THIRD AMENDMENT
I.J. Berthelot, II
Page 6 of 4




             THIRD AMENDMENT TO EMPLOYMENT AGREEMENT


       This  Third  Amendment  to  Employment  Agreement  ("Third

Amendment")  dated the 18th day of March 1998, is by and  between

Midcoast Energy Resources, Inc. (the "Employer" or the "Company")

and I.J. Berthelot, II (the "Employee").


                  W  I  T  N  E  S  S  E  T  H:


      WHEREAS,  the  Employer and the Employee executed  a  Third

Amendment to Employment Agreement, dated March 17, 1998, which is

superseded by this Third Amendment to Employment Agreement.

      WHEREAS,  the  Employer and the Employee  entered  into  an

Employment Agreement (the "Agreement"), effective April 17, 1995,

as  amended  by  that certain Amendment to Employment  Agreement,

dated  December  8, 1995 (the "First Amendment") and  as  further

amended by that certain Second Amendment to Employment Agreement,

dated  April  25,  1997 (the "Second Amendment") (the  Agreement,

First  Amendment and the Second Amendment shall be herein jointly

referred to as the "Agreement as Amended");

      WHEREAS, Employer and Employee agree that it is in both  of

their  best  interests to amend Section 4,  Term  of  Employment,

Section  5(A),  Base  Salary, Section 5(G), Other  Benefits,  and

Section  6(D),  Termination of Employment, and add Section  5(I),

Automobile  Allowance, Section 5(J), Executive Benefits,  Section

9, Accelerated Vesting of Stock Options, Section 10, Covenant Not

To Compete, and Section 11, Solicitation of Customers.

      NOW,  THEREFORE,  in consideration of  the  foregoing,  the

Employer and the Employee agree as follows:


1.   Section  4,  Term of Employment, shall be deleted  from  the
     Agreement as Amended and replaced with the following:

          Employee's  term  of employment shall commence  on  the
          Effective Date of the Agreement and shall terminate  on
          the  sixth  (6th)  anniversary  of  such  date,  unless
          earlier  terminated  in  accordance  with  Section   6,
          Termination of Employment.



2.   Section  5  (A),  Base  Salary, shall be  deleted  from  the
     Agreement as Amended and replaced with the following:

          "A.   Base  Salary.   For all services  rendered  under
          this  Agreement as Amended, beginning January 1,  1998,
          the  Employer  agrees  to pay the Employee  during  the
          Employment  Period an annual minimum salary  ("Salary")
          in  the amount of ONE HUNDRED THIRTY FIVE THOUSAND  AND
          NO/100 DOLLARS ($135,000.00) per year, payable in equal
          semi-monthly installments of FIVE THOUSAND SIX  HUNDRED
          TWENTY FIVE AND NO/100 DOLLARS ($5,625.00) each, or the
          equivalent  amount payable on any other periodic  basis
          consistent with the Employer's payroll procedures  (but
          no  less frequently than monthly).  Employer shall make
          appropriate  deductions  from  Employee's  Salary   for
          customary withholding taxes and other employment  taxes
          as  required  for salaried compensation under  Federal,
          State  or  Local  laws.   The foregoing  is  Employee's
          minimum Salary and may be adjusted upward from time  to
          time  by  Employer's  Board of Director's  Compensation
          Committee.   Employee's Salary shall be in addition  to
          any  bonuses (in cash or stock), which shall  be  given
          from time to time at the discretion of the President."



3.   Section  5(G),  Other Benefits, shall be  deleted  from  the
     Agreement as Amended and replaced with the following:

          G.    Other Benefits.     Employee shall be entitled to
          vacation  pay  in  accordance with  Employer's  written
          corporate  policy  and  to additional  paid  or  unpaid
          vacation  as approved by the President.  Such  vacation
          shall  be on a calendar year basis.  Effective  January
          1,  1998, Employee shall be entitled to four (4)  weeks
          vacation  pay.  In addition, Employee shall be entitled
          to  such  holidays  and sick leave  as  well  as  other
          benefits,  including  fringe benefits,  provided  other
          employees  of  Employer and other benefits  as  may  be
          agreed to by the parties.



4.   Section  6(D), Termination of Employment, shall  be  deleted
     from   the  Agreement  as  Amended  and  replace  with   the
     following:

          D.    This  Agreement as Amended may be  terminated  at
          Employee's option upon a Change of Control of  Company.
          As  used herein, "Change of Control" means (i) the sale
          of all or substantially all of the assets of Company to
          a  person  (other  than  a wholly-owned  subsidiary  of
          Company)  or  related group (as that term  is  used  in
          Section  13(d)(3)  of the Securities  Exchange  Act  of
          1934)  of persons (other than a wholly-owned subsidiary
          of  Company)  as  an  entirety or substantially  as  an
          entirety  in  one  transaction  or  series  of  related
          transactions, (ii) the first day on which a majority of
          the  members  of the board of directors of Company  are
          not continuing Directors (i.e., any member of the board
          of  directors who is a member of the board of directors
          on the date hereof or who was nominated for election to
          the board of directors with the affirmative vote of 2/3
          of  the  continuing Directors who are  members  of  the
          board  of  directors at the time of such nomination  or
          elections),  (iii) the acquisition  by  any  person  or
          group  (as so defined) or persons (other than a wholly-
          owned  subsidiary of Company) of more than  twenty-five
          percent  (25%)  of the total voting power  entitled  to
          vote  generally  in  the  election  of  the  directors,
          managers  or  trustees of Company, (iv) the liquidation
          or dissolution of Company, or (v) either Dan Tutcher or
          Employee  is  not  the  acting president  and/or  chief
          executive  officer of Employer.  In the event  Employee
          elects   to   terminate  his  employment   under   this
          provision,  Employee shall receive a lump  sum  payment
          equal to fifty percent (50%) of Employee's then current
          annual salary upon written notice of such election.


5.   The following is added to the Agreement as Amended:

          Section   5:  Compensation,  Subsection  I.  Automobile
          Allowance.  Effective January 1, 1998, Employee  shall,
          in  lieu  of being furnished with a company automobile,
          receive  a monthly automobile allowance of FIVE HUNDRED
          AND NO/100 DOLLARS ($500.00).
          
          Section   5:  Compensation,  Subsection  J.   Executive
          Benefits.  The Employee shall receive benefits  similar
          to  those provided other employees in similar executive
          level  positions who from time to time may be  employed
          by Employer.
          
          Section  9: Accelerated Vesting of Stock Options.   All
          of  the stock options previously or hereinafter granted
          to  the  Employee  under any and  all  agreements  with
          Employer  shall  become  immediately  exercisable   and
          vested  (i) should the Employer discharge Employee,  or
          (ii) upon termination of this Agreement as Amended,  as
          long  as such vesting is allowable under the Employer's
          stock  option plan pursuant to which Employee  received
          such options.
          
          Section  10: Covenant Not To Compete.  For a period  of
          twenty-four   (24)  months  from  the   date   of   any
          termination of Employee's employment with the Employer,
          Employee shall not (i) accept employment with or render
          any  services  to  or  form  an  association  with  any
          business directly competitive with the Employer in  the
          areas  where  it is doing business, or (ii)  employ  or
          offer  to  employ, in a professional  capacity  in  any
          business directly competitive with the Employer, in the
          areas where it is doing business, anyone who is or  has
          been  a  director, office, shareholder, or employee  of
          the   Employer.    Employee   acknowledges   that   the
          restrictions  imposed  by  this  agreement  are   fully
          understood and will not preclude Employee from becoming
          gainfully   employed   following   a   termination   of
          employment with the Employer.
          
          Section  11: Solicitation of Customers.  Unless  waived
          in writing by Employer, Employee further agrees that he
          will not, directly or indirectly, during the course  of
          employment  and  for  two  (2)  years  thereafter  upon
          termination   of   this  employment   contract   either
          voluntarily  or  involuntarily,  or  for   any   reason
          whatsoever, solicit the trade or patronage  of  any  of
          Employer's existing customers or prospective  customers
          with  whom  Employer is negotiating,  on  the  date  of
          termination,  regardless  of  the  location   of   such
          customers  or  prospective customers  of  the  Employer
          throughout  the  United  States  with  respect  to  any
          technologies, services, product, trade secret, or other
          matters in which the Employer is active.


6.   All  other  provisions  of the Agreement  as  Amended  shall
     remain in full force and effect and shall not be affected by
     this Third Amendment.

IN  WITNESS  HEREOF, the parties hereto have executed this  Third
Amendment, as of the date first written above.


EMPLOYER:                               EMPLOYEE:

MIDCOAST ENERGY RESOURCES, INC.


By: ________________________________
_____________________________
     Dan C. Tutcher, President                    I. J.
Berthelot, II


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