming  Force Majeure  shall notify  the other
        Parties of the Force Majeure situation within a reasonable time (not
        to exceed thirty (30) days) after the occurrence of the facts relied
        on   and  shall  keep  all  Parties   informed  of  all  significant
        developments.  The  notice of Force Majeure shall give  full details
        of said Force Majeure, and also (if possible) estimate the period of
        time which said Party will require to remedy the Force Majeure or to
        resume  performance of  its obligations under  this Agreement.   The
        affected  Party  shall  use all  reasonable  diligence to  remove or
        overcome the Force Majeure situation, but shall not be obligated  to
        settle  any labor dispute except  on terms acceptable  to it and all
        such disputes  shall be  handled within the sole  discretion of  the
        affected Party.

                                  ARTICLE 26
                           ADMINISTRATIVE PROVISIONS

  26.1  Term  of  Agreement:    This  Agreement  shall  become  binding upon
        execution by all Parties with an effective date as  set forth in the
        preamble to this  Agreement.  This Agreement shall remain  in effect
        from the effective date and for so long as any of  the Leases in the
        Contract  Area  shall  remain  in  effect or  until  all  assets and
        operations have been turned over to a single Working Interest owner.
        Termination of this  Agreement shall not relieve any Party  from any
        Costs or liability  accrued or incurred prior to the  termination of
        this Agreement,  and the provisions of this Agreement shall continue
        in force for such additional time as necessary until:

        (a)   all wells have been plugged and abandoned;

        (b)   all  property and equipment in the  Contract Area belonging to
              the Parties are disposed of by the  Operator and all claims or
              lawsuits have been settled or otherwise disposed of; and,

        (c)   a final  accounting and  settlement has  been made under  this
              Agreement (including settlement of any gas imbalances pursuant
              to Exhibit "D").

        The  Operator shall  have  a  reasonable period  of time  after  the
        occurrence of  an event  of  termination in  which to  conclude  the
        administration of operations and  to make a distribution of  assets.
        During this period of  time, the Operator shall continue to have and
        shall exercise  all powers  granted and meet all  duties imposed  by
        this  Agreement until  all provisions  of this  Agreement are  fully
        executed.

  26.2  Time Limits:  Time is  of the essence in this Agreement and all time
        limits shall  be strictly  construed and enforced.   The failure  or
        delay of any  Party in the enforcement  of the rights granted  under
        this  Agreement shall  not constitute  a waiver  of said  rights nor
        shall it  be considered as a  basis for  estoppel.   Such Party  may
        exercise its  rights  under this  Agreement  despite  any  delay  or
        failure to enforce the rights when the right or obligation arose.

  26.3  Waiver  of  Right  to Partition:    Each    Party  for  itself,  its
        successors and  assigns waives  the  right to  bring an  action  for
        partition  of its  interest  in  the Leases  and lands  or  personal
        property  held subject to  this Agreement, and covenants  that for a
        period of fifteen years from the effective date hereof and  for such
        longer period of  time as may be authorized by  subsequently enacted
        law it  shall not  resort at  any time to  any action at  law or  in
        equity  to partition  any or  all of  Leases and  lands or  personal
        property subject to this Agreement.

  26.4  Compliance With  Laws  and Regulations:   This  Agreement,  and  all
        operations conducted  by the Parties pursuant to this Agreement, are
        expressly subject to  and shall comply with all laws,  orders, rules
        and  regulations  of   any  federal,  state  or  local  governmental
        authority  having jurisdiction  over  the Contract  Area.   No Party
        shall suffer  a forfeiture  or be liable in  damages for  failure to
        comply  with  any  of  the provisions  of  this  Agreement  if  such
        compliance  is   prevented  by  or  if  such  failure  results  from
        compliance with any applicable law, order, rule or regulation.

        26.4.1 Applicable Law:  THE PROVISIONS  OF  THIS   AGREEMENT AND THE
               RELATIONSHIP OF THE PARTIES SHALL BE GOVERNED AND INTERPRETED
               ACCORDING  TO  FEDERAL  LAWS  AND  THE  LAWS  OF THE STATE OF
               LOUISIANA  WITHOUT REGARD TO  PRINCIPLES OF CONFLICTS OF LAWS
               THAT  WOULD  REFER  THE  MATTER  TO  THE  LAWS   OF   ANOTHER
               JURISDICTION.

        26.4.2 Severance  of Invalid  Provisions:   In case  of  a  conflict
               between the provisions of this Agreement and  the  provisions
               of any applicable laws or regulations, the provisions  of the
               laws  or regulations shall govern over the provisions of this
               Agreement. If, for any reason and for  so long as, any clause
               or  provision of this Agreement is held by court of competent
               jurisdiction to be  illegal,   or  invalid, unenforceable  or
               unconscionable   under   any  present  or  future   law   (or
               interpretation  thereof),  the  remainder of  this  Agreement
               shall not be affected by such illegality  or invalidity.  Any
               such  invalid  provision  shall  be modified  to  the  extent
               practical to  conform  with  the  intent  of the  Parties and
               eliminate  such  illegality  or  invalidity or if such is not
               possible, shall be deemed  severed from this  Agreement as if
               this Agreement had  been executed  with the invalid provision
               eliminated.  The surviving provisions of this Agreement shall
               remain in  full force  and effect  unless the  removal of the
               invalid provision destroys the legitimate  purposes  of  this
               Agreement; in which event  this Agreement  shall be  null and
               void.   The  Parties  shall negotiate  in good faith  for any
               required modifications to this Agreement.

        26.4.3 Fair  and  Equal  Employment:   Each  of  the  Parties is  an
               Equal Opportunity Employer. To the extent that this Agreement
               may be subject to Executive Order 11246, as amended, the equal
               opportunity provisions (41 CFR  60-1) are incorporated herein
               by reference. If the Non-Discrimination in the OCS provisions
               of  30 CFR 270   apply  to  this Agreement and the operations
               conducted under it, the  provisions  of  30  CFR 270 are also
               incorporated  by  reference.   To  the  extent  required   by
               applicable laws and regulations, this Agreement also includes
               and  is  subject to the affirmative action clauses concerning
               disabled  veterans  and veterans  of the Vietnam era  (41 CFR
               60-250)   and  the  affirmative  action   clauses  concerning
               employment  of the handicapped (41 CFR 60-741), which clauses
               are  incorporated  herein by reference.  In  performing  work
               under  this  Agreement, the  Parties agree  to  comply   with
               (and the Operator shall require  each  independent contractor
               to comply with) the governmental requirements set   forth  in
               Exhibit "E" attached   hereto,   pertaining  to nonsegregated
               facilities.  This Agreement and the Parties are  also subject
               to  any  other applicable  rules and  regulation relating  to
               nondiscrimination  that may  be promulgated from time to time
               by any governmental body having jurisdiction over the subject
               matter of this Agreement.

  26.5  Construction   and   Interpretation   of   This   Agreement:     The
        interpretation and construction of the  terms of this Agreement will
        be governed by the following conventions:

        26.5.1 Headings for Convenience:  Except for the definition  headings
               contained  in   Article 2  (Definitions),   all  the  table of
               contents, captions, numbering sequences and paragraph headings
               used in this Agreement are inserted  for convenience  only and
               shall in no way define, limit or describe the  scope or intent
               of this Agreement or any  part  thereof;  nor  have any  legal
               effect other than to aid  a  reasonable interpretation of this
               Agreement.

        26.5.2 Gender  and Number:  The use of pronouns in whatever gender or
               number shall be deemed to be a proper reference to the Parties
               to this  Agreement  though the  Parties  may  be  individuals,
               business    entities   or   groups  thereof.   Any   necessary
               grammatical  changes  required to  make the provisions of this
               Agreement refer  to  the correct gender or number shall in all
               instances be assumed as though each case was fully expressed.

        26.5.3 Independent Representation:  Each Party has had the benefit of
               independent  representation with respect to the subject matter
               of this Agreement.  This Agreement, though drawn by one Party,
               shall be construed fairly and reasonably and not more strictly
               against one Party than another.

  26.6  Integrated Agreement:    This Agreement  and the  exhibits  attached
        thereto, contain the final and entire Agreement of the Parties  with
        respect  to the  subject matter of this  contract.    This Agreement
        shall not  be modified  or  changed except  by a  written  amendment
        signed by all  the Parties.  This Agreement is  entire as to all the
        performances to  be rendered  under it and breach  of any  provision
        shall constitute a breach of the entire Agreement.

  26.7  Execution of Documents:

        26.7.1 Binding Effect: This Agreement shall be binding upon and inure
               to the benefit of the Parties and their  respective successors
               and assigns  and shall constitute  a covenant running with the
               land  and  Leases  which are  the subject hereof and which are
               covered hereby. This Agreement does not  benefit or create any
               rights or benefits in any person or entity not a Party to this
               Agreement.

        26.7.2 Corporate Authority: If any Party is a legal entity, including
               but not limited to, an association, corporation, joint venture,
               limited  partnership,  partnership  or   trust,   such   Party
               represents  to  the  other  Parties  that  the  execution  and
               delivery of this  Agreement and the completion of transactions
               contemplated herein have been duly authorized by all necessary
               corporate   proceedings   or  have  received   all   necessary
               management approvals.

        26.7.3  Further Assurances: Each Party further agrees to take any and
                all  actions  necessary   and   sign  any  and  all documents
                necessary to  implement  the terms  of this  Agreement.   Any
                necessary documents (e.g., a Designation  of Operator,  etc.)
                shall be  prepared  and executed by all Parties within thirty
                (30) days from the receipt of a written request for same from
                any Party.

        26.7.4 Multiple  Counterparts:  This  Agreement  may  be  executed by
               signing the  original  or  a  counterpart  thereof.   If  this
               Agreement is  executed in multiple counterparts, each counter-
               part shall be deemed an  original and all  of which when taken
               together shall constitute but one and the same  Agreement with
               the  same   effect  as if  all  Parties  had  signed  the same
               instrument.  This Agreement may also be  ratified by  separate
               instrument  referring  to  this  Agreement  and  adopting   by
               reference all the provisions of this Agreement. A ratification
               shall have the same  effect as  an execution  of  the original
               Agreement.

  IN WITNESS  WHEREOF, each  Party,  through its  duly authorized  agent  or
  representative, has executed this Agreement effective as of the date first
  above written.


  ENSERCH EXPLORATION, INC.                READING & BATES DEVELOPMENT CO.    

  By:______________________________        By:______________________________

  Its: Senior Vice President               Its: President

  Date:____________________________        Date:____________________________

  Witnesses:                               Witnesses:
  _________________________________        _________________________________

  _________________________________        _________________________________

  MOBIL OIL CORPORATION                    MOBIL OIL EXPLORATION & PRODUCING
                                           SOUTHEAST INC.

  By:______________________________        By:______________________________

  Its: Attorney-in-Fact                    Its: Attorney-in-Fact

  Date:____________________________        Date:____________________________
            
  Attest:                                   Attest:

  _________________________________         _________________________________
  Assistant Secretary                       Assistant Secretary

  Witnesses:

  _________________________________         _________________________________

  _________________________________         _________________________________


  MOBIL EXPLORATION & PRODUCING U.S.
  INC. ACKNOWLEDGING AND ACCEPTING ITS
  RIGHTS AND OBLIGATIONS PURSUANT TO
  ARTICLES 5.1, 8.9 AND 8.10.

  By:________________________________

  Its: Attorney-in-Fact

  Date:______________________________
            
  Attest:

  ___________________________________
  Assistant Secretary

  Witnesses:                               
  ___________________________________
                                       
  ___________________________________

                               *   *   *   *   *


            
  STATE OF TEXAS

  COUNTY OF DALLAS



  This instrument was acknowledged before me on

  ____________________________________, 1995 by 

  __________________________________________________________________________

  ________ as ________________________ of

  ________________________________________________________, a _____________

  corporation, on behalf of said corporation.



              ___________________________________________________

              Notary Public, State of Texas

  My Commission Expires:



  STATE OF TEXAS

  COUNTY OF DALLAS

  This instrument was acknowledged before me on

  ____________________________________, 1995 by 

  __________________________________________________________________________

  ________ as ________________________ of

  ________________________________________________________, a _____________

  corporation, on behalf of said corporation.

              ___________________________________________________

              Notary Public, State of Texas

  My Commission Expires:

  on.


              ___________________________________________________

              Notary Public, State of ____________________



  My Commission Expires:



  STATE OF __________



  COUNTY OF ____________



  This instrument was acknowledged before me on

  ____________________________________, 1995 by 

  __________________________________________________________________________

  ________ as ________________________ of

  ________________________________________________________, a _____________

  corporation, on behalf of said corporation.



              ___________________________________________________

              Notary Public, State of ____________________



  My Commission Expires:

                               *   *   *   *   *


  ACKNOWLEDGMENTS


  STATE OF

  COUNTY OF


  On this _____  day of ______, 19__, before me,  appeared _________________
  to me personally known, who, being  by me duly sworn, did say  that he/she
  is  the  ____________  of  ______________________________  and  that   the
  foregoing instrument was signed in behalf of that corporation by authority
  of its Board of Directors and acknowledged  the instrument to be the  free
  act and deed of that corporation.


  ___________________________________
                                                   NOTARY PUBLIC

  My Commission expires: __________________

                               *   *   *   *   *

  STATE OF

  COUNTY OF

  On this _____  day of ______, 19__, before me,  appeared _________________
  to me personally known, who, being by  me duly sworn, did say that  he/she
  is  the  ____________  of  ______________________________  and  that   the
  foregoing instrument was signed in behalf of that corporation by authority
  of its Board of Directors and acknowledged  the instrument to be the  free
  act and deed of that corporation.


  ___________________________________
                                                   NOTARY PUBLIC

  My Commission expires: __________________
                         
                             *   *   *   *   *


  STATE OF

  COUNTY OF


  On this _____  day of ______, 19__, before me,  appeared _________________
  to me personally known,  who, being by me duly sworn,  did say that he/she
  is  the  ____________   of  ______________________________  and  that  the
  foregoing instrument was signed in behalf of that corporation by authority
  of its Board of Directors and acknowledged  the instrument to be the  free
  act and deed of that corporation.


  ___________________________________
                                                   NOTARY PUBLIC

  My Commission expires: __________________

                            *   *   *   *   *

                                 ACKNOWLEDGMENT

  STATE OF 

  COUNTY OF 


  On this _____  day of ______, 19__, before me,  appeared _________________
  to  me personally known, who, being by  me duly sworn, did say that he/she
  is  the  ____________   of  ______________________________  and  that  the
  foregoing instrument was signed in behalf of that corporation by authority
  of its Board of  Directors and acknowledged the instrument to be  the free
  act and deed of that corporation.


  ___________________________________
                                                   NOTARY PUBLIC

  My Commission expires: __________________

                               *   *   *   *   *

  STATE OF

  COUNTY OF

  On this _____  day of ______, 19__, before me,  appeared _________________
  to me personally  known, who, being by me duly  sworn, did say that he/she
  is  the  ____________   of  ______________________________  and  that  the
  foregoing instrument was signed in behalf of that corporation by authority
  of its Board of  Directors and acknowledged the instrument to be  the free
  act and deed of that corporation.


  ___________________________________
                                                   NOTARY PUBLIC

  My Commission expires: __________________

                               *   *   *   *   *


  STATE OF

  COUNTY OF 


  On this _____  day of ______, 19__, before me,  appeared _________________
  to me personally known,  who, being by me duly sworn,  did say that he/she
  is  the  ____________   of  ______________________________  and  that  the
  foregoing instrument was signed in behalf of that corporation by authority
  of its Board of Directors and acknowledged  the instrument to be the  free
  act and deed of that corporation.


  ___________________________________
                                                   NOTARY PUBLIC

  My Commission expires: __________________

                               *   *   *   *   *

                                ACKNOWLEDGMENT 


  STATE OF

  COUNTY OF 


  On this _____  day of ______, 19__, before me,  appeared _________________
  to me personally known, who, being  by me duly sworn, did say  that he/she
  is  the  ____________  of  ______________________________  and  that   the
  foregoing instrument was signed in behalf of that corporation by authority
  of its Board of Directors and acknowledged  the instrument to be the  free
  act and deed of that corporation.


  ___________________________________
                                                   NOTARY PUBLIC

  My Commission expires: __________________

                               *   *   *   *   *


  STATE OF

  COUNTY OF

  On this _____  day of ______, 19__, before me,  appeared _________________
  to me personally known, who,  being by me duly sworn, did say  that he/she
  is  the  ____________  of   ______________________________  and  that  the
  foregoing instrument was signed in behalf of that corporation by authority
  of its Board  of Directors and acknowledged the  instrument to be the free
  act and deed of that corporation.


  ___________________________________
                                                   NOTARY PUBLIC

  My Commission expires: __________________


                                *   *   *   *   *


  STATE OF

  COUNTY OF

  On this _____  day of ______, 19__, before me,  appeared _________________
  to me personally known, who,  being by me duly sworn, did say  that he/she
  is  the  ____________  of  ______________________________   and  that  the
  foregoing instrument was signed in behalf of that corporation by authority
  of its Board of  Directors and acknowledged the instrument to be  the free
  act and deed of that corporation.


  ___________________________________
                                                   NOTARY PUBLIC

  My Commission expires: __________________
 
-----------------------------------------------------------------------------
                                                                EXHIBIT "A"


  ATTACHED TO AND MADE A PART OF THAT CERTAIN ALLEGHENY OPERATING AGREEMENT
  EFFECTIVE  MAY 1, 1995 BETWEEN ENSERCH EXPLORATION, INC., READING & BATES
  DEVELOPMENT  CO.,  MOBIL  OIL  CORPORATION  AND  MOBIL  OIL EXPLORATION &
  PRODUCING SOUTHEAST INC..

  WORKING INTERESTS OF THE PARTIES AND REPRESENTATIVES

  I.  WORKING INTERESTS OF THE PARTIES:

  GREEN CANYON BLOCK 120 (OCS-G 15548)
  GREEN CANYON BLOCK 126 (OCS-G 15550)
  GREEN CANYON BLOCK 250 (OCS-G 15566)
  GREEN CANYON BLOCK 251 (OCS-G 15567)
  GREEN CANYON BLOCK 257 (OCS-G 15568)
  GREEN CANYON BLOCK 295 (OCS-G 15570)
  GREEN CANYON BLOCK 299 (OCS-G 15571)
  GREEN CANYON BLOCK 301 (OCS-G 15572)
  GREEN CANYON BLOCK 302 (OCS-G 15573)

  WORKING INTERESTS IN THE ABOVE BLOCKS ARE OWNED AS FOLLOWS:

  ENSERCH EXPLORATION, INC.------------------------------------------- 40%
  MOBIL OIL EXPLORATION & PRODUCING SOUTHEAST INC.-------------------- 40%
  READING & BATES DEVELOPMENT CO.------------------------------------- 20%
                                                                      100%

  AS TO THE FOLLOWING LISTED BLOCKS,  WORKING INTERESTS ARE SET FORTH BELOW:

  GREEN CANYON BLOCK 210 (OCS-G 13696)
  GREEN CANYON BLOCK 213 (OCS-G 8000)
  GREEN CANYON BLOCK 253 (OCS-G 8005)
  GREEN CANYON BLOCK 254 (OCS-G 7049)
  GREEN CANYON BLOCK 258 (OCS-G 8006)
  GREEN CANYON BLOCK 297 (OCS-G 8876)
  GREEN CANYON BLOCK 298 (OCS-G 8010)
  GREEN CANYON BLOCK 341 (OCS-G 13171)
  GREEN CANYON BLOCK 342 (OCS-G 8012)


  ENSERCH EXPLORATION, INC.-------------------------------------------- 40%
  MOBIL OIL CORPORATION------------------------------------------------ 40%
  READING & BATES DEVELOPMENT CO.-------------------------------------- 20%
                                                                       100%

  AS TO GREEN CANYON 209 (OCS-G 8504) WORKING INTERESTS ARE OWNED AS
  FOLLOWS:

  AMOCO PRODUCTION COMPANY------------------------------------------ 33.33%
  ENSERCH EXPLORATION, INC.----------------------------------------- 26.67% 
  MOBIL OIL CORPORATION--------------------------------------------- 26.67%
  READING & BATES DEVELOPMENT CO.----------------------------------  13.33%
                                                                    100.00%

  II.   DESIGNATED REPRESENTATIVES OF THE PARTIES:

        ENSERCH EXPLORATION, INC.
        4849 GREENVILLE AVENUE, SUITE 1200
        DALLAS, TEXAS 75206
        ATTN: MR. C.R. ERWIN - REGIONAL DIRECTOR
        TELEPHONE:  (214) 987-7780
        TELECOPIER: (214) 987-6673

        MOBIL EXPLORATION & PRODUCING U.S. INC.
        1250 POYDRAS BUILDING
        NEW ORLEANS, LOUISIANA 70113
        ATTN: MR. W.J. ENGLE - PROJECT MANAGER FOR JOINT VENTURE RELATIONS
        TELEPHONE:  (504) 566-5234
        TELECOPIER: (504) 566-5365

        READING & BATES DEVELOPMENT CO.
        901 THREADNEEDLE, SUITE 200
        HOUSTON, TEXAS 77079
        ATTN: MR. D.C. TOALSON - PRESIDENT
        TELEPHONE:   (713) 496-5000
        TELECOPIER: (713) 496-0186

-----------------------------------------------------------------------------
                                                               EXHIBIT "A-1"


  ATTACHED TO AND MADE  A PART OF THAT CERTAIN ALLEGHENY OPERATING AGREEMENT
  EFFECTIVE MAY 1,  1995 BETWEEN ENSERCH EXPLORATION, INC., READING  & BATES
  DEVELOPMENT CO.,  MOBIL  OIL  CORPORATION  AND  MOBIL  OIL  EXPLORATION  &
  PRODUCING SOUTHEAST INC..


  CONTRACT AREA AND DESIGNATED PROSPECT OUTLINES


  I.    THE CONTRACT AREA  SHALL BE COMPRISED OF THE FOLLOWING  GREEN CANYON
        LEASES:  GREEN CANYON BLOCKS 120, 126, 209, 210, 213, 250, 251, 253,
        254, 257, 258, 295, 297, 298, 299, 301, 302, 304, 341 AND 342.


  II.   DESIGNATED PROSPECTS

        Prospect                            Blocks

        Allegheny                           Green  Canyon  Blocks  209, 210,
                                            253, 254, 297, 298, 299, 341 and
                                            342

        N.W. Bison                          Green Canyon Block 120

        Thor                                Green Canyon Block  250, 251 and
                                            295

        Thebes                              Green Canyon 126

        Isis                                Green Canyon 213,  257, 258, 301
                                            and 302

-----------------------------------------------------------------------------
                                                                EXHIBIT "A-2" 

  Attached to and made a part of that certain Allegheny Operating Agreement
  dated  effective May 1, 1995, between Enserch Exploration Inc., Reading &
  Bates Development Co. and Mobil Oil Corporation.


                             DESCRIPTION OF LEASES

  1.    GREEN CANYON BLOCK 120
        MMS Serial No. OCS-G-15548
        Effective date of Lease: September 1, 1995
        Lessor:  United States of America
        Lessee:  Enserch Exploration, Inc. et al
        Legal Description:
        Block 120, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

  2.    GREEN CANYON BLOCK 126
        MMS Serial No. OCS-G-15550
        Effective date of Lease: July 1, 1995
        Lessor:  United States of America
        Lessee:  Enserch Exploration, Inc. et al
        Legal Description:
        Block 126, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

  3.    GREEN CANYON BLOCK 209
        MMS Serial No. OCS-G-8504
        Effective date of Lease:  June 1, 1986 
        Lessor:  United States of America
        Lessee:  Placid Oil Company, et al 
        Legal Description:
        Block 209, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

  4.    GREEN CANYON BLOCK 210
        MMS Serial No. OCS-G-13696
        Effective date of Lease:  July 1, 1992
        Lessor:  United States of America
        Lessee:  EP Operating Company, et al
        Legal Description:
        Block 210, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

  5.    GREEN CANYON BLOCK 213
        MMS Serial No. OCS-G-8000
        Effective date of Lease:  July 1, 1985
        Lessor:  United States of America
        Lessee:  Placid Oil Company, et al 
        Legal Description:
        Block 213, Green Canyon Area, as shown on OCS Official Protraction 
        Diagram, NG-15-3, containing approximately 5,760 acres.

  6.    GREEN CANYON BLOCK 250
        MMS Serial No. OCS-G-15566
        Effective date of Lease: July 1, 1995
        Lessor:  United States of America
        Lessee:  Enserch Exploration, Inc. et al
        Legal Description:
        Block 250, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

  7.    GREEN CANYON BLOCK 251
        MMS Serial No. OCS-G-15567
        Effective date of Lease: July 1, 1995
        Lessor:  United States of America
        Lessee:  Enserch Exploration, Inc. et al
        Legal Description:
        Block 251, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

  8.    GREEN CANYON BLOCK 253
        MMS Serial No. OCS-G-8005
        Effective date of Lease:  July 1, 1985
        Lessor:  United States of America
        Lessee:  Amerada Hess, et al 
        Legal Description:
        Block 253, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

  9.    GREEN CANYON BLOCK 254
        MMS Serial No. OCS-G-7049
        Effective date of Lease:  June 1, 1984
        Lessor:  United States of America
        Lessee:  Placid Oil Company, et al
        Legal Description:
        Block 254, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

 10.    GREEN CANYON BLOCK 257
        MMS Serial No. OCS-G-15568
        Effective date of Lease:  July 1, 1985
        Lessor:  United States of America
        Lessee:  Placid Oil Company, et al
        Legal Description:
        Block 257, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

 11.    GREEN CANYON BLOCK 258
        MMS Serial No. 8006
        Effective date of Lease:  July 1, 1985
        Lessor:  United States of America 
        Lessee:  Placid Oil Company, et al 
        Legal Description:
        Block 258, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

 12.    GREEN CANYON BLOCK 295
        MMS Serial No. OCS-G-15570
        Effective date of Lease: July 1, 1995
        Lessor:  United States of America
        Lessee:  Enserch Exploration, Inc. et al
        Legal Description:
        Block 295, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

 13.    GREEN CANYON BLOCK 297
        MMS Serial No. OCS-G-8876
        Effective date of Lease:  June 1, 1987
        Lessor:  United States of America
        Lessee:  OPUBCO Resources, Inc. et al 
        Legal Description:
        Block 297, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

 14.    GREEN CANYON BLOCK 298
        MMS Serial No. OCS-G-8010
        Effective date of Lease:  July 1, 1985
        Lessor:  United States of America
        Lessee:  Placid Oil Company, et al
        Legal Description:
        Block 298, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

 15.    GREEN CANYON BLOCK 299
        MMS Serial No. OCS-G-15571
        Effective date of Lease: July 1, 1995
        Lessor:  United States of America
        Lessee:  Enserch Exploration, Inc. et al
        Legal Description:
        Block 299, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

 16.    GREEN CANYON BLOCK 301
        MMS Serial No. OCS-G-15572
        Effective date of Lease: July 1, 1995
        Lessor:  United States of America
        Lessee:  Enserch Exploration, Inc. et al
        Legal Description:
        Block 301, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

 17.    GREEN CANYON BLOCK 302
        MMS Serial No. OCS-G-15573
        Effective date of Lease: July 1, 1995
        Lessor:  United States of America
        Lessee:  Enserch Exploration, Inc. et al
        Legal Description:
        Block 302, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

 18.    GREEN CANYON BLOCK 341
        MMS Serial No. OCS-G-13171
        Effective date of Lease:  May 1, 1991
        Lessor:  United States of America
        Lessee:  Exxon Company U.S.A. 
        Legal Description: 
        Block 341, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

 19.    GREEN CANYON BLOCK 342
        MMS Serial No. 8012
        Effective date of Lease: July 1, 1985
        Lessor:  United States of America
        Lessee:  Placid Oil Company, et al
        Legal Description:
        Block 342, Green Canyon Area, as shown on OCS Official Protraction
        Diagram, NG-15-3, containing approximately 5,760 acres.

   SUBJECT TO OVERRIDING ROYALTY RESERVATIONS

   Green Canyon Block 253 is subject to reservations of overriding royalty or
   other burdens and encumbrances as set forth in the following instruments:  

   DATE: Effective March 1, 1995
   ASSIGNOR: Shell Offhsore, Inc., et al
   ASSIGNEE: Enserch Exploration, Inc.
   ASSIGNING: All of Assignor's right, title and interest subject to a 5%  of
              8/8ths overriding royalty.

   Green Canyon Blocks 209, 254, 297, 298 and 342 are subject to reservations
   of overriding royalty as set forth in the following instruments:

   DATE: Effective July 11, 1991, 7:00 a.m.
   ASSIGNOR: Hunt Petroleum Corporation
   ASSIGNEE: Exxon Corporation
   FILED: August 15, 1991
   ASSIGNING: All of Assignor's right, title and interest subject to 1/9th of
              8/8ths overriding royalty, proportionately reduced.

   DATE: Effective May 31, 1993, 7:00 a.m.
   ASSIGNOR: Hunt Petroleum Corporation
   ASSIGNEE: Exxon Corporation
   FILED: October 26, 1993
   ASSIGNING: All of Assignor's right, title and interest subject to 1/9th of
              8/8ths overriding royalty, proportionately reduced 

----------------------------------------------------------------------------
                                                              EXHIBIT "A-3"


  ATTACHED TO AND MADE A PART OF THAT CERTAIN ALLEGHENY OPERATING AGREEMENT
  EFFECTIVE  MAY 1, 1995 BETWEEN ENSERCH EXPLORATION, INC., READING & BATES
  DEVELOPMENT  CO.,  MOBIL  OIL  CORPORATION  AND  MOBIL  OIL EXPLORATION &
  PRODUCING SOUTHEAST INC..

  OPERATOR DESIGNATIONS

        Prospect    Blocks                        Operator

        Allegheny   Green Canyon Blocks 209,      ENSERCH EXPLORATION, INC.
                    210, 253, 254, 297, 298, 
                    299, 341 and 342

        N.W. Bison  Green Canyon Block 120        ENSERCH EXPLORATION, INC.

        Thor        Green Canyon Block 250,       ENSERCH EXPLORATION, INC.
                    251 and 295

        Thebes      Green Canyon 126              MOBIL OIL EXPLORATION &
                                                  PRODUCING SOUTHEAST INC.

        Isis        Green Canyon 213, 257,        MOBIL OIL EXPLORATION & 
                    258, 301 and 302              PRODUCING SOUTHEAST INC.

-----------------------------------------------------------------------------
                                                                  EXHIBIT B

  Attached to and made  a part of that certain Allegheny Operating Agreement
  dated effective May 1, 1995,  between Enserch Exploration, Inc., Reading &
  Bates Development Co.,  Mobil Oil Corporation and Mobil Oil Exploration  &
  Producing Southeast Inc.

                         OFFSHORE  INSURANCE PROVISIONS

  I.    Any and all  times while operations  are being conducted  under this
        Agreement, Operator shall carry or cause to be carried insurance for
        the benefit of and at the expense of the Joint Account as follows:

        1.    Worker's Compensation Insurance  to cover full liability under
              the  applicable State and Federal  Worker's Compensation Laws.
              Said   insurance   policy   shall    contain   the   following
              endorsements:

              a.    Employee's   Liability   Insurance   with  a   limit  of
                    $1,000,000 for accidental injuries or  deaths of one  or
                    more employees as a result of one accident.

              b.    Coverage under  U.S. Longshoremen's  and Harbor Worker's
                    Compensation  Act,   including   provisions   of   Outer
                    Continental Shelf Lands Act, if applicable.

              c.    Marine  and Voluntary  Compensation, including  but  not
                    limited   to   General   Maritime    Law,   Jones   Act,
                    Transportation, Wages, Maintenance  and Cure, subject to
                    a limit of $50,000,000.

        2.    Such insurance shall be carried for the benefit of the Parties
              hereto and its cost shall be charged to the Joint Account.  If
              under  the laws  of the jurisdiction  in which  operations are
              conducted, Operator  is authorized to be  a self-insurer as to
              the foregoing,  Operator may elect to be  a self-insurer under
              such laws  and, in  such event, Operator shall  charge to  the
              Joint Account, in lieu  of any premiums for  such insurance, a
              premium  equivalent in an amount determined by applying manual
              insurance rates to the payroll.

  II.   It is specifically understood that Operator shall have no obligation
        to carry  any other insurance for  the benefit of the  Joint Account
        unless mutually  agreed in  writing by all Parties.   Any  Party may
        individually, at its own expense, acquire additional insurance as it
        desires; however, any such additional insurance shall contain waiver
        or subrogation rights in favor of the remaining Parties hereto.

  III.  Operator  shall  make  a good  faith  effort to  require third-party
        contractors performing  work on  the Joint  Property to  carry  such
        insurance and in such amount as  Operator shall deem necessary.   It
        is recognized in the industry that there are certain contractors and
        service  companies  whose  services  are  necessary  to   carry  out
        operations contemplated by the  Parties, who, as a  matter of policy
        or  legal interpretation  refuse contractually  to indemnify  and/or
        carry  any  insurance  indemnifying  lease  owners.    As  to  those
        entities,   Operator  may  waive  any   requirement  of  contractual
        indemnity or insurance whatsoever.

  IV.   If  Non-Consent Operations  are conducted  under  the terms  of this
        Agreement, the cost of insurance requirements hereunder in regard to
        such operations,  as well  as all losses,  liabilities, and expenses
        incurred as a result of such operations,  shall be the burden of the
        Parties participating therein.

  V.    With respect to insurance carried by Operator for the benefit of the
        Joint Account hereunder, Operator  shall  cause  the  Non-Operators,
        their  respective  parents,  subsidiaries, Affiliates,  insurers and
        underwriters to be named as additional  insureds thereunder and also
        cause a waiver of subrogation to be granted by the insurance company
        or  underwriter  in  favor  of  the  Non-Operators, their respective
        parents,  subsidiaries, Affiliates,  insurers  and underwriters with
        respect to such insurance coverage. 

-----------------------------------------------------------------------------
                             ADDENDUM TO EXHIBIT "C"
                          COPAS ACCOUNTING PROCEDURES


  ADDITIONS:

  1)    Salaries of First Level Supervisors employed for the benefit of  the
        Joint  Property in  the conduct  of Joint  Operations.   First Level
        Supervisors are individuals at  the lowest level of the organization
        who have  supervision over  the day to  day operations  of the Joint
        Property.  Designation of an individual as a First Level  Supervisor
        shall  not be based on title or location but rather on the functions
        performed.  The inclusion  of a First Level  Supervisor as a  direct
        charge to  the Joint  Account  reflects the  cost of  the  immediate
        supervisor responsible  for the daily  supervision of the Operator's
        field  employees and contract labor, which  are directly employed on
        the Joint Property in the conduct of Joint Operations.

  2)        In  such  event,  Operator shall  charge  to  the Joint  Account,
            in lieu of any premiums for such  insurance, a premium equivalent
            in an  amount determined by  applying manual  insurance rates  to
            the payroll.

  3)        Costs  incurred  for  the  benefit  of  the  Joint  Property  and
            applicable to  the Joint Operations  which arise from  compliance
            with governmental  or regulatory requirements  or to protect  the
            Joint  Property  from  potential environmental  liability.   Such
            costs  may include  surveys of  an  ecological or  archaeological
            nature.  Also,  such costs may include expenditures to provide or
            have available pollution containment and  removal equipment, plus
            the actual cost of  control and clean up  of hazardous spills  as
            required by applicable laws and regulations.

  4)        No  costs  incurred  beyond  the  Shore  Base  Facility shall  be
            charged as  direct charge  unless such  charges are  specifically
            covered by  items 1 through  14 above.   This exclusion  does not
            cover items  covered by  the Integrated  Project Team  Accounting
            described in Addendum, Item No. 5.

            Expenditures or  services provided by  Non-Operator(s) which  are
            of  direct  benefit  the  Joint  Account  and  requested  by  the
            Operator will  be billed  by the Non-Operator(s)  to the Operator
            on a 100%  basis.  Operator  will bill  back Non-Operator(s)  for
            their proportional share of these costs.

  5)        INTEGRATED PROJECT TEAM ACCOUNTING

            a.    Services Rendered by Employees of Participants

                  All salaries,  wages, payroll burden  and Personal Expenses
                  of  management, supervisory, technical  and other personnel
                  who  are  assigned  to  the  Integrated  Project  Team  (as
                  defined  in Exhibit  "G") ("IPT')  and  engaged in  project
                  management, design, construction and installation shall  be
                  charged direct  regardless of location ("Qualified Costs").
                  A pro rata  share of  salaries, wages,  payroll burden  and
                  Personal   Expenses   of   part-time  technical   personnel
                  assigned  to the  IPT may  be charged  direct  as Qualified
                  Costs  if the  individual's  time  devoted to  the  project
                  totals at least one full day during a given month.

                  Qualified Costs  incurred by  Non-Operators will  be billed
                  to the  Operator on or  before the  20th day  of the  month
                  following the month  in which the costs were incurred.  The
                  billing  for  such  Qualified  Costs   shall  include  time
                  sheets, copies of expense reports  and sufficient detail to
                  support  the charge.   Operator  will remit  payment to the
                  Non-Operators for these  costs and charge the  total amount
                  to the Joint Account.

                  A pro rata share of  salaries will be charged to the  Joint
                  Account  as Qualified  Costs based  on  actual days  worked
                  only when  such time totals  at least  one day or  more per
                  month devoted to  the project.  Payroll burden and Personal
                  Expenses associated with this labor will  be charged to the
                  Joint Account  consistent with  the  provisions of  Exhibit
                  "C", Section II,  Paragraph 2,  Direct Charges -  Labor and
                  Paragraph 3, Direct Charges - Employee Benefits.

                  The  defined   term  "Personal   Expenses"  shall   include
                  reasonable  travel,  accommodation,  per  diem, meals,  and
                  other  reimbursable   costs  incurred  by  personnel  whose
                  salaries are  chargeable to  the Joint  Account.   Personal
                  Expenses shall  be subject to  the approval of the  Project
                  Manager.  Relocation costs  shall not be chargeable to  the
                  Joint Account.

                  Each  participant   shall  maintain  auditable  records  to
                  support any charges  made by it  to the  Joint Account  and
                  shall  be subject  to  the  audit requirement  provided  in
                  Section  I, Paragraph  5  of this  Exhibit  "C" as  to such
                  charges.  Auditable  records shall include time  sheets and
                  expense account reports for personnel  charged to the Joint
                  Account,  basis  for  calculation  of  payroll  burden  and
                  copies of third-party invoices.

            b.    Other  Services  Provided by  Operator's  or Non-Operators'
                  Employees or Affiliates

                  Support staff employed by the  Operator or Non-Operator, or
                  Affiliate controlled  by the Operator or  Non-Operator, may
                  provide  technical services  for the  benefit  of the  IPT.
                  Without limiting the foregoing, examples  of such technical
                  services include  computer assisted  drafting and  computer
                  services,  prior  to  incurring  such  costs,  the  Project
                  Manager  shall  recommend the  expenditure  to  the Owners'
                  Committee ("Recommendation").  The  Recommendation shall be
                  in  writing and shall include  a description of the service
                  to be provided, the  time period  during which the  service
                  will   be  rendered   and   the   estimated  cost.      The
                  Recommendation shall  include a comparison of the estimated
                  cost of the expenditure with the estimated  cost of similar
                  services provided  by  third  party  vendors.   If  an  all
                  inclusive standard rate is  to be charged, such  rate shall
                  not   be  greater   than  the   rate  customarily   charged
                  internally  by   the  provider  of   the  service  to   its
                  Affiliates.   Approval of the Recommendation  shall require
                  the  unanimous  consent  of  the  Owners   Committee.    If
                  unanimous consent  is obtained,  the costs  covered by  the
                  Recommendation shall  be  directly  charged  to  the  Joint
                  Account.    If  unanimous  consent  is  not  obtained,  the
                  Project  Manager  shall  withdraw  the  Recommendation  and
                  acquire the service from third party vendors.

                  Affiliates shall  maintain auditable records to support all
                  charges  made by  it to  the Joint  Account and as  to such
                  charges shall  be subject  to the  same audit  requirements
                  provided for Operator's  charges in Section I,  Paragraph 5
                  of this Exhibit "C".

            c.    Third-Party Costs

                  All third party  expenditures incurred by the  Operator for
                  the direct  benefit of the  project regardless of  location
                  will be direct charged to  the Joint Account.   Third party
                  expenditures shall include, but not be limited to:

                  -     Contractors, consultants and service companies
                  -     Fabrication,     construction    and     installation
                        activities and associated cost
                  -     Specialized  equipment,  materials, testing  or other
                        services   (including   software    and   specialized
                        computer applications)
                  -     Research  and development,  prototype studies, design
                        and development work
                  -     Conceptual work/studies
                  -     On-site construction  representatives and  inspectors
                        and associated cost
                  -     Drilling design and development

            d.    Overhead Application

                  The  Major  Construction rates  provided  in  Exhibit  "C,"
                  Section  III,  2.  shall  cover   the  cost  of  Operator's
                  personnel  above the  Project Manager  level and Operator's
                  other   administrative   functions  and   associated  costs
                  indirectly  serving the project  including, but not limited
                  to, the cost for accounting,  services personnel, treasury,
                  administrative,   senior   management  and   other  support
                  services provided  by the Operator.   Such  rates shall  be
                  applied  to the total cost (gross)  of the applicable fixed
                  asset which  is the subject  of the Major Construction  and
                  which is  charged to the  Joint Account.   Total cost shall
                  include  the Qualified Costs  of the  IPT, insofar  as such
                  costs are associated with such fixed asset.

                  If the  Project Manager  elects to  locate the  IPT at  the
                  office of a  Non Operating  Party, the Project  Manager and
                  Non-Operator shall agree upon  a rental rate to  charge for
                  providing  a work  location  for  the  IPT.    One  hundred
                  percent (100%) of  the rent will  be invoiced  by the  Non-
                  Operator  to  the  Operator.   The  Operator  shall  not be
                  entitled  to   charge  overhead  on  Non-Operator's  office
                  rental charges to the Joint Account.

  6)        The  pricing  of  material transfers  to  and/or  from the  Joint
            Property  will  be   determined  by  utilizing  the  Computerized
            Equipment Pricing  System (CEPS),   historical  price multiplier,
            pricing on application  or fair market value.  The pricing method
            selected  by the  Operator will  be applied  consistently to  all
            material transfer transactions.

            A  "Direct Purchase"  occurs when the  Operator contracts  with a
            third party for  the acquisition of materials for a specific well
            site or  location.  Direct  Purchases shall charged  to the Joint
            Account at the price paid by the Operator after deduction of  all
            discounts  received.   Material provided  by  the Operator  under
            "vendor stocking programs, where the  initial use is for  a joint
            property and title of the material does  not pass from the vendor
            until usage, is  considered a Direct  Purchase.   If material  is
            found to be defective or is returned to the vendor for any  other
            reason,  the Joint  Account shall  be  credited when  adjustments
            have  been  received  by  the  Operator  from  the  manufacturer,
            distributor or agent.

            "Tubular substitution" is defined where higher-than-specification
            grade  or  size  tubulars  are  charged to the Joint Account from
            Operator's inventory.  The Operator is  entitled  to  charge  the
            Joint Account at an equivalent price of the well design  specifi-
            cation tubulars.

  7)     1.Directed Inventories
            With an interval of not less than 5 years, physical inventories
            shall be performed by the Operator upon written notification of
            a majority in working interest of the Non-Operators.

  8)        Prior  to the  Operator entering  into  new contracts  with Third
            Parties to  acquire helicopter, ship  transport or other  ongoing
            support  services   ("Services"),  and  prior  to   the  Operator
            contracting with Third Parties for  Shore Base Facilities ("Shore
            Base Facilities"),  Operator or  Non-Operator may propose sharing
            their  existing  support   Services  or  Shore   Base  Facilities
            ("Sharing Proposal").   The Sharing Proposal shall be made to the
            Owners'  Committee  and  shall  include   a  description  of  the
            Services or Shore  Base Facilities  to be provided,  the duration
            of the  sharing  arrangement and  the  estimated actual  cost  to
            provide such  Services  or Shore  Base  Facilities.   It  is  the
            intention of  this section that  Sharing Proposals be  based on a
            reasonable estimate of  the actual cost to provide the Service or
            Shore Base Facilities for  use by the Joint Account and that such
            proposal  not be  based on  the  rate that  a  Third Party  might
            charge   for  comparable  Services   or  Shore  Base  Facilities.
            Approval of the proposal  shall require the unanimous consent  of
            the Owners' Committee.
 
-----------------------------------------------------------------------------
                                                                 EXHIBIT "D"

                     GAS BALANCING AGREEMENT ("AGREEMENT')
                   ATTACHED TO AND MADE PART OF THAT CERTAIN
            OPERATING AGREEMENT DATED EFFECTIVE MAY 1, 1995, BETWEEN
          ENSERCH EXPLORATION, INC., READING & BATES DEVELOPMENT CO.,
   MOBIL OIL CORPORATION AND MOBIL OIL EXPLORATION & PRODUCING SOUTHEAST INC.
                             ("OPERATING AGREEMENT")


  1.    DEFINITIONS

        The following definitions shall apply to this Agreement:

        1.01  "Arm's Length  Agreement" shall  mean any  gas sales agreement
              with a unaffiliated purchaser or any gas sales agreement  with
              an affiliated  purchase where  the sales  price represents the
              current value as published  in an industry publication such as
              Inside  F.E.R.C. or  such  other future  publication  as maybe
              applicable.

        1.02  "Index Price" shall mean the average of spot sales prices  for
              gas  during any  specific month  as published  Inside F.E.R.C.
              first of  the month publication  for the applicable downstream
              pipeline(s) to which the gathering pipelines deliver.

        1.03  "Balancing  Area" shall  mean all  of  the acreage  and depths
              subject to the Operating Agreement.

        1.04  "Full Share  of Current Production"  shall mean the Percentage
              Interest of each  Party in the Gas actually produced  from the
              Balancing Area during each month.

        1.05  "Gas" shall mean  all hydrocarbons produced or producible from
              the Balancing Area,  whether from a well classified as  an oil
              well or gas well  by the regulatory agency having jurisdiction
              in  such matters, which are  or may be made available for sale
              or  separate  disposition  by  the  Parties,   excluding  oil,
              condensate  and  other liquids  recovered  by  field equipment
              operated  for the joint  account.  "Gas" does  not include gas
              used in  joint operations,  such  as  for fuel,  recycling  or
              reinjection, or which is  vented or lost prior to its sale  or
              delivery from the Balancing Area.

        1.06  "Makeup  Gas" shall  mean any  Gas  taken by  an Underproduced
              Party  from the Balancing Area in excess of  its Full Share of
              Current Production, whether pursuant to Section 3.3 or Section
              4.1 hereof.

        1.07  "Mcf" shall mean one thousand cubic feet.  A cubic foot of Gas
              shall mean  the volume of gas  contained in one  cubic foot of
              space  at sixty  degrees Fahrenheit,  14.73 pounds  per square
              inch absolute (PSIA) and having a specific gravity of 1.00.

        1.08  "MMBtu"  shall mean  one million  British  Thermal  Units.   A 
              British Thermal Unit shall mean the quantity of  heat required
              to raise one pound avoirdupois of pure water from 58.5 degrees
              Fahrenheit to  59.5 degrees Fahrenheit  at a constant pressure
              of 14.73 pounds per square inch absolute.

        1.09  "Operator" shall  mean  the  individual or  entity  designated
              under  the terms of  the Operating Agreement or,  in the event
              this Agreement is not employed in connection with an operating
              agreement, the individual or entity designated as the operator
              of the well(s) located in the Balancing Area.

        1.10  "Overproduced  Party"  shall mean  any  Party  having  taken a
              greater quantity  of Gas  from  the  Balancing Area  than  the
              Percentage Interest  of such Party  in the cumulative quantity
              of all Gas produced from the Balancing Area.

        1.11  "Overproduction"  shall mean  the  cumulative quantity  of Gas
              taken by  a Party in excess of its Percentage  Interest in the
              cumulative quantity of Gas produced from the Balancing Area.

        1.12  "Party" shall  mean those  individuals or  entities subject to
              this   Agreement,  and  their  respective  heirs,  successors,
              transferees and assigns.

        1.13  "Percentage  Interest" shall  mean the  percentage or  decimal
              interest of each Party in the Gas produced from the  Balancing
              Area  pursuant  to   the  Operating  Agreement  covering   the
              Balancing Area.

        1.14  "Royalty"  shall mean payments  on production of Gas  from the
              Balancing   Area  to  all  owners   of  royalties,  overriding
              royalties, production payments or similar interests.

        1.15  "Underproduced  Party" shall  mean  any Party  having  taken a
              lesser quantity  of  Gas  from  the  Balancing Area  than  the
              Percentage Interest  of such Party  in the cumulative quantity
              of all Gas produced from the Balancing Area.

        1.16  "Underproduction"  shall  mean   the  deficiency  between  the
              cumulative quantity of Gas taken by a Party and its Percentage
              Interest in the  cumulative quantity of all  Gas produced from
              the Balancing Area.

        1.17  "Winter Period" shall mean the months November and December in
              one  calendar year and  the months of January  and February in
              the succeeding calendar year.

  2.        BALANCING AREA

            2.1  If this Agreement  covers more than  one Balancing Area,  it
                 shall be applied as  if each Balancing Area were  covered by
                 separate but identical agreements.  All balancing  hereunder
                 shall be on the basis of  Gas taken from the Balancing  Area
                 measured in MMBtus.

            2.2  In the  event that all or part of the Gas deliverable from a
                 Balancing  Area is or becomes subject to one or more maximum
                 lawful  prices, any Gas not subject  to price controls shall
                 be considered as  produced from a single Balancing  Area and
                 Gas  subject to each maximum  lawful price category shall be
                 considered produced from a separate Balancing Area.

  3.        RIGHT OF PARTIES TO TAKE GAS

            3.1  Each  Party desiring to take Gas will notify the Operator of
                 the volume nominated, the  name of the transporting pipeline
                 and the  pipeline contract  number (if available)  and meter
                 station relating  to such delivery, sufficiently  in advance
                 for the Operator, acting  with reasonable diligence, to meet
                 all  nomination   and  other  requirements.     Operator  is
                 authorized to deliver the volumes so nominated and confirmed
                 (if confirmation is  required) to the transporting  pipeline
                 in accordance with the terms of this Agreement.

            3.2  Each Party shall make a reasonable good faith effort to take
                 its  Full Share  of  Current Production  each  month to  the
                 extent that  such production is required  to maintain leases
                 in  effect, to protect the  producing capacity of  a well or
                 reservoir, to preserve  correlative rights,  or to  maintain
                 oil production.

            3.3  When a Party fails for any  reason to take its Full Share of
                 Current  Production (as  such Share  may be  reduced by  the
                 right of the other Parties to make up for Underproduction as
                 provided  herein), the  other Parties  shall be  entitled to
                 take any  Gas which such Party fails to take.  To the extent
                 practicable, such  Gas shall be made  available initially to
                 each   Underproduced  Party  in   the  proportion  that  its
                 Percentage Interest in the Balancing Area bears to the total
                 Percentage Interest of all Underproduced Parties desiring to
                 take  such  Gas.   If  all  such Gas  is  not  taken by  the
                 Underproduced Parties,  the portion not taken  shall then be
                 made available to the  other Parties in the  proportion that
                 their respective Percentage Interest  in the Balancing  Area
                 bears to the total Percentage Interest of such Parties.

            3.4  All Gas taken by  a Party in accordance with  the provisions
                 of  this  Agreement, regardless  of  whether  such Party  is
                 underproduced  or  overproduced, shall  be  regarded as  Gas
                 taken for its own  account with title thereto being  in such
                 taking Party.

            3.5  Notwithstanding  the provisions  of Section  3.3 hereof,  no
                 Overproduced  Party shall be  entitled in any  month to take
                 any Gas in  excess of  three hundred percent  (300%) of  its
                 Percentage  Interest  of the  Balancing  Area's then-current
                 Maximum Monthly  Availability; provided, however,  that this
                 limitation  shall not  apply  to the  extent  that it  would
                 preclude production  that is required to  maintain leases in
                 effect,  to protect  the  producing capacity  of  a well  or
                 reservoir, to  preserve correlative  rights, or to  maintain
                 oil  production.  "Maximum  Monthly Availability" shall mean
                 the maximum average monthly rate  of production at which Gas
                 can be delivered from the  Balancing Area, as determined  by
                 the Operator,  considering the  maximum efficient  well rate
                 for  each  well  within  the  Balancing  Area,  the  maximum
                 allowable(s) set by the appropriate  regulatory agency, mode
                 of  operation, production facility capabilities and pipeline
                 pressures.

            3.6  In the event that a Party fails to make arrangements to take
                 its Full Share of Current Production required to be produced
                 to  maintain  leases in  effect,  to  protect the  producing
                 capacity  of a  well or  reservoir, to  preserve correlative
                 rights, or to maintain oil production, the Operator may sell
                 any part  of such Party's  full share of  Current Production
                 that such Party fails to take for the account  of such Party
                 and  render  to such  Party, on  a  current basis,  the full
                 proceeds  of   the  sale  less  any   reasonable  marketing,
                 compression,  treating,  gathering  or transportation  costs
                 incurred directly in  connection with the sale  of such Full
                 Share   of  Current   Production.     In  making   the  sale
                 contemplated herein, the Operator shall be obligated only to
                 obtain  such price  and  conditions  for  the  sale  as  are
                 reasonable  under   the  circumstances  and   shall  not  be
                 obligated to  share any of  its markets.   Any such  sale by
                 Operator  under the  terms  hereof shall  be  only for  such
                 reasonable  periods  of  time  as are  consistent  with  the
                 minimum  needs   of  the   industry  under  the   particular
                 circumstances, but in no event for a period in excess of one
                 year.  Notwithstanding the provisions of Article 3.4 hereof,
                 Gas sold by Operator for a Party under the provisions hereof
                 shall  be deemed to  be Gas  taken for  the account  of such
                 Party.

  4.        IN-KIND BALANCING

            4.1  Effective  the first day of  any calendar month following at
                 least  thirty  (30)  days'   prior  written  notice  to  the
                 Operator,  any  Underproduced  Party may  begin  taking,  in
                 addition  to its  Full Share of  Current Production  and any
                 Makeup Gas  taken pursuant to Section 3.3 of this Agreement,
                 a  share  of  current production  determined  by multiplying
                 fifty percent (50%) of the Full Shares of Current Production
                 of all Overproduced Parties by a fraction, the  numerator of
                 which is the Percentage Interest of such Underproduced Party
                 and  the denominator of which is the total of the Percentage
                 Interests  of all  Underproduced  Parties  desiring to  take
                 Makeup  Gas.   In  no event  will  an Overproduced  Party be
                 required to  provide more  than fifty  percent (50%)  of its
                 Full  Share  of  Current Production  for  Makeup  gas.   The
                 Operator will promptly  notify all  Overproduced Parties  of
                 the  election  of an  Underproduced  Party  to begin  taking
                 Makeup  Gas.   However,  it  is  further  provided  that  an
                 Underproduced Party  shall not be  entitled to take  or sell
                 Make-up   Gas  during   the   Winter  Period   unless   such
                 Underproduced  Party shall  have  taken or  sold during  the
                 preceding  eight  months (unless  excused  by Force  Majeure
                 events on the gathering pipeline  from the Balancing Area) a
                 total amount of Gas that was not less than its full share of
                 the Gas produced during such period.

            4.2  Notwithstanding   the  provisions   of   Section   4.1,   no
                 Overproduced  Party will  be required  to provide  more than
                 twenty-five  percent  (25%) of  its  Full  Share of  Current
                 Production for Makeup Gas during the Winter Period.

            4.3  Notwithstanding  any other provision  of this  Agreement, at
                 such  time and  for  so long  as  Operator, or  (insofar  as
                 concerns  production  by  the  Operator)  any  Underproduced
                 Party, determines  in good faith that  an Overproduced Party
                 has produced all  of its share of the ultimately recoverable
                 reserves in the Balancing  Area, such Overproduced Party may
                 be required  to  make available  for  Makeup Gas,  upon  the
                 demand of the Operator or any Underproduced Party, up to one
                 hundred  percent (100%)  of such  Overproduced Party's  Full
                 Share of Current Production.

  5.        STATEMENT OF GAS BALANCES

            5.1  The  Operator will  maintain  appropriate  accounting  on  a
                 monthly and cumulative basis of the volumes of Gas that each
                 Party is entitled to receive and the volumes of Gas actually
                 taken or  sold for each Party's account.   Within forty-five
                 (45) days after the  month of production, the Operator  will
                 furnish a statement for such  month showing (1) each Party's
                 Full Share of  Current Production, (2)  the total volume  of
                 Gas actually taken or sold for each Party's account, (3) the
                 difference between the volume taken by each and that Party's
                 Full Share of Current  Production, (4) the Overproduction or
                 Underproduction  of  each  Party,  and  (5)  other  data  as
                 recommended by  the provisions  of the Council  of Petroleum
                 Accountants   Societies  Bulletin  No.  24,  as  amended  or
                 supplemented hereafter.  Each Party taking Gas will promptly
                 provide to  the Operator any  data required by  the Operator
                 for preparation of the statements required hereunder.

            5.2   If any Party  fails to provide the data required herein for
                  four (4)  consecutive production  months, the Operator,  or
                  where  the Operator  has failed  to  provide data,  another
                  Party, may give  formal written notice of a demand for such
                  data.   If  the  non-reporting Party  fails  or refuses  to
                  provide  such data  within thirty (30)  days of its receipt
                  of  the demand,  then  the notifying  Party shall  have the
                  right  to   audit  the   production  and   Gas  sales   and
                  transportation volumes  of the  non-reporting Party.   Such
                  audit shall be  conducted only after reasonable  notice and
                  during normal  business hours  in the  office of  the Party
                  whose  records are  being audited.    All costs  associated
                  with  such audit  will  be charged  to  the account  of the
                  Party failing to provide the required data.

  6.        PAYMENTS ON PRODUCTION

            6.1  Each  Party taking Gas  shall pay  or cause  to be  paid all
                 production and  severance taxes  due on  all volumes  of Gas
                 actually taken by such Party.

            6.2  Each Party  shall pay or cause  to be paid Royalty  due with
                 respect to Royalty owners to whom it is accountable based on
                 the volume of Gas actually taken for its account.

            6.3  In the  event that any governmental  authority requires that
                 Royalty payments  be  made  on any  other  basis  than  that
                 provided  for in this Section  6, each Party  agrees to make
                 such   Royalty  payments  accordingly,   commencing  on  the
                 effective date required by such governmental  authority, and
                 the method provided for herein shall be thereby superseded.

  7.        CASH SETTLEMENTS

            7.1   Upon the  earlier of the  plugging and  abandonment of  the
                  last  producing  interval  in   the  Balancing  Area,   the
                  termination of  the Operating Agreement  or any pooling  or
                  unit agreement covering the Balancing Area, or at  any time
                  no Gas  is taken from  the Balancing Area  for a period  of
                  twelve (12) consecutive months, any  Party may give written
                  notice calling  for cash settlement  of the Gas  production
                  imbalances among the Parties.   Such notice shall be  given
                  to all Parties in the Balancing Area.

            7.2   Within sixty (60)  days after the notice  calling for  cash
                  settlement  under Section 7.1, the Operator will distribute
                  to each  Party a Final  Gas Settlement Statement  detailing
                  the  quantity of Overproduction  owed by  each Overproduced
                  Party  to  each  Underproduced Party  and  identifying  the
                  month to which  such Overproduction is attributed, pursuant
                  to the methodology set out in Section 7.4.

            7.3   Within sixty  (60)  days after  receipt  of the  Final  Gas
                  Settlement Statement,  each Overproduced Party will  pay to
                  each  Underproduced  Party   entitled  to  settlement   the
                  appropriate  cash  settlement,  accompanied by  appropriate
                  accounting  detail.     At   the  time   of  payment,   the
                  Overproduced  Party will  notify the  Operator  of the  Gas
                  imbalance settled by the Overproduced Party's payment.

            7.4   The amount of  the cash settlement for  Overproduction will
                  be based  on the  Index Price  (without regard to  proceeds
                  attributable  to liquid  hydrocarbons  which may  have been
                  extracted   from   the  Overproduction)   less  appropriate
                  deductions  listed in  section 7.5  under  an Arm's  Length
                  Agreement for  the  Gas taken  from  time  to time  by  the
                  Overproduced Party  in excess of  the Overproduced  Party's
                  Full Share of  Current Production.  Any Makeup Gas taken by
                  the  Underproduced  Party  prior  to  monetary   settlement
                  hereunder  will   be  applied   to  offset   Overproduction
                  chronologically in the order of accrual.

            7.5   The values used  for calculating the cash  settlement under
                  Section 7.4, triggered  by the notice of 7.1, will be based
                  on  the  Index  Price after  deducting  any  production  or
                  severance taxes paid and  any Royalty actually paid by  the
                  Overproduced  Party  to an  Underproduced  Party's  Royalty
                  owner(s),  to  the  extent  said   payment  amounted  to  a
                  discharge    of   said    Underproduced   Party's   Royalty
                  obligation,   as   well  as   any   reasonable   marketing,
                  compression,  treating,  gathering or  transportation costs
                  incurred  directly  in  connection with  the  sale  of  the
                  Overproduction.

            7.6   To  the  extent the  Overproduced  Party did  not  sell all
                  Overproduction under an  Arm's Length Agreement, or  in the
                  event  that no  sales under  Arm's  Length Agreements  were
                  made during any  such month, the cash  settlement for  such
                  month will be based on  the Index Price (without  regard to
                  proceeds attributable  to  liquid hydrocarbons  which  have
                  been extracted from the Overproduction).   In either event,
                  the amount  of cash settlement  will be based  on the Index
                  Price after  deducting any  production  or severance  taxes
                  paid  and any  Royalty actually  paid  by the  Overproduced
                  Party to an Underproduced Party's  Royalty owner(s), to the
                  extent  said  payment   amounted  to  a  discharge   of  an
                  Underproduced   Party's   Royalty   obligation   and    any
                  reasonable  marketing, compression,  treating, gathering or
                  transportation  costs  connected  with  the   sale  of  the
                  Overproduction.

            7.7   Interest compounded  at the rate  specified in Exhibit  "C"
                  of  the Operating  Agreement to  which  this Gas  Balancing
                  Agreement  is  attached  or  the  maximum  lawful  rate  of
                  interest  applicable to  the  Balancing Area,  whichever is
                  less, will accrue  for all amounts due  under Section  7.1,
                  beginning the first  day following the date  payment is due
                  pursuant to  Section 7.3. Such interest  shall be  borne by
                  the Operator  or any Overproduced  Party in the  proportion
                  that their respective  delays beyond the deadlines  set out
                  in Sections 7.2 and 7.3  contributed to the accrual  of the
                  interest.

            7.8   In lieu of  the cash settlement required by Section 7.3, an
                  Overproduced Party  may deliver to  the Underproduced Party
                  an offer to  settle its Overproduction in-kind  and at such
                  rates, quantities, time and sources  as may be agreed  upon
                  by the Underproduced Party.   If the Parties are  unable to
                  agree upon the manner in which such  in-kind settlement gas
                  will  be  furnished  within  sixty   (60)  days  after  the
                  Overproduced Party's offer to settle  in-kind, which period
                  may  be  extended   by  agreement  of  said   Parties,  the
                  Overproduced  Party   shall  make  a  cash   settlement  as
                  provided  in  Section 7.3.      The  making  of an  in-kind
                  settlement  offer under  this Section  will  not delay  the
                  accrual  of interest  on  the  cash settlement  should  the
                  Parties fail to reach agreement on an in-kind settlement.

            7.9   At  any  time  during  the  term  of  this  Agreement,  any
                  Overproduced Party may,  in its sole discretion,  make cash
                  settlement(s) with the  Underproduced Parties covering  all
                  or part  of its  outstanding Gas  imbalance, provided  that
                  such  settlements  must  be  made  with  all  Underproduced
                  Parties proportionately based on the relative imbalance  of
                  the Under-produced Parties, and provided  further that such
                  settlement  may not  be  made more  often  than once  every
                  twenty-four  (24)   months.    Such  settlements   will  be
                  calculated  in the  same manner  provided  above for  final
                  cash  settlements.   The  Overproduced  Party will  provide
                  Operator a detailed accounting of  any such cash settlement
                  within thirty (30) days after the settlement is made.

  8.        TESTING

            8.1   NOT APPLICABLE

  9.        OPERATING COSTS

            Nothing  in this  Agreement shall  change or  affect  any Party's
            obligation  to  pay its  proportionate  share  of all  costs  and
            liabilities  incurred in operations on  or in connection with the
            Balancing Area,  as  its  share  thereof  is  set  forth  in  the
            Operating Agreement, irrespective  of whether any Party is at any
            time selling and  using Gas or whether  such sales or use  are in
            proportion to its Percentage Interest in the Balancing Area.

  10.       LIQUIDS

            The  Parties shall share  proportionately in  and own  all liquid
            hydrocarbons recovered with  Gas by field equipment  operated for
            the joint account  in accordance with their  Percentage Interests
            in the Balancing Area.

  11.       AUDIT RIGHTS

            Notwithstanding  any provision  in this  Agreement  or any  other
            agreement    between   the   Parties      hereto,   and   further
            notwithstanding   any   termination  or   cancellation   of  this
            Agreement, for  a period  of two (2)  years from  the end of  the
            calendar year in  which  any  information to  be furnished  under
            Section  5 or  7 hereof  is supplied,  any  Party shall  have the
            right  to  audit  the  records  of  any  other  Party   regarding
            quantity,  including but  not  limited to  information  regarding
            Btu-content.  Any  Underproduced Party shall have the right for a
            period of  two (2)  years from the  end of  the calendar year  in
            which any  cash settlement is  received pursuant to  Section 7 to
            audit the records  of any Overproduced  Party as  to all  matters
            concerning values,  including  but  not  limited  to  information
            regarding prices and disposition of Gas  from the Balancing Area.
            Any such audit shall be conducted at the expense of the Party  or
            Parties  desiring  such  audit, and  shall  be  conducted,  after
            reasonable notice,  during normal business hours in the office of
            the Party whose  records are being  audited.   Each Party  hereto
            agrees to  maintain records as to  the volumes and prices  of Gas
            sold  each  month  and  the  volumes  of  Gas  used  in  its  own
            operations, along with  the Royalty paid on any  such Gas used by
            a Party in its own operations.  The  audit rights provided for in
            this Section 11 shall be in addition to those   provided  for  in
            Section 5.2 of this Agreement.

  12.       MISCELLANEOUS

            12.1  As  between  the Parties,  in  the  event of  any  conflict
                  between   the  provisions   of  this   Agreement  and   the
                  provisions of any  gas sales contract,  or in  the even  of
                  any conflict between  the provisions of this  Agreement and
                  the  provision of the  Operating Agreement,  the provisions
                  of this Agreement shall govern.

            12.2  Each Party  agrees to defend,  indemnify and hold  harmless
                  all other Parties  from and against any  and all  liability
                  for any  claims, which may  be asserted by  any third party
                  which   now   or  hereafter   stands   in   a   contractual
                  relationship with such  indemnifying Party and  which arise
                  out of  the operation of this  Agreement or  any activities
                  of such  indemnifying Party  under the  provisions of  this
                  Agreement,  and  does  further  agree  to  save  the  other
                  Parties harmless  from all  judgments or damages  sustained
                  and costs incurred in connection therewith.

            12.3  Except as  otherwise provided  in this Agreement,  Operator
                  is  authorized   to  administer  the   provisions  of  this
                  Agreement,  but  shall  have  no  liability  to  the  other
                  Parties  for losses sustained  or liability  incurred which
                  arise  out of  or  in connection  with  the performance  of
                  Operator's  duties  hereunder, except  such  as  may result
                  from  Operator's  gross negligence  or  willful misconduct.
                  Operator shall  not be  liable to  any Underproduced  Party
                  for  the failure  of  any  Overproduced Party  (other  than
                  Operator)  to pay any  amounts owed  pursuant to  the terms
                  hereof.

            12.4  This  Agreement shall  remain in full  force and effect for
                  as long as  the Operating  Agreement shall remain  in force
                  and effect as to  the Balancing Area, and  thereafter until
                  the  Gas accounts between the Parties  are settled in full,
                  and shall inure  to the benefit of and  be binding upon the
                  Parties hereto,  and  their respective  heirs,  successors,
                  legal representatives  and assigns,  if any.   The  Parties
                  hereto  agree  to  give notice  of  the  existence  of this
                  Agreement to  any successor in  interest of any such  Party
                  and to  provide that any  such successor shall  be bound by
                  this Agreement, and shall further make any transfer of  any
                  interest subject  to the Operating  Agreement, or any  part
                  thereof, also subject to the terms of this Agreement.

            12.5  Unless the context  clearly indicates otherwise, words used
                  in the  singular include  the plural,  the plural  includes
                  the singular, and the neuter  gender includes the masculine
                  and the feminine.

            12.6  This Agreement  shall bind the  Parties in accordance  with
                  the provision hereof, nothing herein  shall be construed or
                  interpreted  as creating any right in  any person or entity
                  not a signatory  hereto, or as being a stipulation in favor
                  of any such person or entity.

            12.7  If   contemporaneously   with   this   Agreement   becoming
                  effective, or thereafter any Party  requests that any other
                  Party execute an  appropriate memorandum or notice  of this
                  Agreement in  order to give third  parties notice of record
                  of same  and submits same for execution in recordable form,
                  such memorandum  or notice  shall be duly  executed by  the
                  Party to which such request is  made and delivered promptly
                  thereafter to the Party making the request.   Upon receipt,
                  the  Party making the request shall cause the memorandum or
                  notice  to  be  duly  recorded   in  the  appropriate  real
                  property or other records affecting the Balancing Area.

            12.8  In the  event Internal Revenue Service  regulations require
                  a  uniform  method  of  computing  taxable  income  by  all
                  Parties, each Party agrees  to compute and report income to
                  the Internal Revenue  Service based on the  quantity of Gas
                  taken for its account in  accordance with such regulations,
                  insofar as same relate to sales method tax computations.

            12.9  In  the  event  pipeline  penalties  are  assessed  to  any
                  Party(s) under  this Agreement they  will be settled  under
                  the provisions as set forth in the Operating Agreement.

  13.       ASSIGNMENT AND RIGHTS UPON ASSIGNMENT

            13.1  Subject  to  the  provisions  of  Sections  13.2  and  13.3
                  hereof, and notwithstanding  anything in this Agreement  or
                  in  the Operating  Agreement to the  contrary, if any Party
                  assigns (including  any sale,  exchange or  other transfer)
                  any  of its  working interest  in  the Balancing  Area when
                  such Party is  an Underproduced or Overproduced  Party, the
                  assignment or other  act of transfer shall, insofar  as the
                  Parties hereto are  concerned, include all interest  of the
                  assigning or transferring  Party in the Gas,  all rights to
                  receive or  obligations to provide or  take Makeup  Gas and
                  all rights to  receive or obligations to make  any monetary
                  payment  which   may  ultimately   be  due  hereunder,   as
                  applicable.  Operator and each of the other Parties  hereto
                  shall thereafter treat the assignment  accordingly, and the
                  assigning or  transferring Party shall  look solely to  its
                  assignee or  other transferee for  any interest in the  Gas
                  or monetary  payment that such  Party may have  or to which
                  it may  be entitled and  shall cause its  assignee or other
                  transferee to assume its obligation hereunder.

            13.2  Notwithstanding anything in  this Agreement (including  but
                  not limited to  the provisions  of Section 13.1  hereof) or
                  in the  Operating Agreement to the contrary, and subject to
                  the  provisions of  Section 13.3  hereof, in  the  event an
                  Overproduced Party  intends  to sell,  assign, exchange  or
                  otherwise  transfer any  of  its  interest in  a  Balancing
                  Area, such Overproduced  Party shall notify in  writing the
                  other working  interest owners  who are  Parties hereto  in
                  such Balancing Area of such  fact at least sixty  (60) days
                  prior  to  closing   the  transaction.    Thereafter,   any
                  Underproduced  Party  may  demand  from  such  Overproduced
                  Party in  writing, within thirty (30) days after receipt of
                  the Overproduced Party's  notice, a cash settlement  of its
                  Underproduction from  the  Balancing  Area.   The  Operator
                  shall be  notified of  any such demand  by an Underproduced
                  Party and of  any cash settlement pursuant  to this Section
                  13,  and  the Overproduction  and  Underproduction of  each
                  Party shall be  adjusted accordingly.  Any  cash settlement
                  pursuant  to  this  Section   13  shall  be  paid  by   the
                  Overproduced Party on  or before  the earlier to  occur (i)
                  of  sixty (60)  days  after  receipt of  the  Underproduced
                  Party's demand or  (ii) at the closing  of the  transaction
                  in which  the Overproduced Party sells,  assigns, exchanges
                  or otherwise transfers  its interest in a Balancing Area on
                  the  same basis  as  otherwise set  forth  in Sections  7.3
                  through  7.6 hereof,  and shall  bear interest  at the rate
                  set forth in Section 7.7 hereof, beginning sixty (60)  days
                  after  the Overproduced Party's  sale, assignment, exchange
                  or transfer of its interest  in the Balancing Area  for any
                  amounts not paid.  Provided,  however, if any Underproduced
                  Party  does  not  so  demand such  cash  settlement  of its
                  Underproduction    from    the    Balancing   Area,    such
                  Underproduced Party  shall look exclusively to the assignee
                  or other  successor in interest  of the Overproduced  Party
                  giving  notice  hereunder  for  the  satisfaction  of  such
                  Underproduced  Party's  Underproduction in  accordance with
                  the provision of Section 13.1 hereof.

            13.3  The provisions of  this Section 13 shall not  be applicable
                  in  the event any Party  mortgages its interest or disposes
                  of its  interest by  merger, reorganization,  consolidation
                  or sale of  substantially all of its assets to a subsidiary
                  or parent  company, or to  any company in  which any parent
                  or subsidiary  of such Party  owns a majority  of the stock
                  of such company.

-----------------------------------------------------------------------------
                                                                 EXHIBIT "E"

  Attached to and made a part of that certain Allegheny Operating  Agreement
  dated effective May 1, 1995, between  Enserch Exploration, Inc., Reading &
  Bates  Development Co., Mobil Oil Corporation and  Mobil Oil Exploration &
  Producing Southeast Inc..  

                     EQUAL EMPLOYMENT OPPORTUNITY PROVISION
        During the  performance of  this contract,  the  Operator agrees  as
  follows:

        1.   The  Operator will  not  discriminate against  any employee  or
  applicant for employment because of race, color, religion, sex or national
  origin.    The  Operator  will take  affirmative  action  to  ensure  that
  applicants are employed and that  employees are treated during employment,
  without regard  to their  race, color,  religion, sex  or national origin.
  Such  action  shall  include,  but  not   be  limited  to  the  following:
  Employment, upgrading, demotion,  or transfer, recruitment or  recruitment
  advertising;  layoff  or  termination;  rates  of pay  or  other  forms of
  compensation; and selection  for training, including apprenticeship.   The
  Operator agrees to post  in conspicuous places, available to employees and
  applicants for  employment notices  to  be  provided for  the  contracting
  officer setting forth the provisions of this non-discrimination clause.

        2.  The  Operator will, in  all solicitations or advertisements  for
  employees placed by or on behalf of the Operator, state that all qualified
  applicants  will receive  consideration for  employment without  regard to
  race, color, religion, sex or national origin.

        3.  The  Operator will send to each labor union or representative of
  workers  with which  it  has a  collective bargaining  agreement  or other
  contract  or  understanding,  a  notice  to  be  provided  by  the  agency
  contracting officer,  advising the labor  union or workers' representative
  of the Operator's  commitments under Section 202 of Executive  Order 11246
  of September 24, 1965, and shall post copies of  the notice in conspicuous
  places available to employees and applicants for employment.

        4.  The Operator will comply with all provisions of  Executive Order
  11246 of September 24, 1965, and  of the rules, regulations,  and relevant
  orders of the Secretary of Labor.

        5.  The Operator will  furnish all information and  reports required
  by  Executive Order  11246  of  September 24,  1965,  and  by  the  rules,
  regulations,  and orders of  the Secretary of Labor,  or pursuant thereto,
  and  will  permit  access  to  its  books, records,  and  accounts  by the
  contracting  agency  and   the  Secretary   of  Labor   for  purposes   of
  investigation to  ascertain compliance with such  rules, regulations,  and
  orders.

        6.    In  the  event  of  Operator's non-compliance  with  the  non-
  discrimination  clauses  of  this contract  or  with  any  of  such rules,
  regulations, or  orders, this  contract  may  be canceled,  terminated  or
  suspended in whole or in part and the Operator  may be declared ineligible
  for further Government contracts in  accordance with procedures authorized
  in Executive Order  11246 of September 24,  1965, and such other sanctions
  may be imposed  and remedies invoked as provided in Executive  Order 11246
  of September 24, 1965, or by rules, regulations, or order of the Secretary
  of Labor, or as otherwise provided by law.

        7.    The Operator  will include  the  provisions of  paragraphs (1)
  through  (7) in  every subcontract  or purchase  order unless  exempted by
  rules, regulations, or orders of the Secretary of Labor issued pursuant to
  Section 204 of Executive Order 11246 of  September 24, 1965, so that  such
  provisions  will  be  binding  upon  each subcontractor  or  vendor.   The
  Operator will take such action with respect to any subcontract or purchase
  order as the contracting  agency may direct  as a means of enforcing  such
  provisions  including  sanctions for  non-compliance:   Provided, however,
  that in the event the Operator becomes involved in, or is threatened with,
  litigation with a subcontractor or vendor as a result of such direction by 
  the  contracting agency,  the Operator  may request  the United  States to
  enter into such litigation to protect the interests of the United States.

        Operator acknowledges that it may be  required to file Standard Form
  100  (EEO-1)  promulgated  jointly  by  the  Office  of  Federal  Contract
  Compliance,  the  Equal Employment  Opportunity  Commission and  Plans for
  Progress with  the appropriate agency within thirty (30) days  of the date
  of contract award  if such report has not been  filed for the current year
  and otherwise comply with or file such other compliance  reports as may be
  required under Executive Order 11246, as amended and Rules and Regulations
  adopted thereunder.

        Operator further acknowledges  that it may be  required to develop a
  written affirmative action compliance program as required by the Rules and
  Regulations  approved  by  the  Secretary  of  Labor  under  authority  of
  Executive Order 11246 and supply Non-Operators with a copy of such program
  if they so request.

                   CERTIFICATION OF NON-SEGREGATED FACILITIES

        Operator  assures  Non-Operators  that  it  does  not  and  will not
  maintain or provide for its employees any segregated facilities  at any of
  its establishments, and that it does not and will not permit its employees
  to  perform their  services at  any  location,  under its  control,  where
  segregated facilities are maintained.  For this purpose,  it is understood
  that the phrase  "segregated facilities" includes facilities  which are in
  fact segregated on a  basis of race, color,  religion, or national origin,
  because of habit, local custom or otherwise.  It is further understood and
  agreed  that  maintaining  or  providing  segregated  facilities  for  its
  employees or  permitting its employees to  perform their  services at  any
  location under its control where segregated facilities are maintained is a
  violation of  the equal  opportunity clause  required  by Executive  Order
  11246 of September 24, 1965.

        Operator  further  understands  and  agrees  that  a  breach  of the
  assurance herein contained  subjects it to the provisions of the  Order at
  41  CFR Chapter 60 of  the Secretary of Labor dated May  21, 1968, and the
  provisions of  the equal  opportunity clause enumerated contracts  between
  the United States of America and Non-Operators.

        Whoever  knowingly  and  willfully makes  any  false, fictitious  or
  fraudulent representation may  be liable to criminal  prosecution under 18
  U.S.C. 1001.

------------------------------------------------------------------------------

                                                                EXHIBIT "F"

  Attached to and made a part of that certain Unit Operating Agreement dated
  effective  May 1, 1995, between Enserch Exploration, Inc., Reading & Bates
  Development  Co.,  Mobil  Oil  Corporation  and  Mobil  Oil  Exploration &
  Producing Southeast Inc.


                            NEWS RELEASE GUIDELINES

  The  Parties  hereby  establish  the  following  guidelines regarding  the
  issuing of a release  to the news media concerning operations on  any area
  affected by the Agreement to which this Exhibit is attached.

            Subject to  Article  7.5 (News  Releases)  of the  Agreement,  no
            release  to  the news  media  shall  be  made  until all  testing
            (excluding flow  testing) in a  well is completed.   Upon receipt
            of all  such  final test  results  which indicates  a  commercial
            discovery, Operator  will prepare a  release using the  following
            News Release Content Guidelines:

                  1.    Name of Well
                  2.    Location of Well by Area, Block and Adjacent State
                  3.    Bonus Price and Sale Date
                  4.    Tested lnterval(s), if appropriate
                  5.    Test(s) results, if appropriate
                  6.    Participants and Percentages
                  7.    Acreage Controlled

            Proposed  releases will  be wired  to  the Non-Operating  Parties
            within 72 hours  (exclusive of Saturdays, Sundays,  and holidays)
            before being issued to the  news media.  Any  Non-Operating Party
            desiring its  name  to be  excluded  from  the releases  will  so
            advise Operator  during this 72-hour  period.  Any  Participating
            Party may prepare its own release  ("Preparing Party"), using the
            Content  Guidelines,  following  receipt  of Operator's  proposed
            release.   The Preparing  Party shall  send the  other Parties  a
            copy of  the proposed  release by  facsimile  transmission.   Any
            Party may have  its name excluded  from the  proposed release  by
            notifying  the  Preparing  Party within  seventy-two  (72)  hours
            following its  receipt of the proposed  release.  A Non-Operating
            Party's news  release  shall not  be  issued  in advance  of  the
            Operators release. 
-----------------------------------------------------------------------------
                                                                  EXHIBIT "G"

  Attached  to and made a part of that certain Operating Agreement effective
  May 1,  1995, by  and between Enserch  Exploration, Inc.,  Reading & Bates
  Development  Co.,  Mobil  Oil  Corporation  and  Mobil  Oil Exploration  &
  Producing Southeast Inc.

                            INTEGRATED PROJECT TEAM

            The Parties agree  to the formation of an Integrated Project Team
  which will assist the Operator in the continued operation, development and
  exploitation  drilling of  Producible Reservoirs  in accordance  with this
  Exhibit and the Agreement.  In accordance with the foregoing,  the Parties
  desire  to establish  an  understanding,  relating to  (i) the  Costs  and
  expenses of the Integrated  Project Team to be charged to the  Parties and
  the  method  in  which  such  Costs  shall  be  shared,  (ii)  the overall
  operation, administration  and management of  the Integrated Project Team,
  and (iii)  the exchange,  development and use of  technology collected  or
  developed by or through this Integrated Project Team.

                                   ARTICLE 1
                                  DEFINITIONS

  1.1       "Confidential Information"  shall mean all  information developed
  hereunder or received from  or on behalf of  the other Parties  hereunder,
  and shall include information developed by the Integrated Project Team  or
  information the Cost of  which is charged to the Joint Account, background
  technology exchanged  by the  Parties, business  and technical information
  relating to the development of the Designated Prospect.  The provisions of
  this Exhibit shall not be applicable to "Confidential Data,"  as that term
  is defined in the Agreement.

  1.2       "Integrated  Project  Team."  The  designated  employees  of  the
  Parties  or their respective  Affiliates for the purpose  of assisting the
  Operator in the operation of the Designated Prospect.

  1.3       "Operating Agreement." That  certain Operating  Agreement by  and
  between  the  Parties  effective  May  1,  1995,  covering  the Designated
  Prospect.

  1.4       "Project  Managers."  The   representatives  designated  by   the
  Owners' Committee who  will direct, supervise and oversee the work  of the
  Technical Units.

  1.5       "Owners' Committee."  A committee comprised of  no more  than two
  (2) manager level representatives from each Party.

  1.6       "Technical  Units."  A  group   of  technical  expert   personnel
  approved by the Owners' Committee to develop recommendations and plans.

  1.7 Other  terms. Except  as defined  in this  Exhibit, other  terms  used
  herein shall have the same meaning as defined in the Operating Agreement.

                                   ARTICLE 2
                 OWNERS' COMMITTEE AND INTEGRATED PROJECT TEAM

  2.1      Owners' Committee.   The Owners'  Committee shall;  1) except  as
  otherwise  provided in Article 2.2 herein, vote on the formation of groups
  of technical  personnel ("Technical Units")  within the Integrated Project
  Team;  2) vote on  the appointment  of a  Project Manager  to each  of the
  Technical  Units; 3) vote on the  appointment of personnel to  each of the
  Technical Units; 4) vote on the recommendations and plans developed by the
  Technical  Units  for  the  ongoing  operation,  development,  evaluation,
  drilling and  exploitation of  the  Designated  Prospect; and  5)  direct,
  coordinate and manage the  work of the Technical Units through the Project
  Managers as follows:

             2.1.1.    Duties and  Functions.  Within thirty  (30) days  of
  execution of this Agreement each Party shall appoint its representative(s)
  to the  Owners' Committee. Among other  duties set forth in  this Exhibit,
  the Owners   Committee shall  issue a document  setting out  the limits of
  authority and other administrative  matters (including, but not limited to
  communications,  accounting and  reporting  between the  IPT  members, and
  purchasing  and   contracting  responsibilities  and   approvals)  in  the
  execution  of the engineering, procurement,  fabrication, construction and
  installation of the Production System.

            2.1.2.      Meetings. The Owners' Committee shall meet on an  as
  needed basis, but not less than once per year.  The Operator shall provide
  notice of meetings  not less than  10 days prior  to such meeting.   Other
  Owners' Committee meetings may be called by any Party on five business (5)
  days  prior written  notice  to the  other  Parties.   Notices  of Owners'
  Committee meetings shall  specify the  time and place  of the  meeting and
  include an agenda for discussion at the meeting.

            2.1.3 Voting.    The  Owners' Committee  shall  vote  on matters
  placed before it  by the Parties, by  a Project Manager or by  a Technical
  Unit.  Each Party shall be entitled to vote its Working  Interest.  A vote
  of one or more  Parties representing greater  than fifty percent (50%)  of
  the Voting Interest as defined in Article 8.2.1 of the Operating Agreement
  shall be required for approval.

            2.1.4 Owners'  Committee  Approval.    Any  and  all  plans  and
  recommendations approved  by a  Technical Unit  of the  Integrated Project
  Team  but not approved by a Party  to the Owners' Committee will require a
  presentation  by  the  Party(s)  that  failed  to  approve  the  Technical
  Committee's  recommendation to  the Party(s)  that approved  the Technical
  Committee's recommendation.   The presentation shall include the technical
  and economic justification for not approving the plan or recommendation.

           Each  representative of  the  Owners'  Committee may  assign  his
           duties  on a  temporary  basis to  a  designated alternate.   Any
           Party  may  change  its representative  by  notifying  the  other
           Parties in writing of the name of the alternate representative.

  2.2      Composition  of the  Integrated  Project  Team.   The  Integrated
  Project Team shall be composed of one or more Technical Units.   Any Party
  may  request formation  of  a  Technical Unit  to coordinate  the  design,
  construction and  operation of production  Facilities, to conduct geologic
  and geophysical evaluation of the Designated Prospect, to  recommend plans
  for conducting  additional drilling,  or  to perform  such other  work  as
  determined necessary  by the  Owners' Committee  (collectively referred to
  herein as "Study Plan").  The request shall contain specific  instructions
  regarding  the areas  to be  studied and  reported upon by  such Technical
  Unit.  If the request for formation of a Technical Unit involves a project
  or  operation   which  is  reasonably   anticipated  to  cost  less   than
  $10,000,000, the  Owners' Committee  may, in  its discretion,  create such
  Technical  Unit in accordance with the Study Plan request.  If the request
  for formation of a Technical Unit involves a project or operation which is
  reasonably  anticipated  to   cost  more  than  $10,000,000,  the  Owners'
  Committee  shall create such  Technical Unit in accordance  with the Study
  Plan request.  The Owners' Committee  shall direct that the Technical Unit
  complete the Study Plan within a specified time period, as it may, in  its
  discretion, determine to be reasonable under the circumstances.

            Technical Units  may be eliminated by  the Owners' Committee  if
  their services are no  longer needed.  The  representatives on the Owners'
  Committee shall  nominate and vote  on the  individual to  be the  Project
  Manager of each Technical Unit.   An individual may be the Project Manager
  of  one or more Technical Units  and a Project Manager  may also have team
  member responsibilities.   The  Parties  shall  nominate personnel  to  be
  included  as  team  members  of each  Technical  Unit.    The  individuals
  nominated  for   participation  by   the  Parties   must  have  experience
  commensurate  with the  position to  which they  are being  nominated, who
  could be expected  to meaningfully participate and contribute to  the work
  of the Technical Unit.  Each Party shall have the right to have percentage
  representation on the Integrated Project Team up to its respective Working
  Interest share of the total number of engineering and technical  personnel
  to be  assigned to  the Integrated  Project Team; this  however, does  not
  preclude a  Party from  having more  or less  than its respective  Working
  Interest representation on the Integrated Project Team consistent with the
  needs of the Integrated Project Team.

           The  Integrated  Project  Team  may   utilize  employees  of  the
  Parties, Affiliates, outside consultants  and contractors to carry out the
  work of the Integrated Project Team.

  2.3       Status of  Integrated  Project Team  Participants.    Each  non-
  consultant member of the Integrated Project Team shall remain an  employee
  of  its respective company  and each company shall  remain responsible for
  their employees'  salaries and benefits  as well  as maintaining  workers'
  compensation insurance  on their employees.  Accordingly,  each Party will
  continue to  administer the  compensation, benefits,  allowances and staff
  planning  of its  employees  on  the Integrated  Project Team.    However,
  employees  who  participate  on   a  Technical  Unit  will   receive  team
  assignments and general supervision from the Project Manager in connection
  with their day-to-day work and their Costs and shall be regulated pursuant
  to Article 2.7  (Integrated Project  Team Costs  and Payment)  below.   An
  individual selected  to the  Integrated  Project  Team shall,  insofar  as
  possible, and  consistent with  the needs  of the  individual's  employer,
  serve  on the Integrated Project  Team for the duration  of the Integrated
  Project Team.   A Project Manager may  request that the Owners'  Committee
  replace a non-performing member of the Integrated Project Team.

  2.4       Project  Manager.  Each Technical Unit  shall operate  under the
  direction of  a  Project Manager,  who shall  be selected  by the  Owners'
  Committee.   The Project  Manager  shall be  responsible for  the  overall
  management and supervision of specific work tasks for the Technical  Unit.
  The Project Manager shall determine at whose offices the Technical  Unit's
  work  is to  be undertaken.   Such assignments shall consider  use of Non-
  Operator facilities  and inconveniences to the Participating Parties.  The
  Project Manager shall recommend the appointment of individual team members
  to  the Technical  Unit from  the  nominations provided  by Parties.   The
  Project  Manager   shall  also   be  responsible   for  selecting  outside
  contractors to  perform certain  contract services,  acquiring supplies as
  needed by the Technical Unit and for instituting  rules and procedures for
  maintaining Confidential Information.   The Project Manager  shall also be
  responsible  for making presentations on the work of the Technical Unit to
  the Owners' Committee.

  2.5.1      Scope  of Integrated  Project Team  Work.   The  objectives for
  forming  the Integrated Project Team is to pool the talents of the Parties
  in assisting the  Operator in the preparation of the Development  Plan and
  in  the design, fabrication, installation and commissioning of the initial
  Production  System  and  in  the  planning  of  additional evaluation  and
  exploitation of the  existing and  potential Producible  Reservoirs.   The
  Technical Units shall be responsible for generating plans, for approval by
  the Owners' Committee, which  will be used by the Parties in  planning and
  budgeting  for  ongoing  operations  including  the exploitation  drilling
  program for the Designated Prospect.  If a subsequent Producible Reservoir
  is discovered,  the Integrated  Project Team will assist  the Operator  in
  preparing  plans for the evaluation, exploitation  and development of such
  reservoir.

           The Integrated  Project Team shall  remain in place  for the term
  of  the  Operating  Agreement.   The  composition  and  functions  of  the
  Integrated  Project Team  may  be  changed by  the Owners'  Committee  and
  Technical  Units may  be  created or  eliminated  during the  term of  the
  Operating Agreement to correspond with changes in operations.

  2.5.2 Owners  Committee Approval. The Development  Plan shall be submitted
  to the  Owners' Committee  for approval.  Upon  approval, the  Development
  Plan  shall  be  submitted  to  the Parties  for  planning,  budgeting and
  Election  purposes as  the plan  of  the Integrated  Project Team  for the
  development of the affected reservoir.

  2.6      Place of  Integrated Project Team  Meetings.  The  time and place
  of the  meetings of  the Technical Units and  the location  for conducting
  Technical Unit activities shall be determined by the Project Managers.

  2.7       Integrated  Project  Team  Costs  and  Payment.    The Costs and
  expenses for the Integrated Project Team and  the Technical Units shall be
  charged to  the Joint  Account  pursuant to  the Exhibit  "C"  (Accounting
  Procedures) Addendum 5  of the  Operating Agreement.   Each  Participating
  Party shall be  responsible for its proportionate share of  the Integrated
  Project Team  expenses, regardless  of its level of  participation on  the
  Integrated Project Team.

                                   ARTICLE 3
                              SECURITY PROVISIONS

  3.1       Security  Policy.   All  employees  of  the  Parties  or   their
  Affiliates which become associated with the Integrated Project Team  shall
  fully  comply with the security  policy of the Operator and all procedures
  then  in effect  made available  by the  Project Managers  for use  by the
  Integrated Project  Team.    A  copy  of  the  applicable  confidentiality
  requirements and any revisions thereto shall be made available to all such
  employees by the  Project Managers for their use  during the project.  The
  Project Managers may,  subject to approval of the Parties,  also institute
  reasonable  additional   provisions  as  may   be  appropriate  under  the
  circumstances.    Operator shall  take reasonable  steps  to  minimize the
  exposure of  Non-Operator's Integrated Project  Team members to Operator's
  proprietary and Confidential Information not related to the project.   Any
  incidental  disclosure of a  business or technical nature,  whether or not
  related  to the Designated  Prospect to which the  Integrated Project Team
  members are exposed by virtue of working in the facilities provided to the
  Integrated  Project  Team  shall  be  subject to  security  policy  of the
  Operator.    This  Article is  not  intended  to restrict  the  access  of
  Integrated  Project Team  members  to relevant  and  pertinent information
  needed to accomplish their team's assignments.

                                   ARTICLE 4
                                CONFIDENTIALITY

  4.1      Obligation  of Confidentiality  and Restrictions  on  Use.   Each
  Party agrees  to maintain confidentiality and not to disclose to any third
  party or  use the  Confidential Information, except  as expressly provided
  hereunder,  for  a  confidentiality  period  commencing  on  the  date  of
  execution  of the Operating  Agreement and extending through  the later of
  (a) two (2) years following the termination of the Integrated Project Team
  work pursuant  to Article 8.3 (Termination)  of this Exhibit or  (b) seven
  (7)  years following  the date  of execution  of the  Operating Agreement.
  After  expiration  of the  confidentiality  period  the  receiving Party's
  obligations of confidentiality and restrictions on use shall cease.   Each
  Party  agrees to treat  the disclosure of the  Confidential Information in
  the same manner as it treats its own Confidential Information.

  The  Parties shall  declare and list background technology and information
  which will be utilized by the Integrated Project Team prior to  establish-
  ment of such  Integrated Project Team.  Such  declared  and  listed  back-
  ground technology and  information shall be  subject  to  this  Article  4
  (Confidentiality).

  4.2    Exceptions

           (a)   The   provisions    of   Article    4.1   (Obligation    of
  Confidentiality  and  Restrictions  or  Use)  above  shall  not  apply  to
  Confidential Information which:

            (1)   was in  the public knowledge  or literature at  the time of
                  development or receipt hereunder, or

            (2)   subsequent  to  the formation  of  the  Integrated  Project
                  Team, was  not marked or  identified as being  confidential
                  at the time of disclosure, or

            (3)   was already  in the  receiving Party's  possession (or  its
                  Affiliate) without  obligation of  confidentiality, at  the
                  time of development or receipt by the receiving Party.

            (b)   Provisions of  Article 4.1  (Obligation of  Confidentiality
   and Restrictions or Use) above  shall cease to apply to information which:

            (1)   becomes  part of  the public  knowledge  subsequent to  its
                  development or receipt  hereunder and without fault of  the
                  receiving Party, or

            (2)   is disclosed to  the receiving Party without  obligation of
                  confidentiality by a  third party having legal right  to do
                  so, or

            (3)   is independently developed by or for the receiving Party.

  4.3      Supporting Agreements.  Upon  request of a Project Manager,  each
  Party shall require those participating in the Integrated Project Team  to
  execute a confidentiality agreement  having obligations of confidentiality
  and  restrictions on  use  of  the Confidential  Information at  least  as
  restrictive as  those set forth in  this Exhibit and  shall furnish a copy
  thereof to the other Parties.

                              ARTICLE 5
                    LICENSE TO USE CONFIDENTIAL INFORMATION

  5.1      Right to Release Joint Account Work Product.   Each Party will be
  entitled to  review the  full  reports of  all technical  studies,  detail
  reports, general  conclusions, numerical results  and design drawings from
  all engineering services that are charged to the Joint Account pursuant to
  an AFE in  which it  is a Participating Party,  whether those  engineering
  services are performed by a Party participating in the Integrated  Project
  Team, an Affiliate or by a third party.  A Party may copy such material at
  its sole cost.

  5.2      Right to  Confidential Information.   Subject to the  obligations
  of  confidentiality of  Article  4 (Confidentiality)  of this  Exhibit and
  subject  to the  patent rights  of  the Parties,  each  Party may  use all
  Confidential  Information received  or  developed hereunder  which  is (1)
  background technology  exchanged by  the Parties or (2)  developed by  the
  Integrated  Project  Team under  this Agreement  or the  Cost of  which is
  charged  to the Joint  Account, without otherwise accounting  to the other
  Party,  including use  by or  for  a joint  venture or  production sharing
  arrangement in which a Party has ownership interest.

  5.3      Right  to  Disclose.   Subject  to  the  foregoing,  each of  the
  Parties  may  disclose  Confidential  Information  during  the  period  of
  confidentiality set  forth in Article 4.1   (Obligation of Confidentiality
  and Restrictions or Use) of this Exhibit upon the following conditions:

            (a)   Each Party may  extend all its rights under this Exhibit to
                  its Affiliates who agree to  obligations of confidentiality
                  and  restrictions on  use at least  as restrictive as those
                  set forth in this Exhibit.

            (b)   Each   Party   and   its   Affiliates  may   disclose   the
                  Confidential   Information  of   Article   5.2  (Right   to
                  Confidential  Information)  to consultants  and contractors
                  who  agree   to  hold  such  Confidential   Information  in
                  confidence and  to use it  only for the benefit  of a Party
                  or its Affiliates.

            (c)   Each Party  and  its Affiliates  may disclose  Confidential
                  Information of  Article 5.2 above to  governmental agencies
                  and insurance companies or  as otherwise required by law or
                  regulation as  such Parties  or Affiliates deem  necessary,
                  either in confidence or not  in confidence if the  Party or
                  its  Affiliates  has  made a  reasonable  but  unsuccessful
                  attempt to obtain a confidentiality agreement.

            (d)   Upon prior  written consent of the  non-disclosing Parties,
                  a Party  and its Affiliates  may disclose the  Confidential
                  Information of  Article 5.2 above to other members of joint
                  ventures  or production sharing  arrangements in  which the
                  Party or Affiliate  has an ownership interest  provided the
                  other members  agree to hold  the Confidential  Information
                  in confidence and  to use it  only for the benefit  of that
                  joint venture or production sharing arrangement.

            (e)   Any  Party  may  disclose  Confidential  Information  under
                  Article  5.2 above  which is  specifically  related to  the
                  Designated Prospect  to any potential  purchaser of all  or
                  any  portion of  such Party's  interest  therein, provided,
                  the potential  purchaser  agrees to  hold the  Confidential
                  Information  in  confidence  and  to use  it  only  for the
                  purposes  of  determining  its  interest  in  acquiring  an
                  interest in the Designated Prospect.

            (f)   Each  Party  may use  such  Confidential Information  under
                  Article 5.2 as reasonably necessary  or appropriate to file
                  patent  applications  pursuant  to Article  6  (Patents and
                  Integrated  Project Inventions).    Prompt notice  will  be
                  provided to the other Parties of any such filing.

  5.4      Rights   Under    Copyright   and    Following   Expiration    of
  Confidentiality.      Following   the   expiration   of   the  period   of
  confidentiality set  forth in Article 4.1   (Obligation of Confidentiality
  and  Restrictions or  Use), each  Party may  freely use  and  disclose the
  Confidential Information identified  in Article 5.2 (Right to Confidential
  Information)  without  accounting  to  any other  Party,  subject only  to
  whatever patent rights may apply to the technology and, where  applicable,
  to the  obligations of  Articles 5.5.1  and 5.5.2  below.   Subject to the
  obligations of confidentiality set forth herein, each Party has the  right
  to copy, display, publish, distribute and prepare derivative works of  all
  documents,  drawings or  other writings  or materials created  or conveyed
  under this  Exhibit, including  the rights to license,  sell or  otherwise
  transfer such rights.

  5.5      Notice of Third-Party Limitations

           5.5.1 Notwithstanding  the provisions of  Articles 5.2  (Right to
  Confidential Information), 5.3 (Right  to Disclose) and 5.4 (Rights  Under
  Copyright  and  Following Expiration  of  Confidentiality),    the Parties
  acknowledge that various background materials may  have been received from
  third  parties under  preexisting restrictions, e.g.,  that the  Party may
  disclose  the third-party  source  information  to a  partner in  a  joint
  venture only under obligations of confidentiality and under restriction to
  use the information only in connection with the joint venture.  Each Party
  agrees to identify, in writing, any such restrictions in effect and secure
  the receiving  Party's acknowledgment prior to transmittal  of such third-
  party   source  information.     The   receiving   Party's  acknowledgment
  constitutes its acceptance of such obligations and restrictions.

           5.5.2 The Project  Manager and  each Party  soliciting work  from
  third-party contractors and consultants (or from Affiliates) shall use its
  best efforts to secure contract terms with such third  party which contain
  applicable confidentiality terms and which support  rights to the  Parties
  consistent with this Agreement.

  5.6      Software.   A Party  may be  authorized to  use various  computer
  software and  programs which are identified  as proprietary to  one of the
  other Parties during the duration of the Integrated Project Team, however,
  such computer software and programs shall not be considered joint property
  and  its use may be limited under license to a  single Party.  Use of such
  proprietary  software and programs is not a grant of license of any rights
  outside  of  this Agreement  and the  Parties  retain all  rights  to such
  property.  Computer software and programs which are not proprietary to one
  of the Parties, but which was developed jointly by the Integrated  Project
  Team, shall be considered co-owned property.

                                     ARTICLE 6
                     PATENTS AND INTEGRATED PROJECT INVENTIONS

  6.1      Patent Assignment With Right to License  and Sublicense.  Patents
  on inventions  which are  (1) conceived solely by  outside contractors  or
  consultants,  or conceived jointly among  the Parties  (each including its
  respective Affiliates) while  working on the Integrated  Project Team  and
  (2) from work which has been funded by the Joint Account, will be assigned
  to the  Operator.   The Party  holding such assignments  hereby agrees  to
  grant each  other Party an  irrevocable, nonexclusive, worldwide, royalty-
  free license  to practice under  all such patents, including  the right to
  grant sublicenses under such  patents to any  third party or Affiliate  on
  such other terms and conditions that such Party deems appropriate, without
  accounting to any other Party.

  6.2      Patent Assignment and  License With Limited Right  to Sublicense.
  Patents on inventions  not covered in Article 6.1 (Patent  Assignment With
  Right to License and Sublicense), which are  conceived or first reduced to
  practice (actual  or constructive),  by a Party or  its Affiliate,  either
  alone or jointly  with any  outside contractors or consultants,  and as  a
  direct result  of work which has been funded by  the Joint Account will be
  owned by that  Party.  The  Party owning any  such patent agrees to  grant
  each  other Party  an irrevocable,  nonexclusive,  worldwide, royalty-free
  license under all such patents to make, have made, use and have used  such
  invention for such other Party's own business, including any joint venture
  or  production-sharing  arrangement  in  which  such other  Party  has  an
  ownership  interest.   Further, each  such other  Party  has the  right to
  extend these rights to its Affiliates.

  6.3      No Other Commitment  to License or Disclose.  Except as expressly
  set  forth above,  nothing in this  Exhibit will be deemed  to require any
  Party or Affiliate to grant any licenses under any patents to anyone.  The
  scope and  content  of any  background  technology  disclosed  under  this
  Agreement  will be  determined in  the sole  discretion of  the disclosing
  Party.

                                   ARTICLE 7
                     DISCLAIMER OF WARRANTY AND INDEMNITIES

  7.1      Disclaimer  of  Warranties.   ALL  INFORMATION  RECEIVED  BY  THE
  PARTIES  HEREUNDER  SHALL BE  PROVIDED  ON AN  "AS  IS" BASIS  WITHOUT ANY
  WARRANTIES  EITHER EXPRESS  OR IMPLIED,  AS TO  THE ACCURACY,  VALIDITY OR
  UTILITY OF SUCH INFORMATION OR  THAT IT CAN BE USED WITHOUT INFRINGING ANY
  THIRD-PARTY  PATENT,  COPYRIGHT  OR  OTHER  PROPRIETARY  RIGHT.    WITHOUT
  LIMITING  THE  PRECEDING,  ANY  IMPLIED  WARRANTY  OF MERCHANTABILITY  AND
  FITNESS  FOR  A    PARTICULAR  PURPOSE ARE  EXPRESSLY  EXCLUDED  FROM THIS
  AGREEMENT.   IN NO EVENT SHALL A PARTY CONVEYING INFORMATION BE LIABLE FOR
  ANY INCIDENTAL, CONSEQUENTIAL OR OTHER DAMAGES ARISING OUT OF OR RESULTING
  FROM THE USE OF INFORMATION CONVEYED UNDER THIS EXHIBIT.

  7.2      Indemnities.    Each Party  agrees to  defend, hold  harmless and
  indemnify  the other  Parties from  and against  any loss,  damage, claim,
  suit, liability,  judgment and expense (including attorney  fees and other
  costs of litigation) related to  or in connection with  its use (including
  use by others  which it authorizes), outside of  the Contract Area, of any
  Confidential Information under or developed pursuant to this Exhibit.

                                   ARTICLE 8
                                 MISCELLANEOUS

  8.1      Export Controls.    Each Party  agrees  to  abide by  the  United
  States Department  of Commerce  regulations concerning the  export or  re-
  export of  United States  source  technical data,  or the  direct  product
  thereof,  to  unauthorized  destinations  and  regulations  in respect  of
  information supplied by or on behalf of any other Party hereunder.

  8.2      Independent Research.  Nothing herein  shall in any way  restrict
  or  impair the right of any Party to conduct its own independent research,
  development or design activities even  though such activities may parallel
  or overlap the activities provided  for herein.  Any Party conducting such
  independent  activities shall  have no  obligation arising  therefrom with
  respect to the  use or disposition of  the results thereof,  including but
  not  limited  to  all  information  and data  resulting  therefrom.   Such
  independent work  shall not delay, disrupt or hinder the activities of the
  Integrated Project Team  or any contractor working under the  direction of
  the Integrated Project Team.

  8.3       Termination.  The work of the Integrated Project Team will
  terminate upon expiration of the Operating Agreement.

           All provisions  of this  Exhibit related  to confidentiality  and
  use  of information,  patents and  indemnity  shall survive  completion of
  Integrated  Project Team  activities conducted  hereunder.   A withdrawing
  Party  shall  have   the  rights  specified  in  this  Exhibit   based  on
  developments  and "changes prior  to the effective date  of Withdrawal and
  shall continue to  have all obligations with  respect thereto as set forth
  in this Exhibit relating to confidentiality, restrictions on use, patents,
  indemnity and, as applicable, duties to license the other Parties.

  8.4      Assignability.   A new party  not a Party  to this  Agreement who
  acquires an interest in a  Designated Prospect may  join as a Party to the
  Integrated Project Team  upon the  approval of  the Parties  as a  General
  Matter pursuant to Article 8 of  the Operating Agreement.   Approval shall
  be  based  upon  such  factors as  the  depth  of its  generally  relevant
  technical expertise, offshore operating  experience, the level of skill of
  its potential Integrated  Project Team members, the  percentage of Working
  Interest  acquired  in  the  Designated  Prospect,  the  compatibility  of
  specific areas  of technical  expertise with the needs  of the  Integrated
  Project  Team and  the  financial support  provided  by the  Party to  the
  development  of   the  Designated  Prospect   pursuant  to  the  Operating
  Agreement.  Approval  to participate on the Integrated Project  Team shall
  not  be unreasonably  withheld.   Project  Managers  shall  recommend  the
  assignment  of new  members  to  the Technical  Units in  accordance  with
  Article 2 (Owners' Committee and Integrated Project Team) herein.

           A new  Party joining the  Integrated Project Team  must agree, in
  writing,  to undertake all  obligations set forth for  a Party thereunder.
  Such new Party will have all rights, duties  and obligations under Article
  5 (License to Use Confidential Information) of this Exhibit for use of all
  Confidential Information exchanged or developed prior to the date it joins
  the  Integrated  Project Team  and  during  its  participation thereunder.
  However,  patent rights received  by such new Party  hereunder pursuant to
  Article 6  (Patents  and Integrated  Project Inventions)  of this  Exhibit
  shall be in accordance with the terms of this Agreement limited to patents
  based on  developments after  the  date such  Party joins  the  Integrated
  Project Team.

           The licenses  received by a Party under Articles  5 and 6 of this
  Exhibit may be  assigned by that Party only to  an Affiliate of the Party,
  to the successor of all or substantially all of  the business of the Party
  relating to  offshore hydrocarbon developments,  or as otherwise expressly
  provided in this Agreement.   However, a Party may transfer license rights
  limited to a specific, fabricated embodiment which was made and used under
  such license and the license will continue in effect  as to that specific,
  fabricated embodiment transferred.

           In the  event that  a Party assigns  its entire  interest in  the
  Leases, the  assigning Party shall  have all the rights  specified in this
  Exhibit including patent rights  and license  rights thereunder, based  on
  developments and exchanges prior to the effective date of such  assignment
  and shall continue to have all obligations and duties with respect thereto
  as set forth in this Exhibit relating to the confidentiality, restrictions
  on use, patents, indemnity  and as applicable, duties to license the other
  Parties.

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                                                                 EXHIBIT "H"

  Attached  to and  made a  part of  that certain Operating  Agreement dated
  effective May 1, 1995, between Enserch Exploration, Inc., Reading &  Bates
  Development  Co.,  Mobil  Oil  Corporation  and  Mobil  Oil Exploration  &
  Producing Southeast Inc.

                              PRODUCTION HANDLING

1.    Application.

      If a Production System Component (as defined herein) has unused
  capacity or uncommitted capacity, this exhibit shall control the
  allocation of such excess capacity.

2.    Definitions.

      For purposes of this exhibit, the following definitions shall apply:

      (a)  "Barrel of Oil Equivalent"  - The combined volume  of oil and  gas
           expressed in barrels, converting each 5.626 thousand cubic feet of
           gas to a barrel of oil.

      (b)  "Excess Capacity" - The ability of the Production System or any of
           its components to process or transport production in excess of the
           production committed  to the    Production System  or any  of  its
           components, all as determined in Article 3 hereof.

      (c)  "Party or Parties" - The owner or  owners of Working Interests who
           either  own,  lease  or  have  service  contract  rights   to  the
           Production System.

      (d)  "Production  System."  -  Shall be  as  defined  in  the Operating
           Agreement.

      (e)  "Production  System Capacity."  The anticipated maximum production
           handling capacity of  the entire Production System at the  time of
           the application of Article 14.  

      (f)  "Production  System Component  Capacity." The  anticipated maximum
           production handling  capacity of each component  of the Production
           System.

      (g)  "Non-Unit Production" - Hydrocarbon production not contemplated by
           any approved Development Plan.

      (h)  "Unit  Production"  - Hydrocarbon  production contemplated  by the
           current  approved  Development  Plan  for  such Production  System
           component.

3.    Determination of Excess Capacity and Priority of Its Use.

      The  ability to  process  or  transport  Non-Unit  Production  will  be
  determined  by establishing  the  Excess Capacity  available  through each
  Production  System Component.    The  amount of  Excess Capacity  will  be
  calculated  by  deducting  the  total  of (i)  the  estimated  peak future
  production  volumes   from  the  Designated   Prospect(s)  for  which  the
  Production  System   was  built  or  modified   pursuant  to  an  approved
  Development Plan and (ii) the  volume of Non-Unit Production contractually
  committed to be processed or transported by the affected Production System
  Component from  the actual  operating capacity of  such Production  System 
  Component.  The final determination of the  amount of Excess Capacity  for
  each  Production System Component  to be made available  shall require the
  mutual agreement of the Parties.

      Excess Capacity from  a Production System Component shall be subject to
  the following priority usage:

      a.   First  priority to Hydrocarbon production from Leases that are co-
           owned   by the Participating Parties  and that are located  inside
           the  Designated Prospect(s)  for which  the Production  System was
           installed pursuant to an approved Development Plan.

      b.   Second priority to Hydrocarbon production from Leases that are co-
           owned by all of the Participating Parties in the Production System
           and that are located outside the  Designated Prospect(s) for which
           the  Production  System  was  installed  pursuant to  an  approved
           Development  Plan, but  from a  Designated Prospect(s)  within the
           Contract Area.

      c.   Third priority  to Hydrocarbon  production from Lease(s)  that are
           co-owned by  less than all  but at least one  of the Participating
           Parties in the Production System and that are located outside  the
           Designated  Prospect(s)  for   which  the  Production  System  was
           installed  pursuant to an  approved Development Plan,   but from a
           Designated Prospect(s) within the Contract Area.

      d.   Fourth priority  to Hydrocarbon production  from a  lease in which
           less than all Parties have an ownership interest  and in which the
           other Party(ies) was offered an interest but  declined pursuant to
           the  AMI provisions  of  Article 23.3  (Area of  Mutual  Interest)
           hereof.
    
      e.   Fifth priority to hydrocarbon  production owned by a Participating
           Party coming from outside the Contract Area.

      f.   Sixth priority to hydrocarbon production owned by  third parties.

4.    Non-Unit Production Handling Charges.

      Monthly production  handling fees ("Fee")  will be charged  on a dollar
      per Barrel  Oil Equivalent basis  for production volumes utilizing  any
      Production System  Component.   Metering systems will  be installed for
      Non-Unit  Production and  shall  conform  to  the requirements  of  the
      Operator.    The  Fee to  use  Excess  Capacity assigned  to  the sixth
      priority in Section 3 f. above shall be negotiated between the  Parties
      and the third party  producer at  the time of  the contracting for  the
      use of  the affected  component by such  third party.   Such Fee  shall
      reflect  the cost  and  the fair  market value  of  the services  to be
      provided.  For each Production System Component, the  Fee to use Excess
      Capacity assigned  to the priorities identified in  Sections 3 a, b, c,
      d  & e  above shall be  the sum of  the capital  investment,  interest,
      depreciation  expense and  actual  operating  and maintenance  expenses
      calculated as follows:

         A.Charges for Access

         Non-Unit  Production shall be charged  an access  fee ("Access Fee")
         equivalent  to  the  depreciation  and   interest  for  the  capital
         investment  in  the  Production System  Components  utilized.    The
         Access  Fee  shall be  equal  to  (a) the  gross  investment in  the
         Production  System  Component   (adjusted  for  subsequent   capital
         expenditures)  depreciated over  twenty (20)  years,  on a  straight
         line basis and (b) the interest  charged on the gross investment  in
         such      Production   System   Component,   less  the   accumulated
         depreciation  provided under (a) above, computed  at the rate of ten
         percent (10%).   The cumulative  sum of the  annual depreciation (a)
         and  interest (b)  charges divided  by eighty-five  percent (85%) of
         the  total  Production  System capacity,  divided  by  twenty  (20),
         establishes  the   Access  Fee  to  be  charged  for  processing  or
         transporting the Non-Unit  Production through the Production  System
         Component.   The  Access Fee  depreciation  and interest  components
         shall  be increased to include  capital expenditures incurred by the
         Owners of the Production System in excess of $5,000,000.

         B.Charges for Operating and Maintenance Expense

         Non-Unit Production  will be charged for  its proportionate share of
         the operating and maintenance expenses  (including all marketing and
         third  party  transportation  fees) attributable  to  the Production
         System Component utilized on  a monthly basis.  The actual volume of
         Non-Unit Production  throughput for that  component will be  divided
         by the  total  of unit  and  non-unit  throughput to  determine  the
         portion   of   the   total   operating   and   maintenance  expenses
         attributable to Non-Unit Production.  The  result will be multiplied
         times the  monthly operating and  maintenance expenses  attributable
         to the affected  Unit Production  System Component  and included  in
         the Access Fee.   The Access Fee will also include a fifteen percent
         overhead   charge  on   the   operating  and   maintenance  expenses
         attributable to the affected Production System Component.

  5.     Capital Improvements.

         Capital  improvements  required to  accommodate  Non-Unit Production
         will  be borne by the Party contracting to use the Production System
         Component (hereafter  the "Non-Unit  Producer") to  handle its  Non-
         Unit Production.    Approval  of engineering  and  design  a  actual
         installation  of the  equipment will  be the  responsibility of  the
         Parties with  costs  borne by  the  Non-Unit Producer.    Additional
         capital investment  requirements  in  Non-Unit  Production  handling
         equipment  and  facilities  to comply  with  safety,  regulatory  or
         operation  concerns  shall  be borne  exclusively  by  the  Non-Unit
         Producer.  Major capital investment required on  the Unit Production
         System  in excess  of  five hundred  thousand dollars  which benefit
         both the owners  or lessees  of the Production  System and the  Non-
         Unit Parties  will be allocated  to all Parties  on percentage basis
         based  upon  the  capacity  allocated  pursuant  to  the  Production
         Handling Agreement.   The allocation of  such cost will  be made  in
         proportion  to their respective rights to utilize the total capacity
         of  the  affected  Production System  Component  after  the  capital
         investment is made.   As between the parties  to this Agreement, all
         accounting,   billing   and  overhead   requirements   for  Non-Unit
         Production will conform to  the terms of Exhibit "C".  The agreement
         to  process  or   transport  Non-Unit  Production  will   include  a
         provision  where upon termination, the Parties  will have the option
         of removing  the capital improvement made at  the sole cost and risk
         of the Non-Unit  Producer or, the  Parties may  acquire the  capital
         improvements on an as  is, where  is, basis at  no cost by  assuming
         abandonment and salvage responsibility.

  6.     Other Requirements for Non-Unit Production Handling Agreements.

         a. Any  such  agreement  will  require  unanimous  approval  by  all
            Parties.

         b. All Parties  will,  in proportion  to their  ownership or  leased
            interest  in affected   Production  System  Component, share  the
            benefits  and the  risk  and liability  associated  with an  such
            agreement.

         c. No Party  may separately enter  into an agreement  with any third
            party involving the use  of said Party's percentage  ownership or
            leasehold interest of the Production System.

         d. Any such agreement will  be a Service Agreement only and will not
            involve any  sale, lease or transfer  of interest to a  party who
            is not a Party to this Agreement.

         e. The payment  of production downtime compensation  associated with
            accommodating Non-Unit Production with an  e. priority in Section
            3. above will be negotiated at  the time of the execution of  the
            Non-Unit Production Handling Agreement.

         Production downtime compensation associated with accommodating  Non-
  Unit production with a priority of c,  d, or e in Section 3. above will be
  equal  to the  fixed operating  costs of  the Production  System Component
  utilized for  the downtime period  plus the estimated loss  in the present
  value  of revenue less expenses associated  with production delayed during
  the downtime  period.  No  downtime compensation  will be  required for  a
  cumulative total  of ten  (10) days of  lost revenue  associated with  the
  initial tie-in of such production.   Downtime compensation for third-party
  production (Section 3 f. priority) will be negotiated.

         f. Every  Non-Unit  Production  Handling  Agreement  will  terminate
            before, or  contemporaneously with, the  end of the economic  and
            useful   life  of  the   applicable  Production   System,  unless
            otherwise agreed by the owners of such Production System.

         g. Each Non-Unit  Production  Handling Agreement  will identify  the
            ownership  of  the  Production System  Component  and  include  a
            description   of   the  financing   and   leasing   relationships
            associated with the  design, installation an construction  of the
            Production System Component.

         h. Each   Non-Unit  Production  Handling   Agreement  shall  contain
            quality  specifications to insure  that no  decrease in  value of
            Unit production  will occur as  a result of  commingling Unit and
            Non-Unit Production.

------------------------------------------------------------------------------

                                                                  EXHIBIT "K" 

                  ATTACHED TO AND MADE A PART OF THAT CERTAIN                
          ALLEGHENY OPERATING AGREEMENT EFFECTIVE MAY 1, 1995 BETWEEN ENSERCH
   EXPLORATION, INC., READING & BATES DEVELOPMENT CO.,  MOBIL OIL CORPORATION
              AND MOBIL OIL EXPLORATION & PRODUCING SOUTHEAST INC.

                            JOINT BIDDING AGREEMENT

   Agreement is made and entered into as of the  1st day of September, 1995,
  by and between MOBIL OIL EXPLORATION & PRODUCING SOUTHEAST INC. ("Mobil"),
  ENSERCH EXPLORATION,  INC. ("Enserch") and READING & BATES DEVELOPMENT CO.
  ("Reading &  Bates"), each  of  such parties  being hereinafter  called  a
  "Party"  and all  of such  parties together  being hereinafter  called the
  "Parties."

                              W I T N E S S E T H:

           WHEREAS, the United States Department of the Interior (the "DOI")
  has  heretofore  announced  tentative plans  for OCS  Lease Sales covering
  certain areas of the Outer Continental Shelf in the Central Gulf of Mexico
  to be  made available  for oil and  gas leasing  in the  years 1996, 1997,
  1998, 1999 and the year 2000 ; and

           WHEREAS,  the oil  and gas exploration  and development  of these
  areas involves  unusually large technological  and financial risks because
  of  (i)  variable   geologic  conditions   and  the   inexact  nature   of
  technological measurements and interpretations involved in  predicting the
  occurrence  of oil and gas, and hence the high probability of drilling dry
  holes, in such areas and (ii) the expected high  costs of acquiring leases
  and of  exploring for,  discovering and  developing oil  and gas  in these
  areas; and

           WHEREAS, in  recognition of the  magnitude of these  risks and of
  the  concomitant need for increased domestic oil and gas supplies to serve
  the  national interest,  the Parties  deem it  necessary to  join together
  herein to share  such risks and  thus minimize their own  individual costs
  and  investments in the block(s)  or tract(s)  covered hereby in  order to
  maximize monies available for discovery and development of needed oil  and
  gas reserves from other blocks or tracts and areas.

           NOW, THEREFORE,  in consideration  of  the premises,  and of  the
  mutual covenants and obligations  of the Parties  herein set forth, it  is
  agreed as follows:

                                   ARTICLE 1
                                  DEFINITIONS

            As used in this Agreement:

            1.1   "Subject  Block"  is a  block,  tract or  bidding  unit, as
                  described or  referred to in Section  2.1 hereof,  to which
                  the further provisions of this Agreement apply.

            1.2   "Subject Sale,"  with respect to  a Subject Block,  is  any
                  public  offering of that block  for oil  and/or gas leasing
                  purposes during the term  of this Agreement (whether or not
                  actually held  on the date  specified in the  DOI notice of
                  sale).

            1.3   "Joint  Bid  Hereunder"   is  a  bid  on  a  Subject  Block
                  submitted or proposed for submission  hereunder by at least
                  two Parties at a Subject Sale."

            1.4   "Technical  Information"  is  any geological,  geophysical,
                  engineering, well or  other similar information,  materials
                  or data  or interpretations thereof  relevant to a  Subject
                  Block.

            1.5   "Affiliate"  of  a  Party is  any  company  which  owns  or
                  controls, is  owned or  controlled by,  or is  under common
                  ownership or control with, such  Party.  Control  means the
                  ownership,  directly  or  indirectly,  of  more than  fifty
                  percent (50%)  of the  outstanding voting  securities of  a
                  corporation.


                                   ARTICLE 2

                               SCOPE OF AGREEMENT

           2.1   This  Agreement shall  apply only to  the blocks  and areas
  described  in the  AMI  attached to  Operating Agreement  as Exhibit "A-4"
  attached hereto which are available for bid at a Subject Sale, hereinafter
  referred to as  "Contract Area",  excepting  any blocks which the  Parties
  may hereafter elect,  pursuant to the provisions of Article  6.2.1 hereof,
  to  be excluded  from this  Agreement, provided  that any  blocks  not now
  subject  to this  Agreement may  be added  by unanimous  agreement of  the
  Parties to amend said Exhibit "A-4".

                                   ARTICLE 3
                             RIGHT OF PARTICIPATION

           3.1   The Parties  shall have the  opportunity to participate  in
  any Joint Bid Hereunder, and in the ownership of any oil and/or gas  lease
  issued pursuant to such bid  by reason of a Subject Sale, in the following
  proportions:

              Mobil                          40.000%
              Enserch                        40.000%
              Reading & Bates                20.000%

  or in such  other proportions as the Parties  may hereafter agree upon; in
  such  case the  Parties shall  sign a  memorandum recording  the agreement
  reached in the form of Exhibit "B".

           3.2   If more  than two parties  are, or become,  Parties to this
  Agreement, and  if one  or more Parties thereafter  withdraw from  further
  participation  with respect to  a Subject Block, as  required or permitted
  hereunder:  (i) the  remaining Parties,  proceeding independently  of such
  non-participating Party(ies) but  in full compliance with the requirements
  and procedures  applicable to considering,  agreeing to  and submitting  a
  Joint Bid  Hereunder, may  continue consideration of  matters relating  to
  that Subject Block which are within  the scope of this Agreement, and (ii)
  the above stated interest of each such remaining Party shall be changed to
  accord with the ratio that  such interest bears to the total of  the above
  stated interests of  all such  remaining Parties (or as  may otherwise  be
  mutually agreed upon by such remaining Parties).

                                   ARTICLE 4
                               TECHNICAL MEETINGS

           4.1   At the  request of  any Party  a technical  meeting may  be
  called prior to the dates set for bid meetings, at a time and place mutual
  convenient,  in  order  to   systematically  review  data  and   to  share
  interpretations  of such data so  that a thorough  review of the prospects
  can be completed by the time bids are to be determined.

                                   ARTICLE 5
                               BIDDING COMMITTEE

           5.1   The  meetings of  the Parties  provided  in this  Agreement
  shall be  conducted by  and  through a  "Bidding Committee."  The  Bidding
  Committee shall be formed and shall act  in accordance with the provisions
  hereinafter set forth.

           5.2   Prior  to the  first  meeting of  the  Parties, each  Party
  shall designate, by written notice to each other Party, its representative
  to  the Bidding  Committee.   A designated  representative may  appoint an
  alternate to act in his place and stead at any particular meeting(s).

           5.3   Each Party's representative and/or alternate  and a maximum
  of  four  assistants  may  be  present  at  all  meetings  of the  Bidding
  Committee,  but only a  designated representative or (in  his absence) his
  appointed  alternate  may  bind  the  Party he  represents  on  any matter
  requiring a decision,  action or agreement of  that Party hereunder.   The
  representative of Mobil shall be chairman of the Bidding Committee and  he
  (or his alternate) shall preside at each such meeting.

                                   ARTICLE 6
                       MEETINGS AND DETERMINATION OF BIDS

           6.1   In  addition to holding the meeting required by Section 6.3
  hereof, the  Parties shall,  at the  request of  any Party,  with at least
  forty-eight (48) hours advance  notice, meet at such  other time(s) as may
  be appropriate  to consider  matters within the scope  of this  Agreement.
  Each  meeting  hereunder  shall  be  conducted  in   accordance  with  the
  requirements and procedures set forth in this Agreement.

           6.2   At the  first and any  subsequent meeting of Parties,  each
  Party shall inform  each other Party of  any Subject Block on which  it is
  then no longer interested in participating in a Joint Bid Hereunder.

                  6.2.1 If such  information  is  disclosed and  the  Parties
                        determine  that such  Subject  Block has  no  further
                        interest for  joint bidding purposes  hereunder prior
                        to  suggestion  of   any  amount  for  a   Joint  Bid
                        Hereunder,    then    (i)   this    Agreement   shall
                        automatically  terminate  as to  such  Subject  Block
                        (subject  only to  the provisions  of Section  6.2.2)
                        and, if  any  confidential  information  relevant  to
                        such  block  has  been  disclosed,   subject  to  the
                        provisions  of   Article  7   hereof,   and  (ii)   a
                        memorandum  to that  effect shall  be  signed by  the
                        Parties.  Otherwise,  such block shall remain subject
                        to all further provisions hereof.

                  6.2.2 By mutual  agreement of  the Parties,  a block as  to
                        which this  Agreement  has terminated  under  Section
                        6.2.1  hereof  may  again be  made  subject  to  this
                        Agreement   (in  which   event  it   shall  again  be
                        considered as a  Subject Block and be subject  to all
                        the   provisions  hereof).     Appropriate  memoranda
                        recording  the  actions  taken   shall  thereupon  be
                        signed by the Parties.

           6.3   At a  meeting to commence  not later than  12 p.m. (C.D.T.)
  on the 7th  day immediately  preceding the  date announced  for a  Subject
  Sale, each  Party shall disclose to  each other Party  the highest  bid in
  which it is then willing  to participate on each Subject Block.  Following
  such disclosure,  each Party  shall  inform each  other Party  whether  it
  elects to participate in a Joint Bid Hereunder on  each such Subject Block
  at the highest amount suggested by any  Party (the "Highest Suggested  Bid
  Amount").  In the event any Party ( "Non-Participating Party")  elects not
  to participate in any such bid, the other Party or Parties ("Participating
  Party") may bid solely or jointly with others for a lease on such  Subject
  Block; and if the  Participating Party or Parties  (solely or with others)
  bid  no less  than the Highest  Suggested Bid Amount, and  are awarded the
  lease,  the Non-Participating  Party shall, with  respect to  such Subject
  Block, have no further rights under this Agreement.

           6.4   Whenever  Parties  have agreed  to  join in  any  Joint Bid
  Hereunder,  in accordance with the  requirements and  procedures set forth
  herein,  the  Parties  shall  sign a  memorandum  recording the  agreement
  reached in the form of Exhibit "C".  Whenever any Party cannot or does not
  participate in any  Joint Bid Hereunder at the highest  amount theretofore
  suggested, the Party shall:  (I) sign a memorandum in the form  of Exhibit
  "D" setting forth  such determination,  the date,  the name  of each  Non-
  Participating Party and the amount  at which that Party cannot or does not
  agree  to participate and  (ii) such Non-Participating Party  shall not be
  entitled  to  participate  in  further  discussions  or meetings  relating
  thereto.

           6.5   A record  of all  suggested Joint Bids  Hereunder shall  be
  made;  and no  Party shall  participate in  any Joint  Bid Hereunder  on a
  Subject Block that is less than the highest Joint Bid  Hereunder suggested
  by any Party for that block.

                                   ARTICLE 7
                   DISCLOSURE AND CONFIDENTIAL OF INFORMATION

           7.1   A  Party  that  believes  the   disclosure  of  information
  (including, but  not limited to, Technical Information) it possesses would
  be beneficial  in arriving at  a Joint  Bid Hereunder may,  subject to the
  further  provisions of this  Article 7, disclose such  information to each
  other Party.

           7.2   No  information  shall  be  disclosed,  nor any  discussion
  held, relating to future hydrocarbon supply, demand or price.

           7.3   A Party disclosing information, including, but  not limited
  to, Technical Information,  (the "Disclosing Party") thereby represents it
  has the right  to make such  disclosure to each  other Party to whom  such
  information is disclosed (the "Examining Party").

           7.4   Whenever Technical  Information is  disclosed, the  Parties
  shall  sign a  memorandum identifying  such  information and  each Subject
  Block  to  which it  relates  and  setting  forth  (i)  the  date  of  the
  disclosure, (ii)  the name of each  Disclosing Party and  the name of each
  Examining Party and (iii) whether such information is to be subject to the
  confidentiality provisions of Section 7.5 hereof.

           7.5   All  Technical Information  shall be  held confidential  by
  each Examining Party and shall not be divulged by  such Examining Party to
  any other  person or entity, except an Affiliate, for  a period of two (2)
  years from the date such confidential information is disclosed, unless the
  Parties mutually agree to a lesser period of time or unless the Disclosing
  Party indicates at  the time of disclosure that  the information is not to
  be  subject  to  this  requirement  of  confidentiality.    The  foregoing
  confidentiality  provision shall not  apply to any Examining  Party to the
  extent that the  particular disclosed information (i) is now  or hereafter
  becomes part of the public domain other than as a result of a wrongful act
  or omission by such Examining Party, or (ii) is already owned by or in the
  possession of the Examining Party, or (iii) is hereafter  disclosed to the
  Examining Party by a third party without binder of confidentiality.


           7.6   All other disclosed  information relating to bids  shall be
  held confidential  by the Parties and  shall not be  divulged to any other
  person or entity except an Affiliate until after the opening of bids.

           7.7   If   any  Examining  Party discloses  to  an Affiliate  any
  information it is obligated to hold  confidential hereunder, the Examining
  Party shall ensure  that such Affiliate shall  likewise be fully  bound by
  the confidentiality provisions hereof.

                                   ARTICLE 8
                           NON-RESTRICTION OF BIDDING

           8.1   Nothing  herein  shall  ever be  construed  as  denying  or
  restricting the right of a Party to bid on any Subject Block (or any other
  block); and  the Parties hereby  expressly confirm the right  of any Party
  (acting either solely or with others) to bid on  any such block (including
  any Subject Block on which  a Joint Bid hereunder is proposed or submitted
  hereunder) if, as and when  it may desire.  In order reasonably to protect
  all Parties against  the inequitable use of  information obtained pursuant
  to this Agreement, however, it is agreed that:

            8.1.1 If  a  Party  (an  "Acquiring  Party"),  either  solely  or
                  jointly,  should bid  at a  Subject Sale  for, and  thereby
                  acquire  a leasehold  interest in,  any  Subject Block  for
                  which an unaccepted bid  was made by one or more Parties at
                  the  same  sale   pursuant  to  this  Agreement   and  such
                  unaccepted bid was for an  amount no less than  the Highest
                  Suggested  Bid Amount,  then  such Acquiring  Party  shall,
                  within  thirty  (30)  days  after  such  acquisition,  give
                  written notice thereof  (together with the details  of such
                  acquisition) to each other Party  that participated in such
                  unaccepted  bid  (an "Unsuccessful  Bidding Party").   Each
                  Unsuccessful  Bidding  Party shall  have  thirty  (30) days
                  after   receipt  of  said  notice  in  which  to  give  the
                  Acquiring Party  written notice of its  election (if  it so
                  elects)   to  purchase   from   the  Acquiring   Party  the
                  hereinafter stated  part of the Acquiring  Party's interest
                  by reimbursing the  Acquiring Party  for said  part of  the
                  Acquiring  Party's lease-acquisition costs  and by assuming
                  said part of the  Acquiring Party's leasehold  obligations.
                  That part  of the  Acquiring Party's  costs for which  such
                  Unsuccessful Bidding  Party is  to reimburse the  Acquiring
                  Party,   that  part  of  the  Acquiring  Party's  leasehold
                  obligations  which such  Unsuccessful Bidding  Party is  to
                  assume  and that  part of  the  Acquiring Party's  interest
                  which such Unsuccessful Bidding Party  shall be entitled to
                  purchase is as follows:

                  (i)   If  the  Acquiring Party  participated  in submitting
                        the  above-described unaccepted bid: that part of the
                        Acquiring  Party's interest  which  is equal  to  the
                        Unsuccessful   Bidding   Party's   share   of    said
                        unaccepted bid.

                  (ii)  If  the  Acquiring  Party  did  not  participate   in
                        submitting said  unaccepted bid:   that  part of  the
                        Acquiring Party's  interest  which  is equal  to  the
                        ratio that the  Unsuccessful Bidding Party's  Section
                        3.1 interest bears to the total  of those Section 3.1
                        interests that are  represented in both the  accepted
                        and unaccepted bids.

            8.1.2 If  a Party,  either solely  or jointly,  should acquire  a
                  leasehold interest in  any Subject Block as the result of a
                  bid at a  Subject Sale for an amount  less than the Highest
                  Suggested Bid  Amount, such  Acquiring Party shall,  within
                  thirty   (30)  days after  such  acquisition, give  written
                  notice   thereof  (together   with  the   details  of  such
                  acquisition) to  each other Party.   Each such other  Party
                  shall have the  option for  a period of  thirty  (30)  days
                  after  receipt  of  such  notice  in  which  to  give  such
                  Acquiring Party  written notice of its  election (if  it so
                  elects)  to   purchase  from   such  Acquiring  Party   the
                  hereinafter-stated part  of such Acquiring Party's interest
                  by reimbursing the  Acquiring Party  for said  part of  the
                  Acquiring  Party's  leasehold  acquisition  costs  and   by
                  assuming  said  part  of  the Acquiring  Party's  leasehold
                  obligations.  That part of the  Acquiring Party's costs for
                  which  each such other Party  is to reimburse the Acquiring
                  Party, and  that part  of the  Acquiring Party's  leasehold
                  obligations which each such other  Party is to assume,  and
                  that  part of  the Acquiring  Party's  interest which  each
                  such  other Party  shall be entitled  to purchase, shall be
                  equal to the  percentage interest  for such other  Party as
                  provided in Section 3.1 hereinabove.

           8.2   The right  of purchase from  an Acquiring Party, as  stated
  in Sections  8.1.1 and  8.1.2  hereof, shall  apply whether  the  original
  leasehold interest  was acquired by a  Party to  this Agreement  or by  an
  Affiliate of such Party.

                                   ARTICLE 9
                            RESPONSIBILITY FOR BIDS

           9.1   Mobil shall prepare  and file the  bids for  the blocks  or
  blocks  in  which all  the  Parties  elect to  participate  in  Joint Bids
  Hereunder at  the Subject Sale.   Each Party participating in  a Joint Bid
  Hereunder shall be responsible for satisfying itself as to the correctness
  of such  bid and shall  take whatever  steps it deems  desirable to ensure
  that such bid is  timely and properly prepared and submitted.   Each Joint
  Bid Hereunder shall  disclose the identity of  all Parties joining in such
  bid, and comply with any other requirements promulgated by the MMS.  Mobil
  will  advance all funds required to cover that part of the bonus(es) which
  must be submitted  with the bid(s) in  which Mobil elects  to participate.
  As  soon as  Mobil determines  when the  Minerals Management  Service will
  deposit  the bid  check(s),  Mobil will  notify  the  other  Participating
  Parties  by  telephone   of  the  date  that   the  Party  must  wire  its
  proportionate share  of  immediately available  funds to  CitiBank N.A.  -
  American Bankers Association Routing Number 021000089 - (New York, NY) for
  credit to Mobil Oil Corporation's account number 4064-0942.  One day prior
  to the date  upon which the balance of the bonus and the first year rental
  is due for an accepted Joint Bid Hereunder, Mobil shall pay the total then
  due to  the Minerals Management Service,  and on the  same date  the other
  Participating  Parties   agree  to  wire   their  proportionate  share  of
  immediately available funds pursuant to the above wiring instructions.

           9.2   In the  event that a surety bond is  required for any Joint
  Bid  Hereunder in which  Mobil elects to participate,  Mobil shall prepare
  and file such surety bond, and shall maintain  same until such time as the
  Minerals  Management Service  deems the  bond no  longer necessary.   Each
  Party that participates in a Joint Bid Hereunder, for which Mobil prepares
  and  files a surety bond, shall  be billed for its  proportionate share of
  any  and  all  costs  realized  or  incurred  by  Mobil  in  securing  and
  maintaining such bond.

                                   ARTICLE 10
                 SELECTION OF OPERATOR AND OPERATING AGREEMENT

           10.1  If  the Parties  submit a Joint  Bid Hereunder, the Parties
  agree that  the Operator  for  any jointly  acquired lease(s)  under  this
  Agreement shall be either Mobil or Enserch (if a Party owns an interest in
  such lease).   Operatorship shall  be determined within thirty   (30) days
  following issuance of  all leases  and shall be  selected on  a Designated
  Prospect basis with each  individual selection  covering all blocks  which
  comprise said Designated Prospect.  

           10.2  The  Party  which  generated the  prospect  for  which  the
  lease(s) was  acquired shall have the option to be designated Operator. If
  a prospect acquired by two or more of the  Parties was generated by two or
  more Parties independently of one another, then the Party with the largest
  interest  in the  prospect  (with 33.33334%  and 33.33333%  considered  as
  equal) shall have the option to be designated Operator thereof.

           10.3  In  the event that: (i) a prospect  was generated by two or
  more  Parties, (ii)  no Party has  a larger interest in  the prospect such
  that two or more of the Parties have an equal interest in the prospect and
  (iii)  such Parties  do not  reach agreement  as to  which Party  shall be
  designated Operator,  the order  of the right  to elect  to be  designated
  Operator of such Designated Prospect(s) shall be determined by lot between
  such  owners.  As  to those  prospects which  the same two Parties  own in
  equal proportions, each  of said Parties will,  from such drawing of lots,
  receive  an assigned selection  number either 1 or  2. Prospect selections
  win be made by each such Party in sequential order as follows: 1, 2, 2, 1,
  1, 2, 2, 1, etc.   As to those prospects which the same three Parties  own
  in equal proportions, each of said Parties will then, from such drawing of
  lots, receive  an assigned  selection number  either 1,  2 or  3. Prospect
  selections  will then  be made by  each such Party in  sequential order as
  follows: 1, 2, 3; 2, 3, 1; 3, 1, 2; 1, 2, 3; 2, 3, 1; 3, 1, 2; etc.).

                                   ARTICLE 11
                          RELATIONSHIP OF THE PARTIES

           11.1  It  is  expressly  agreed  that  the  relationship  of  the
  Parties as created by this Agreement is not as members of any partnership,
  joint venture or association; that the duties, obligations and liabilities
  of  the Parties  are several  and not  joint;  and that  nothing contained
  herein  shall be  construed  to  create or  impose any  partnership  duty,
  obligation or  liability on  any Party.   Each Party hereby  elects to  be
  excluded from  the application of all  or any  part of  the provisions  of
  Subchapter K, Chapter  1, Subtitle  A, Internal Revenue Code  of 1986,  as
  amended, or similar provisions of applicable state laws.

                                   ARTICLE 12
                     APPLICABLE LAWS, RULES AND REGULATIONS

           12.1  The provisions  hereof shall be  subject to all  applicable
  valid laws and  all applicable valid rules,  regulations and orders of any
  governmental authority having jurisdiction; and in the event any provision
  hereof shall  be found to be  contrary to, or  inconsistent with, any such
  law,  rule,  regulation  or  order, the  latter  shall  prevail  and  this
  Agreement shall be deemed modified to the extent, but  only to the extent,
  necessary  for it  to  be  consistent therewith,  subject to  the  further
  provisions of this Article 12.

           12.2  In the event  a Joint  Bid Hereunder would  be disqualified
  under any provision of 30  CFR   256.44 or under any other applicable law,
  rule, regulation or order, then no such  bid shall be submitted, and  this
  Agreement shall thereupon  terminate as to each Subject Block  affected by
  such disqualification (except that  the obligations  of the Parties  under
  Article 7  hereof shall remain in  force and effect  during the  period of
  time specified therein).

           12.3  Each Party hereby represents that:

                  12.3.1      Such  Party   has  heretofore  filed  with  the
                              appropriate    Minerals   Management    Service
                              ("MMS")  office(s)  all   statements,  reports,
                              documents and other matters required by  30 CFR
                              256.41,   DOI  notice of sale and/or  any other
                              applicable law,  rule, regulation  or order  in
                              order for  such Party  to qualify  to submit  a
                              bid at a Subject Sale,  to the extent same  may
                              be  so filed  prior  to  the time  of  actually
                              submitting a bid; and

                  12.3.2      Such Party:

                        (a)   is now and will remain during  the term of this
                              Agreement,   in   full   compliance  with   all
                              applicable  joint  bidding  requirements of  30
                              CFR     256.41 (including,  without limitation,
                              each   Statement    of   Production    required
                              thereby), of the DOI notice of sale  and of any
                              other  applicable  law,  rule,  regulation   or
                              order; and

                        (b)   is not  now, and will  not, during the term  of
                              this  Agreement, become,  a  party  to (i)  any
                              pre-lease  agreement  described  in   30    CFR  
                              256.44 that  would  disqualify    a  Joint  Bid
                              Hereunder at a  Subject Sale or (ii)  any other
                              agreement which  would preclude such Party from
                              joining   in  and  being  fully  bound  by  the
                              provisions of this Agreement; and

                        (c)   can and will, in connection  with any Joint Bid
                              Hereunder to which  it is a Party,  comply with
                              all  requirements  of  30 CFR   256.41  et seq.
                              applicable to a Subject Sale.

                                   ARTICLE 13
                                 ASSIGNABILITY

           13.1  A Party's rights  and obligations under this  Agreement may
  be assigned, in whole or in part, subject to the following:

                  13.1.1  No  such  assignment,  other  than  an  assignment
                          to an Affiliate, shall be made without the advance
                          written  consent of each other Party; and any such
                          assignment not so consented to shall be void.

                  13.1.2  Any  assignment permitted  hereunder shall  be made
                          expressly subject to the provisions  of  Agreement;
                          and the assignee(s) thereunder shall, to the extent
                          of such  assignment, assume all of the obligations,
                          and be bound by all  of  the  provisions,  of  this
                          Agreement.

                                   ARTICLE 14
                                    NOTICES

           14.1  All notices  required or permitted  to be given  to a Party
  under this Agreement shall be given (i) by United States mail or telegram,
  postage  or charges prepaid, and addressed to that Party at its address as
  shown opposite its name on the signature page hereof  or (ii) by telephone
  to that Party's representative or alternate, confirmed in writing as above
  provided.   Each  Party shall  have the  right to  change its  address for
  notice purposes at  any time(s) by giving  written notice thereof to  each
  other Party.

                                   ARTICLE 15
                                      TERM

           15.1  Unless sooner  terminated, in  whole or in  part, by reason
  of  some other  provision hereof, or by  mutual agreement  of the Parties,
  this Agreement,  with respect  to each Subject Block,  shall terminate  on
  December 31, 2000; provided however;

              15.1.1   The  obligation  of   each  Party  with  respect   to
                       confidential Technical  Information under Section 7.5
                       hereof shall remain in effect during the period(s) of
                       time specified therein; and

              15.1.2   The  provisions of  Articles 8,  10  and of  Sections
                       13.2 and 16.1 hereof  shall remain in effect  for any
                       additional period(s) of time as  may  be required  in
                       order  for  such  provisions  to  be  complied   with
                       following a Subject Sale.

           15.2  Any Party may,  with respect  to a Subject  Block, provided
  that  no Subject  Sale  has theretofore  been  held with  respect  to that
  Subject  Block,  withdraw from  further  participation  in  this Agreement
  (thereby  terminating  its  further  rights  and  obligations  under  this
  Agreement)  at any  time during the  term hereof but after  six (6) months
  from the  date hereof,  by  giving written  notice thereof  to each  other
  Party; except that any Joint Bid Hereunder which has been submitted to the
  MMS by the Parties may not be rescinded without the mutual  consent of all
  Parties participating in such joint bid; provided however:

            15.2.1   The obligation  of such  withdrawing Party with  respect
                     to  confidential  Technical  Information under  Sections
                     7.5,  7.6 and  7.7  shall remain  in  effect during  the
                     period of time specified therein; and

            15.2.2   If  such withdrawing  Party,  either solely  or  jointly
                     with others, should,  during the remaining term  of this
                     Agreement, acquire  an interest  in such Subject  Block,
                     then such  Party shall,  within thirty  (30) days  after
                     such  acquisition, give  written notice  thereof to each
                     other Party.   Such other Party shall  have the  option,
                     for a period of thirty  (30) days after receipt  of such
                     notice, to  give such  withdrawing Party written  notice
                     of  its  election  (if  it  so  elects)  to acquire  its
                     prorata share  (i.e., that share which  is equal  to its
                     participating interest  under Section 3.1 hereof) of the
                     acquired interest  by reimbursing such withdrawing Party
                     for such  prorata share of the  acquisition costs and by
                     assuming  such prorata share  of the withdrawing Party's
                     obligations relating thereto.

                                   ARTICLE 16
                            SUBSEQUENT ACQUISITIONS

           16.1  If a Party, including an  Affiliate (an "Acquiring Party"),
  either solely or jointly, should acquire  (or obtain the right to acquire)
  from others, within  one (1) year after the  Subject Sale, or December 31,
  2000, whichever is the earlier, a leasehold interest in a Subject Block by
  farmin, purchase or any means other than bidding at a  Subject Sale and if
  an  unaccepted bid  was previously  made by  one or  more Parties  on such
  Subject Block at  a Subject  Sale pursuant  to this  Agreement, then  such
  Acquiring  Party shall, within  thirty (30) days after  the acquisition of
  such interest  or right,  give written notice thereof  (together with  the
  details of such acquisition) to each other Party that participated in such
  unaccepted bid (an "Unsuccessful Bidding Party").  An Unsuccessful Bidding
  Party shall have thirty (30) days after receipt of said notice in which to
  give the Acquiring Party written  notice of its election (if it so elects)
  to purchase from the Acquiring Party that portion of the Acquiring Party's
  interest stated in Section 8.1.1 hereof by reimbursing the Acquiring Party
  for said part of  the Acquiring Party's acquisition  costs and by assuming
  the said part of the Acquiring Party's obligations.

                                   ARTICLE 17
                                ENTIRE AGREEMENT

           17.1  This Agreement supersedes and replaces  any oral or written
  communication heretofore made between  the Parties relating to the subject
  matter  hereof,  except  for  any  prior  written confidential  agreements
  between the Parties pertaining to data or information or blocks covered by
  this Agreement.   This Agreement may not be  modified or changed except by
  an instrument in writing signed by all Parties.

           17.2  This  Agreement may  be  executed  in counterpart,  any  of
  which shall be considered an original.

           IN WITNESS WHEREOF, the  Parties have executed this Agreement  as
  of the date first above stated.

  WITNESS:                                MOBIL OIL EXPLORATION &
                                                PRODUCING SOUTHEAST INC.

  _____________________________


  _____________________________           By: _____________________________
                                                Attorney-in-Fact



  WITNESS:                                ENSERCH EXPLORATION, INC.

  _____________________________


  ______________________________          By: ______________________________



  WITNESS:                                READING & BATES DEVELOPMENT CO.

  _____________________________


  ______________________________          By: ______________________________

   

                                   EXHIBIT "B" 

  Attached to  and  made  a part of that certain Joint Bidding Agreement dated
  September 1, 1995 by and between Mobil Oil Exploration & Producing Southeast
  Inc., Enserch Exploration, Inc.  and Reading & Bates Development Co.

                         AMENDMENT TO BIDDING AGREEMENT

  In consideration  of the  covenants and  agreements hereinafter expressed,
  and for  other valuable  considerations received,  the undersigned parties
  agree  that  the names  and  percentages  shown in  Article  3  (RIGHT  OF
  PARTICIPATION) of that certain Joint Bidding Agreement, dated September 1,
  1995, by  and between  Mobil Oil Exploration &  Producing Southeast  Inc.,
  Enserch  Exploration, Inc. and  Reading & Bates Development  Co., shall be
  and is  hereby amended  insofar and  only insofar as it  covers the  below
  listed Area/Blocks(s) for OCS Sale No. ___ :


  AREA                                          BLOCK(S)

  __________________________                    __________________________

  to read as follows:

            MOBIL                   __________________ %
            ENSERCH                 __________________ %
            READING & BATES         __________________ %

  Except as amended hereby, all other terms and provision of the Agreement
  shall remain in full force and effect as written.


  Mobil Oil Exploration & Producing Southeast Inc.

  By: ________________________   Executed & Effective: _____________________


  Enserch Exploration, Inc.

  By: ________________________    Executed & Effective: _____________________


  Reading & Bates Production Co.

  By: ________________________    Executed & Effective: _____________________


                                  Exhibit "C"

  Attached to  and  made  a part of that certain Joint Bidding Agreement dated
  September 1, 1995 by and between Mobil Oil Exploration & Producing Southeast
  Inc., Enserch Exploration, Inc. and Reading & Bates Development Co.


                                   MEMORANDUM
                   AGREEMENT TO PARTICIPATE IN JOINT BIDDING

  Pursuant to Article  6 (MEETINGS  AND DETERMINATION OF BIDS)  of the  that
  certain Joint Bidding  Agreement, dated September 1, 1995, by  and between
  Mobil  Oil Exploration  & Producing  Southeast Inc.,  Enserch Exploration,
  Inc. and Reading & Bates Development Co., the Parties signing below record
  agreement to enter a joint bid for OCS Sale No. ___  as follows:

  AREA                        BLOCK       HIGHEST SUGGESTED BID

  ___________________      __________  ____________________________________


  PARTICIPATION %                         Mobil Oil Exploration & Producing
                                          Southeast Inc.

  ________________________          By: __________________________________



                                          Enserch Exploration, Inc.

  ________________________          By: __________________________________



                                          Reading & Bates Development Co.

  ________________________          By: __________________________________



  Date Signed: ________________________


                                Exhibit "D"

  Attached  to  and  made a part of that certain Joint Bidding Agreement dated
  September 1, 1995 by and between Mobil Oil Exploration & Producing Southeast
  Inc., Enserch Exploration, Inc. and Reading & Bates Development Co.


                                   MEMORANDUM

                               ELECTION REGARDING
                         PARTICIPATION IN JOINT BIDDING

  Pursuant  to Article 6 (MEETINGS  AND DETERMINATION  OF BIDS) of  the that
  certain Joint Bidding  Agreement, dated September 1, 1995, by  and between
  Mobil  Oil Exploration  & Producing  Southeast Inc.,  Enserch Exploration,
  Inc. and Reading & Bates Development Co., the non-participating party  (or
  parties) has elected not to participate in the highest suggested bid shown
  below for OCS Sale No. ____.  The participating parties, if more than one,
  agree to consider a joint bid at such highest suggested amount.



  AREA                        BLOCK       HIGHEST SUGGESTED BID

  _____________________   _____________   _________________________________



  PARTICIPATING PARTY:


  By: _____________________________



  NON-PARTICIPATING PARTY:


  By: _____________________________



  Date Signed: _____________________