LOAN AGREEMENT II



     Agreement, made as of March 16, 2004 between Richard Strain with an address
at 329  Manchester  Road,  Poughkeepsie,  New  York  12603  (the  "Lender")  and
Nathaniel  Energy  Corporation,  a Delaware company with its business address at
8001 South InterPort Blvd., Englewood, Colorado 80112 (the "Borrower").

     WHEREAS,  the  Lender  and  the  Borrower  desire  to  memorialize  certain
conditions that effect the following:

         1.  The loan set forth herein
         2.  Loan Agreement dated October 3, 2003, between Lender and Borrower
         3.  Promissory Note dated October 3, 2003, between Lender and Borrower

     Hereinafter,  in this Loan  Agreement  II  document,  the  above  mentioned
October 3, 2003 loan  agreements and Promissory  Note and this Loan Agreement II
shall be collectively referred to as "Three Strain Debt Agreements".

     WHEREAS,   the  Lender  and  the  Borrower  desire  to  collateralize   the
aforementioned Three Strain Debt Agreements, between Lender and Borrower.

     WHEREAS,  the Lender and the Borrower agree to a fixed conversion price and
registration right of the aforementioned  Three Strain Debt Agreements,  between
Lender and Borrower.

     NOW  THEREFORE,  for good  and  valuable  consideration,  the  receipt  and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereto  agree as
follows:

1. The Lender shall loan to the Borrower  $2,000,000  pursuant to the terms of a
Promissory  Note of even date March 16, 2004 in the form and substance  mutually
acceptable by the Lender and Borrower.

2. The  Borrower  grants to the  Lender a security  interest  in, and the Lender
shall  have a first  lien on,  all  assets of the  Borrower  and all  Borrower's
subsidiaries,  which shall include,  but not be limited to accounts  receivable,
inventory,  equipment and general intangibles. The Borrower will also pledge the
shares of its subsidiaries, (collectively the "Collateral").

3. The Borrower hereby authorizes the Lender to file UCC-1 financing  statements
covering the  Collateral  naming the Lender as secured party and the Borrower as
the  debtor   simultaneous   with  the  closing   hereof,   in  all  appropriate
jurisdictions,  together with any amendments,  modifications  and  substitutions
thereto to secure the obligations of the Borrower to the Lender contained herein
and the cost, if any, incurred in collecting such obligations.
<PAGE>

4. The Lender  shall have the right,  at any time,  upon  written  notice to the
Borrower, to convert all, or any portion of the outstanding indebtness under the
Three Strain Debt  Agreements  into shares of the Borrowers  common  stock.  The
conversion price therefore will be equal to 103% of the average closing price of
the Borrowers common stock for the 5 trading days prior to the date hereof.  The
terms and condition of that certain  conversion  agreement dated October 3, 2003
between  Borrower  and the  Lender,  other than the  conversion  price set forth
therein,  are hereby  incorporated  by reference  into this Agreement and made a
part hereof (including,  without limitation the miscellaneous  section thereof),
with respect to the terms and mechanisms of the conversion hereunder.

5. The Borrower will file a  registration  statement  for the  Borrowers  common
stock  into  which  all of the debt in the  Three  Strain  Debt  Agreements  are
convertible,  with  the SEC  within  120  days of  funding  and  will  have  the
registration  declared  effective  within  180 days of  funding.  The  terms and
conditions of sections 1 through 9 of that certain Registration Rights Agreement
dated October 3, 2003 between the  Borrower,  the Lender and/or any designees of
the Lender,  are hereby  incorporated  by reference in this Agreement and made a
part hereof, except that in the event that there is a conflict between the first
sentence of this section 5 and the terms of the  Registration  Rights  Agreement
incorporated  herein,  the terms of the first  sentence  of this  section 5 will
govern.

     IN WITNESS WHEREOF the parties have caused this agreement to be executed by
their  proper  officers  and by having  their seals  affixed on the day and year
first above written.




                                   Lender
                                   ------


                                   /s/ Richard Strain
                                   --------------------
                                   RICHARD STRAIN


                                   Borrower
                                   --------

                                   NATHANIEL ENERGY CORPORATION


                                   By:  /s/ Stan Abrams
                                       ------------------

                                   Name:  Stan Abrams
                                         -------------

                                   Title: CEO/President
                                         --------------