162 (7-85) GPC

                                                           162-0159-90 (Stamped)

                              GAS PURCHASE CONTRACT
                              ---------------------

     THIS  AGREEMENT, made and entered into this    22 day of __JUNE__,19_92_,by
                                                 -----          ----      --
and  between  WARREN  PETROLEUM  COMPANY,  a  Division  of  Chevron U.S.A. Inc.,
hereinafter  referred  to  as  "Buyer",  and  JUBILEE  OIL  & GAS CORPORA'I'ION,
hereinafter  referred  to  as  "Seller";

WITNESSETH:

     WHEREAS,  Seller owns and holds one or more valid and subsisting oil and/or
gas  mining  leases  covering  the  following described lands situated and being
within  the  County  of  Ward,  State  of  Texas,  to-wit:

     Pennzoil  Hartwich  Lease     -     Section  219,  Block  34,  H&TC Survey

and,

     WHEREAS,  Seller  is  operating  the above-described properties and certain
wells on said lands are productive, of what is termed casinghead gas, and/or gas
well  gas,  and  Seller  desires to sell the gas which may hereafter be produced
from  wells  located  on  said  premises;  and,

     WHEREAS,  Buyer  desires  to  purchase  said  gas;
     NOW,  THEREFORE, in consideration of the mutual covenants and agreements to
be kept and performed by the parties, Seller hereby grants, bargains, sells, and
agrees  to deliver to Buyer and further agrees to purchase and take from Seller,
subject  to  the  stipulations  and  conditions  hereinafter specified, Seller's
interest  in  gas  now or hereafter Produced from wells on the lands hereinabove
described.

1.     PURPOSE-  The  gas  hereby  sold  is conveyed to Buyer for the purpose of
       -------
extracting  therefrom  liquid hydrocarbons. Seller agrees that prior to delivery
to Buyer, the gas shall not be processed other than in a conventional mechanical
gas  oil  separator  or  separators,  operating with no internal piping for heat
interchange.  The  term "gas' as used throughout this contract means gas issuing
from  oil  wells  or  gas  produced  from  gas  wells as classified by the Texas
Railroad  Commisson.

2.     DELIVERY  PLACE-  The  delivery  of gas shall he made at vapor tight flow
       ---------------
ranks  and/or  gas  traps  furnished  by Seller and/or at the casingheads of the
wells.  Buyer may, with Seller's consent, install equipment acceptable to Seller
on  Seller's  storage  links  for  the  purpose  of  saving and utilizing vapors
therefrom,  which  vapors  for  the purpose of this contract shall he considered
gas.

3.     DELIVERY  DATE-  The  delivery  and reception of said gas hereunder shall
       --------------
begin  on  or  before  sixty  (60)  days  from the date this contract, signed by
Seller,  is  received by Buyer at its offices in Tulsa, Oklahoma. If Buyer fails
to  accept  and/or  agree to pay for said gas by said date, Seller's sole remedy
shall  be  the  right  to cancel this contract any time thereafter before actual
utilization  begins  by serving ten (10) days' written notice on Buyer, in which
event  this contract shall terminate at the end of said ten-day period unless on
or  before the last day thereof Buyer either starts receiving said gas or agrees
to  pay  for  the  same  as  though  received.


                                                          (HAND WRITTEN)C-162158
                                                           -------------
<PAGE>
                                                                   162(7-85)/GPC
                                                     (HAND STAMPED)  162-0159-00

4.     LEAN  AND  FLUSH  GAS- Buyer agrees to take all the gas testing more than
       ---------------------
0.50  gallons  of  gasoline  to one thousand (1,000) cubic feet of gas, provided
that  during  flush  gas  production  and  during  periods of curtailment by the
residue  gas  purchaser  or purchasers Buyer shall only be obligated to take gas
ratably  as to quantity with all other casinghead gas connected to its gathering
line  and only obligated to take gas well gas ratably with other gas well gas of
the  same  type  connected  to  Buyer's  plant.  A flush gas condition is hereby
defined  to  exist  whenever  Buyer's gathering line or plant is of insufficient
capacity  to  gather  or  process all of the gas connected thereto. Unless Buyer
within  six  (6) months from the commencement of such excess production arranges
to  take  or  pay  for any part or all of such excess gas, Seller shall have the
right  to  dispose  of  any  such  excess  gas not taken or paid for by Buyer.
4.     RESIDUE  GAS-  The  term 'residue gas' is defined as and shall be any gas
       ------------
connected  to Buyer's plant gas gathering system which is sold before processing
or  which  is  discharged  in  the form of gas from the gas processing facility.
Buyer  shall not be obligated to return residue gas to Seller's lease for use in
the  development and operation of such lease, though Buyer may do so at any time
that  it so elects. Until such time as Buyer does return residue gas to Seller's
lease, Seller may use gas produced from said lease for the purpose of developing
and  operating  the  lease,  excluding  the  use  of  gas for gas lifting or for
pressure  maintenance and/or cycling operations. Upon Buyer's election to return
residue  gas,  Buyer  agrees  to return to the nearest boundary line of Seller's
lease, heretofore described, sufficient residue gas for developing and operating
said lease, the amount of such gas not to exceed an amount equal to the "residue
gas  remaining"  as  hereinafter  determined,  provided  that  in  the event the
"residue  gas  remaining"  shall  be insufficient in quantity for the purpose of
developing and operating said lease, Seller hereby reserves the right to use gas
from  its  lease sufficient in quantity to make up the deficiency. The volume of
residue  gas  returned  to  Seller  shall  be  computed  on  the  same  basis of
measurement  as  provided  in  Paragraph 9, MEASUREMENT; provided, however, such
volume  of  residue  gas may, at Buyer's option, be estimated in accordance with
methods  followed  generally in the natural gas processing industry. Utilization
of  said  residue  gas  so  delivered by Buyer shall be at Seller's risk. In the
event  Seller  accepts  and uses residue gas furnished by Buyer in excess of the
amount  of  residue  gas to which Seller is entitled, Seller shall pay Buyer for
such  gas  at the weighted average price per MCF paid by the major purchasers of
residue  gas sold from Buyer's plant for the residue gas sold to such purchasers
from said plant. In the event Seller accepts and uses gas other than residue gas
in excess of the amount of residue gas to which Seller is entitled, Seller shall
pay  Buyer  for  such excess gas at Buyer's cost at point of delivery to Seller.
Seller  shall  not  permit  wasteful  use  of  gas  returned hereunder. The term
"wasteful  use" shall include, but not by way of limitation, the use of gas as a
working  fluid in steam pumps or turbines and the burning of gas in open flares.
The volume of "residue gas remaining" shall be determined by (1) multiplying the
volume  of  said  gas  delivered  from  said lease by the applicable theoretical
percentage  as  shown  in the following table, the result being the "theoretical
volume  of  residue  gas  remaining" from the gas delivered from said lease, (2)
dividing  the  "total actual volume of residue gas remaining" (determined in the
manner  hereinafter  provided) from all gas delivered to said plant by the total
"theoretical  volume  of  residue  gas remaining" from all gas delivered to said
plant  (the  latter being the sum of the theoretical volumes for all leases from
which  gas  is delivered to said plant determined as to each lease in accordance
with (1) above) and expressing the result in percentage, and (3) multiplying the
"theoretical  volume  of residue gas remaining" from Seller's said lease by said
last-mentioned  percentage.  The  "total actual volume of residue gas remaining"
from  all  gas  delivered to said plant as used herein shall mean that volume of
residue gas remaining, after the extraction of gasoline and additional products,
from  all  gas  processed  in  Buyer's  plant,  less  the  volume of residue gas
necessary  for  plant  operation.  Said  "total  actual  volume  of  residue gas
remaining"  shall  be measured by suitable orifice meters of standard make to be
installed  and  kept  in repair by Buyer at the various points where the residue
gas  is delivered to producers and to purchasers (if not measured by purchasers)
and to flare; provided, however, that Buyer shall not be required to measure the
deliveries  of  small  quantities  of  residue  gas  which would not, in Buyer's
judgment,  justify a meter installation and the volumes of such deliveries shall
he  estimated  by  Buyer  in  accordance  with methods followed generally in the
natural  gas  processing  industry.


                                        2
<PAGE>
162-  0159-00  (STAMPED)                                        162(7-85)/GPC


Notwithstanding  anything  in this agreement to the contrary, Buyer, at its sole
discretion,  may  at  any  time  change the residue gas allocation procedure set
forth herein to a procedure which takes into account the BTU content of the gas,
thereby providing that the total BTU's in the actual Plant residue gas remaining
will  he  allocated  between leases/wells connected to the Plant on the basis of
the theoretical BTU's remaining from each lease/well after the extraction of the
products  and  the consumption of fuel. Likewise, Buyer may change the method of
product  allocation  set  forth  herein  to one based on the theoretical product
content  of  the  gas  from  each  lease/well  as  determined by measurement and
chromatographic  analysis  of  the  gas  from  each  lease/well.


Theoretical Percentage of Gas Remaining as Residue After Extraction of Gasoline
-------------------------------------------------------------------------------
and Plant Use Based Upon Gasoline Content in Gallons per 1,000 Cubic Feet (GPM).
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
GPM      %     GPM     %     GPM     %     GPM     %     GPM     %      GPM     %      GPM     %
----  -------  ----  ------  ----  ------  ----  ------  ----  ------  -----  ------  -----  -----
<S>   <C>      <C>   <C>     <C>   <C>     <C>   <C>     <C>   <C>     <C>    <C>     <C>    <C>
 .00    100.00  2.00   72.90  4.00   54.30  6.00   38.30  8.00   25.10  10.00   13.70  12.00   3.50
 .05     93.10  2.05   72.45  4.05   53.85  6.05   37.90  8.05   24.80  10.05   13.35  12.05   3.25
 .10     92.60  2.10   72.00  4.10   53.40  6.10   37.50  8.10   24.50  10.10   13.00  12.10   3.00
 .15     92.10  2.15   71.50  4.15   52.95  6.15   37.20  8.15   24.25  10.15   12.75  12.15   2.75
 .20     91.50  2.20   71.00  4.20   52.50  6.20   36.90  8.20   24.00  10.20   12.50  12.20   2.50
 .25     91.05  2.25   70.50  4.25   52.15  6.25   36.55  8.25   23.65  10.25   12.25  12.25   2.30
 .30     90.50  2.30   70.10  4.30   51.80  6.30   36.20  8.30   23.30  10.30   12.00  12.30   2.10
 .35     90.05  2.35   69.60  4.35   51.30  6.35   35.80  8.35   22.95  10.35   11.75  12.35   1.85
 .40     89.60  2.40   69.10  4.40   50.80  6.40   35.40  8.40   22.60  10.40   11.50  12.40   1.60
 .45     89.00  2.45   68.65  4.45   50.40  6.45   35.10  8.45   22.30  10.45   11.25  12.45   1.40
 .50     88.40  2.50   68.20  4.50   50.00  6.50   34.80  8.50   22.00  10.50   11.0O  12.50   1.20
 .55     87.85  2.55   67.70  4.55   49.65  6.55   34.45  8.55   21.70  10.55   10.75  12.55    .90
 .60     87.30  2.60   67.20  4.60   49.30  6.60   34.10  8.60   21.40  10.60   10.50  12.60    .60
 .65     86.80  2.65   66.70  4.65   48.85  6.65   33.80  8.65   21.10  10.65   10.25  12.65    .35
 .70     86.30  2.70   66.20  4.70   48.40  6.70   33.50  8.70   20.80  10.70   10.00  12.70    .10
 .75     85.75  2.75   65.75  4.75   47.95  6.75   33.15  8.75   20.55  10.75    9.75
 .80     85.20  2.80   65.30  4.80   47.50  6.80   32.80  8.80   20.30  10.80    9.50
 .85     84.70  2.85   64.90  4.85   47.15  6.85   32.50  8.85   20.05  10.85    9.25
 .90     84.20  2.90   64.50  4.90   46.90  6.90   32.20  8.90   19.80  10.90    9.00
 .95     83.65  2.95   63.95  4.95   46.35  6.95   31.85  8.95   19.50  10.95    8.75
1.00    83.10  3.00   61.40  5.00   45.90  7.00   31.50  9.00   19.20  11.00    8.50
1.05    82.50  3.05   62.95  5.05   45.50  7.05   31.15  9.05   18.85  11.05    8.25
1.10    81.90  3.10   62.50  5.10   45.10  7.10   30.80  9.10   18.50  11.10    8.00
1.15    81.50  3.15   62.00  5.15   44.75  7.15   30.50  9.15   18.20  11.15    7.70
1.20    80.90  3.20   61.50  5.20   44.20  7.20   30.20  9.20   17.90  11.20    7.40
1.25    80.40  3.25   61.00  5.25   43.85  7.25   29.95  9.25   17.60  11.25    7.20
1.30    79.90  3.30   60.50  5.30   43.50  7.30   29.50  9.30   17.30  11.30    7.00
1.15    79.45  3.35   00.15  5.35   43.05  7.35   29.25  9.35   17.05  11.35    6.75
1.40    79.00  3.40   59.80  5.40   42.60  7.40   29.00  9.40   16.80  11.40    6.50
1.45    78.50  3.45   59.30  5.45   42.25  7.45   28.65  9.45   16.50  11.45    6.25
1.50    78.00  3.50   58.80  5.50   41.90  7.50   28.30  9.50   16.20  11.50    6.00
1.55    77.50  3.55   58.15  5.55   41.55  7.55   28.00  9.55   16.00  11.55    5.80
1.60    77.00  3.60   57.90  5.60   41.20  7.60   27.70  9.60   15.80  11.60    5.60
1.65    76.50  3.65   57.40  5.65   40.80  7.65   27.30  9.65   15.50  11.65    5.35
1.70    76.00  3.70   56.90  5.70   40.40  7.70   26.90  9.70   15.20  11.70    5.10
1.75    75.50  3.75   56.55  5.75   40.15  7.75   26.70  9.75   14.95  11.75    4.95
1.80    75.00  3.80   56.20  5.80   39.90  7.80   26.50  9.80   14.70  11.80    4.60
1.85    74.50  3.85   55.75  5.85   39.50  7.85   26.20  9.85   14.41  11.85    4.35
1.90    74.00  3.90   55.30  5.90   39.10  7.90   25.90  9.90   14.20  11.90    4.10
1.95    73.45  3.95   54.80  5.95   38.70  7.95   25.50  9.95   13.95  11.95    3.80
</TABLE>


                                        3
                                                      (HAND WRITTEN)  C - 162158
<PAGE>
                                                                  162 (7-85)/GPC

6.     DILUTFD  GAS-  Should  Seller's  operations under this paragraph create a
       ------------
condition  which  in  the  exclusive  judgment  of  Buyer  makes  the taking and
utilization  of  gas  therefrom unprofitable to Buyer, or should such operations
tend  to  endanger  the  plant  or  property  of  Buyer  or the lives of Buyer's
employees  should  such diluted or contaminated gas be taken, then Buyer, at its
election, may discontinue taking the gas from the particular well or wells while
being  so  operated.

7.       RIGHT  OF  WAY  - To the full extent that Seller is able to convey such
         --------------
rights,  Seller  hereby  assigns  and  grants  to  Buyer  an easement across the
premises  covered  hereby to lay and maintain lines and to install, maintain and
operate any equipment necessary to its operations hereunder and Buyer shall have
the  right  of  free  entry  for  any purpose connected therewith. All lines and
equipment  placed  by  Buyer on said premises shall remain the property of Buyer
and  may  he  removed  by  Buyer  before  or  within a reasonable time after the
expiration  of  this  Agreement.

8.     SETTLEMENT  TESTS-  The  gasoline  content per thousand cubic feet of gas
       -----------------
delivered to Buyer hereunder shall be determined by a field compression test, or
chromatographic  analysis,  at  Buyer's  option,  made  in  accordance  with the
official  code  of  the  Gas  Processors Association for testing natural gas for
gasoline  content.  The  specific  gravity  shall  be determined by the use of a
gravitometer  of  the  Ranarex type. The tests for gasoline content and specific
gravity  shall  be  made  by  Buyer  semiannually except when, in the opinion of
either  party,  a  change  in  the method of operations of the lease will affect
materially  the gasoline content and specific gravity of the gas, in which event
the tests shall be made at the demand of either party upon five (5) days' notice
to  the other party. Buyer shall notify Seller in writing ten (10) days previous
to  the  semiannual  tests in order that it may have a representative present to
witness  said tests and/or make joint tests with its own appliances. The content
tests  shall  be computed to a standard pressure base of 14.65 pounds per square
inch  absolute  and  at  a  standard  base  temperature  of  sixty  (60) degrees
Fahrenheit.

9.     MEASUREMENT-  The gas delivered hereunder shall be measured by a suitable
       -----------
orifice  meter, or meters, of standard make to be furnished, installed, and kept
in  repair  by  Buyer near tile point of delivery of such gas. Buyer may, at its
option,  install  an  electronic  flow  recorder  to  record  the  static  and
differential  pressures,  flowing  temperature  and  volume of such gas. All gas
volumes  measured  hereunder  shall  be  computed to a standard pressure base of
14.65  pounds  per  square inch absolute at a standard base temperature of sixty
(60)  degrees  Fahrenheit. For purposes of measurement computations tile average
atmospheric  pressure shall be assumed to be 13.2 pounds per square inch and the
average  flowing  temperature  shall  be  assumed  to  be  sixty  (60)  degrees
Fahrenheit.  All  orifice  coefficient  computations shall be made in accordance
with  published  procedures  adopted  as  American  National  Standard, "Orifice
Metering of Natural Gas," published as ANSI-API 2530 (Formerly prescribed by the
API  and  published  as  API2530, including therein the American Gas Association
Report  No.  3  adopted  in  1975  by  API  and further approved by the American
National  Standards  Institute June 28, 1977) as amended or revised from time to
time,  except  that  the Reynolds Number, Expansion, and Manometer Factors shall
each be considered as unity, and only those gas volumes measured at pressures of
100  pounds  per  square  inch gauge or greater shall be corrected for deviation
from  Boyle's  Law. Notwithstanding the foregoing, at Buyer's option the flowing
temperature  of  the  gas  may be determined by means of a recording thermometer
installed  by and at the expense of Buyer. In the event Buyer elects to exercise
such  option,  the  arithmetical average of the recorded temperatures of the gas
delivered during each month shall be deemed to be the temperature of such gas so
delivered  during  such  month.  Buyer  shall  test, and if necessary adjust and
repair,  any  meter installed by it hereunder at or about the time the tests for
gasoline content are made. Said meter, or meters, shall be open to inspection at
all  times by Seller in the presence of Buyer. In case any question arises as to
the  accuracy  of  the meter measurement, said meter, or meters, shall be tested
upon the demand of either party. The expense of such tests shall be borne by the
party  demanding  same if the meter is found to be correct and by Buyer if found
incorrect.  A  registration  within 2% of correct shall be considered correct.


                                        4
                                                      (HAND WRITTEN)  C - 162158
<PAGE>
                                                                  162 (7-85)/GPC

If  at  any time any of the measuring or testing equipment is found to be out of
service,  or registering inaccurately in any percentage, it shall be adjusted at
once  to  read  accurately, within the limits prescribed by the manufacturer. If
such  equipment  is  out  of  service,  or inaccurate by an amount exceeding two
percent  (2%)  at  a  reading  corresponding to the average rate of flow for the
period  since  the  last preceding test, the previous readings of such equipment
shall  be  disregarded for any period definitely known or agreed upon, or if not
so  known or agreed upon, for a period of sixteen (16) days or one-half (1/2) of
the  elapsed  time  since the last test, whichever is shorter. The volume of gas
delivered  during  such  period  shall  be  estimated  by:

(a)     Using  the  data  recorded by any check-measuring equipment if installed
and  accurately  registering,  or  if not installed or registering accurately;
(b)     By  correcting  the error if the percentage of error is ascertainable by
calibration,  test  or  mathematical  calculation,  or if neither such method is
feasible;
(e)     By  estimating the quantity, or quality, delivered based upon deliveries
under  similar  conditions  during  a  period when the equipment was registering
accurately.                No  corrections  shall  be  made  for  recorded
inaccuracies  of  two  percent  (2%)  or  less.
If  requested,  Buyer  shall send charts or flow computer unit data printouts to
Seller  for  checking  after  which  they  shall  be  returned  to  Buyer.

10.    PRICE
       -----

A.     Natural  Gasoline  Value- The gasoline content values due each connection
       ------------------------
shall be determined by multiplying the "Total Gasoline Value" by a fraction, the
numerator of which is the "Adjusted Gasoline Content of Each Connection" and the
denominator  of which is the "Adjusted Gasoline Content of All Connections," and
then  multiplying  the  result  by  whichever  of  the  following percentages is
applicable,  to-wit:

     Monthly  Delivered  Volume  (MCF                             Percentage
     --------------------------------                             ----------

     Less  than  9,125                                                55%
     9,125  or  more,  but  less than 15,200                          60%
     15,200  or  more                                                 65%

The  "Total  Gasoline Value" shall be the total value invoiced for deliveries of
natural  gasoline.

The  "Adjusted  Gasoline  Content  of  Each  Connection"  shall be determined by
multiplying  the  "Gasoline  Content  Per Thousand Cubic Feet", as determined in
accordance with Section 8 hereunder, by a fraction, the numerator of which shall
be  the "Actual Net Plant Production of Natural Gasoline" and the denominator of
which  shall  be the "Gasoline Content of all Connections", then multiplying the
result  by  the  applicable  measured  volume  of  gas  from  each  connection.
The  "Actual  Net  Plant  Production of Natural Gasoline", expressed in gallons,
shall  be  the  total  net deliveries of natural gasoline adjusted for change in
inventory.

The  "Adjusted  Gasoline  Content  of  All  Connections" shall be the sum of the
"Adjusted  Gasoline  Content  of  Each  Connection"  for  all  connections.

The  "Gasoline  Content  of  all  Connections"  shall be the sun or the products
obtained  by  multiplying the "Gasoline Content Per Thousand Cubic Feet" of each
connection  by  the  applicable  measured  volume  of  gas from each connection.

                                        5
                                                      (HAND WRITTEN)  C - 162158
<PAGE>
                                                                  162 (7-85)/GPC

B.     Additional  Products  Value-  The  additional  products  value  for  each
       ---------------------------
connection  shall  he  determined  by multiplying the "Total Additional Products
Value"  by  a fraction, the numerator of which is the "Adjusted Gasoline Content
of each Connection", as defined in Section 10-A, and the denominator of which is
the "Adjusted Gasoline Content of all Connections", also as defined in 10-A, and
then  by  whichever  of  the  following  percentages  is  applicable,  to-wit:

     Monthly  Delivered  Volume  (MCF                            Percentage
     --------------------------------                            ----------
     less  than  9,125                                               55%
     9,125  or  more,  but  less  than  15,200                       60%
     15,200 or more                                                  65%

The  "Total  Additional  Products  Value"  shall be the total value invoiced for
deliveries  of additional products. The value invoiced shall include any and all
adjustments  from prescribed quality specifications including but not limited to
impurities  and contamination claims, if allowed by Buyer, but shall not include
any  cash  discounts.

Notwithstanding  the  foregoing,  the  individual  liquid  hydrocarbon products,
delivered  by  Buyer into a pipeline operated by others or delivered to remotely
located  fractionation  facilities  owned  by  Buyer or remotely located storage
owned  by  Buyer  shall he deemed to have been sold; and each of said individual
products  except methane shall be priced for settlement purposes hereunder at an
amount  per  gallon equal to the weighted average price per gallon paid by Buyer
for  all like product purchased by it under arms-length contracts from suppliers
(other than any corporation more than 50% of the capital stock of which is owned
directly  or  indirectly  by  Buyer  or  other  entity which controls Buyer) and
delivered  during  such  settlement  period  into  Chevron  Pipe  Line Company's
(formerly  Gulf Pipeline Company's) LPG Pipeline System at points west of Taylor
County,  Texas,  for  transportation  to  Buyer's  MtBelvieu  fractionation
facilities.  Methane,  if  any  shall  be priced at the same price as heretofore
provided  for  ethane.

In  the  event  such  deliveries  of  said  products to Buyer's remotely located
fractionation  or  storage facilities are made as a composite stream or streams,
the composition of such composite stream delivered during each accounting period
hereunder  shall  be deemed to be the same as that revealed by a chromatographic
analysis  of  a  representative sample of such stream taken by Buyer during such
month.  Such  samples  shall  be  analyzed  at  Buyer's  expense.

The parties hereto acknowledge that governmental regulations, both currently and
prospectively,  may  limit  the  price  Buyer  may  charge third parties for the
respective  liquid products attributable to the gas purchased hereunder. When so
limited,  Buyer may elect to pay Seller, notwithstanding the above paragraph, an
amount  equal  to the applicable percentage of such limited price, multiplied by
the  volume  of  the  subject  product  saved and sold at Buyer's Plant which is
attributable  to  Seller's  gas  purchased  hereunder.

C.     Residue  Gas  Sales Value - If the "residue gas remaining" (determined as
       -------------------------
heretofore  provided)  from  Seller's  gas shall he more than sufficient for the
needs and requirements of Seller for development and operation purposes upon the
premises from which said gas is produced, Buyer shall have the right to sell any
or  all  of  such  surplus residue gas or to use such surplus residue gas in its
operations.  If  Buyer  sells  any  surplus  residue  gas remaining from the gas
delivered  hereunder, Buyer shall pay to Seller eighty percent (80%) of the "net
proceeds  received  from the sale of such residue gas," hereinafter defined. The
"net  proceeds received from the sale of such residue gas" shall be deemed to be
the gross proceeds received from the sale of such residue gas less Buyer's costs
of  treating, dehydrating, and compressing such gas to the pressure required for
delivery  to  the  purchaser thereof (whether treated, dehydrated, or compressed
before  or  after  processing  in  Buyer's  plant),  and  less  the  cost of any
transportation  necessary  to  market  the residue gas. For the purposes hereof,
Buyer's  said  treating  cost  shall  be deemed to be 0.5  per MCF, Buyer's said
dehydration  cost  shall  be  deemed  to  be  0.25  per  MCF,  and  Buyer's said
compression  cost  shall  be  deemed  to  be  1.0  per  MCF  for  each  stage of
compression.


                                        6
<PAGE>
In  the event Buyer should elect to utilize the surplus residue gas attributable
to  the  gas  delivered hereunder, said residue gas shall he valued at the price
Warren receives for said gas from the Company, Division, or Department utilizing
such  gas.

The  volume  of  surplus  residue  gas available for sale from the gas delivered
hereunder  shall be the remainder obtained by subtracting the volume, determined
either  by  estimate  or  measurement, that actually was delivered to Seller for
lease  operation  during  the  month for which settlement is to be made from the
volume  of  "residue  gas  remaining"  determined  by application of Paragraph 5
hereof.  The volume of surplus residue gas sold from the gas delivered hereunder
shall  be  deemed  to  be that proportionate part of the total volume of surplus
residue  gas  sold  from  Buyer's  plant which the volume of surplus residue gas
available  for  sale  from  the  gas delivered to Buyer hereunder, determined as
heretofore  provided, bears to the total volume of surplus residue gas available
for  sale  from  all  gas  delivered  to  Buyer  for  processing  in such plant.

11.     SEVERANCE  TAXES - Buyer hereby agrees to reimburse Seller for all state
        ----------------
severance  taxes  which  are  actually  borne by Seller and which Buyer actually
collects  from  its  purchaser of residue gas under the terms of Buyer's residue
sales  contract  or  applicable  law  or  regulation.

12.     FUEL  GAS  &  ELECTRICAL  POWER-  In  the event, Buyer elects to utilize
        -------------------------------
electrical  power  in  the  operation  of compressors at the processing plant or
located  in the field, such electrical power costs will be allocated to Seller's
gas by multiplying the total electrical power cost times a factor, the numerator
of  which  is the volume of gas delivered hereunder and the denominator of which
is  the  total  volume  of  gas utilizing such electrical cost. This total lease
allocated  electric  cost  will  then be subtracted from the lease residue value
before  dividing  the  residue  income  between  Buyer and Seller as provided in
Section  C  of  Article  10.

13.     PAYMENT  -  Payment shall he mailed by Buyer not later than the last day
        -------
of each month for all gas purchased hereunder during the preceding month, and at
the  time  payment is made a statement showing full details of the account shall
he  transmitted  to  Seller  accompanying  Buyer's  check  in  payment therefor.
Examination  by Seller of the books of account kept by Buyer respecting said gas
account  shall  be  permitted  by  Buyer  at  any  and all reasonable hours. All
statements  rendered  to  Seller  by  Buyer  during  any  calendar year shall be
conclusively  presumed  to  be  true  and  correct after twenty-four (24) months
following  the end of any such calendar year, unless within the said twenty-four
month period Seller takes written exception therein and makes claim on Buyer for
adjustment.  Failure on the part of Seller to make claim on Buyer for adjustment
within  such  period  shall  establish  the correctness thereof and preclude the
filing  of  exceptions  thereto  or  making  of claims for adjustment thereof.
If  the  lease  or leases described herein are owned by two or more parties, the
Gas  Purchase Statement will be sent to the operator and payment of any sums due
to  Seller  hereunder  shall be made to the party designated as Operator of such
lease or leases and he shall make proper distribution of the sums to the parties
Seller.

14.     TITLE  -  Title to the gas conveyed hereunder shall pass to Buyer at the
        -----
point  of  delivery.  Seller  warrants  that it has clear title to the gas being
conveyed  hereunder and that it has good and merchantable title in the leasehold
from  which the gas is produced. Seller also warrants and represents that it has
a  good  and  clear  right  to  sell all of the gas conveyed to Buyer hereunder.
Seller  also  agrees that upon demand by Buyer it will submit abstracts of title
covering  said  leasehold  and  such  other  documents  as  may  be necessary or
desirable to satisfy the attorneys of Buyer that Seller has good and clear title
to  the  gas  being  conveyed hereunder; provided, however, that if the title of
Seller  is  questioned, or involved in any action, Buyer shall have the right to
withhold payment for such gas without liability for interest during the pendency
of  such action or until said title is freed from such question, or until Seller
furnishes  Buyer  with  a bond acceptable to Buyer that will save Buyer harmless
from  any losses that may arise from Buyer having made payment to Seller for gas
in  which  Seller  did  not  have  a  good  and  clear  title.


                                        7
<PAGE>
                                                                  162 (7-85)/GPC

15.     ROYALTY  -  Seller  agrees  to  account  and pay to the persons entitled
        -------
thereto  all  royalties,  overriding  royalties,  bonus  payments and production
payments due with respect to the gas sold or delivered hereunder. Seller further
agrees  to  defend,  indemnify  and hold Buyer harmless from all suits, actions,
debts,  accounts, damages, costs (including court costs and reasonable attorneys
fees),  losses  and  expenses  arising  from  or  out of any of said payments.

16.     DRIP  -  Buyer  shall  keep  reasonably  clear  of  obstruction  all its
        ----
pipelines  through  which  said gas is being delivered and shall own all liquids
collecting  in  such  lines.

17.     FORCE  MAJEURE-  In  the  event  of  either  party hereto being rendered
        --------------
unable,  wholly  or in part, by force majeure to carry out its obligations under
this  Agreement,  other  than to make payments due hereunder, the obligations of
the  party  suffering  force  majeure,  so  as  they  are affected by such force
majeure,  shall  be  suspended  to  the  extent and for the period of such force
majeure condition. Such party suffering force majeure shall give notice and full
particulars  of such force majeure in writing or by telegraph to the other party
as  soon  as possible after the occurrence of the cause. Such cause shall as far
as  possible  he remedied with all reasonable dispatch. The term "force majeure"
as employed herein shall mean acts of God, strikes, lockouts or other industrial
disputes  or  disturbances,  acts  of  the  public  enemy,  wars,  blockades,
insurrections,  riots,  epidemics,  landslides,  lightning,  earthquakes, fires,
storms,  floods,  washouts,  arrests  and  restraints of governments and people,
civil  disturbances,  explosions, breakage or accidents to machinery or lines of
pipe, the making of repairs or alterations to lines of pipe or plants, inability
to  secure  labor  or  materials, freezing of wells or lines of pipe, partial or
entire  failure  of wells or gas supply, necessity for compliance with any court
order,  or  any  law,  statute,  ordinance, regulation or order promulgated by a
governmental  authority having jurisdiction, inclement weather that necessitates
extraordinary  measures  and  expense  to  construct  facilities and/or maintain
operations  and  any  other  causes,  whether  of  the kind enumerated herein or
otherwise,  not within the control of the party claiming suspension and which by
the  exercise of due diligence such party is unable to prevent or overcome. Such
term  shall likewise include (a) in those instances where either party hereto is
required  to  obtain  servitudes,  right-of-way  grants,  permits or licenses to
enable  such  party  to fulfill its obligations hereunder, the inability of such
party  to  acquire,  or  delays  on  the  part  of  such  party in acquiring, at
reasonable cost and after the exercise of reasonable diligence, such servitudes,
right-of-way  grants,  permits  or  licenses,  and  (b) in those instances where
either  party  hereto  is  required  to  furnish  materials and supplies for the
purpose  of  constructing  or  maintaining  facilities  or is required to secure
permits  or  permissions  from  any  governmental agency to enable such party to
fulfill  its  obligations  hereunder, the inability of such party to acquire, or
delays  on the part of such party in acquiring, at reasonable cost and after the
exercise  of  reasonable  diligence,  such  materials,  supplies,  permits  and
permissions.  It  is  understood  and  agreed  that the settlement of strikes or
lockouts  shall  be  entirely  within  the  discretion  of  the party having the
difficulty,  and  that  the  above  requirements that any force majeure shall be
remedied  with  all  reasonable  dispatch  shall  not  require the settlement of
strikes  or  lockouts  by  acceding  to  the demands of opposing party when such
course  is  inadvisable in the discretion of the party having difficulty. Either
party  may briefly interrupt its performance hereunder for the purpose of making
necessary  or  desirable  inspections,  alterations  and  repairs; and the party
requiring  such  relief  shall  give to the other party reasonable notice of its
intention  to  suspend  its  performance hereunder, except in cases of emergency
where such notice is impracticable or in cases where the operations of the other
party  will  not  be  affected the party requiring such relief shall endeavor to
arrange  such  interruptions so as to inconvenience the other party as little as
possible. Service interruptions on the part of either party which are sanctioned
by  this  provision  are  expressly  included  within  the  definition of "force
majeure"  for  the  purposes  of  this  contract.

In  the  event that during the term of this Agreement Seller claims a suspension
of  its  obligation to deliver gas to Buyer for thirty (30) or more days for the
reason  of  one or more events of force majeure, then the term of this Agreement
shall  he  extended  for  the  number  of  days  during which such force majeure
condition  is  claimed.


                                        8
<PAGE>
                                                                  162 (7-85)/GPC

18.     UNPROFITABLE GAS- If, in Buyer's sole judgment, the gas available at any
        ----------------
delivery  point  provided  for hereunder is or becomes insufficient in volume or
liquefiable  hydrocarbons  content,  or  for  any  other  cause  is  or  becomes
unprofitable  for  the  extraction  of liquefiable hydrocarbons therefrom, Buyer
shall  not  be required to take such gas so long as such condition exists. If at
any time the volume and/or liquefiable hydrocarbons content of the gas available
to  Buyer, or any other cause beyond Buyer's control, shall render the operation
of  Buyer's  plant  or the gas gathering lines to Seller's lease unprofitable in
Buyer's  sole  judgment,  Buyer may by thirty (30) days written notice to Seller
cancel  this  contract.

19.     PRIORITY  RIGHTS  OF SELLER - Seller may, at any time, without liability
        ---------------------------
to  Buyer clean out, deepen, or abandon any well or wells on the above-described
properties,  or  may  use  any  efficient,  modern,  or  improved method for the
production  of oil or gas. Before any well or wells are taken out of service for
any  reason  whatsoever  Seller  agrees  to  first  shut  off  the  same  from
communication  with  Buyer's  gathering  system.

20.     INDEMNITY  - Seller agrees to defend, indemnify and save harmless Buyer,
        ---------
from and against any and all loss, damage, injury, liability and claims thereof,
for  injury to or death of any person (including an employee of Seller or Buyer)
or  for  loss or damage to property (including the property of Buyer), resulting
from  Seller's  performance  of  this  Agreement,  including  such loss, damage,
injury,  liability  and  claims  as  are attributable to the gas covered by this
Agreement,  prior  to  the  delivery  of said gas to Buyer. This indemnity shall
apply  regardless  of whether liability without fault is imposed or sought to be
imposed  on  Buyer. This indemnity shall not apply to the extent that said loss,
damage,  injury,  liability  and  claims  arise  from  personal injury, death or
property  damage  which  is  caused  by  or  results from the sole or concurrent
negligence  of Buyer, or an individual contractor directly responsible to Buyer.
Seller  and Buyer specifically intend that the foregoing obligation of Seller to
defend, indemnify and save harmless shall cover and apply to, but is not limited
to, all loss, damage, injury, liability and claims as are caused by, result from
or  are  attributable  to  the  sole,  comparative,  contributory  or concurrent
negligence  of  Seller  or  any  third  party.

21.     SCOPE  -  In  the  event the above-described property is covered by more
        -----
than one lease,                   this contract shall be construed as a separate
contract  as  to  each  lease.

22.     TAXES  - Seller shall bear all taxes imposed upon Seller with respect to
        -----
the  gas  delivered  hereunder and Buyer shall bear all taxes imposed upon Buyer
with  respect to such gas after delivery thereof to Buyer. If required by law or
requested  by Seller, Buyer shall remit taxes to the proper authority and deduct
Seller's  portion  thereof  from  Buyer's  payment  to  Seller.

23.     LAWS  AND  REGULATIONS- This contract and all provisions herein shall be
        ----------------------
subject  to  and performed in accordance with all present and future, applicable
and  valid  orders,  laws, rules or regulations of any duly constituted federal,
state  or local governmental authority now or hereafter having jurisdiction over
the parties, their facilities, the gas delivered hereunder, or this Agreement.

24.     TERM  - This Agreement will become effective on the date hereof and will
        ----
remain  in full force and effect for a period of five (5) years from the date of
initial  delivery  of  gas  hereunder. At the end of such period, this Agreement
will  continue in effect from year-to-year thereafter, until canceled by written
notice  given  by either party to the other not less than one (1) month prior to
the  end  of  the initial five (5) year term or any subsequent anniversary date.
However,  in  the  event  the  oil  and  gas  lease covering the above-described
property  should  terminate before the expiration of the term of this Agreement,
then this Agreement shall be canceled contemporaneously with such termination.
Upon  termination, this Agreement will cease to have any force or effect, except
as to unsatisfied obligations or liabilities of either party attributable to the
period prior to 12:00 midnight on the date of termination, or arising thereafter
as  a  result  of  such  termination.


                                        9
                                                     (HAND WRITTEN)   C - 162158
<PAGE>
                                                                  162 (7-85)/GPC

25.     ASSIGNMENT-  The  provisions of this Agreement shall be binding upon and
        ----------
inure to the benefit of the parties hereto, their heirs, successors and assigns.
If  Seller  assigns or conveys all or any part of the leases or other properties
covered  hereby,  Seller  shall  provide  in  any  instrument  of  assignment or
conveyance  that the leases or other properties are assigned or conveyed subject
to  the  terms and conditions of this Agreement and that the party or parties to
whom  such  assignment or conveyance is made shall be bound by the terms of this
Agreement.  No  assignment  of  any  of Seller's rights or obligations hereunder
shall  be  made  without  the consent of Buyer, except to any company with which
Seller  is  affiliated  or to a trustee or trustees, individual or corporate, as
security  for bonds, security or other obligations. No transfer of or succession
to  the  interest of Seller hereunder, wholly or partially, shall Affect or bind
Buyer until Buyer shall have been furnished with written notice and the original
instrument  or  a certified copy or an acceptable photocopy of the instrument or
instruments  effecting  such  changes  of  ownership.

26.     PRODUCTION  IN  CONFORMANCE  WITH  FLOW  SCHEDULE - In order to maintain
        -------------------------------------------------
maximum  plant  efficiency on a 24-hour operating schedule, it is desired by the
parties  hereto  to  maintain  a  reasonably uniform rate of flow of gas to said
plant  over  each 24-hour period. It is, therefore, agreed that Seller shall, at
its  option, either (1) regulate its producing schedule so that the gas shall be
supplied from Seller's lease at a reasonably uniform rate of flow; or (2) accept
and  follow  a  producing  schedule  to  be  established  by Buyer for all wells
connected  to  Buyer's  plant,  provided that Buyer shall consider the wishes of
Seller  in  establishing  the  producing  schedule  for  Seller's well or wells.
Anything  else  contained  in  this  agreement  to the contrary notwithstanding,
Seller  hereby  agrees  that  in  the  event  it  fails to comply with the above
provisions  of  this  paragraph, such failure shall give Buyer the right, at its
option,  to  refuse to accept delivery of Seller's gas during any period of such
non-compliance.

27.     COUNTERPART SIGNATURES - This Agreement may be executed in any number of
        ----------------------
counterparts,  each  of  which,  when  executed by [any] Buyer and [any] Seller,
shall  be  deemed  to  be  an original, binding agreement between such Buyer and
Seller,  as  of  the  effective date hereof, regardless of any failure by one or
more  parties  to  execute  such  contract.

28.     CANDELLATION OF PRIOR CONTRACTS - Upon commencement of deliveries of gas
        -------------------------------
hereunder,  this  Agreement  shall  supersede  any  prior  gas contracts and any
amendments  thereto  effective  between  the  parties  hereto  insofar  as  such
contracts  cover  the  properties  hereinbefore  described.

          IN  WITNESS  WHEREOF the parties have hereunto subscribed their names.

                                   WARREN  PETROLEUM  COMPANY,
                                   A  Division  of  Chevron  U.S.A.  Inc.


                                   By            (SIGNED)
                                     ---------------------------------
                                             Attorney-in-Fact

                                                 "BUYER'

ATTEST:                              JUBILEE  OIL & GAS CORPORA'I'ION

 Juanda Harrell (SIGNED)             Sidney W. Sers, President(SIGNED)
 -----------------------             ---------------------------------

                                     Sidney  W.  Sers,  President
                                     ---------------------------------

                                                 "SELLER"


                                       10
                                                      (HAND WRITTEN)  C - 162158
<PAGE>