EXHIBIT 10.39
                              PROMISSORY NOTE

Date of Note:  May 30, 1995

Maker:  Midcoast Energy Resources, Inc.

Maker's Mailing Address:  1100 Louisiana  Suite 3030, Houston, TX  77003
Payee:  Texline Gas Company

Place for Payment:   P.O. Box 1050, Corpus Christi, TX  78403-1050

Principal Amount:  One Hundred Seventy Three Thousand Eight Hundred Twenty
                   Two Dollard and Sixteen Cents ($173,822.16)

Annual Interest Rate:   Prime Rate plus 1% per annum (as defined hereafter)

     The term "Prime Rate" as used herein shall mean the prime rate as 
announced from time to time by Mercantile Bank, N.A. of Corpus Christi, 
Texas, and thereafter entered in the Minutes of the Loan and Discount Committee 
of said bank, such interest rate automatically fluctuating upward and downward 
with each announcement without notice to Maker or any other person.

     Said rate shall be computed on a per annum basis of a year of 360 days and 
for the acual number of days elapsed, however, said maximum legal rate shall be 
computed on a full calender year (365/366 days) basis.  Article 5069 Chapter 15 
V.A.T.S. shall not in any event apply to the loan evidenced hereby.  After 
maturity hereof, unpaid principal and accrued interest shall bear interest from
maturity until paid at the rate of eighteen percent 918%) per annum, calculated
on a full year basis.

Terms of Payment:
                 Maker shall make monthly payments to Payee equal to 25% of 
Maker's net revenue check, after payment of expenses, received from its interest
in the Exxon SunField properties in Starr Co., Texas.  All remaining amounts
owed, including principal and accrued interest, shall be due and payable not 
later than June 1, 1996.

                 Maker reserves the right tp prepay, prior to maturity, all
or any part of the principal of this note without penalty, and interest shall 
immediately cease on any amounts prepaid.

                 Maker promises to pay to the order of Payee at the place for
payment and according to the terms of payment the principal amount plus interest
at the rates stated above.  All unpaid amounts shall be due by the final 
scheduled payment date.

                 On default in the payment of this note the unpaid principal 
balance and earned interest on this note shall become immediately due at
the election of Payee.  Maker and each surety, endorser, and guarantor waive
all demands for payment, presentations for payment, notices of intentions to
accelerate maturity, protests, and notices or protest.

                 If this note is given to an attorney for collection or
enforcement, or if suit is brought for collection or enforcement, or if it 
is collected or enforced through probate, bankruptcy, or other judicial
proceeding, Maker shall pay Payee all costs of collection and enforcement,
including reasonable attorney's fee and court costs, in addition to other
amounts due.

                 Interest on the debt evidenced by this note shall not exceed 
the maximum amount of nonusurious interest that may be contracted  for, taken,
reserved, charges, or received under law; any interest in excess of that 
maximum amount shall be credited on the principal of the debt or, if that has 
been paid, refunded.  On any acceleration or required or permitted prepayment,
any such excess shall be cnaceled automatically as of the acceleration or 
prepayment or, if already paid, credited on the principal of the debt or, if 
the principal of the debt has been paid, refunded.  This provision overrides 
other provisions in this and all other instruments concerning debt.

                When the context requires, singular nouns and pronouns 
include the plural.

     EXECUTED this        day of            , 1995.

Midcoast Energy Resources, Inc.

By:
   Dan C. Tutcher, President