EXHIBIT 10(d)

      Attached are three (3) examples of Employment Agreements entered into
between Santa Fe Energy Resources Inc. and certain executive officers and other
key employees of the Company. The agreements vary in the potential amount of
payments to be made to the individuals but are otherwise substantially similar.
The individuals are listed below with the number of the form of agreement next
to their name.

         NAME OF EMPLOYEE                              AGREEMENT NO.
         ----------------                              -------------
         James L. Payne ...................................   1
         Hugh L. Boyt .....................................   2
         Jerry L. Bridwell ................................   2
         Dyabe C, Radtke ..................................   2
         David L. Hicks ...................................   3
         Charles G. Hain, Jr ..............................   3
         E. Everett Deschner ..............................   3
         John R. Womack ...................................   3
         Janet F. Clark ...................................   3
         Kathy E. Hager ...................................   3
         Mark A. Older ....................................   3
<PAGE>
                           EMPLOYMENT AGREEMENT NO. 1

      This Employment Agreement ("Agreement") is entered into effective as of
December 31, 1996 by and between Santa Fe Energy Resources, Inc., a Delaware
corporation ("Company"), and James L. Payne ("Employee").

      WHEREAS, the Company employs Employee and desires to continue such
employment relationship and Employee desires to continue such employment;

      NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties, and agreements contained herein, and for other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:

      1. EMPLOYMENT. The Company hereby employs Employee, and Employee hereby
accepts employment by the Company, on the terms and conditions set forth in this
Agreement.

      2. TERM OF EMPLOYMENT. Subject to the provisions for earlier termination
provided in the Agreement, the term of this Agreement (the "Term") shall
commence on the effective date of this Agreement as stated above and shall
terminate on December 31, 1999; PROVIDED, HOWEVER, commencing on January 1, 1998
and on each January 1 thereafter, the term of this Agreement shall automatically
be extended one additional year unless, not later than September 30 of the
preceding year, the Board of Directors of the Company (the "Board") shall give
written notice to Employee that the Term of the Agreement shall cease to be so
extended; PROVIDED, FURTHER, that if a Change in Control, as defined in Section
6, shall have occurred during the original or extended Term of this Agreement,
the Term shall continue in effect for a period of not less than three years from
the date of such Change in Control. In no event, however, shall the Term of this
Agreement extend beyond the end of the calendar month in which Employee's 65th
birthday occurs. Notwithstanding any provision of this Agreement to the
contrary, termination of this Agreement shall not alter or impair any rights of
Employee (or Employee's estate or beneficiaries) that have arisen under this
Agreement prior to such termination.

      3. EMPLOYEE'S DUTIES. During the Term of this Agreement, Employee shall
serve as the Chairman of the Board, Chief Executive Officer and President of the
Company, with such customary duties and responsibilities as may from time to
time be assigned to him by the Board, provided that such duties are at all times
consistent with the duties of such position.

      Employee agrees to devote reasonable attention and time during normal
business hours to the business and affairs of the Company and, to the extent
necessary to discharge the duties and responsibilities assigned to Employee
hereunder, to use reasonable best efforts to perform faithfully and efficiently
such duties and responsibilities.
<PAGE>
      4. BASE COMPENSATION. For services rendered by Employee under this
Agreement, the Company shall pay to Employee a base salary ("Base Compensation")
of $515,000 per annum payable in accordance with the Company's customary payroll
practice for its executive officers. The amount of Base Compensation shall be
reviewed periodically and may be increased to reflect inflation or such other
adjustments as the Board may deem appropriate but Base Compensation, as
increased, may not be decreased thereafter.

      5. ADDITIONAL BENEFITS. In addition to the Base Compensation provided for
in Section 4 herein, Employee shall be entitled to receive all fringe benefits
and prerequisites offered by the Company to its executive officers, including,
without limitation, participation in the Company's Annual Incentive Compensation
Plan and other incentive plans offered generally to key employees, the various
employee benefit plans or programs provided to the employees of the Company in
general, subject to the regular eligibility requirements with respect to each
of such benefit plans or programs, and such other benefits or prerequisites as
may be approved by the Board during the Term of this Agreement. Nothing in this
paragraph shall be deemed to prohibit the Company from making any changes in any
of the plans, programs or benefits described in this Section 5, provided the
change similarly affects all executives of the Company similarly situated.

      6. CHANGE IN CONTROL.

      For purposes of this Agreement, a "Change in Control" shall mean the
occurrence of one of the following events:

            (i) any "person" (as such term is used in Section 13(d) and 14(d) of
      the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
      other than a trustee or other fiduciary holding securities under an
      employee benefit plan of the Company or any affiliate, or any corporation
      owned, directly or indirectly, by the stockholders of the Company in
      substantially the same proportions as their ownership of stock of the
      Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
      under the Exchange Act), directly or indirectly of securities of the
      Company representing 25% or more of the combined voting power of the
      Company's then outstanding securities;

            (ii) during any period of two consecutive years (not including any
      period prior to the execution of this Agreement), individuals who at the
      beginning of such period constitute the Board of Directors of the Company,
      and any new director (other than a director designated by a person who has
      entered into an agreement with the Company to effect a transaction
      described in clause (i), (iii) or (iv) of this Section) whose election by
      the Board of Directors of the Company or nomination for election by the
      Company's stockholders was approved by a vote of at least two-thirds of
      the directors then still in office who either were directors at the
      beginning of the period or whose election or nomination for election was
      previously so approved (hereinafter referred to as "Continuing
      Directors"), cease for any reason to constitute at least a majority
      thereof;

                                      -2-
<PAGE>
            (iii) the stockholders of the Company approve a merger or
      consolidation of the Company with any other corporation, other than a
      merger or consolidation which would result in the voting securities of the
      Company outstanding immediately prior thereto continuing to represent
      (either by remaining outstanding or by being converted into voting
      securities of the surviving entity) more than 65% of the combined voting
      power of the voting securities of the Company (or such surviving entity)
      outstanding immediately after such merger or consolidation; or

            (iv) the stockholders of the Company approve a plan of complete
      liquidation of the Company or an agreement for the sale or disposition by
      the Company of all or substantially all of the Company's assets. For
      purposes of this clause (iv), the term "the sale or disposition by the
      Company of all or substantially all of the Company's assets" shall mean a
      sale or other disposition transaction or series of related transactions
      involving assets of the Company or of any direct or indirect subsidiary of
      the Company (including the stock of any direct or indirect subsidiary of
      the Company) in which the value of the assets or stock being sold or
      otherwise disposed of (as measured by the purchase price being paid
      therefor or by such other method as the Board of Directors of the Company
      determines is appropriate in a case where there is no readily
      ascertainable purchase price) constitutes more than two-thirds of the
      "fair market value of the Company" (as hereinafter defined). For purposes
      of the preceding sentence, the "fair market value of the Company" shall be
      the aggregate market value of the Company's outstanding common stock (on a
      fully diluted basis) plus the aggregate market value of the Company's
      other outstanding equity securities. The aggregate market value of the
      Company's common stock shall be determined by multiplying the number of
      shares of the Company's common stock (on a fully diluted basis)
      outstanding on the date of the execution and delivery of a definitive
      agreement with respect to the transaction or series of related
      transactions (the "Transaction Date") by the average closing price for the
      Company's common stock for the ten trading days immediately preceding the
      Transaction Date. The aggregate market value of any other equity
      securities of the Company shall be determined in a manner similar to that
      prescribed in the immediately preceding sentence for determining the
      aggregate market value of the Company's common stock or by such other
      method as the Board of Directors of the Company shall determine is
      appropriate. However, notwithstanding anything in this clause (iv) to the
      contrary, a spinoff or distribution of the stock of a subsidiary of the
      Company to those persons who were stockholders of the Company immediately
      prior to such spinoff or distribution in substantially the same proportion
      as their ownership of Company stock immediately prior to such spinoff or
      distribution shall not constitute a "sale or disposition by the Company of
      all or substantially all of the Company's assets."

      7. TERMINATION. This Agreement may be terminated prior to the end of its
Term as set forth below.

            (a) RESIGNATION. Employee may resign, including by reason of
      retirement, his position at any time. In the event of such resignation,
      except in the case of resignation for

                                      -3-
<PAGE>
      Good Reason (as defined below) on or following a Change in Control, the
      Company shall have no obligations to Employee with respect to this
      Agreement other than the payment of any Base Compensation and vacation pay
      which had accrued hereunder at the date of Employee's termination.

            (b) DEATH. If Employee's employment is terminated due to his death,
      this Agreement shall terminate and the Company shall have no obligations
      to Employee's legal representatives with respect to this Agreement other
      than the payment of any Base Compensation and vacation pay which had
      accrued hereunder at the date of Employee's death.

            (c) DISCHARGE.

                  (i) The Company may terminate Employee's employment for any
            reason deemed sufficient by the Company upon notice as provided in
            Section 10. In the event of such termination prior to a Change in
            Control, the Company shall have no obligations to Employee with
            respect to this Agreement other than the payment of any Base
            Compensation and vacation pay which had accrued hereunder at the
            date of Employee's termination. However, in the event that
            Employee's employment is terminated during the Term by the Company
            on or within two years following a Change in Control and for any
            reason other than his Misconduct (as defined in Section 7(c)(ii)
            below) then, subject to Sections 7(g) and (h): (A) the Company shall
            pay in a lump sum in cash to Employee, within 15 days of the Date of
            Termination, an amount equal to three times the sum of (1)
            Employee's Base Compensation and (2) the greater of (i) Employee's
            target incentive award under the Company's Annual Incentive Plan for
            such year or (ii) the average award received by Employee under the
            Annual Incentive Plan for the three fiscal years preceding the year
            of termination; (B) for the 36-month period after such Date of
            Termination, the Company shall provide or arrange to provide
            Employee (and Employee's dependents) with life, disability, accident
            and group health insurance benefits substantially similar to those
            which Employee (and Employee's dependents) were receiving
            immediately prior to the Notice of Termination, with the Employee
            charged a monthly premium(s) for such coverage(s) that does not
            exceed the premium(s) charged to an active employee for comparable
            coverage(s); provided, however, the Company shall pay Employee each
            month during such period of continued coverage an amount that, on a
            net after-tax basis to Employee, is equal to the monthly premium
            charged Employee for such coverage and to the extent coverage and/or
            benefits received are taxable to Employee, the Company shall make
            Employee "whole" on a net after tax basis; provided, however,
            benefits otherwise receivable by Employee pursuant to this clause
            (B) shall be reduced to the extent other comparable benefits are
            actually received by Employee (and Employee's dependents) during the
            36-month period following Employee's termination, and any such
            benefits actually received by Employee shall be reported to the
            Company; (C) within 15 days of the Date of

                                      -4-
<PAGE>
            Termination or, if later, the first date on which such payment would
            not subject Employee to suit under Section 16(b) of the Securities
            Exchange Act of 1934, if applicable, the Company shall pay to
            Employee in cancellation of all outstanding Company stock-based
            awards of Employee which are not vested on the Date of Termination
            (collectively, "Awards"), a lump sum amount in cash equal to the sum
            of the value (with respect to an option or stock appreciation right,
            the "spread"; and with respect to restricted stock or phantom stock,
            the value of an unrestricted share) determined as of the Date of
            Termination of all such nonvested Awards, calculated, where
            applicable, as if all corporate performance goals had been achieved
            at the maximum level (thus warranting payment of the maximum value
            of the Award); and (D) the Company shall provide to Employee
            outplacement services by a nationally recognized firm.

                  (ii) Notwithstanding the foregoing provisions of this Section
            7, in the event Employee is terminated because of Misconduct, the
            Company shall have no compensation obligations pursuant to this
            Agreement after the Date of Termination. As used herein,
            "Misconduct" means (a) the willful and continued failure by Employee
            to substantially perform his duties with the Company (other than any
            such failure resulting from Employee's incapacity due to physical or
            mental illness or any such actual or anticipated failure after the
            issuance of a Notice of Termination by Employee for Good Reason),
            after a written demand for substantial performance is delivered to
            Employee by the Board, which demand specifically identifies the
            manner in which the Board believes that Employee has not
            substantially performed his duties, or (b) the willful engaging by
            Employee in conduct which is demonstrably and materially injurious
            to the Company, monetarily or otherwise. For purposes hereof, no
            act, or failure to act, on Employee's part shall be deemed "willful"
            unless done, or omitted to be done, by Employee not in good faith
            and without reasonable belief that Employee's action or omission was
            in the best interest of the Company. Notwithstanding the forgoing,
            Employee shall not be deemed to have been terminated for Misconduct
            unless and until there shall have been delivered to Employee a copy
            of a resolution duly adopted by the affirmative vote of not less
            than three-quarters of the entire membership of the Board at a
            meeting of the Board called and held for such purpose (after
            reasonable notice to Employee and an opportunity for Employee,
            together with Employee's counsel, to be heard before the Board),
            finding that in the good faith opinion of the Board Employee was
            guilty of conduct set forth above and specifying the particulars
            thereof in detail.

            (d) RESIGNATION FOR GOOD REASON. In the event of a Change in
      Control, Employee shall be entitled to terminate his employment for Good
      Reason as defined herein. If Employee terminates his employment for Good
      Reason on or within two years following a Change in Control, Employee
      shall be entitled to the compensation and benefits provided in Paragraph
      7(c)(i) hereof. "Good Reason" shall mean (1) the material breach of any of
      the Company's obligations under this agreement without Employee's express
      written consent

                                      -5-
<PAGE>
      or (2) the occurrence of any of the following circumstances without
      Employee's express written consent unless such breach or circumstances are
      fully corrected prior to the Date of Termination specified in the Notice
      of Termination pursuant to Subsections 7(e) and 7(f), respectively, given
      in respect thereof:

                  (i) the assignment to Employee of any duties inconsistent with
            the position in the Company that Employee held immediately prior to
            the Change in Control, or a significant adverse alteration in the
            nature or status of Employee's office, title, responsibilities,
            including reporting responsibilities, or the conditions of
            Employee's employment from those in effect immediately prior to such
            Change in Control or a failure to reelect Employee as Chairman of
            the Board;

                  (ii) a reduction in Employee's Base Compensation;

                  (iii) the failure by the Company to pay to Employee any
            portion of Employee's current compensation or to pay to Employee any
            portion of an installment of deferred compensation under any
            deferred compensation program of the Company within seven days of
            the date such compensation is due;

                  (iv) the failure by the Company to continue in effect any
            compensation plan in which Employee participates immediately prior
            to the Change in Control that is material to Employee's total
            compensation unless an equitable arrangement (embodied in an ongoing
            substitute or alternative plan) has been made with respect to such
            plan, or the failure by the Company to continue Employee's
            participation therein (or in such substitute or alternative plan) on
            a basis not materially less favorable, both in terms of the amount
            of benefits provided and the level of Employee's participation
            relative to other participants, as existed at the time of the Change
            in Control;

                  (v) the failure by the Company to continue to provide Employee
            with benefits substantially similar to those enjoyed by Employee
            under any of the Company's life insurance, medical, health and
            accident, or disability plans in which Employee was participating at
            the time of the Change in Control; the taking of any action by the
            Company which would directly or indirectly materially reduce any of
            such benefits or deprive Employee of any material fringe benefit
            enjoyed by Employee at the time of the Change in Control, or the
            failure by the Company to provide Employee with the number of paid
            vacation days to which Employee is entitled on the basis of years of
            service with the Company (and its predecessors) in accordance with
            the Company's normal vacation policy in effect at the time of the
            Change in Control;

                                      -6-
<PAGE>
                  (vi) the failure of the Company to obtain a satisfactory
            agreement from any successor to assume and agree to perform this
            Agreement, as contemplated in Section 12 hereof;

                  (vii) the relocation of the Company's principal executive
            offices to a location outside the greater Houston, Texas area, or
            the Company's requiring Employee to relocate anywhere other than
            the location of the Company's principal executive offices, except
            for required travel on the Company's business to an extent
            substantially consistent with Employee's business travel obligations
            immediately prior to the Change in Control;

                  (viii) the amendment, modification or repeal of any provision
            of the Certificate of Incorporation, or the Bylaws of the Company
            which was in effect immediately prior to such Change in Control, if
            such amendment, modification or repeal would materially adversely
            effect Employee's right to indemnification by the Company; or

                  (ix) any purported termination of Employee's employment that
            is not effected pursuant to a Notice of Termination satisfying the
            requirements of Subsection (f) hereof, which purported termination
            shall not be effective for purposes of this Agreement.

            Notwithstanding anything in this Agreement to the contrary, if
      Employee's employment with the Company terminates prior to, but within six
      months of, the date on which a Change in Control occurs and it is
      reasonably demonstrated by Employee that such termination of employment
      was in connection with or anticipation of the Change in Control (i) by
      the Company or (ii) by Employee under circumstances which would have
      constituted Good Reason if the circumstances arose on or after the Change
      in Control, then, for purposes of this Agreement, Employee shall be deemed
      to have continued employment with the Company until the date of the Change
      in Control and then terminated his employment on such date for Good Reason
      (which such date for purposes of this Agreement shall be Date of
      Termination). In addition, any Company stock-based awards forfeited by
      Employee as a result of such termination shall be included as non-vested
      awards for purposes of calculating the payment due Employee pursuant to
      Section 7(e)(i)(C).

            Employee's right to terminate his employment pursuant to this
      subsection shall not be affected by his incapacity due to physical or
      mental illness. Employee's continued employment shall not constitute
      consent to, or a waiver of rights with respect to, any circumstance
      constituting Good Reason hereunder.

            (e) NOTICE OF TERMINATION. On or within two years after a Change in
      Control, any purported termination of Employee's employment by the Company
      or by Employee in the case of resignation for Good Reason shall be
      communicated by written Notice of

                                      -7-
<PAGE>
      Termination to the other party hereto in accordance with Section 10
      hereof. For purposes of this Agreement, a "Notice of Termination" shall
      mean a notice which shall set forth in reasonable detail the Date of
      Termination (which shall be no sooner than the 15th day from the date the
      Notice of Termination is communicated), the reason for termination of
      Employee's employment, or in the case of resignation for Good Reason, said
      notice must specify in reasonable detail the basis for such resignation.
      No purported termination which is not effected pursuant to this Section
      7(e) shall be effective.

            (f) DATE OF TERMINATION, ETC. "Date of Termination" shall mean the
      date specified in the Notice of Termination. Either party may, within 10
      days after any Notice of Termination is given, provide notice to the other
      party pursuant to Section 10 hereof that a dispute exists concerning the
      termination. Notwithstanding the pendency of any such dispute, the Company
      will continue to pay Employee his full compensation in effect when the
      notice giving rise to the dispute was given (including, but not limited
      to, Base Compensation) and continue Employee as a participant in all
      compensation, benefit and insurance plans in which Employee was
      participating when the notice giving rise to the dispute was given, until
      the dispute is finally resolved, but in no event past the second
      anniversary of the Change in Control except to the extent such plans
      otherwise provide for continued participation by a similarly terminated
      employee.

            (g) MITIGATION. Employee shall not be required to mitigate the
      amount of any payment provided for in this Section 7 by seeking other
      employment or otherwise, nor shall the amount of any payment or benefit
      provided for in this Agreement by reduced by any compensation earned by
      Employee as a result of employment by another employer, self-employment
      earnings, by retirement benefits, by offset against any amount claimed to
      be owing by Employee to the Company, or otherwise, except that any
      severance amounts otherwise payable to Employee pursuant to a Company
      severance plan or policy for employees in general.

            (h) GROSS-UP OF PARACHUTE PAYMENTS.

                  (1) To provide Employee with adequate protection in connection
            with his ongoing employment with the Company, this Agreement
            provides Employee with various benefits in the event of termination
            of Employee's employment with the Company. If Employee's employment
            is terminated following a "change in control" of the Company, within
            the meaning of Section 280G of the Internal Revenue Code of 1986, as
            amended (the "Code"), a portion of those benefits could be
            characterized as "excess parachute payments" within the meaning of
            Section 280G of the Code. The parties hereto acknowledge that the
            protections set forth herein are important, and it is agreed that
            Employee should not have to bear the burden of any excise tax that
            might be levied under Section 4999 of the Code, in the event that a
            portion of the benefits payable to Employee pursuant to this
            Agreement are treated as an excess parachute payment. The parties,
            therefore, have agreed as set forth herein.

                                      -8-
<PAGE>
                  (2) Anything in this Agreement or in any plan or program of
            the Company to the contrary notwithstanding, if it shall be
            determined that any payment or distribution by the Company or any
            other person to or for the benefit of Employee (whether paid or
            payable or distributed or distributable pursuant to the terms of
            this Agreement or otherwise, but determined without regard to any
            additional payments required hereunder (a "Payment") would be
            subject to the excise tax imposed by Section 4999 of the Code or any
            interest or penalties are incurred by Employee with respect to such
            excise tax (such excise tax, together with any such interest and
            penalties, are hereinafter collectively referred to as the "Excise
            Tax"), then the Company shall pay an additional payment (a "Gross-Up
            Payment") in an amount such that after payment by Employee of all
            taxes (including any interest or penalties imposed with respect to
            such taxes), including, without limitation, any income taxes (and
            any interest and penalties imposed with respect thereto) and Excise
            Tax imposed upon the Gross-Up Payment, Employee retains an amount of
            hte Gross-Up Payment equal to the Excise Tax imposed upon the
            Payments.

                  (3) Subject to the provisions of subparagraph (4) below, all
            determinations required to be made hereunder, including whether and
            when a Gross-Up Payment is required and the amount of such Gross-Up
            Payment and the assumptions to be utilized in arriving at such
            determination, shall be made by an independent public accounting
            firm with a national reputation that is selected by Employee (the
            "Accounting Firm") which shall provide detailed supporting
            calculations both to the Company and to Employee within 15 business
            days after the receipt of notice from Employee that there has been a
            Payment, or such earlier time as is requested by the Company. In the
            event that the Accounting Firm is serving as accountant or auditor
            for the individual, entity or group effecting the change in control
            of the Company, Employee shall appoint another nationally recognized
            accounting firm to make the determinations required hereunder (which
            accounting firm shall then be referred to as the Accounting Firm
            hereunder). All fees and expenses of the Accounting Firm shall be
            borne solely by the Company. (The Company shall indemnify and hold
            harmless Employee, on an after-tax basis, for any Excise Tax or
            income tax (including interest and penalties with respect thereto)
            imposed on Employee as a result of such payment of fees and
            expenses.) Any Gross-Up Payment, as determined pursuant hereto,
            shall be paid by the Company to Employee within five days of the
            receipt of the Accounting Firm's determination. If the Accounting
            Firm determines that no Excise Tax is payable by Employee, it shall
            furnish Employee and the Company with a written opinion that failure
            to report the Excise Tax on Employee's applicable federal income tax
            return would not result in the imposition of a negligence or similar
            penalty. Any determination by the Accounting Firm shall be binding
            upon the Company and Employee. As a result of uncertainty in the
            application of Section 4999 of the Code at the time of the initial
            determination by the Accounting Firm hereunder, it is possible that
            Gross-Up Payments may not have been made by the Company which should
            have been made

                                      -9-
<PAGE>
            ("Underpayment"), consistent with the calculations required to be
            made hereunder. If the Company exhausts its remedies pursuant to
            subparagraph (4) below and Employee thereafter is required to make a
            payment of any Excise Tax, the Accounting Firm shall determine the
            amount of the Underpayment that has occurred and any such
            Underpayment shall be promptly paid by the Company to or for the
            benefit of Employee.

                  (4) Employee shall notify the Company in writing of any claim
            (including any threatened tax lien related to or based upon any such
            claim) by the Internal Revenue Service that, if successful, would
            require the payment of the Company of the Gross-Up Payment. Such
            notification shall be given as soon as practicable but no later than
            10 business days after Employee is informed in writing of such claim
            (or threatened lien) and shall apprise the Company of the nature of
            such claim and the date on which such claim is requested to be paid.
            Employee shall not pay such claim prior to the expiration of the
            30-day period following the date on which Employee gives such notice
            to the Company (or such shorter period ending on the date that any
            payment of taxes with respect to such claim is due or such tax lien
            would be imposed). If the Company notifies Employee in writing prior
            to the expiration of such period that it desires to contest such
            claim (or threatened lien), Employee shall:

                        (a) give the Company any information reasonably
                  requested by the Company relating to such claim (or threatened
                  lien);

                        (b) take such action in connection with contesting such
                  claim (or threatened lien) as the Company shall reasonably
                  request in writing from time to time, including, without
                  limitation, accepting legal representation with respect to
                  such claim by an attorney reasonably selected by the Company;

                        (c) cooperate with the Company in good faith in order
                  effectively to contest such claim (or threatened lien); and

                        (d) permit the Company to participate in any proceedings
                  relating to such claim (or threatened lien);

            PROVIDED, HOWEVER, that the Company shall bear and pay directly all
            costs and expenses (including additional interest and penalties)
            incurred in connection with such contest and shall indemnify and
            hold Employee harmless, on an after-tax basis, for any Excise Tax or
            income tax (including interest and penalties with respect thereto)
            imposed as a result of such representation and payment of costs and
            expenses. Without limitation on the foregoing provisions of this
            subparagraph (4), the Company shall control all proceedings taken in
            connection with such contest and, at its sole option, may pursue or
            forgo any and all administrative appeals,

                                      -10-
<PAGE>
            proceedings, hearings and conferences with the taxing authority in
            respect of such claim and may, at its sole option, either direct
            Employee to pay the tax claimed and sue for a refund or contest the
            claim in any permissible manner, and Employee agrees to prosecute
            such contest to a determination before any administrative tribunal,
            in a court of initial jurisdiction and in one or more appellate
            courts, as Employee shall determine (but in no event shall the
            Company permit or direct Employee to allow a tax lien to be imposed
            on Employee's property); PROVIDED, FURTHER, that if the Company
            directs Employee to pay such claim and sue for a refund, the Company
            shall advance the amount of such payment to Employee, on an
            interest-free basis, and shall indemnify and hold Employee harmless
            on an after-tax basis, from any Excise Tax or income tax (including
            interest and penalties with respect thereto) imposed with respect to
            such advance or with respect to any imputed income with respect to
            such advance; and FURTHER, PROVIDED that any extension of the
            statute of limitations relating to payment of taxes for the taxable
            year of Employee with respect to which such contested amount is
            claimed to be due is limited solely to such contested amount. In
            addition, the Company's control of the contest shall be limited to
            issues with respect to which a Gross-Up Payment would be payable
            hereunder and Employee shall be entitled to settle or contest, as
            the case may be, any other issue raised by the Internal Revenue
            Service or any other taxing authority.

                  (5) If, after the receipt by Employee of an amount advanced by
            the Company pursuant to subparagraph (4), Employee becomes entitled
            to receive any refund with respect to such claim, Employee shall
            (subject to the Company's complying with the requirements of
            subparagraph (4) above) promptly pay to the Company the amount of
            such refund (together with any interest paid or credited thereon
            after taxes applicable thereto). If after the receipt by Employee of
            an amount advanced by the Company pursuant to subparagraph (4)
            above, a determination is made that Employee shall not be entitled
            to any refund with respect to such claim and the Company does not
            notify Employee in writing of its intent to contest such denial of
            refund prior to the expiration of 30 days after such determination,
            then such advance shall be forgiven and shall not be required to be
            repaid and the amount of such advance shall offset, to the extent
            thereof, the amount of Gross-Up Payment required to be paid.

                  (6) The Company hereby acknowledges that, as a consequence of
            this full parachute tax gross-up to Employee under this Agreement,
            any provision in a Company plan or program that provides for a
            parachute payment, "cut-back" to 2.99, if such "cut-back" would
            result in the employee being in a better net after-tax position,
            shall be inapplicable to Employee.

      (8) NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit Employee's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any of its
affiliated companies and for which Employee may

                                      -11-
<PAGE>
qualify, nor shall anything herein limit or otherwise adversely affect such
rights as Employee may have under any stock option or other agreements with the
Company or any of its affiliated companies.

      (9) ASSIGNABILITY. The obligations of Employee hereunder are personal and
may not be assigned or delegated by him or transferred in any manner whatsoever,
nor are such obligations subject to involuntary alienation, assignment or
transfer. The Company shall have the right to assign this Agreement only
pursuant to the terms of Section 12(a).

      (10) NOTICE. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
Company at its principal office address, directed to the attention of the Board
with a copy to the Secretary of the Company, and to Employee at Employee's
residence address on the records of the Company or to such other address as
either party may have furnished to the other in writing in accordance herewith
except that notice of change of address shall be effective only upon receipt.

      (11) VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

      (12) SUCCESSORS: BINDING AGREEMENT.

      (a) The Company will require any successor (whether direct or indirect, by
merger, consolidation or otherwise or by acquisition of) all or substantially
all of the business and/or assets of the Company to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
The phrase "all or substantially all of the business and/or assets of the
Company" has the meaning as defined in Section 6(iv). Failure of the Company to
obtain such agreement no later than 30 days prior to the effectiveness of any
such succession shall be a breach of this Agreement and shall entitle Employee
to compensation from the Company in the same amount and on the same terms as
Employee would be entitled to hereunder if Employee terminated Employee's
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used herein, the term "Company" shall include
any successor to its business and/or assets as aforesaid which executes and
delivers the Agreement provided for in this Section 12 or which otherwise
becomes bound by all terms and provisions of this Agreement by operation of law.

      (b) This Agreement and all rights of Employee hereunder shall inure to the
benefit of and be enforceable by Employee's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. Any payments or benefits hereunder which have accrued to Employee at
the time of his death, unless otherwise provided herein, shall be paid

                                      -12-
<PAGE>
in accordance with the terms of this Agreement to Employee's devisee, legatee,
or other designee or, if there be no such designee, to Employee's estate.

      13. INDEMNIFICATION. In consideration of the premises and of the mutual
agreements set forth in this Agreement, the parties hereto further agree as
follows:

            1. The Company shall pay on behalf of Employee and Employee's
      executors, administrators or assigns, any amount which Employee is or
      becomes legally obligated to pay as a result of any claim or claims made
      against Employee by reason of the fact that Employee served as an
      employee, director and/or officer of the Company or because of any actual
      or alleged breach of duty, neglect, error, misstatement, misleading
      statement, omission or other act done, or suffered or wrongfully attempted
      by Employee in Employee's capacity as an employee, Director and/or Officer
      of the Company. The payments that the Company will be obligated to make
      hereunder shall include (without limitation) damages, judgments,
      settlements, costs and expenses of investigation, costs and expenses of
      defense of legal actions, claims and proceedings and appeals therefrom,
      and costs of attachments and similar bonds; PROVIDED, HOWEVER, that the
      Company shall not be obligated to pay fines or other obligations or fees
      imposed by law or otherwise that it is prohibited by applicable law from
      paying as indemnity or for any other reason.

            2. Costs and expenses (including, without limitation, attorneys'
      fees) incurred by Employee in defending or investigating any action, suit,
      proceeding or claim shall be paid by the Company in advance of the final
      disposition of such matter upon receipt of a written undertaking by or on
      behalf of Employee to repay any such amounts if it is ultimately
      determined that Employee is not entitled to indemnification under the
      terms of this Agreement.

            3. If the claim under this Section 13 is not paid by or on behalf of
      the Company within ninety days after a written claim has been received by
      the Company, Employee may at any time thereafter bring suit or commence
      arbitration proceedings against the Company to recover the unpaid amount
      of the claim and, if successful in whole or in part, Employee shall also
      be entitled to be paid the expense of prosecuting such claim.

            4. In the event of payment under this Section 13, the Company shall
      be subrogated to the extent of such payment to all of the rights of
      recovery of Employee, who shall execute all papers required and shall do
      everything that may be necessary to secure such rights, including the
      execution of such documents necessary to enable the Company effectively to
      bring suit to enforce such rights.

                                      -13-
<PAGE>
            5. The Company shall not be liable under this Agreement to make any
      payment in connection with any claim made against Employee:

                  (a) for which payment is actually made to Employee under an
            insurance policy maintained by the Company, except in respect of any
            excess beyond the amount of payment under such insurance;

                  (b) for which payment is made to or on behalf of Employee by
            the Company otherwise than pursuant to this Agreement;

                  (c) based upon or attributable to Employee gaining in fact any
            personal profit or advantage to which Employee was not legally
            entitled;

                  (d) for an accounting of profits made from the purchase or
            sale by Employee of securities of the Company within the meaning of
            Section 16(b) of the Securities Exchange Act of 1934 and amendments
            thereto; or

                  (e) brought about or contributed to by the dishonesty of
            Employee; PROVIDED, HOWEVER, that notwithstanding the foregoing,
            Employee shall be protected under this Agreement as to any claims
            upon which suit may be brought alleging dishonesty on the part of
            Employee, unless a judgment or other final adjudication thereof
            adverse to Employee shall establish that Employee committed acts of
            active and deliberate dishonesty with actual dishonest purpose and
            intent, which acts were material to the cause of action so
            adjudicated.

            6. Employee, as a condition precedent to his right to be indemnified
      under this Agreement, shall give to the Company notice in writing as soon
      as practicable of any claim made against him for which indemnity will or
      could be sought under this Agreement. Notice to the Company shall be
      directed to the Company, 1616 S. Voss, Suite 1000, Houston, Texas 77057,
      Attention: Secretary (or such other address as the Company shall designate
      in writing to Employee). Notice shall be deemed received if sent by
      prepaid mail properly addressed, the date of such notice being the date
      postmarked. In addition, Employee shall give the Company such information
      and cooperation as it may reasonably require and as shall be within
      Employee's power.

            7. Nothing herein shall operate or be construed to diminish or
      otherwise restrict Employee's right to indemnification under any provision
      of the Certificate of Incorporation or the Bylaws of the Company, the
      Indemnification Agreement between the Company and Employee dated as of
      March 1, 1990, or under Delaware law.

      14. MISCELLANEOUS. This Agreement may not be amended unless such amendment
is agreed to in writing and signed by Employee and such officer as may be
specifically authorized by the Board. In addition, no provision of this
Agreement may be waived unless such waiver is in

                                      -14-
<PAGE>
writing and signed by the party entitled to the benefits of such provision. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or in compliance with, any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Delaware.

      15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

      16. RESOLUTION OF DISPUTES. Employee shall be permitted (but not required)
to elect that any dispute or controversy arising under or in connection with
this Agreement be settled by arbitration in Houston, Texas, in accordance with
the rules of the American Arbitration Association then in effect. Judgment may
be entered on the arbitrator's award in any court having jurisdiction. All legal
fees and costs incurred by Employee in connection with the resolution of any
dispute or controversy under or in connection with this Agreement with the
exception of any dispute or controversy under or in connection with Section 13
of this Agreement shall be paid by the Company as bills for such services are
presented by Employee to the Company. With respect to any claim by Employee
arising under Section 13, Section 13.3 shall govern any payment of legal fees
and costs.

      IN WITNESS WHEREOF, the parties have executed this Agreement on
______________, 1997, effective for all purposes as provided above.

                                          SANTA FE ENERGY RESOURCES, INC.

                                          By:________________________________

                                          Name: _____________________________

                                          Title: ____________________________
                                                       James L. Payne

                                      -15-
<PAGE>
                           EMPLOYMENT AGREEMENT NO. 2

      This Employment Agreement ("Agreement") is entered into effective as of
December 31, 1996 by and between Santa Fe Energy Resources, Inc., a Delaware
corporation ("Company"), and ______________ ("Employee").

      WHEREAS, the Company employs Employee and desires to continue such
employment relationship and Employee desires to continue such employment;

      NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties, and agreements contained herein, and for other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:

      1. EMPLOYMENT. The Company hereby employs Employee, and Employee hereby
accepts employment by the Company, on the terms and conditions set forth in this
Agreement.

      2. TERM OF EMPLOYMENT. Subject to the provisions for earlier termination
provided in the Agreement, the term of this Agreement (the "Term") shall
commence on the effective date of this Agreement as stated above and shall
terminate on December 31, 1999; PROVIDED, HOWEVER, commencing on January 1, 1998
and on each January 1 thereafter, the term of this Agreement shall automatically
be extended one additional year unless, not later than September 30 of the
preceding year, the Board of Directors of the Company (the "Board") shall give
written notice to Employee that the Term of the Agreement shall cease to be so
extended; PROVIDED, FURTHER, that if a Change in Control, as defined in Section
6, shall have occurred during the original or extended Term of this Agreement,
the Term shall continue in effect for a period of not less than two years from
the date of such Change in Control. In no event, however, shall the Term of this
Agreement extend beyond the end of the calendar month in which Employee's 65th
birthday occurs. Notwithstanding any provision of this Agreement to the
contrary, termination of this Agreement shall not alter or impair any rights of
Employee (or Employee's estate or beneficiaries) that have arisen under this
Agreement prior to such termination.

      3. EMPLOYEE'S DUTIES. During the Term of this Agreement, Employee shall
serve as _______________________ of the Company, with such customary duties and
responsibilities as may from time to time be assigned to him by the Chief
Executive Officer of the Company, provided that such duties are at all times
consistent with the duties of such position.

      Employee agrees to devote reasonable attention and time during normal
business hours to the business and affairs of the Company and, to the extent
necessary to discharge the duties and
<PAGE>
responsibilities assigned to Employee hereunder, to use reasonable best efforts
to perform faithfully and efficiently such duties and responsibilities.

      4. BASE COMPENSATION. For services rendered by Employee under this
Agreement, the Company shall pay to Employee a base salary ("Base Compensation")
of $_______ per annum payable in accordance with the Company's customary payroll
practice for its executive officers. The amount of Base Compensation shall be
reviewed periodically and may be increased to reflect inflation or such other
adjustments as the Board may deem appropriate but Base Compensation, as
increased, may not be decreased thereafter.

      5. ADDITIONAL BENEFITS. In addition to the Base Compensation provided for
in Section 4 herein, Employee shall be entitled to receive all fringe benefits
and perquisites offered by the Company to its executive officers, including,
without limitation, participation in the Company's Annual Incentive Compensation
Plan and other incentive plans offered generally to key employees, the various
employee benefit plans or programs provided to the employees of the Company in
general, subject to the regular eligibility requirements with respect to teach
of such benefit plans or programs, and such other benefits or prerequisites as
may be approved by the Board during the Term of this Agreement. Nothing in this
paragraph shall be deemed to prohibit the Company from making any changes in any
of the plans, programs or benefits described in this Section 5, provided the
change similarly affects all executives of the Company similarly situated.

      6. CHANGE IN CONTROL.

      For purposes of this Agreement, a "Change in Control" shall mean the
occurrence of one of the following events:

            (i) any "person" (as such term is used in Section 13(d) and 14(d) of
      the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
      other than a trustee or other fiduciary holding securities under an
      employee benefit plan of the Company or any affiliate, or any corporation
      owned, directly or indirectly, by the stockholders of the Company in
      substantially the same proportions as their ownership of stock of the
      Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
      under the Exchange Act), directly or indirectly of securities of the
      Company representing 25% or more of the combined voting power of the
      Company's then outstanding securities;

            (ii) during any period of two consecutive years (not including any
      period prior to the execution of this Agreement), individuals who at the
      beginning of such period constitute the Board of Directors of the Company,
      and any new director (other than a director designated by a person who has
      entered into an agreement with the Company to effect a transaction
      described in clause (i), (iii) or (iv) of this Section) whose election by
      the Board of Directors of the Company or nomination for election by the
      Company's stockholders was approved by a vote of at least two-thirds of
      the directors then still in office who either were directors at the
      beginning of the period or whose election or nomination for election was

                                      -2-
<PAGE>
      previously so approved (hereinafter referred to as "Continuing
      Directors"), cease for any reason to constitute at least a majority
      thereof;

            (iii) the stockholders of the Company approve a merger or
      consolidation of the Company with any other corporation, other than a
      merger or consolidation which would result in the voting securities of the
      Company outstanding immediately prior thereto continuing to represent
      (either by remaining outstanding or by being converted into voting
      securities of the surviving entity) more than 65% of the combined voting
      power of the voting securities of the Company (or such surviving entity)
      outstanding immediately after such merger or consolidation; or

            (iv) the stockholders of the Company approve a plan of complete
      liquidation of the Company or an agreement for the sale or disposition by
      the Company of all or substantially all of the Company's assets. For
      purposes of this clause (iv), the term "the sale or disposition by the
      Company of all or substantially all of the Company's assets" shall mean a
      sale or other disposition transaction or series of related transactions
      involving assets of the Company or of any direct or indirect subsidiary of
      the Company (including the stock of any direct or indirect subsidiary of
      the Company) in which the value of the assets or stock being sold or
      otherwise disposed of (as measured by the purchase price being paid
      therefor or by such other method as the Board of Directors of the Company
      determines is appropriate in a case where there is no readily
      ascertainable purchase price) constitutes more than two-thirds of the
      "fair market value of the Company" (as hereinafter defined). For purposes
      of the preceding sentence, the "fair market value of the Company" shall be
      the aggregate market value of the Company's outstanding common stock (on a
      fully diluted basis) plus the aggregate market value of the Company's
      other outstanding equity securities. The aggregate market value of the
      Company's common stock shall be determined by multiplying the number of
      shares of the Company's common stock (on a fully diluted basis)
      outstanding on the date of the execution and delivery of a definitive
      agreement with respect to the transaction or series of related
      transactions (the "Transaction Date") by the average closing price for the
      Company's common stock for the ten trading days immediately preceding the
      Transaction Date. The aggregate market value of any other equity
      securities of the Company shall be determined in a manner similar to that
      prescribed in the immediately preceding sentence for determining the
      aggregate market value of the Company's common stock or by such other
      method as the Board of Directors of the Company shall determine is
      appropriate. However, notwithstanding anything in this clause (iv) to the
      contrary, a spinoff or distribution of the stock of a subsidiary of the
      Company to those persons who were stockholders of the Company immediately
      prior to such spinoff or distribution in substantially the same proportion
      as their ownership of Company stock immediately prior to such spinoff or
      distribution shall not constitute a "sale or disposition by the Company of
      all or substantially all of the Company's assets."

      7. TERMINATION. This Agreement may be terminated prior to the end of its
Term as set forth below.

                                      -3-
<PAGE>
            (a) RESIGNATION. Employee may resign, including by reason of
      retirement, his position at any time. In the event of such resignation,
      except in the case of resignation for Good Reason (as defined below) on or
      following a Change in Control, the Company shall have no obligations to
      Employee with respect to this Agreement other than the payment of any Base
      Compensation and vacation pay which had accrued hereunder at the date of
      Employee's termination.

            (b) DEATH. If Employee's employment is terminated due to his death,
      this Agreement shall terminate and the Company shall have no obligations
      to Employee's legal representatives with respect to this Agreement other
      than the payment of any Base Compensation and vacation pay which had
      accrued hereunder at the date of Employee's death.

            (c) DISCHARGE.

                  (i) The Company may terminate Employee's employment for any
            reason deemed sufficient by the Company upon notice as provided in
            Section 10. In the event of such termination prior to a Change in
            Control, the Company shall have no obligations to Employee with
            respect to this Agreement other than the payment of any Base
            Compensation and vaction pay which had accrued hereunder at the date
            of Employee's termination. However, in the event that Employee's
            employment is terminated during the Term by the Company on or within
            two years following a Change in Control and for any reason other
            than his Misconduct (as defined in Section 7(c)(ii) below) then,
            subject to Sections 7(g) and (h): (A) the Company shall pay in a
            lump sum in cash to Employee, within 15 days of the Date of
            Termination, an amount equal to two times the sum of (1)
            Employee's Base Compensation and (2) the greater of (i) Employee's
            target incentive award under the Company's Annual Incentive Plan for
            such year or (ii) the average award received by Employee under the
            Annual Incentive Plan for the three fiscal years preceding the year
            of termination; (B) for the 24-month period after such Date of
            Termination, the Company shall provide or arrange to provide
            Employee (and Employee's dependents) with life, disability, accident
            and group health insurance benefits substantially similar to those
            which Employee (and Employee's dependents) were receiving
            immediately prior to the Notice of Termination, with the Employee
            charged a monthly premium(s) for the coverage(s) that does not
            exceed the premium(s) charged to an active employee for comparable
            coverage(s); PROVIDED, HOWEVER, the Company shall pay Employee each
            month during such period of continued coverage an amount that, on a
            net after-tax basis to Employee, is equal to the monthly premium
            charged Employee for such coverage and to the extent coverage and/or
            benefits received are taxable to Employee, the Company shall make
            Employee "whole" on a net after tax basis; PROVIDED, HOWEVER,
            benefits otherwise receivable by Employee pursuant to this clause
            (B) shall be reduced to the extent other comparable benefits are
            actually recieved by

                                      -4-
<PAGE>
            Employee (and Employee's dependents) during the 24-month period
            following Employee's termination, and any such benefits actually
            received by Employee shall be reported to the Company; (C) within 15
            days of the Date of Termination or, if later, the first date on
            which such payment would not subject Employee to suit under Section
            16(b) of the Securities Exchange Act of 1934, if applicable, the
            Company shall pay to Employee in cancellation of all outstanding
            Company stock-based awards of Employee which are not vested on the
            Date of Termination (collectively, "Awards"), a lump sum amount in
            cash equal to the sum of the value (with respect to an option or
            stock appreciation right, the "spread"; and with respect to
            restricted stock or phantom stock, the vale of an unrestricted
            share) determined as of the Date of Termination of all such
            nonvested Awards, calculated, where applicable, as if all corporate
            performance goals had been achieved at the maximum level (thus
            warranting payment of the maximum value of the Award); and (D) the
            Company shall provide to Employee outplacement services by a
            nationally recognized firm.

                  (ii) Notwithstanding the foregoing provisions of this Section
            7, in the event Employee is terminated because of Misconduct, the
            Company shall have no compensation obligations pursuant to this
            Agreement after the Date of Termination. As used herein,
            "Misconduct" means (a) the willful and continued failure by Employee
            to substantially perform his duties with the Company (other than any
            such failure resulting from Employee's incapacity due to physical or
            mental illness or any such actual or anticipated failure after the
            issuance of a Notice of Termination by Employee for Good Reason),
            after a written demand for substantial performance is delivered to
            Employee by the Board, which demand specifically identifies the
            manner in which the Board believes that Employee has not
            substantially performed his duties, or (b) the willful engaging by
            Employee in conduct which is demonstrably and materially injurious
            to the Company, monetarily or otherwise. For purposes hereof, no
            act, or failure to act, on Employee's part shall be deemed "willful"
            unless done, or omitted to be done, by Employee not in good faith
            and without reasonable belief that Employee's action or omission was
            in the best interest of the Company. Notwithstanding the forgoing,
            Employee shall not be deemed to have been terminated for Misconduct
            unless and until there shall have been delivered to Employee a copy
            of a resolution duly adopted by the affirmative vote of not less
            than three-quarters of the entire membership of the Board at a
            meeting of the Board called and held for such purpose (after
            reasonable notice to Employee and an opportunity for Employee,
            together with Employee's counsel, to be heard before the Board),
            finding that in good faith opinion of the Board Employee was guilty
            of conduct set forth above and specifying the particulars thereof in
            detail.

            (d) RESIGNATION FOR GOOD REASON. In the event of a Change in
      Control, Employee shall be entitled to terminate his employment for Good
      Reason as defined herein. If Employee terminates his employment for Good
      Reason on or within two years following a

                                      -5-
<PAGE>
      Change in Control, Employee shall be entitled to the compensation and
      benefits provided in Paragraph 7(c)(i) hereof. "Good Reason" shall mean
      (1) the material breach of any of the Company's obligations under this
      Agreement without Employee's express written consent or (2) the occurrence
      of any of the following circumstances without Employee's express written
      consent unless such breach or circumstances are fully corrected prior to
      the Date of Termination specified in the Notice of Termination pursuant to
      Subsections 7(e) and 7(f), respectively, given in respect thereof:

                  (i) the assignment to Employee of any duties inconsistent with
            the position in the Company that Employee held immediately prior to
            the Change in Control, or a significant adverse alteration in the
            nature or status of Employee's office, title, responsibilities,
            including reporting responsibilities, or the conditions of
            Employee's employment from those in effect immediately prior to such
            Change in Control;

                  (ii) a reduction in Employee's Base Compensation;

                  (iii) the failure by the Company to pay to Employee any
            portion of Employee's current compensation or to pay to Employee any
            portion of an installment of deferred compensation under any
            deferred compensation program of the Company within seven days of
            the date such compensation is due;

                  (iv) the failure by the Company to continue in effect any
            compensation plan in which Employee participates immediately prior
            to the Change in Control that is material to Employee's total
            compensation unless an equitable arrangement (embodied in an ongoing
            substitute or alternative plan) has been made with respect to such
            plan, or the failure by the Company to continue Employee's
            participation therein (or in such substitute or alternative plan) on
            a basis not materially less favorable, both in terms of the amount
            of benefits provided and the level of Employee's participation
            relative to other participants, as existed at the time of the Change
            in Control;

                  (v) the failure by the Company to continue to provide Employee
            with benefits substantially similar to those enjoyed by Employee
            under any of the Company's life insurance, medical, health and
            accident, or disability plans in which Employee was participating at
            the time of the Change in Control; the taking of any action by the
            Company which would directly or indirectly materially reduce any of
            such benefits or deprive Employee of any material fringe benefit
            enjoyed by Employee at the time of the Change in Control, or the
            failure by the Company to provide Employee with the number of paid
            vacation days to which Employee is entitled on the basis of years of
            service with the Company (and its predecessors) in accordance with
            the Company's normal vacation policy in effect at the time of the
            Change in Control;

                                      -6-
<PAGE>
                  (vi) the failure of the Company to obtain a satisfactory
            agreement from any successor to assume and agree to perform this
            Agreement, as contemplated in Section 12 hereof;

                  (vii) the relocation of the Company's principal executive
            offices to a location outside the greater Houston, Texas area, or
            the Company's requiring Employee to relocate anywhere other than
            the location of the Company's principal executive offices, except
            for required travel on the Company's business to an extent
            substantially consistent with Employee's business travel obligations
            immediately prior to the Change in Control;

                  (viii) the amendment, modification or repeal of any provision
            of the Certificate of Incorporation, or the Bylaws of the Company
            which was in effect immediately prior to such Change in Control, if
            such amendment, modification or repeal would materially adversely
            effect Employee's right to indemnification by the Company; or

                  (ix) any purported termination of Employee's employment that
            is not effected pursuant to a Notice of Termination satisfying the
            requirements of Subsection (f) hereof, which purported termination
            shall not be effective for purposes of this Agreement.

            Notwithstanding anything in this Agreement to the contrary, if
      Employee's employment with the Company terminates prior to, but within six
      months of, the date on which a Change in Control occurs and it is
      reasonably demonstrated by Employee that such termination of employment
      was in connection with or anticipation of the Change in Control (i) by
      the Company or (ii) by Employee under circumstances which would have
      constituted Good Reason if the circumstances arose on or after the Change
      in Control, then, for purposes of this Agreement, Employee shall be deemed
      to have continued employment with the Company until the date of the Change
      in Control and then terminated his employment on such date for Good Reason
      (which such date for purposes of this Agreement shall be Date of
      Termination). In addition, any Company stock-based awards forfeited by
      Employee as a result of such termination shall be included as non-vested
      awards for purposes of calculating the payment due Employee pursuant to
      Section 7(c)(i)(C).

            Employee's right to terminate his employment pursuant to this
      subsection shall not be affected by his incapacity due to physical or
      mental illness. Employee's continued employment shall not constitute
      consent to, or a waiver of rights with respect to, any circumstance
      constituting Good Reason hereunder.

            (e) NOTICE OF TERMINATION. On or within two years after a Change in
      Control, any purported termination of Employee's employment by the Company
      or by Employee in the

                                      -7-
<PAGE>
      case of resignation for Good Reason shall be communicated by written
      Notice of Termination to the other party hereto in accordance with Section
      10 hereof. For purposes of this Agreement, a "Notice of Termination" shall
      mean a notice which shall set forth in reasonable detail the Date of
      Termination (which shall be no sooner than the 15th day from the date the
      Notice of Termination is communicated), the reason for termination of
      Employee's employment, or in the case of resignation for Good Reason, said
      notice must specify in reasonable detail the basis for such resignation.
      No purported termination which is not effected pursuant to this Section
      7(e) shall be effective.

            (f) DATE OF TERMINATION, ETC. "Date of Termination" shall mean the
      date specified in the Notice of Termination. Either party may, within 10
      days after any Notice of Termination is given, provide notice to the other
      party pursuant to Section 10 hereof that a dispute exists concerning the
      termination. Notwithstanding the pendency of any such dispute, the Company
      will continue to pay Employee his full compensation in effect when the
      notice giving rise to the dispute was given (including, but not limited
      to, Base Compensation) and continue Employee as a participant in all
      compensation, benefit and insurance plans in which Employee was
      participating when the notice giving rise to the dispute was given, until
      the dispute is finally resolved, but in no event past the second
      anniversary of the Change in Control except to the extent such plans
      otherwise provide for continued participation by a similarly terminated
      employee.

            (g) MITIGATION. Employee shall not be required to mitigate the
      amount of any payment provided for in this Section 7 by seeking other
      employment or otherwise, nor shall the amount of any payment or benefit
      provided for in this Agreement by reduced by any compensation earned by
      Employee as a result of employment by another employer, self-employment
      earnings, by retirement benefits, by offset against any amount claimed to
      be owing by Employee to the Company or otherwise, except that any
      severance amounts otherwise payable to Employee pursuant to a Company
      severance plan or policy for employees in general or the receipt by
      Employee (and Employee's dependents) of other comparable benefits as
      described in Section 7(c)(i)(B) shall reduce the amount or benefitts
      otherwise payable or provided, respectively, pursuant to Section 7(c)(i).

            (h) PARACHUTE PAYMENTS. The parties to this Agreement recognize that
      certain provisions of the 1990 Incentive Stock Compensation Plan, as
      amended, and the 1995 Incentive Stock Compensation Plan for Nonexecutive
      Employees (the "Stock Plans") require a reduction in payments or benefits
      under such Stock Plans to the extent necessary so that no portion thereof
      shall be subject to the excise tax imposed by Section 4999 of the
      Internal Revenue Code of 1986, as amended (the "Code"); such reduction
      will be made, however, only if, by reason of such reduction, Employee's
      net after-tax benefit shall exceed the net after-tax benefit if such
      reduction were not made. It is the intent of the parties that,
      notwithstanding the above or any provision of this Agreement or any other
      plan or program of the Company to the contrary, in the event any payment
      to be made and/or any benefits to be provided to or on behalf of Employee
      pursuant to this Agreement, when aggregated with

                                      -8-
<PAGE>
      payments and/or benefits under the Stock Plans or any other plans or
      programs, would constitute an "excess parachute payment", within the
      meaning of Section 280G of the Code, Employee may elect in advance which
      payment and/or benefit will be reduced in whole or in part so that the
      aggregated payments and/or benefits received will not constitute excess
      parachute payments. Such reduction will only be made, however, if by
      reason of such reductions, Employee's net after-tax benefit shall exceed
      Employee's net after-tax benefit if such reductions were not made. The
      determination of whether any amount or benefit under this Agreement would
      be such an excess parachute payment shall be made by tax counsel selected
      by the Company and reasonably acceptable to Employee. The costs of
      obtaining such determination shall be borne by the Company.

      (8) NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit Employee's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any of its
affiliated companies and for which Employee may qualify, nor shall anything
herein limit or otherwise adversely affect such rights as Employee may have
under any stock option or other agreements with the Company or any of its
affiliated companies.

      (9) ASSIGNABILITY. The obligations of Employee hereunder are personal and
may not be assigned or delegated by him or transferred in any manner whatsoever,
nor are such obligations subject to involuntary alienation, assignment or
transfer. The Company shall have the right to assign this Agreement only
pursuant to the terms of Section 12(a).

      (10) NOTICE. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
Company at its principal office address, directed to the attention of the Board
with a copy to the Secretary of the Company, and to Employee at Employee's
residence address on the records of the Company or to such other address as
either party may have furnished to the other in writing in accordance herewith
except that notice of change of address shall be effective only upon receipt.

      (11) VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

      (12) SUCCESSORS: BINDING AGREEMENT.

      (a) The Company will require any successor (whether direct or indirect, by
merger, consolidation or otherwise or by acquisition of all or substantially
all of the business and/or assets of the Company) to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place. The phrase "all or substantially all of the business and/or assets of the
Company" has the

                                      -9-
<PAGE>
meaning as defined in Section 6(iv). Failure of the Company to obtain such
agreement no later than 30 days prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Employee to
compensation from the Company in the same amount and on the same terms as
Employee would be entitled to hereunder if Employee terminated Employee's
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used herein, the term "Company" shall include
any successor to its business and/or assets as aforesaid which executes and
delivers the Agreement provided for in this Section 12 or which otherwise
becomes bound by all terms and provisions of this Agreement by operation of law.

      (b) This Agreement and all rights of Employee hereunder shall inure to the
benefit of and be enforceable by Employee's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. Any payments or benefits hereunder which have accrued to Employee at
the time of his death, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Employee's devisee, legatee, or
other designee or, if there be no such designee, to Employee's estate.

      13. INDEMNIFICATION. In consideration of the premises and of the mutual
agreements set forth in this agreement, the parties hereto further agree as
follows:

            1. The Company shall pay on behalf of Employee and Employee's
      executors, administrators or assigns, any amount which Employee is or
      becomes legally obligated to pay as a result of any claim or claims made
      against Employee by reason of the fact that Employee served as an
      employee, director and or/officer of the Company or because of any actual
      or alleged breach of duty, neglect, error, misstatement, misleading
      statement, omission or other act done, or suffered or wrongly attempted by
      Employee in Employee's capacity as an employee, Director and/or Officer of
      the Company. The payments that the Company will be obligated to make
      hereunder shall include (without limitation) damages, judgments,
      settlements, costs and expenses of investigation, costs and expenses of
      defense of legal actions, claims and proceedings and appeals therefrom,
      and costs of attachments and similar bonds; PROVIDED, HOWEVER, that the
      Company shall not be obligated to pay fines or other obligations or fees
      imposed by law or otherwise that it is prohibited by applicable law from
      paying as indemnity or for any other reason.

            2. Costs and expenses (including, without limitation, attorney's
      fees) incurred by Employee in defending or investigating any action, suit,
      proceeding or claim shall be paid by the Company in advance of the final
      disposition of such matter upon receipt of a written undertaking by or on
      the behalf of Employee to repay any such amounts if it is ultimately
      determined that Employee is not entitled to indemnification under the
      terms of this Agreement.

            3. If a claim under this Section 13 is not paid by or on behalf of
      the Company within ninety days after a written claim has been received by
      the Company, Employee may

                                      -10-
<PAGE>
      at any time thereafter bring suit or commence arbitration proceedings
      against the Company to recover the unpaid amount of the claim and, if
      successful in whole or in part, Employee shall also be entitled to be paid
      the expense of prosecuting such claim.

            4. In the event of payment under this Section 13, the Company shall
      be subrogated to the extent of such payment to all of the rights of
      recovery of Employee, who shall execute all papers required and shall do
      everything that may be necessary to secure such rights, including the
      execution of such documents necessary to enable the Company effectively to
      bring suit to enforce such rights.

            5. The Company shall not be liable under this Agreement to make any
      payment in connection with any claim made against Employee:

                  (a) for which payment is actually made to Employee under
            insurance policy maintained by the Company, except in respect of any
            excess beyond the amount of payment under such insurance;

                  (b) for which payment is made to or on behalf of Employee by
            the Company otherwise than pursuant to this Agreement;

                  (c) based upon or attributable to Employee gaining in fact any
            personal profit or advantage to which Employee was not legally
            entitled;

                  (d) for an accounting of profits made from the purchase or
            sale by Employee of securities of the Company within the meaning of
            Section 16(b) of the Securities Exchange Act of 1934 and amendments
            thereto; or

                  (e) brought about or contributed to by the dishonesty of
            Employee; PROVIDED, HOWEVER, that notwithstanding the foregoing,
            Employee shall be protected under this Agreement as to any claims
            upon which suit may be brought alleging dishonesty on the part of
            Employee, unless a judgment or other final adjudication thereof
            adverse to Employee shall establish that Employee committed acts of
            active and deliberate dishonesty with actual dishonest purpose and
            intent, which acts were material to the cause of action so
            adjudicated.

            6. Employee, as a condition precedent to his right to be indemnified
      under this Agreement, shall give to the Company notice in writing as soon
      as practicable of any claim made against him for which indemnity will or
      could be sought under this Agreement. Notice to the Company shall be
      directed to the Company, 1616 S. Voss, Suite 1000, Houston, Texas 77057,
      Attention: Secretary (or such other address as the Company shall designate
      in writing to Employee). Notice shall be deemed received if sent by
      prepaid mail properly addressed, the date of such notice being the date
      postmarked. In addition, Employee shall give the

                                      -11-
<PAGE>
      Company such information and cooperation as it may reasonably require and
      shall be within Employee's power.

            7. Nothing herein shall operate or be construed to diminish or
      otherwise restrict Employee's right to indemnification under any provision
      of the Certificate of Incorporation or the Bylaws of the Company, the
      Indemnification Agreement between the Company and Employee dated as of
      March 1, 1990, or under Delaware law.

      14. MISCELLANEOUS. This Agreement may not be amended unless such amendment
is agreed to in writing and signed by Employee and such officer as may be
specifically authorized by the Board. In addition, no provision of this
Agreement may be waived unless such waiver is in writing and signed by the party
entitled to the benefits of such provision. No waiver by either party hereto at
any time of any breach by other party hereto of, or in compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the state of Delaware.

      15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

      16. RESOLUTION OF DISPUTES. Employee shall be permitted (but not required)
to elect that any dispute or controversy arising under or in connection with
this Agreement be settled by arbitration in Houston, Texas, in accordance with
the rules of the American Arbitration Association then in effect. Judgment may
be entered on the arbitrator's award in any court having jurisdiction. All legal
fees and costs incurred by Employee in connection with the resolution of any
dispute or controversy under or in connection with this Agreement with the
exception of any dispute or controversy under or in connection with Section 13
of this Agreement shall be paid by the Company as bills for such services are
presented by Employee to the Company. With respect to any claim by Employee
arising under Section 13, Section 13.3 shall govern any payment of legal fees
and costs.

      17. PRIOR AGREEMENTS. This Agreement shall supersede and replace in full
that certain Employment Agreement entered into effective March 1, 1990 between
the Company and Employee and such agreement is hereby terminated and of no
further force or effect as of the effective date of this Agreement.

                                      -12-
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement on
______________, 1997, effective for all purposes as provided above.

                                          SANTA FE ENERGY RESOURCES, INC.

                                          By:________________________________

                                          Name: _____________________________

                                          Title:  ___________________________
                                                      Jerry L. Bridwell

                                      -13-
<PAGE>
                           EMPLOYMENT AGREEMENT NO. 3

      This Employment Agreement ("Agreement") is entered into effective as of
December 31, 1996 by and between Santa Fe Energy Resources, Inc., a Delaware
corporation ("Company"), and ______________ ("Employee").

      WHEREAS, the Company employs Employee and desires to continue such
employment relationship and Employee desires to continue such employment;

      NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties, and agreements contained herein, and for other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:

      1. EMPLOYMENT. The Company hereby employs Employee, and Employee hereby
accepts employment by the Company, on the terms and condition set forth in this
Agreement.

      2. TERM OF EMPLOYMENT. Subject to the provisions for earlier termination
provided in the Agreement, the term of this Agreement (the "Term") shall
commence on the effective date of this Agreement as stated above and shall
terminate on December 31, 1999; PROVIDED, HOWEVER, commencing on January 1, 1998
and on each January 1 thereafter, the term of this Agreement shall automatically
be extended one additional year unless, not later than September 30 of the
preceding year, the Board of Directors of the Company (the "Board") shall give
written notice to Employee that the Term of the Agreement shall cease to be so
extended; PROVIDED, FURTHER, that if a Change in Control, as defined in Section
6, shall have occurred during the original or extended Term of this Agreement,
the Term shall continue in effect for a period of not less than three years from
the date of such Change in Control. In no event, however, shall the Term of this
Agreement extend beyond the end of the calendar month in which Employee's 65th
birthday occurs. Notwithstanding any provision of this Agreement to the
contrary, termination of this Agreement shall not alter or impair any rights of
Employee (or Employee's estate or beneficiaries) that have arisen under this
Agreement prior to such termination.

      3. EMPLOYEE'S DUTIES. During the Term of this Agreement, Employee shall
serve as the _______________________ of the Company, with such customary duties
and responsibilities as may from time to time be assigned to him by the Chief
Executive Officer of the Company, provided that such duties are at all times
consistent with the duties of such position.

      Employee agrees to devote reasonable attention and time during normal
business hours to the business and affairs of the Company and, to the extent
necessary to discharge the duties and
<PAGE>
responsibilities assigned to Employee hereunder, to use reasonable best efforts
to perform faithfully and efficiently such duties and responsibilities.

      4. BASE COMPENSATION. For services rendered by Employee under this
Agreement, the Company shall pay to Employee a base salary ("Base Compensation")
of $_______ per annum payable in accordance with the Company's customary payroll
practice for its executive officers. The amount of Base Compensation shall be
reviewed periodically and may be increased to reflect inflation or such other
adjustments as the Board may deem appropriate but Base Compensation, as
increased, may not be decreased thereafter.

      5. ADDITIONAL BENEFITS. In addition to the Base Compensation provided for
in Section 4 herein, Employee shall be entitled to receive all fringe benefits
and perquisites offered by the Company to its executive officers, including,
without limitation, participation in the Company's Annual Incentive Compensation
Plan and other incentive plans offered generally to key employees, the various
employee benefit plans or programs provided to the employees of the Company in
general, subject to the regular eligibility requirements with respect to each
of such benefit plans or programs, and such other benefits or prerequisites as
may be approved by the Board during the Term of this Agreement. Nothing in this
paragraph shall be deemed to prohibit the Company from making any changes in any
of the plans, programs or benefits described in this Section 5, provided the
change similarly affects all executives of the Company similarly situated.

      6. CHANGE IN CONTROL.

      For purposes of this Agreement, a "Change in Control" shall mean the
occurrence of one of the following events:

            (i) any "person" (as such term is used in Section 13(d) and 14(d) of
      the Secutiries Exchange Act of 1934, as amended (the "Exchange Act")),
      other than a trustee or other fiduciary holding securities under an
      employee benefit plan of the Company or any affiliate, or any corporation
      owned, directly or indirectly, by the stockholders of the Company in
      substantially the same proportions as their ownership of stock of the
      Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
      under the Exchange Act), directly or indirectly of securities of the
      Company representing 25% or more of the combined voting power of the
      Company's then outstanding securities;

            (ii) during any period of two consecutive years (not including any
      period prior to the execution of this Agreement), individuals who at the
      beginning of such period constitute the Board of Directors of the Company,
      and any new director (other than a director designated by a person who has
      entered into an agreement with the Company to effect a transaction
      described in clause (i), (iii) or (iv) of this Section) whose election by
      the Board of Directors of the Company or nomination for election by the
      Company's stockholders was approved by a vote of at least two-thirds of
      the directors then still in office who either were directors at the
      beginning of the period or whose election or nomination for election was

                                      -2-
<PAGE>
      previously so approved (hereinafter referred to as "Continuing
      Directors"), cease for any reason to constitute at least a majority
      thereof;

            (iii) the stockholders of the Company approve a merger or
      consolidation of the Company with any other corporation, other than a
      merger or consolidation which would result in the voting securities of the
      Company outstanding immediately prior thereto continuing to represent
      (either by remaining outstanding or by being converted into voting
      securities of the surviving entity) more than 65% of the combined voting
      power of the voting securities of the Company (or such surviving entity)
      outstanding immediately after such merger or consolidation; or

            (iv) the stockholders of the Company approve a plan of complete
      liquidation of the Company or an agreement for the sale or disposition by
      the Company of all or substantially all of the Company's assets. For
      purposes of this clause (iv), the term "the sale or disposition by the
      company of all or substantially all of the Company's assets" shall mean a
      sale or other disposition transaction or series of related transactions
      involving assets of the Company or of any direct or indirect subsidiary of
      the Company (including the stock of any direct or indirect subsidiary of
      the Company) in which the value of the assets or stock being sold or
      otherwise disposed of (as measured by the purchase price being paid
      therefor or by such other method as the Board of Directors of the Company
      determines is appropriate in a case where there is no readily
      ascertainable purchase price) constitutes more than two-thirds of the
      "fair market value of the Company" (as hereinafter defined). For purposes
      of the preceding sentence, the "fair market value of the Company" shall be
      the aggregate market value of the Company's outstanding common stock (on a
      fully diluted basis) plus the aggregate market value of the Company's
      other outstanding equity securities. The aggregate market value of the
      Company's common stock shall be determined by multiplying the number of
      shares of the Company's common stock (on a fully diluted basis)
      outstanding on the date of the execution and delivery of a definitive
      agreement with respect to the transaction or series of related
      transactions (the "Transaction Date") by the average closing price for the
      Company's common stock for the ten trading days immediately preceding the
      Transaction Date. The aggregate market value of any other equity
      securities of the Company shall be determined in a manner similar to that
      prescribed in the immediately preceding sentence for determining the
      aggregate market value of the Company's common stock or by such other
      method as the Board of Directors of the Company shall determine is
      appropriate. However, notwithstanding anything in this clause (iv) to the
      contrary, a spinoff or distribution of the stock of a subsidiary of the
      Company to those persons who were stockholders of the Company immediately
      prior to such spinoff or distribution in substantially the same proportion
      as their ownership of Company stock immediately prior to such spinoff or
      distribution shall not constitute a "sale or disposition by the Company of
      all or substantially all of the Company's assets."

      7. TERMINATION. This Agreement may be terminated prior to the end of its
Term as set forth below.

                                      -3-
<PAGE>
            (a) RESIGNATION. Employee may resign, including by reason of
      retirement, his position at any time. In the event of such resignation,
      except in the case of resignation for Good Reason (as defined below) on or
      following a Change in Control, the Company shall have no obligations to
      employee with respect to this Agreement other than the payment of any Base
      Compensation and vacation pay which had accrued hereunder at the date of
      Employee's termination.

            (b) DEATH. If Employee's employment is terminated due to his death,
      this Agreement shall terminate and the Company shall have no obligations
      to Employee's legal representatives with respect to this Agreement other
      than the payment of any Base Compensation and vacation pay which had
      accrued hereunder at the date of employee's death.

            (c) DISCHARGE.

                  (i) The Company may terminate Employee's employment for any
            reason deemed sufficient by the Company upon notice as provided in
            Section 10. In the event of such termination prior to a Change in
            Control, the Company shall have no obligations to Employee with
            respect to this Agreement other than the payment of any Base
            Compensation and vacation pay which had accrued hereunder at the
            date of Employee's termination. However, in the event that
            Employee's employment is terminated during the Term by the Company
            on or within two years following a Change in Control and for any
            reason other than his Misconduct (as defined in Section 7(c)(ii)
            below) then, subject to Sections 7(g) and (h): (A) the Company shall
            pay in a lump sum in cash to Employee, within 15 days of the Date of
            Termination, an amount equal to two times the sum of (1) Employee's
            Base Compensation and (2) the maximum incentive award payable to
            Employee under the Company's Annual Incentive Compensation Plan for
            such year in lieu of any payment thereunder, assuming for purposes
            hereof that all performance objectives for such year had been met at
            the maximum level and that Employee is entitled to a full award
            thereunder; (B) for the 24-month period after such Date of
            Termination, the Company shall provide or arrange to provide
            Employee (and Employee's dependents) with life, disability, accident
            and group health insurance benefits substantially similar to those
            which Employee (and Employee's dependents) were receiving
            immediately prior to the Notice of Termination, with the Employee
            charged a monthly premium(s) for the coverage(s) that does not
            exceed the premium(s) charged to an active employee for comparable
            coverage(s); PROVIDED, HOWEVER, the Company shall pay Employee each
            month during such period of continued coverage an amount that, on a
            net after-tax basis to Employee, is equal to the monthly premium
            charged Employee for such coverage and to the extent coverage and/or
            benefits received are taxable to Employee, the Company shall make
            Employee "whole" on a net after tax basis; PROVIDED, HOWEVER,
            benefits otherwise receivable by Employee pursuant to this clause

                                      -4-
<PAGE>
            (B) shall be reduced to the extent other comparable benefits are
            actually received by Employee (and Employee's dependents) during the
            24-month period following Employee's termination, and any such
            benefits actually received by Employee shall be reported to the
            Company; (C) within 15 days of the Date of Termination or, if later,
            the first date on which such payment would not subject Employee to
            suit under Section 16(b) of the Securities Exchange Act of 1934, if
            applicable, the Company shall pay to Employee in cancellation of all
            outstanding Company stock-based awards of Employee which are not
            vested on the Date of Termination (collectively, "Awards"), a lump
            sum amount in cash equal to the sum of the value (with respect to an
            option or stock appreciation right, the "spread"; and with respect
            to restricted stock or phantom stock, the value of an unrestricted
            share) determined as of the Date of Termination of all such
            nonvested Awards, calculated, where applicable, as if all corporate
            performance goals had been achieved at the maximum level (thus
            warranting payment of the maximum value of the Award); and (D) the
            Company shall provide to Employee outplacement services by a
            nationally recognized firm.

                  (ii) Notwithstanding the foregoing provisions of this Section
            7, in the event Employee is terminated because of Misconduct, the
            Company shall have no compensation obligations pursuant to this
            Agreement after the Date of Termination. As used herein,
            "Misconduct" means (a) the willful and continued failure by Employee
            to substantially perform his duties with the Company (other than any
            such failure resulting from Employee's incapacity due to physical or
            mental illness or any such actual or anticipated failure after the
            issuance of a Notice of Termination by Employee for Good Reason),
            after a written demand for substantial performance is delivered to
            Employee by the Board, which demand specifically identifies the
            manner in which the Board believes that Employee has not
            substantially performed his duties, or (b) the willful engaging by
            Employee in conduct which is demonstrably and materially injurious
            to the Company, monetarily or otherwise. For purposes hereof, no
            act, or failure to act, on Employee's part shall be deemed "willful"
            unless done, or omitted to be done, by Employee not in good faith
            and without reasonable belief that Employee's action or omission was
            in the best interest of the Company. Notwithstanding the foregoing,
            Employee shall not be deemed to have been terminated for Misconduct
            unless and until there shall have been delivered to Employee a copy
            of a resolution duly adopted by the affirmative vote of not less
            than three-quarters of the entire membership of the Board at a
            meeting of the Board called and held for such purpose (after
            reasonable notice to Employee and an opportunity for Employee,
            together with Employee's counsel, to be heard before the Board),
            finding that in good faith opinion of the Board Employee was guilty
            of conduct set forth above and specifying the particulars thereof in
            detail.

            (d) RESIGNATION FOR GOOD REASON. In the event of a Change in
      Control, Employee shall be entitled to terminate his employment for Good
      Reason as defined herein. If

                                      -5-
<PAGE>
      Employee terminates his employment for Good Reason on or within two years
      following a Change in Control, Employee shall be entitled to the
      compensation and benefits provided in Paragraph 7(c)(i) hereof. "Good
      Reason" shall mean (1) the material breach of any of the Company's
      obligations under this Agreement without Employee's express written
      consent or (2) the occurrence of any of the following circumstances
      without Employee's express written consent unless such breach or
      circumstances are fully corrected prior to the Date of Termination
      specified in the Notice of Termination pursuant to Subsections 7(e) and
      7(f), respectively, given in respect thereof:

                  (i) the assignment to Employee of any duties inconsistent with
            the position in the Company that Employee held immediately prior to
            the Change in Control, or a significant adverse alteration in the
            nature or status of Employee's office, title, responsibilities,
            including reporting responsibilities, or the conditions of
            Employee's employment from those in effect immediately prior to such
            Change in Control;

                  (ii) a reduction in Employee's Base Compensation;

                  (iii) the failure by the Company to pay to Employee any
            portion of Employee's current compensation or to pay to Employee any
            portion of an installment of deferred compensation under any
            deferred compensation program of the Company within seven days of
            the date such compensation is due;

                  (iv) the failure by the Company to continue in effect any
            compensation plan in which employee participates immediately prior
            to the Change in Control that is material to Employee's total
            compensation unless an equitable arrangement (embodied in an ongoing
            substitute or alternative plan) has been made with respect to such
            plan, or the failure by the Company to continue Employee's
            participation therein (or in such substitute or alternative plan) on
            a basis not materially less favorable, both in terms of the amount
            of benefits provided and the level of Employee's participation
            relative to other participants, as existed at the time of the Change
            in Control;

                  (v) the failure by the Company to continue to provide Employee
            with benefits substantially similar to those enjoyed by Employee
            under any of the Company's life insurance, medical, health and
            accident, or disability plans in which Employee was participating at
            the time of the Change in Control; the taking of any action by the
            Company which would directly or indirectly materially reduce any of
            such benefits or deprive Employee of any material fringe benefit
            enjoyed by Employee at the time of the Change in Control, or the
            failure by the Company to provide Employee with the number of paid
            vacation days to which employee is entitled on the basis of years of
            service with the Company (and its predecessors) in

                                      -6-
<PAGE>
            accordance with the Company's normal vacation policy in effect at
            the time of the Change in Control;

                  (vi) the failure of the Company to obtain a satisfactory
            agreement from any successor to assume and agree to perform this
            Agreement, as contemplated in Section 12 hereof;

                  (vii) the relocation of the Company's principal executive
            offices to a location outside the greater Houston, Texas area, or
            the Company's requiring Employee to relocate anywhere other than
            the location of the Company's principal executive offices, except
            for required travel on the Company's business to an extent
            substantially consistent with Employee's business travel obligations
            immediately prior to the Change in Control;

                  (viii) the amendment, modification or repeal of any provision
            of the Certificate of Incorporation, or the Bylaws of the Company
            which was in effect immediately prior to such Change in Control, if
            such amendment, modification or repeal would materially adversely
            effect Employee's right to indemnification by the Company; or

                  (ix) any purported termination of Employee's employment that
            is not effected pursuant to a Notice of Termination satisfying the
            requirements of Subsection (f) hereof, which purported termination
            shall not be effective for purposes of this Agreement.

            Notwithstanding anything in this Agreement to the contrary, if
      Employee's employment with the Company terminates prior to, but within six
      months of, the date on which a Change in Control occurs and it is
      reasonably demonstrated by Employee that such termination of employment
      was in connection with or anticipation of the Change in Control (i) by
      the Company or (ii) by Employee under circumstances which would have
      constituted Good Reason if the circumstances arose on or after the Change
      in Control, then, for purposes of this Agreement, Employee shall be deemed
      to have continued employment with the Company until the date of the Change
      in Control and then terminated his employment on such date for Good Reason
      (which such date for purposes of this Agreement shall be Date of
      Termination). In addition, any Company stock-based awards forfeited by
      Employee as a result of such termination shall be included as non-vested
      awards for purposes of calculating the payment due Employee pursuant to
      Section 7(e)(i)(C).

            Employee's right to terminate his employment pursuant to this
      subsection shall not be affected by his incapacity due to physical or
      mental illness. Employee's continued employment shall not constitute
      consent to, or a waiver of rights with respect to, any circumstance
      constituting Good Reason hereunder.

                                      -7-
<PAGE>
            (e) NOTICE OF TERMINATION. On or within two years after a Change in
      Control, any purported termination of Employee's employment by the Company
      or by Employee in the case of resignation for Good Reason shall be
      communicated by written Notice of Termination to the other party hereto in
      accordance with Section 10 hereof. For purposes of this Agreement, a
      "Notice of Termination" shall mean a notice which shall set forth in
      reasonable detail the Date of Termination (which shall be no sooner than
      the 15th day from the date the Notice of Termination is communicated), the
      reason for termination of Employee's employment, or in the case of
      resignation for Good Reason, said notice must specify in reasonable detail
      the basis for such resignation. No purported termination which is not
      effected pursuant to this Section 7(e) shall be effective.

            (f) DATE OF TERMINATION, ETC. "Date of Termination" shall mean the
      date specified in the Notice of Termination. Either party may, within 10
      days after any Notice of Termination is given, provide notice to the other
      party pursuant to Section 10 hereof that a dispute exists concerning the
      termination. Notwithstanding the pendency of any such dispute, the Company
      will continue to pay Employee his full compensation in effect when the
      notice giving rise to the dispute was given (including, but not limited
      to, Base Compensation) and continue Employee as a participant in all
      compensation, benefit and insurance plans in which Employee was
      participating when the notice giving rise to the dispute was given, until
      the dispute is finally resolved, but in no event past the second
      anniversary of the Change in Control except to the extent such plans
      otherwise provide for continued participation by a similarly terminated
      employee.

            (g) MITIGATION. Employee shall not be required to mitigate the
      amounts of any payment provided for in this Section 7 by seeking other
      employment or otherwise, nor shall the amount of any payment or benefit
      provided for in this Agreement by reduced by any compensation earned by
      Employee as a result of employment by another employer, self-employment
      earnings, by retirement benefits, by offset against any amount claimed to
      be owing by Employee to the Company or otherwise, except that any
      severance amounts otherwise payable to Employee pursuant to a Company
      severance plan or policy for employees in general or the receipt by
      Employee (and Employee's dependents) of other comparable benefits as
      described in Section 7(c)(i)(B) shall reduce the amount or benefits
      otherwise payable or provided, respectively, pursuant to Section 7(c)(i).

            (h) PARACHUTE PAYMENTS. The parties to this Agreement recognize that
      certain provisions of the 1990 Incentive Stock Compensation Plan, as
      amended, and the 1995 Incentive Stock Compensation Plan for Nonexecutive
      Employees (the "Stock Plans") require a reduction in payments or benefits
      under such Stock Plans to the extent necessary so that no portion thereof
      shall be subject to the excise tax imposed by Section 4999 of the
      Internal Revenue Code of 1986, as amended (the "Code"); such reduction
      will be made, however, only if, by reason of such reduction, Employee's
      net after-tax benefit shall exceed the net after-tax benefit if such
      reduction were not made. It is the intent of the parties that,
      notwithstanding the above or any provision of this Agreement or any other
      plan or program

                                      -8-
<PAGE>
      of the Company to the contrary, in the event any payment to be made and/or
      any benefits to be provided to or on behalf of Employee pursuant to this
      Agreement, when aggregated with payments and/or benefits under the Stock
      Plans or any other plans or programs, would constitute an "excess
      parachute payment", within the meaning of Section 280G of the Code,
      Employee may elect in advance which payment and/or benefit will be reduced
      in whole or in part so that the aggregated payments and/or benefits
      received will not constitute excess parachute payments. Such reduction
      will only be made, however, if by reason of such reductions, Employee's
      net after-tax benefit shall exceed Employee's net after-tax benefit if
      such reductions were not made. The determination of whether any amount or
      benefit under this Agreement would be such an excess parachute payment
      shall be made by tax counsel selected by the Company and reasonably
      acceptable to Employee. The costs of obtaining such determination shall be
      borne by the Company.

      8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit Employee's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any of its
affiliated companies and for which Employee may qualify, nor shall anything
herein limit or otherwise adversely affect such rights as Employee may have
under any stock option or other agreements with the Company or any of its
affiliated companies.

      9. ASSIGNABILITY. The obligations of Employee hereunder are personal and
may not be assigned or delegated by him or transferred in any manner whatsoever,
nor are such obligations subject to involuntary alienation, assignment or
transfer. The Company shall have the right to assign this Agreement only
pursuant to the terms of Section 12(a).

      10. NOTICE. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
Company at its principal office address, directed to the attention of the Board
with a copy to the Secretary of the Company, and to Employee at Employee's
residence address on the records of the Company or to such other address as
either party may have furnished to the other in writing in accordance herewith
except that notice of change of address shall be effective only upon receipt.

      11. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

      12. SUCCESSORS: BINDING AGREEMENT.

      (a) The Company will require any successor (whether direct or indirect, by
merger, consolidation or otherwise or by acquisition of all or substantially
all of the business and/or the assets of the Company) to expressly assume and
agree to perform this Agreement in the same manner and

                                      -9-
<PAGE>
to the same extent that the Company would be required to perform it if no such
succession had taken place. The phrase "all or substantially all of the business
and/or assets of the Company" has the meaning as defined in Section 6(iv).
Failure of the Company to obtain such agreement no later than 30 days prior to
the effectiveness of any such succession shall be a breach of this Agreement and
shall entitle Employee to compensation from the Company in the same amount and
on the same terms as Employee would be entitled to hereunder if Employee
terminated Employee's employment for Good Reason, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used herein, the term
"Company" shall include any successor to its business and/or assets as aforesaid
which executes and delivers the Agreement provided for in this Section 12 or
which otherwise becomes bound by all terms and provisions of this Agreement by
operation of law.

      (b) This Agreement and all rights of Employee hereunder shall inure to the
benefit of and be enforceable by Employee's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. Any payments or benefits hereunder which have accrued to Employee at
the time of his death, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Employee's devisee, legatee, or
other designee or, if there be no such designee, to Employee's estate.

      13. INDEMNIFICATION. In consideration of the premises and of the mutual
agreements set forth in this Agreement, the parties hereto further agree as
follows:

            1. The Company shall pay on behalf of Employee and Employee's
      executors, administrators or assigns, any amount which Employee is or
      becomes legally obligated to pay as a result of any claim or claims made
      against Employee by reason of the fact that Employee served as an
      employee, director and or/officer of the Company or because of any actual
      or alleged breach of duty, neglect, error, misstatement, misleading
      statement, omission or other act done, or suffered or wrongly attempted by
      Employee in Employee's capacity as an employee, Director and/or Officer of
      the Company. The payments that the Company will be obligated to make
      hereunder shall include (without limitation) damages, judgments,
      settlements, costs and expenses of investigation, costs and expenses of
      defense of legal actions, claims and proceedings and appeals therefrom,
      and costs and expenses of defense of legal actions, claims and proceedings
      and appeals therefrom, and costs of attachments and similar bonds;
      PROVIDED, HOWEVER, that the Company shall not be obligated to pay fines or
      other obligations or fees imposed by law or otherwise that it is
      prohibited by applicable law from paying as indemnity or for any other
      reason.

            2. Costs and expenses (including, without limitation, attorney's
      fees) incurred by Employee in defending or investigating any action, suit,
      proceeding or claim shall be paid by the Company in advance of the final
      disposition of such matter upon receipt of a written undertaking by or on
      the behalf of Employee to repay any such amounts if it is ultimately
      determined that Employee is not entitled to indemnification under the
      terms of this Agreement.

                                      -10-
<PAGE>
            3. If the claim under this Section 13 is not paid by or on behalf of
      the Company within ninety days after a written claim has been received by
      the Company, Employee may at any time thereafter bring suit or commence
      arbitration proceedings against the Company to recover the unpaid amount
      of the claim and, if successful in whole or in part, Employee shall also
      be entitled to be paid the expense of prosecuting such claim.

            4. In the event of payment under this Section 13, the Company shall
      be subrogated to the extent of such payment to all of the rights of
      recovery of Employee, who shall execute all papers required and shall do
      everything that may be necessary to enable the Company effectively to
      bring suit to enforce such rights.

            5. The Company shall not be liable under this Agreement to make any
      payment in connection with any claim made against Employee:

                  (a) for which payment is actually made to Employee under an
            insurance policy maintained by the Company, except in respect of any
            excess beyond the amount of payment under such insurance;

                  (b) for which payment is made to or on behalf of Employee by
            the Company otherwise than pursuant to this Agreement;

                  (c) based upon or attributable to Employee gaining in fact any
            personal profit or advantage to which Employee was not legally
            entitled;

                  (d) for an accounting of profits made from the purchase or
            sale by Employee of securities of the Company within the meaning of
            Section 16(b) of the Securities Exchange Act of 1934 and amendments
            thereto; or

                  (e) brought about or contributed to by the dishonesty of
            Employee; PROVIDED, HOWEVER, that notwithstanding the foregoing,
            Employee shall be protected under this Agreement as to any claims
            upon which suit may be brought alleging dishonesty on the part of
            Employee, unless a judgment or other final adjudication thereof
            adverse to Employee shall establish that Employee committed acts of
            active and deliberate dishonesty with actual dishonest purpose and
            intent, which acts were material to the cause of action so
            adjudicated.

            6. Employee, as a condition precedent to his right to be indemnified
      under this Agreement, shall give to the Company notice in writing as soon
      as practicable of any claim made against him for which indemnity will or
      could be sought under this Agreement. Notice to the Company shall be
      directed to the Company, 1616 S. Voss, Suite 1000, Houston, Texas 77057,
      Attention: Secretary (or such other address as the Company shall designate
      in writing to Employee). Notice shall be deemed received if sent by
      prepaid mail properly addressed,

                                      -11-
<PAGE>
      the date of such notice being the date postmarked. In addition, Employee
      shall give the Company such information and cooperation as it may
      reasonably require and shall be within Employee's power.

            7. Nothing herein shall operate or be construed to diminish or
      otherwise restrict Employee's right to indemnification under any provision
      of the Certificate of Incorporation or the Bylaws of the Company, the
      Indemnification Agreement between the Company and Employee dated as of
      March 1, 1990, or under Delaware law.

      14. MISCELLANEOUS. This Agreement may not be amended unless such amendment
is agreed to in writing and signed by Employee and such officer as may be
specifically authorized by the Board. In addition, no provision of this
Agreement may be waived unless such waiver is in writing and signed by the party
entitled to the benefits of such provision. No waiver by either party hereto at
any time of any breach by the other party hereto of, or in compliance with, any
condition or provision of this Agreement to be preformed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Delaware.

      15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrumant.

      16. RESOLUTION OF DISPUTES. Employee shall be permitted (but not required)
to elect that any dispute or controversy arising under or in connection with
this Agreement be settled by arbitration in Houston, Texas, in accordance with
the rules of the American Arbitration Association then in effect. Judgment may
be entered on the arbitrator's award in any court having jurisdiction. All legal
fees and costs incurred by Employee in connection with the resolution of any
dispute or controversy under or in connection with this Agreement with the
exception of any dispute or controversy under or in connection with Section 13
of this Agreement shall be paid by the Company as bills for such services are
presented by Employee to the Company. With respect to any claim by Employee
arising under Section 13, Section 13.3 shall govern any payment of legal fees
and costs.

      17. PRIOR AGREEMENTS. This Agreement shall supersede and replace in full
that certain Employment Agreement entered into effective March 1, 1990 between
the Company and Employee and such agreement is hereby terminated and of no
further force or effect as of the effective date of this Agreement.

                                      -12-
<PAGE>
      IN WITNESS WHEREOF, the parties have executed this Agreement on
______________, 1997, effective for all purposes as provided above.

                                          SANTA FE ENERGY RESOURCES, INC.

                                          By:________________________________

                                          Name: _____________________________

                                          Title:  ___________________________
                                                      David L. Hicks

                                      -13-