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                                                                   EXHIBIT 10.11

                          LONG TERM INCENTIVE AGREEMENT

      This LONG TERM INCENTIVE AGREEMENT is entered into as of February 25, 2004
between DAUGHERTY RESOURCES, INC., a British Columbia corporation (the
"Company"), and _______________, the ____________ of the Company (the
"Executive").

      The parties desires to establish an incentive for the Executive to remain
with the Company on a long term basis by providing for a cash bonus and stock
option award vesting on the terms and subject to the conditions of this
Agreement. Accordingly, the parties hereto agree as follows.

      1. DEFINITIONS. The following terms used in this Agreement shall have the
meanings set forth below.

            1.1 "Adjudication" means an adjudication and final judgment
determining the rights or obligations of a party hereunder in any court of
competent jurisdiction.

            1.2 "Change of Control Agreement" means the Change of Control
Agreement of even date herewith between the Company and the Executive.

            1.3 "Common Stock" means the common stock, no par value, of the
Company now or hereafter outstanding, or any capital shares or other securities
of the Company issued in exchange, conversion or substitution therefor by the
Company, it successors and assigns, including any successor resulting from any
merger or consolidation involving the Company.

            1.4 "Company" means Daugherty Resources, Inc. and its subsidiaries
unless the context otherwise requires or, following a Change of Control, any
successor to all or substantially all the business or assets of the Company,
whether direct or indirect, by purchase, merger, consolidation or otherwise.

            1.5 "Incentive Bonus" has the meaning set forth in Section 2.1.

            1.6 "Incentive Plan" means the Company's 2003 Incentive Stock and
Stock Option Plan.

            1.7 "Option" and "Option Period" have the respective meanings set
forth in Section 3.1.

            1.8 "Securities" means the Securities Act of 1933, as amended.

            1.9 "Shares" has the meaning set forth in Section 3.1.

            1.10 "Vesting Date" means the earlier of (a) fifth anniversary of
the date hereof or (b) following any Change of Control (as defined in the Change
of Control Agreement), the date on which the Executive's employment with the
Company is terminated by the Executive for Good Reason (as defined in the Change
of Control Agreement) or by the Company other than for Cause (as defined in the
Change of Control Agreement) or the death or Disability (as defined in the
Change of Control Agreement) of the Executive.

      2. INCENTIVE BONUS.

            2.1 Entitlement. In the event that the Executive continues to serve
as an executive officer of the Company until the Vesting Date, the Executive
shall be entitled to a cash bonus in an amount equal to the Executive's total
salary and bonus for the preceding year (the "Incentive Bonus").

            2.2 Payment. The Incentive Bonus provided under Section 2.1 shall be
payable by the Company in cash on the Vesting Date or, at the election of the
Executive, in periodic installment payments, subject in either case to any
applicable withholding taxes.

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            2.3 Reserves. Unless prohibited under any credit agreement or other
debt instruments of the Company, as long as the Executive continues to serve as
an executive officer of the Company prior to the Vesting Date, the Company shall
establish annual cash reserves equal to 20% of the Incentive Bonus to secure its
payment obligation under Section 2.2.

      3. STOCK OPTION

            3.1 Grant and Vesting. The Company hereby grants to the Executive
the right and option (the "Option") to purchase an aggregate of ________ shares
of Common Stock (the "Shares") at an exercise price of $4.03 per Share,
reflecting the closing price of the Common Stock on the trading day immediately
preceding the date hereof. In the event that the Executive continues to serve as
an executive officer of the Company until the Vesting Date, the Option shall
vest and become exercisable on the Vesting Date and shall remain exercisable
until the first anniversary of the Vesting Date (the "Option Period").

            3.2 Exercise. During the Option Period, the Executive may exercise
the Option in whole or in part by delivering to the Company's offices a written
notice signed by the Executive stating the number of Shares that he has elected
to purchase and accompanied by payment (in the form prescribed by Section 3.3)
of an amount equal to the exercise price for the Shares to be purchased. The
exercise notice must also contain a statement confirming that the Executive is
acquiring the Shares for investment. Following receipt by the Company of the
exercise notice and full payment of the exercise price for the Shares covered
thereby, the Company shall instruct its stock transfer agent to issue, as
expeditiously as practicable, a certificate representing the Shares so purchased
in the name of the Executive and to deliver the certificate to the Executive at
the address specified in the exercise notice. The certificate shall bear no
restrictive legend under the Securities Act, reflecting the effectiveness of the
Company's registration statement on Form S-8 covering the resale of Common Stock
issued under the Plan in accordance with Rule 415 under the Securities Act.

            3.3 Payment of Exercise Price. The exercise price for Shares
purchased under the Option shall be payable either (a) by personal check or
official bank check, (b) with shares of Common Stock already owned by the
Executive or (c) any combination of those forms of payment. Any shares of Common
Stock used to satisfy the exercise price for Shares purchased under the Option
shall be valued at their fair market value (determined in accordance with the
Plan) on the date of the exercise notice. If the Executive elects to pay any
portion of the exercise price for Shares with shares of Common Stock, the
exercise notice shall state the number of shares of Common Stock to be applied
toward the exercise price and shall be accompanied by the certificate(s)
representing those shares of the Common Stock, together with stock powers
therefor duly executed by the Executive.

            3.4 Transferability of Option. The Option shall not be transferable
other than by will or by the laws of descent and distribution and may be
exercised only by the Executive or his personal representatives.

            3.5. Incorporation of Incentive Plan. The Option is subject to, and
governed by, the terms and conditions of the Incentive Plan, which are hereby
incorporated by reference. As of the date of this Agreement, the Incentive Plan
is subject to approval by the shareholders of the Company.

      4. REMEDIES OF THE EXECUTIVE.

            4.1 Right to Adjudication. In the event that (a) payments required
to be made by the Company hereunder are not timely made or (b the Executive
otherwise seeks to enforce his rights under this Agreement, the Executive shall
be entitled to an Adjudication, and the Company will not oppose the Executive's
right to seek the Adjudication.

            4.2 Burden of Proof in Adjudication. In any Adjudication, the
Executive shall be presumed to be entitled to the benefits provided under this
Agreement following the Vesting Date, and the Company shall have the burden of
proof to overcome that presumption. In any Adjudication, the Company shall be
precluded from asserting that the procedures and presumptions provided in this
Agreement are not valid, binding and enforceable. The Company shall stipulate
that it is bound by all the provisions of this Agreement and precluded hereunder
from making any assertion to the contrary.

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            4.3 Expenses of Adjudication. Expenses reasonably incurred by the
Executive in connection with the enforcement of this Agreement through an
Adjudication shall be borne by the Company if the Executive is successful in the
Adjudication.

      5. NATURE OF OBLIGATIONS. The Company's obligations hereunder shall be
absolute and unconditional and shall not be subject to any setoff, counterclaim,
recoupment, defense or other right that the Company may have against the
Executive or any other person. Any amounts payable by the Company hereunder
shall be made without notice or demand. The Company waives any rights it may now
have or hereafter acquire, by statute or otherwise, to cancel, terminate or
rescind this Agreement in whole or in part.

      6. SUCCESSOR AND ASSIGNS. This Agreement shall be binding on the
successors and assigns of the Company and shall inure to the benefit of and be
enforceable by the legal representatives, executors, administrators, heirs,
distributees, devises and legatees of the Executive. Upon any Change of Control,
the Company shall require any successor to all or substantially all the business
or assets of the Company, whether direct or indirect, by purchase, merger,
consolidation or otherwise, by written agreement satisfactory in form and
substance to the Executive, 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 succession had taken place.

      7. MISCELLANEOUS.

            7.1 Reservation of Rights. Nothing in this Agreement shall affect
any right that the Company may otherwise have to terminate the Executive's
employment at any time in any lawful manner, subject to providing any benefits
required hereunder, under the Change of Control Agreement or under any severance
policy of the Company then in effect. The rights and remedies provided by this
Agreement are cumulative, and the use of any one right or remedy by a party
shall not preclude or waive that party's right to use any or all other remedies.
Those rights and remedies are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.

            7.2 Waiver of Provisions. No provisions of this Agreement may be
modified, amended, waived or discontinued unless agreed to in writing by the
parties hereto. No waiver at any time by either party of any breach by the other
party or waiver of compliance with any condition or provision to be performed by
the other party shall be deemed a waiver of similar or dissimilar breaches,
conditions or provisions at the same time or any prior or subsequent time.

            7.3 Integration. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof. No assurances or
representations, oral or otherwise, express or implied, with respect to the
subject matter of this Agreement have been made by either party except as
expressly set forth herein.

            7.4 Amendment. This Agreement shall not be amended or modified
except by a written instrument signed by both parties.

            7.5 Governing Law. This Agreement and the rights and obligations of
the parties shall be governed by and construed in accordance with the laws of
the state of Delaware, excluding any conflict of laws rules of that State or
other principle that might refer the governance or construction of this
Agreement to the law of British Columbia or any other jurisdiction.

            7.6 Notices. Any notice, request or other communication required or
permitted under this Agreement shall be made in writing and shall be deemed to
have been duly given or made if delivered personally, or mailed (postage prepaid
by registered or certified mail), or sent by facsimile to the party (or to an
executive officer of the Company) at their respective addresses provided in
writing to the other party for that purpose. Any notice, request or other
communication so sent shall be deemed to have been given or delivered (a) at the
time that it is personally delivered, (b) two business days after the date
deposited in the United States mail, (c) one business day after delivery to an
overnight courier or (d) when receipt is acknowledged, if sent by facsimile.

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      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.

                                                       DAUGHERTY RESOURCES, INC.

                                                       By_______________________
                                                         William S. Daugherty,
                                                         President and Chief
                                                         Executive Officer

                                                        EXECUTIVE:

                                                        ________________________

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