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                                                                    EXHIBIT 10.2


                               GUARANTY AGREEMENT

  This Guaranty Agreement dated as of September 30, 1997, is made by CRYSTAL
OIL COMPANY, a Louisiana corporation ("Guarantor"), in favor of MAHONIA
LIMITED, a company incorporated under the laws of Jersey ("Beneficiary").

  WHEREAS, Crystal Properties and Trading Company, a corporation organized
under the laws of the State of Nevada ("Seller"), and Beneficiary have entered
into the Forward Sale Contracts;

  WHEREAS, Seller is a wholly-owned Subsidiary of Guarantor;

  WHEREAS, pursuant to the Forward Sale Contracts, Seller agrees to deliver to
Beneficiary certain volumes of Crude Oil and Natural Gas deliverable at various
locations; and

  WHEREAS, the guaranties provided in this Agreement are reasonably expected to
benefit, directly or indirectly, Guarantor; and it is in the best interest of
Guarantor to provide the guaranties set forth hereunder, and such guaranties
are necessary or convenient to the conduct, promotion or attainment of the
business of Guarantor.

  NOW, THEREFORE, in consideration of the premises and in order to induce
Beneficiary to enter into the Forward Sale Contracts with Seller, Guarantor
hereby agrees as follows:

                  ARTICLE I - DEFINITIONS AND ACCOUNTING TERMS

Section 1.01  Certain Defined Terms.  As used in this Agreement (including the
recitals), the following terms shall have the following meanings:

  "Agreement" shall mean this Guaranty Agreement, as the same may be amended or
modified from time to time.

  "Events of Default" shall have the meaning assigned such term in Section
5.01.

  "Excepted Liens" shall mean:  (i) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being contested in good
faith by appropriate action and for which adequate reserves have been
maintained; (ii) operator's, vendors', carriers', warehousemen's, repairmen's,
mechanics', workmen's, materialmen's, construction or other like Liens arising
by operation of law in the ordinary course of business or incident to the
exploration, development, operation and maintenance of oil and gas properties
or statutory landlord's Liens, each of which is in respect of obligations that
have not been outstanding more than 90 days or which are being contested in
good faith by appropriate proceedings and for which adequate reserves have been
maintained in accordance with GAAP; (iii) any Liens reserved in leases,
farmouts, gas sales contracts or similar agreements for rent or royalties and
for compliance with the terms of the agreements or leases in the case of
leasehold estates, to the extent that any such Lien referred to in this clause
does not materially impair the use of the property covered by such Lien for the
purposes for which such property is held by Guarantor or any Subsidiary or
materially impair the value of such property subject thereto; (iv) Liens
created by this Agreement or the Forward Sale

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Contracts; and (v) encumbrances (other than to secure the payment of borrowed
money or the deferred purchase price of property or services), easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations in any rights of way or other property of Guarantor or any
Subsidiary for the purpose of roads, pipelines, transmission lines,
transportation lines, distribution lines for the removal of gas, oil, coal or
other minerals or timber, and other like purposes, or for the joint or common
use of real estate, rights of way, facilities and equipment, and defects,
irregularities, zoning restrictions and deficiencies in title of any rights of
way or other property which in the aggregate do not materially impair the use
of such rights of way or other property for the purposes of which such rights
of way and other property are held by Guarantor or any Subsidiary or materially
impair the value of such property subject thereto.

  "Forward Sale Contracts" shall mean (i) the Crude Oil Forward Sale Contract
dated of even date herewith between Seller and Beneficiary, as the same may be
amended or modified from time to time; and (ii) the Natural Gas Forward Sale
Contract dated of even date herewith between Seller and Beneficiary, as the
same may be amended or modified from time to time.

  "Margin Agreement" shall mean the Margin Agreement dated of even date
herewith between Seller and Beneficiary, as the same may be amended or modified
from time to time.

  "Obligations" shall have the meaning assigned such term in Section 2.01(a).

Section 1.02  Other Definitions.  Other capitalized terms used in this
Agreement, unless otherwise defined in Section 1.01, shall have the meaning
given such terms in the Forward Sale Contracts and the Margin Agreement.

Section 1.03  Accounting Terms.  All accounting terms not specifically defined
herein shall be constructed in accordance with, and certificates of compliance
with financial covenants shall be based on, GAAP; provided, however, the
financial statements and reports required pursuant to Section 4.01(b) shall be
prepared in accordance with generally accepted accounting principles
consistently applied except to the extent stated therein.

                             ARTICLE II - GUARANTY

Section 2.01  Guaranty.  Guarantor hereby unconditionally guarantees to
Beneficiary, the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all payment obligations associated with the
performance obligations of Seller, now or hereafter existing under the Forward
Sale Contracts, (all of such payment obligations under the Forward Sale
Contracts, being referred to herein as the "Obligations"), and any and all
expenses (including reasonable counsel fees and expenses) incurred by
Beneficiary in enforcing any rights under this Guaranty, provided that all
payments by Guarantor under this Section 2.01 shall be made in immediately
available funds within five (5) Business Days following Beneficiary's demand
therefor given in writing to Guarantor (which demand will set forth the basis
and calculation of the amount for which demand is made).

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Section 2.02  Guaranty Absolute.  Guarantor guarantees that the Obligations
will be paid strictly in accordance with the terms of the Forward Sale
Contracts.  The liability of Guarantor under this Agreement shall be absolute
and unconditional irrespective of:

  (a)  any lack of validity or enforceability of the Forward Sale Contracts,
the Margin Agreement or any other agreement or instrument relating thereto;

  (b)  any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of the terms of the Forward Sale Contracts or the
Margin Agreement or the rights of Beneficiary with respect thereto;

  (c)  any change in the time, manner or place of performance or payment of, or
in any other term of, the Obligations or any other amendment, extension or
waiver of or any consent to departure from the Forward Sale Contracts or any
Confirmation Letter;

  (d)  the existence of, or any release or amendment or waiver of or consent to
departure from, any other guaranty, for all or any of the Obligations;

  (e)  the existence of, or any release or amendment or waiver of or consent to
departure from the Margin Agreement; or

  (f)  any assignment or merger by Seller permitted by any of the Forward Sale
Contracts.

This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by Beneficiary for any reason, including, without
limitation, the insolvency, bankruptcy or reorganization of Guarantor, Seller
or otherwise, all as though such payment had not been made; and, in such event,
Guarantor will pay to Beneficiary an amount equal to any such payment that has
been rescinded or returned.  This Guaranty shall be absolute and unconditional
notwithstanding the occurrence of any event or the existence of any other
circumstances which might constitute a defense available to a guarantor or
Seller or a legal or equitable discharge of a surety or guarantor except
indefeasible payment in full of the Obligations.  The provisions of this
paragraph will survive any release or termination of this Agreement.  If and to
the extent that Guarantor makes any payment to Beneficiary or to any other
Person pursuant to or in respect of this Guaranty, any claim which Guarantor
may have against Seller by reason thereof shall be subject and subordinate to
the prior indefeasible payment in full in cash of the Obligations.

Section 2.03  Waiver.  Except as otherwise set forth herein, Guarantor hereby
waives, to the extent permitted by law, promptness, diligence, notice of
acceptance and any other notice with respect to any of the Obligations and this
Agreement and any requirement that Beneficiary protect, secure, perfect or
insure any collateral or exhaust any right or take any action against Seller or
any other Person or any collateral.





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                  ARTICLE III - REPRESENTATIONS AND WARRANTIES

Section 3.01  Representations and Warranties.  Guarantor hereby represents and
warrants as follows:

  (a)  Existence.  Guarantor is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of its incorporation
and has all requisite corporate powers and governmental licenses,
authorizations, consents and approvals required to own its properties and carry
on its business as now conducted.

  (b)  Authority.  The execution, delivery and performance by Guarantor of this
Agreement are within Guarantor's corporate powers, have been duly authorized by
all necessary corporate action, and require, in respect of Guarantor, no action
by or in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of law or
regulation applicable to Guarantor or the certificate of incorporation or
by-laws of Guarantor or any judgment, injunction, order, decree or material
("material" for the purposes of this representation meaning creating a
liability of $5,000,000 or more) agreement binding upon Guarantor or result in
the creation or imposition of any Lien on any asset of Guarantor.

  (c)  Binding Obligations.  This Agreement has been duly executed and
delivered by Guarantor and is the legal, valid and binding obligation of
Guarantor enforceable against Guarantor in accordance with its terms, except as
the enforceability thereof may be limited by the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and by general principles of equity.

  (d)  Financial Statements.

  (i)  The audited consolidated balance sheet of the Guarantor and its
  Subsidiaries as of December 31, 1996, and the related audited consolidated
  statements of income, cash flows and changes in stockholders' equity accounts
  for the fiscal year then ended, and the unaudited consolidated balance sheet
  of the Guarantor and its Subsidiaries as of June 30, 1997, and the related
  unaudited consolidated statements of income, cash flows and changes in
  stockholders' equity accounts for the fiscal quarter then ended, copies of
  which have been delivered to Beneficiary, fairly present, in conformity with
  GAAP, except as otherwise expressly noted therein, the consolidated financial
  position of the Guarantor and its Subsidiaries as of such dates and their
  consolidated results of operations and changes in financial position for such
  fiscal periods, subject (in the case of the unaudited balance sheet and
  statements) to changes resulting from audit and normal year-end adjustments.

  (ii) Since December 31, 1996, and through the date hereof there has been no
  material adverse change in the business, consolidated financial position or
  consolidated results of operations of Guarantor and its Consolidated
  Subsidiaries, considered as a whole.

  (e)  Litigation.  Except as disclosed in the Guarantor's Form 10-K for the
year ended December 31, 1996, any Form 8-Ks subsequently filed, or the
Guarantor's Form 10-Q for the quarter ended June 30, 1997, which were delivered
to the Beneficiary prior to the date hereof, there is no action, suit or
proceeding pending against Guarantor or any of its Subsidiaries, or to the
knowledge of Guarantor threatened against Guarantor or any of its Subsidiaries,
before any court or arbitrator or any governmental





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body, agency or official in which there is a reasonable possibility of an
adverse decision which could materially adversely affect the business,
consolidated financial position or consolidated results of operations of
Guarantor and its Consolidated Subsidiaries taken as a whole or which in any
manner draws into question the validity of this Agreement, the Forward Sale
Contracts or the Margin Agreement.

                             ARTICLE IV - COVENANTS

Section 4.01  Affirmative Covenants.  Guarantor covenants and agrees that, so
long as any part of the Obligations shall remain unpaid, Guarantor will, unless
Beneficiary shall otherwise consent in writing:

  (a)  Compliance with Laws, Etc.  Comply in all material respects with all
applicable laws, rules, regulations and orders of any governmental authority to
the extent non-compliance therewith would have a material and adverse effect on
Guarantor and its Subsidiaries taken as a whole, such compliance to include,
without limitation, paying before the same become delinquent all taxes,
assessments and governmental charges imposed upon it or upon its property
except to the extent contested in good faith.

  (b)  Reporting Requirements.  Furnish to Beneficiary:

   (i)   (1) promptly after the sending or filing thereof, a copy of each of
  the Guarantor's reports on Form 8-K (or any comparable form), (2) promptly
  after the filing or sending thereof, and in any event within 75 days after
  the end of each of the first three fiscal quarters of each fiscal year of the
  Guarantor, a copy of the Guarantor's report on Form 10-Q (or any comparable
  form) for such quarter, which report will include the Guarantor's quarterly
  unaudited consolidated financial statements as of the end of and for such
  quarter, and (3) promptly after the filing or sending thereof, and in any
  event within 135 days after the end of each fiscal year of the Guarantor, a
  copy of the Guarantor's annual report on form 10-K (or any comparable form)
  for such year, which annual report will include the Guarantor's annual
  audited consolidated financial statements as of the end of and for such year;

   (ii)  simultaneously with the delivery of each of the annual or quarterly
  reports referred to in clause (i) above, a certificate of the chief financial
  officer or the chief accounting officer of the Guarantor in a form acceptable
  to the Beneficiary, (x) setting forth in reasonable detail the calculations
  required to establish whether a Trigger Event has occurred on the date of the
  financial statements contained in such report and (y) stating whether there
  exists on the date of such certificate any Event of Default or Trigger Event
  or event, which, with the giving of notice or lapse of time, or both, would
  constitute an Event of Default or Trigger Event, and, if so, setting forth
  the details thereof and the action which the Guarantor has taken and proposes
  to take with respect thereto;

   (iii)  as soon as possible and in any event within five days after an
  executive officer of the Guarantor having obtained knowledge thereof, notice
  of the occurrence of any Event of Default or any event which, with the giving
  of notice or lapse of time, or both, would constitute an Event of Default,
  continuing on the date of such notice, and a statement of the chief financial
  officer of the Guarantor setting forth details of such Event of Default or
  event and the action which the Guarantor has taken and proposes to take with
  respect thereto; and





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   (iv)  such other information respecting the condition or operations,
  financial or otherwise relevant to this Agreement and the Forward Sale
  Contracts and Guarantor's ability to perform its obligations hereunder as
  Beneficiary may from time to time reasonably request.

  (c)  Preservation of Corporate Existence, Etc.  Preserve and maintain its
legal existence, rights and franchises; provided, however, that this Section
4.01(c) shall not apply to any transactions or matters permitted by Section
4.02 or to the termination of rights or franchises of the Guarantor pursuant to
any lease, sale, transfer or other disposition of assets by the Guarantor, and
provided, further, that the Guarantor shall not be required to preserve any
right or franchise if the Guarantor shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Guarantor
and that the loss thereof is not disadvantageous in any material respect to the
Beneficiary.

  (d)  Ownership of Seller.  Continue to be the direct or indirect beneficial
owner of 100% of the capital stock of Seller.

  (e)  Engineering Reports.

   (i)   Not less than 90 days after each January 1st of each year, commencing
  January 1, 1998, Guarantor shall furnish to Beneficiary a Reserve Report,
  which shall be prepared by certified independent petroleum engineers or
  internally by Guarantor, at the option of the Guarantor.

   (ii)  With the delivery of each Reserve Report, Guarantor shall provide to
  Beneficiary a certificate from a responsible officer certifying that, to the
  best of such officer's knowledge, in all material respects: (A) the
  information contained in the Reserve Report and any other information
  delivered in connection therewith is true and correct, and (B) except as set
  forth on an exhibit to the certificate, on a net basis there are no material
  gas imbalances, take or pay or other prepayments with respect to the
  Designated Fields which would require Seller to deliver hydrocarbons produced
  from such fields at some future time without then or thereafter receiving
  full payment therefor in excess of the volumes presold under the Forward Sale
  Contracts.

   (iii)  Upon written request of Beneficiary, within 30 days after Guarantor's
  receipt of such request, Guarantor shall provide production reports by lease
  for the Designated Fields for the calendar month immediately preceding the
  month during which such request was made.

Section 4.02  Negative Covenant.  Guarantor covenants and agrees that, so long
as any part of the Obligations shall remain unpaid, Guarantor will not, unless
Beneficiary shall otherwise consent in writing:

  (a)  Mergers.  Merge or consolidate with or into, any Person, unless (i)
Guarantor is the survivor either by operation of law or by agreement, or (ii)
the surviving Person, if not Guarantor, is organized under the laws of the
United States or a state thereof and assumes all obligations of Guarantor under
this Agreement, provided, in each case that immediately after giving effect to
such proposed transaction, no Event of Default or event which, with the giving
of notice or the lapse of time, or both, would constitute an Event of Default
would exist or result.





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  (b)  Liens.  Create, incur, assume or permit to exist any Lien on its
interests in the Designated Fields, except for Excepted Liens.

  (c)  Business of Seller.  Guarantor agrees that it will not permit Seller to
materially change it business as contemplated in the Articles of Incorporation
of Seller as in effect on the date hereof or permit Seller to amend its
Articles of Incorporation at any time prior to January 20, 1999.

  (d)  Working Capital.  Guarantor agrees that it will maintain the amount of
its Working Capital at not less than $12,000,000.

                         ARTICLE V - EVENTS OF DEFAULT

Section 5.01  Events of Default.  An "Event of Default" shall exist if any of
the following events shall occur and be continuing:

  (a)  Any representation or warranty made by Guarantor under or in connection
with this Agreement shall prove to have been incorrect in any material respect
when made and such materiality is continuing; or

  (b)  Guarantor shall fail to perform or observe any material term, covenant
or agreement contained in this Agreement on its part to be performed or
observed if such failure shall remain unremedied for twenty-five (25) days
after written notice thereof shall have been given to Guarantor by Beneficiary;
provided that such grace period shall not apply to Guarantor's payment
obligations under Section 2.01; or

  (c)  Guarantor or any of its Subsidiaries shall generally not pay its debts
as such debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against Guarantor or any
of its Subsidiaries seeking to adjudicate it as bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its property and,
in the case of any such proceeding instituted against it (but not instituted by
it), shall remain undismissed or unstayed for a period of forty-five (45) days;
or Guarantor or any of its Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this Section 5.01(c); or

  (d)  Any provision of this Agreement after execution and delivery thereof for
any reason is not or ceases to be valid and binding on Guarantor, or Guarantor
or any of its Subsidiaries shall so state in writing; or

  (e)  Guarantor or any of its Subsidiaries shall fail to pay any principal of
or premium or interest on any Debt which is outstanding in the principal amount
of at least $5,000,000 in the aggregate, of Guarantor or such Subsidiary (as
the case may be), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or other otherwise), and
such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument





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relating to such Debt; or any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate the
maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled
required prepayment or as a result of the giving of notice of a voluntary
prepayment), prior to the stated maturity thereof.

                           ARTICLE VI - MISCELLANEOUS

Section 6.01  Amendments, Etc.  No amendment or waiver of any provision of this
Agreement nor consent to any departure by Guarantor therefrom shall in any
event be effective unless the same shall be in writing and signed by Guarantor
and Beneficiary.

Section 6.02  Addresses for Notices.  All notices and other communications
provided for hereunder shall be in writing (including telecopier or cable
communication) delivered, if to Guarantor, at its address at 229 Milam,
Shreveport, Louisiana 71101, Attention: Chief Financial Officer (telecopier
number (318) 677-5515; if to Beneficiary, at its address at 22 Grenville
Street, St. Helier, Jersey, Channel Islands JE1 1BL, Attention:  Ian James
(Telecopier No.:  44-1534-609333), with a copy to:  The Chase Manhattan Bank,
270 Park Avenue, 8th Floor, New York, New York 10017, Attention: Alex Mintcheff
(telecopy number (212) 834-6084).  All such notices and communications shall,
if mailed, be effective three (3) days after being deposited in the mails, when
sent by telecopier to Guarantor or Beneficiary to the telecopier numbers set
forth above (or such other telecopy number specified by Guarantor or
Beneficiary in a written notice to the other party) and receipt thereof is
acknowledged by such party, or when delivered to a courier and written
confirmation of delivery is received back from such courier.

Section 6.03  No Waiver; Cumulative Rights and Remedies.  No failure on the
part of Beneficiary to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.  Each of the rights and remedies herein
provided are cumulative and not exclusive of any rights and remedies provided
by law or in any other documents.

Section 6.04  Continuing Guaranty.  The obligations of Guarantor under Article
II of this Agreement shall be continuing and (a) remain in full force and
effect until indefeasible payment in full of the Obligations and all other
amounts payable under this Agreement and the Forward Sale Contracts, (b) be
binding upon Guarantor, its successors and assigns, and (c) inure to the
benefit of and be enforceable by Beneficiary and its successors, transferees
and assigns (including any person holding a security interest in Beneficiary's
rights hereunder); and accordingly, "Beneficiary" shall be construed to include
Beneficiary's successors, transferees, and assigns and holders of such security
interests.

Section 6.05  Execution in Counterparts.  This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.

Section 6.07  Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to principles of conflicts of laws that would result in the application
of the laws of another jurisdiction.

Section 6.08  Third Party Beneficiaries.  There are no third-party
beneficiaries to this Agreement.





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Section 6.09  Assignment.  Neither party may assign any rights or delegate any
obligations hereunder without the prior written consent of the other party.
Without the consent of Guarantor, Beneficiary may assign this Agreement to any
Person as security for any financing or hedging provided to Beneficiary by such
Person and such Person may exercise, upon default by Beneficiary of its
agreements with such Person, the rights of Beneficiary hereunder.  Upon notice
to Guarantor of any such assignment, Beneficiary will agree to substitute the
secured party for Beneficiary hereunder.





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  IN WITNESS WHEREOF, Guarantor has caused this Agreement to be duly executed
and delivered by its officer thereunto duly authorized as of the date first
above written.

                                                CRYSTAL OIL COMPANY



                                                By:_______________________
                                                        J.A. Ballew
                                                        Senior Vice President





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