AGREEMENT


          AGREEMENT dated July 16, 2004 between Nathaniel Energy Corporation,  a
Delaware corporation ("NEC"), and L & R Energy Company,  LLC, a New York limited
liability company ("L & R").

          WHEREAS,  NEC and L & R were parties to that certain  Gasifier  Supply
and Start-Up Agreement dated October 28, 2003 (the "Gasifier Agreement").

          WHEREAS,  on July  1,2004,  NEC served  notice of  termination  of the
Gasifier Agreement on L & R.

          WHEREAS,  NEC and L & R are  contemporaneously  herewith entering into
that certain contract dated July 16, 2004 (the "Accord") between Ecoidea S.R.L.,
Electronic Solar, European Waste Solutions, Inc., L & R and NEC.

          WHEREAS,  NEC and L & R wish to  release  certain  outstanding  claims
which they each have, or may have, in connection with the Gasifier Agreement, on
the terms set forth herein.

          WHEREAS, the parties desire to rescind the termination of the Gasifier
Agreement and reinstate the Gasifier  Agreement as amended hereby,  on the terms
set forth harem.

          NOW, THEREFORE,  for good and valuable consideration,  the receipt and
sufficiency of which is hereby acknowledged, and the agreements and covenants of
the patties set forth herein, it is hereby agreed as follows:

          1. Recission of Termination.
             ------------------------

               (a)  The   termination  of  the  Gasifier   Agreement  is  hereby
rescinded, and the Gasifier Agreement is hereby reinstated and in full force and
effect as if it had never been terminated, as amended hereby, and subject to the
Accord.

               (b) NEC's  agreement to rescind the  termination  of the Gasifier
Agreement is made upon  substantial  and material  reliance on the execution and
delivery of the Accord by all  parties  thereto  and the  enforceability  of the
Accord against all parties thereto.

          2.  Amendments to the Gasifier  Agreement.  The Gasifier  Agreement is
hereby  amended  to add the  following  Section  to  Article  3 of the  Gasifier
Agreement.

          "3.4 Conditions to NEC's Performance.  NEC's performance of its duties
and obligations under this Article 3 is conditioned upon all other parties which
are involved in the  development,  completion and start-up of the Works,  timely
performing their

<PAGE>

respective duties,  obligations and/or responsibilities at, and with respect to,
the Works, which are necessary to be done in order for NEC to be able to perform
any or all of its duties and obligations under this Section 3."

          3.  Representation.  L & R hereby  represents and warrants that it has
not  breached or violated any of the  provisions  of Section 7.4 of the Gasifier
Agreement in any manner.

          4. Release.

               (a) For the  purposes  of this  Section  4, each of NEC and L & R
shall be referred to as the  "Releasor" in the context of the  releasing  party,
and the "Releasee" in the context of the party being released.

               (b) Each of NEC and L & R., respectively,  as "Releasor",  hereby
discharges the other, as "Releasee", the Releasee,  Releasee's heirs, executors,
administrators,  successors  and  assigns  from all  actions,  causes of action,
suits,  debts,  dues,  sums  of  money,  accounts,   reckonings,  bonds,  bills,
specialties,   covenants,  contracts,   controversies,   agreements,   promises,
variances,  trespasses,  damages, judgments,  extents,  executions,  claims, and
demands whatsoever,  in law, admiralty or equity, which against the Release, the
Releasor,  Releasor's heirs, executors,  administrators,  successors and assigns
ever had, now have or hereafter  can, shall or may, have for, upon, or by reason
of any matter,  cause or thing  whatever  from the beginning of the world to the
day of the date hereof,  arising under the Gasifier Agreement or the transaction
to which the Gasifier Agreement relates.

               (c) The provisions of Section 4(b)  notwithstanding  the releases
set forth in  Section  4(b) shall be null and void and of no force nor effect ab
initio if the start up of the Works as set forth in that  certain  Agreement  to
Definition of Start-Up dated July 29, 2004,  between Ecoidea S.R,L.,  Electronic
Solar, European Waste Solutions,  Inc., L & R and NEC does not occur on a timely
basis for any reason.

          5. Press  Releases.  L &R shall  have the right to  approve  the press
release of NEC relating to L & R and this matter, prior to distribution thereof;
provided  however that NEC shall be entitled to make any  disclosure  that it is
required to make to meet its obligations under applicable securities laws, rules
and regulations.

         6. Conflict. To the extent that the terms and provisions of the Accord
or any schedules, exhibits or attachments conflicts with the terms and
provisions of this Agreement or the Gasifier Agreement as amended hereby, the
terms of the Accord and any schedules, exhibits, or attachments thereto, shall
govern.

          7. Force and Effect. The Gasifier Agreement,  as amended hereby, shall
be in full force and effect.


<PAGE>


          IN WITNESS WHEREOF, the undersigned have duly caused this agreement to
be executed as of the date first above written.

                                          NATHANIEL ENERGY CORPORATION


                                          By: /s/ Dennis Pungitore
                                             --------------------------------
                                          Name: Dennis Pungitore
                                               ------------------------------
                                          Title: Vice President Operations
                                                -----------------------------


                                          L & R ENERGY COMPANY, LLC



                                          By: /s/ Richard L. Franks
                                             --------------------------------
                                          Name: Richard L. Franks
                                               ------------------------------
                                          Title: Member
                                                -----------------------------


<PAGE>


                            L & R Energy Company, LLC
                           8821 S. Blue Mountain Place
                            Highlands Ranch, CO 80126


July 16,2004

Nathaniel Energy Corporation
8001 South InterPort Blvd., Suite 260
Englewood, CO 80112

Subject:  L&R Energy Company / Nathaniel  Energy  Corporation -- Gasifier Supply
          and  Start-Up   Agreement   dated  28  October  2003   relating  to  a
          co-generation waste-to-energy plant in Cologna Veneta (the "Plant")


     With  reference to the agreement  referred to in the subject  matter and to
the  agreement  signed  on the  date  hereof  by  and  between  Ecoidea  S.r.l.,
Electronic Solar S.r.l, European Waste Solution Inc., L&R Energy Company LLC and
Nathaniel  Energy Corp.,  relating to the achievement of the entry into exercise
of the Plant within 31 July 2004, we hereby agree that,  being  understood  that
the first entry into  exercise of the first line of the Plant stall occur within
31 July  2004,  as  already  agreed  between  the  parties  and in line with the
prescriptions  of the  Resolution  of the Region Veneto No. 2926 dated 3 October
2003, the term for the supply and start-up of the Plant,  as provided for in the
agreement  referred to in the subject  matter,  is postponed  until 30 September
2004.

     As a  consequence  of  the  above,  any  claim  for  damages,  indemnities,
reimbursements,  liquidated  damages for delay in the supply and start-up of the
Plant may be exercised only in case of a delay commencing on 1 October 2004.

     Any other provision of the agreement  referred to in the subject matter, as
well as of the agreement  entered into on the date hereof which is not expressly
amended herewith shall remain  unchanged,  including each and all the guarantees
on the operation of the Plant and its successful start-up.


                                                    /s/ Richard L. Franks
                                                    ----------------------------
                                                    L&R ENERGY COMPANY LLC
                                                    Richard L. Franks
                                                    Member


For confirmation and acceptance:


/s/ Dennis W. Pungitore
-----------------------------------
NATHANIEL ENERGY CORPORATION
Dennis W. Pungitore, Vice President Operations