<PAGE>
 
                                                                   EXHIBIT 10.22

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                        AGREEMENT FOR PURCHASE AND SALE

                                by and between

                        BELLWETHER EXPLORATION COMPANY,
                            BLACK HAWK OIL COMPANY,
                       1988-II TEAI LIMITED PARTNERSHIP,
                       1989-I TEAI LIMITED PARTNERSHIP,
                       TEAI VIII-A LIMITED PARTNERSHIP,
                            TEAI OIL & GAS COMPANY
                                      AND
                           ANDREWS OIL AND GAS, INC.

                                   as Seller

                                      and

                           JAY RESOURCES CORPORATION

                                    as Buyer

                                  June 9, 1997

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<PAGE>
 
                               TABLE OF CONTENTS

                                                                            Page

1.   SALE AND PURCHASE OF THE PROPERTIES.....................................  1
     1.1.    THE PROPERTIES..................................................  1
     1.2.    EXCLUDED ASSETS.................................................  2

2.   PURCHASE PRICE..........................................................  3
     2.1.    BASIC AMOUNT....................................................  3
     2.2.    ADJUSTMENTS TO PURCHASE PRICE...................................  3
     2.3.    DEPOSIT.........................................................  5
     2.4.    CLOSING STATEMENT...............................................  5

3.   REPRESENTATIONS AND WARRANTIES OF SELLER................................  5
     3.1.    ORGANIZATION....................................................  5
     3.2.    AUTHORITY AND AUTHORIZATION.....................................  5
     3.3.    ENFORCEABILITY..................................................  5
     3.4.    CONFLICTS.......................................................  6
     3.5.    LITIGATION......................................................  6
     3.6.    TOC OPERATED PROPERTIES.........................................  6

4.   REPRESENTATIONS AND WARRANTIES OF BUYER.................................  6
     4.1.    ORGANIZATION....................................................  6
     4.2.    AUTHORIZATION AND AUTHORITY.....................................  6
     4.3.    ENFORCEABILITY..................................................  7
     4.4.    CONFLICTS.......................................................  7
     4.5.    RELIANCE........................................................  7
     4.6.    QUALIFIED LEASEHOLDER...........................................  7
     4.7.    QUALIFIED PURCHASER.............................................  8
     4.8.    AVAILABLE FUNDS.................................................  8

5.   COVENANTS OF SELLER PENDING CLOSING.....................................  8
     5.1.    CONDUCT OF BUSINESS PENDING CLOSING.............................  8
     5.2.    ACCESS..........................................................  9
     5.3.    ANTITRUST NOTIFICATION..........................................  9


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<PAGE>
 

6.   COVENANTS OF BUYER PENDING CLOSING......................................  9
     6.1.    ANTITRUST NOTIFICATION..........................................  9
     6.2.    NOTIFICATIONS...................................................  9
     6.3.    GOVERNMENTAL BONDS.............................................. 10

7.   CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER........................ 10
     7.1.    REPRESENTATIONS AND WARRANTIES.................................. 10
     7.2.    COMPLIANCE...................................................... 10
     7.3.    CONSENTS........................................................ 10
     7.4.    NO PENDING SUITS................................................ 10
     7.5.    PURCHASE PRICE ADJUSTMENTS...................................... 10
     7.6.    HSR ACT......................................................... 10

8.   CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER....................... 10
     8.1.    REPRESENTATIONS AND WARRANTIES.................................. 11
     8.2.    COMPLIANCE...................................................... 11
     8.3.    CONSENTS........................................................ 11
     8.4.    NO PENDING SUITS................................................ 11
     8.5.    PURCHASE PRICE ADJUSTMENTS...................................... 11
     8.6.    HSR ACT......................................................... 11
     8.7.    FINANCIAL CONDITION............................................. 11
     8.8.    TRANSITION OPERATING AGREEMENT.................................. 11

9.   CLOSING................................................................. 11
     9.1.    THE CLOSING..................................................... 11
     9.2.    DOCUMENTS TO BE DELIVERED AT CLOSING............................ 12
     9.3.    POSSESSION...................................................... 13
     9.4.    PAYMENT OF PURCHASE PRICE....................................... 13

10.  CASUALTY LOSS........................................................... 13

11.  TERMINATION............................................................. 13
     11.1.   EVENTS OF TERMINATION........................................... 13
     11.2.   EFFECT OF TERMINATION........................................... 14

12.  TAXES, PRORATIONS AND ASSUMPTION OF OBLIGATIONS......................... 15
     12.1.   TAX PRORATIONS.................................................. 15
     12.2.   ASSUMPTION BY BUYER............................................. 15



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<PAGE>
 

13.  FINAL ACCOUNTING........................................................ 16
     13.1.   SETTLEMENT STATEMENT............................................ 16
     13.2.   ARBITRATION OF FINAL SETTLEMENT................................. 16
     13.3.   PAYMENT......................................................... 17

14.  SURVIVAL AND INDEMNIFICATION............................................ 17
     14.1.   SURVIVAL........................................................ 17
     14.2.   INDEMNIFICATION BY SELLER....................................... 17
     14.3.   INDEMNIFICATION BY BUYER........................................ 17
     14.4.   LIABILITY LIMITATIONS........................................... 18
     14.5.   WAIVER OF REPRESENTATIONS....................................... 20
     14.6.   DTPA WAIVER..................................................... 20

15.  FURTHER ASSURANCES...................................................... 21
     15.1.   GENERAL......................................................... 21
     15.2.   FILINGS, NOTICES AND CERTAIN GOVERNMENTAL APPROVALS............. 21
     15.3.   LOGOS AND NAMES................................................. 21

16.  ACCESS BY SELLER AFTER CLOSING.......................................... 21

17.  NOTICES................................................................. 22

18.  ASSIGNMENT.............................................................. 22

19.  GOVERNING LAW........................................................... 22

20.  EXPENSES AND FEES....................................................... 23

21.  INTEGRATION............................................................. 23

22.  WAIVER OR MODIFICATION.................................................. 23

23.  HEADINGS................................................................ 23

24.  INVALID PROVISIONS...................................................... 23

26.  MULTIPLE COUNTERPARTS................................................... 24

27.  PUBLIC ANNOUNCEMENTS.................................................... 24


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28.  ARBITRATION......................................................   24
     28.1.  BINDING ARBITRATION.......................................   24
     28.2.  GOVERNING RULES...........................................   25
     28.3.  ARBITRATORS...............................................   25
     28.4.  CONDUCT OF ARBITRATION....................................   25
     28.5.  COSTS OF ARBITRATION......................................   25
     29.    LIABILITY.................................................   25


Annex I    -  Title to the Properties
Annex II   -  Environmental and Physical Assessment
Annex III  -  Certificate of Seller
Annex IV   -  Certificate of Buyer
Annex V    -  Assignment and Bill of Sale
Exhibit




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<PAGE>
 

                            TABLE OF DEFINED TERMS



Term                                                                  Section
----                                                                  -------

AAA.................................................................    28.2
Adjusted Purchase Price.............................................    2.1
Advisor.............................................................    1.2
Agreement...........................................................    Page 1
Allocated Value.....................................................    Annex I
Assignment..........................................................    Annex V
Business Day........................................................    17
Buyer...............................................................    Page 1
Buyer Indemnified Parties...........................................    14.2
Casualty Loss.......................................................    10
Closing.............................................................    9.1
Closing Date........................................................    9.1
Closing Period......................................................    2.2.1
Closing Statement...................................................    2.4
Confidentiality Agreement...........................................    21
Contracts...........................................................    1.1.7
Cure Period.........................................................    Annex I
Data................................................................    1.1.6
Deposit.............................................................    2.3
Dispute.............................................................    28.1
Effective Date......................................................    1
Environmental Condition.............................................    Annex II
Environmental Defect................................................    Annex II
Environmental Defect Amount.........................................    Annex II
Environmental Notice Date...........................................    Annex II
Equipment...........................................................    1.1.5
Equitable Limitations...............................................    3.3
Excluded Assets.....................................................    1.2
Final Settlement Statement..........................................    13.1
HSR Act.............................................................    5.3
Liabilities.........................................................    14.2
Liens...............................................................    Annex I
Marketable Title....................................................    Annex I
Net Revenue Interest................................................    Annex I
Notice Date.........................................................    Annex I


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Oil and Gas Properties...............................................    1.1.1
Permitted Encumbrances...............................................    Annex I
Permits..............................................................    1.1.8
Properties...........................................................    1
Purchase Price.......................................................    2.1
Seller...............................................................    Page 1
Seller Indemnified Parties...........................................    14.3
Substances...........................................................    1.1.3
Surface Contracts....................................................    1.1.4
Title Defect.........................................................    Annex I
Title Defect Amount..................................................    Annex I
Title Properties.....................................................    Annex I
TOC..................................................................    3.6
TOC Operated Properties..............................................    3.6
Wells................................................................    1.1.2
Working Interest.....................................................    Annex I




 

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<PAGE>
 
                        AGREEMENT FOR PURCHASE AND SALE
                                        
  This Agreement for Purchase and Sale ("Agreement") is made and entered into on
this the 9th day of June, 1997, by and between Bellwether Exploration Company,
Black Hawk Oil Company, 1988-II TEAI Limited Partnership, 1989-I TEAI Limited
Partnership, TEAI VIII-A Limited Partnership, TEAI Oil & Gas Company and Andrews
Oil and Gas, Inc. (collectively, "Seller"), and Jay Resources Corporation or its
designee ("Buyer").

1. SALE AND PURCHASE OF THE PROPERTIES. Subject to the terms and conditions and
for the consideration herein set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller agrees to sell, assign, convey and deliver to Buyer, and Buyer agrees to
purchase and acquire from Seller at Closing, but effective as of 7:00 a.m. at
the location of each of the Oil and Gas Properties on May 1, 1997 (the
"Effective Date"), all of the interest of Seller in and to the following
properties, other than the Excluded Assets ("Properties"):

   1.1. THE PROPERTIES.

        1.1.1. OIL AND GAS PROPERTIES. All leasehold interests, mineral
interests, net profits interests, overrides or other interests or operating
rights in the oil and gas leases described in the Exhibit (the "Oil and Gas
Properties").

        1.1.2. WELLS. All oil, condensate or natural gas wells located on the
Oil and Gas Properties, whether producing, operating, shut-in or temporarily
abandoned (the " Wells").

        1.1.3. SEVERED SUBSTANCES. All severed crude oil, natural gas,
casinghead gas, drip gasoline, natural gasoline, petroleum, natural gas liquids,
condensate, products, liquids and other hydrocarbons and other minerals or
materials of every kind and description produced from the Oil and Gas Properties
and either (a) in storage tanks on the Effective Date, (b) in pipelines on the
Effective Date or (c) sold on or after the Effective Date (the "Substances").

        1.1.4. SURFACE CONTRACTS. All right-of-way agreements or other
agreements relating to the use or ownership of surface properties that are used
or held for use for flow lines in connection with the production of Substances
from the Oil and Gas Properties (the "Surface Contracts").

        1.1.5. EQUIPMENT. All equipment, fixtures and physical facilities of
every type and description located on the Oil and Gas Properties (the
"Equipment").
<PAGE>
 
        1.1.6. INFORMATION AND DATA. All title opinions, lease and land files,
well files, geological and geophysical data and files, filings with and reports
to regulatory agencies, gas and sales contract files, division order files and
other books, files and records to the extent that they are directly related to
Oil and Gas Properties, not proprietary to Seller, and the transfer thereof is
not prohibited by existing contractual obligations (the "Data").

        1.1.7. CONTRACTS. All contracts and arrangements that directly relate to
the Properties and the production, storage, treatment, transportation,
processing, purchase, sale, disposal or other disposition of Substances
therefrom and any and all amendments, ratifications or extensions of the
foregoing, to the extent that any of the foregoing relate to periods on or after
the Effective Date (the "Contracts"), and all rights to make claims and receive
proceeds under any insurance policy held by or on behalf of Seller in connection
with the Properties for any claim that arises from the Effective Date through
the Closing Date in connection with the Properties.

        1.1.8. PERMITS.  All franchises, licenses, permits, approvals, consents,
certificates and other authorizations and other rights granted by governmental
authorities and all certificates of convenience or necessity, immunities,
privileges, grants and other rights, that relate to the Properties or the
ownership or operation of any thereof (the "Permits").

   1.2. EXCLUDED ASSETS. As used herein, "Excluded Assets" means (a) Seller's
and Torch Operating Company's operating rights in and to the oil and gas leases
described in the Exhibit; (b) all trade credits and all accounts, instruments
and general intangibles (as such terms are defined in the Texas Uniform
Commercial Code) attributable to the Properties with respect to any period of
time prior to the Effective Date; (c) all claims and causes of action of Seller
(i) arising from acts, omissions or events, or damage to or destruction of
property, occurring prior to the Effective Date, (ii) arising under or with
respect to any of the Contracts that are attributable to periods of time prior
to the Effective Date (including claims for adjustments or refunds), or (iii)
with respect to any of the Excluded Assets; (d) all rights and interests of
Seller (i) under any policy or agreement of insurance or indemnity, (ii) under
any bond, or (iii) to any insurance or condemnation proceeds or awards arising,
in each case, from acts, omissions or events, or damage to or destruction of
property, occurring prior to the Effective Date; (e) all Substances produced and
sold from the Oil and Gas Properties with respect to all periods prior to the
Effective Date, together with all proceeds from or of such Substances; (f)
claims of Seller for refunds of or loss carry forwards with respect to (i)
production or any other taxes attributable to any period prior to the Effective
Date, (ii) income or franchise taxes, or (iii) any taxes attributable to the
Excluded Assets; (g) all amounts due or payable to Seller as adjustments to
insurance premiums related to the Properties with respect to any period prior to
the Effective Date; (h) all proceeds, income or


                                      -2-
<PAGE>
 
revenues (and any security or other deposits made) attributable to (i) the
Properties for any period prior to the Effective Date, or (ii) any Excluded
Assets; (i) all personal computers and associated peripherals and all radio and
telephone equipment; (j) all of Seller's proprietary computer software, patents,
trade secrets, copyrights, names, trademarks, logos and other intellectual
property; (k) all of Seller's interpretations of geological and geophysical
data; (1) all documents and instruments of Seller that may be protected by an
attorney-client privilege; (m) data that cannot be disclosed or assigned to
Buyer as a result of confidentiality arrangements under agreements with persons
unaffiliated with Seller; (n) all audit rights arising under any of the
Contracts or otherwise with respect to any period prior to the Effective Date or
to any of the Excluded Assets; and (o) all (i) agreements and correspondence
between Seller and Torch Energy Advisors Incorporated and any affiliates thereof
(the "Advisor") relating to the transactions contemplated in this Agreement,
(ii) lists of prospective purchasers for such transactions compiled by either
Seller or the Advisor, (iii) bids submitted by other prospective purchasers of
the Properties, (iv) analyses by Seller or the Advisor of any bids submitted by
any prospective purchaser, (v) correspondence between or among Seller or
Advisor, or either of their respective representatives, and any prospective
purchaser other than Buyer, and (vi) correspondence between Seller or Advisor or
any of their respective representatives with respect to any of the bids, the
prospective purchasers, the engagement or activities of the Advisor or the
transactions contemplated in this Agreement.

2. PURCHASE PRICE.

   2.1. BASIC AMOUNT. The purchase price for the Properties, subject to
adjustment as provided in Section 2.2, shall be $14,800,000.00 (the "Purchase
Price"). The Purchase Price as adjusted pursuant to Section 2.2 is referred to
in this Agreement as the "Adjusted Purchase Price."

   2.2. ADJUSTMENTS TO PURCHASE PRICE. The Purchase Price shall be adjusted as
Provided in this Section 2.2.

        2.2.1. The Purchase Price shall be increased by the following amounts
(without duplication):

        (a) An amount equal to the costs and expenses that are (i) attributable
   to the Properties for the period from the Effective Date to the Closing Date
   (the "Closing Period"), whether paid before or after the Effective Date, and
   (ii) paid by Seller, including, without limitation, bond and insurance
   premiums paid by or on behalf of Seller attributable to coverage during the
   Closing Period.

                                      -3-
<PAGE>
 
   (b) An amount equal to the interest of Seller in the quantity of Substances
produced from the Oil and Gas Properties in storage or pipelines on the
Effective Date multiplied by the contract price therefor on the Effective Date,
net of all applicable taxes.

   (c) If Seller or Torch Operating Company, with respect to the TOC Operated
Properties, is named as the operator under a joint operating agreement covering
any of the Oil and Gas Properties other than those included in Excluded Assets,
an amount equal to the costs and expenses paid by Seller on behalf of the other
joint interest owners that is attributable to periods after the Effective Date.

   (d) An amount equal to $1,000 per day from the Effective Date to the Closing
Date in lieu of any indirect overhead charges.

   (e) An amount equal to $1.25 per Mcf of the under position with respect to
any gas production, pipeline, storage, processing or other imbalance
attributable to Substances produced from Oil and Gas Properties as of the
Effective Date under any agreement to the extent the volume of such under
position is greater than zero or an amount equal to $1.25 per Mcf of the over
position with respect to any such imbalance as of the Effective Date under any
such agreement to the extent that the volume of the over position with respect
to any such imbalance is less than zero.

   2.2.2. The Purchase Price shall be decreased by the following amounts
(without duplication):

   (a) An amount equal to the proceeds received by Seller for the sale during
the Closing Period of Substances, net of all applicable taxes not reimbursed to
Seller by a purchaser of Substances.

   (b) An amount equal to all proceeds received by Seller from whatever source
derived that relate to the Properties and are attributable to periods on or
after the Effective Date, other than operator's overhead reimbursements received
by Seller under joint operating agreements in which Seller is designated as the
operator.

   (c) The amount of all adjustments determined in accordance with Annex I for
title adjustments for the Oil and Gas Properties to the extent that the
aggregate of all Title Defect Amounts exceeds $100,000.

   (d) The amount of all taxes prorated to Buyer in accordance with Section
11.1.


                                      -4-
<PAGE>
 
        (e) An amount equal to $1.25 per Mcf of the over position with respect
   to any gas production, pipeline, storage, processing or other imbalance
   attributable to Substances produced from Oil and Gas Properties as of the
   Effective Date under any agreement to the extent the volume of such over
   position is greater than zero or an amount equal to $1.25 per Mcf of the
   under position with respect to any such imbalance as of the Effective Date
   under any such agreement to the extent that the volume of the under position
   with respect to any such imbalance is less than zero.

   2.3. DEPOSIT. Contemporaneously with the execution of this Agreement, Buyer
is depositing with Seller an amount equal to ten percent of the Purchase Price
(the "Deposit"). The Deposit shall be applied to the Adjusted Purchase Price to
be paid at Closing or may be returned to Buyer or retained by Seller in
accordance with the terms of this Agreement.

   2.4. CLOSING STATEMENT. Seller shall deliver to Buyer not less than two
Business Days before the Closing Date a statement (the "Closing Statement")
setting forth the adjustments to the Purchase Price provided in Section 2.2 and
using Title Defect Amounts that have been agreed by Seller and Buyer prior to
such date or determined by arbitration prior to such date. The Closing
Statement shall be prepared in accordance with customary accounting principles
used in the oil and gas industry.

3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants to
Buyer as follows:


   3.1. ORGANIZATION. Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Seller is
qualified to do business in and is in good standing under the laws of each state
in which the Properties are located.

   3.2. AUTHORITY AND AUTHORIZATION. Seller has full corporate power and
authority to carry on its business as presently conducted, to enter into this
Agreement and to perform its obligations under this Agreement. The execution and
delivery of this Agreement by Seller have been, and the performance by Seller of
this Agreement and the transactions contemplated hereby shall be at the time
required to be performed hereunder, duly and validly authorized by all requisite
corporate action on the part of Seller.

   3.3. ENFORCEABILITY. This Agreement has been duly executed and delivered on
behalf of Seller and constitutes the legal, valid and binding obligation of
Seller enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, reorganization or moratorium statutes, or
other similar laws affecting the rights of creditors generally or equitable
principles (collectively, "Equitable Limitations"). At the

                                      -5-
<PAGE>
 
Closing all documents and instruments required hereunder to be executed and
delivered by Seller shall be duly executed and delivered and shall constitute
legal, valid and binding obligations of Seller enforceable in accordance with
their terms, except as enforceability may be limited by Equitable Limitations.

   3.4. CONFLICTS. The execution and delivery of this agreement by seller does
not, and the consummation of the transactions contemplated by this Agreement
shall not, (a) violate or be in conflict with, or require the consent of any
person or entity under, any provision of Seller's governing documents, (b)
violate any provision of or require any consent, authorization or approval under
any judgment, decree, judicial or administrative order, award, writ, injunction,
statute, rule or regulation applicable to Seller, or (c) result in the creation
of any lien, charge or encumbrance on any of the properties.

   3.5. LITIGATION. Except as set forth on the Exhibit, no claim, demand,
filing, hearing, notice of violation, proceeding, notice or demand letter,
investigation, administrative proceeding, civil, criminal or other action, suit
or other legal proceeding is pending or, to the best of Seller's knowledge,
threatened, against Seller relating to, resulting from or affecting the
ownership or operation of the Properties. No notice from any governmental
authority or any other person (including employees) has been received by Seller
as to any claim, demand, filing, hearing, notice of violation, proceeding,
notice or demand letter, relating to, resulting from or affecting the ownership
or operation of the Properties, claiming any violation of any law, statute,
rule, regulation, ordinance, order, decision or decree of any governmental
authority (including, without limitation, any such law, rule, regulation,
ordinance, order, decision or decree concerning the conservation of natural
resources) or claiming any breach of contract or agreement with any third-party.

   3.6. TOC OPERATED PROPERTIES. Torch Operating Company ("TOC") operates
certain of the Properties described on the Exhibit on behalf of Nuevo Energy
Company and after consummation of these transactions shall continue to operate
such Properties ("TOC Operated Properties"). The TOC Operated Properties are
described on the Exhibit.

4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to
Seller that:

   4.1. ORGANIZATION. Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Texas.

   4.2. AUTHORIZATION AND AUTHORITY. The execution and delivery of this Agree-
ment have been and the performance of this Agreement and the transactions
contemplated hereby shall be at the time required to be performed hereunder,
duly and validly authorized

                                      -6-
<PAGE>
 
by all requisite corporate action on the part of Buyer. Buyer has full corporate
power and authority to carry on its business as presently conducted, to enter
into this Agreement, to purchase the Properties on the terms described in this
Agreement and to perform its other obligations under this Agreement.

   4.3. ENFORCEABILITY. This Agreement has been duly executed and delivered on
behalf of Buyer, and constitutes a legal, valid and binding obligation of Buyer
enforceable in accordance with its terms, except as enforceability may be
limited by Equitable Limitations. At the Closing all documents required
hereunder to be executed and delivered by Buyer shall be duly executed and
delivered and shall constitute legal, valid and binding obligations of Buyer
enforceable in accordance with their terms, except as enforceability may be
limited by Equitable Limitations.

   4.4. CONFLICTS. The execution and delivery of this Agreement by Buyer does
not, and the consummation of the transactions contemplated by this Agreement
shall not, (a) violate or be in conflict with, or require the consent of any
person or entity under, any provision of Buyer's Certificate of Incorporation,
bylaws or other governing documents, (b) conflict with, result in a breach of,
constitute a default (or an event that with the lapse of time or notice, or
both, would constitute a default) under any agreement or instrument to which
Buyer is a party or is bound, or (c) violate any provision of or require any
consent, authorization or approval under any judgment, decree, judicial or
administrative order, award, writ, injunction, statute, rule or regulation
applicable to Buyer.

   4.5. RELIANCE. Prior to executing this Agreement, Buyer has been afforded an
opportunity to (a) examine the Properties and such materials as it has requested
to be provided to it by Seller, (b) discuss with representatives of Seller such
materials and the nature and operation of the Properties and (c) investigate the
condition, including subsurface condition, of the Oil and Gas Properties and
Surface Contracts and the condition of the Equipment. In entering into this
Agreement, Buyer has relied solely on the express representations and covenants
of Seller in this Agreement, its independent investigation of, and judgment with
respect to, the Equipment and the other Properties and the advice of its own
legal, tax, economic, environmental, engineering, geological and geophysical
advisors and not on any comments or statements of any representatives of, or
consultants or advisors engaged by, Seller or the Advisor.

   4.6. QUALIFIED LEASEHOLDER. As soon as possible after Closing, Buyer intends
to satisfy the area-wide bonding and any other bonding requirements of the
Minerals Management Service and other governmental authorities, and, after the
Closing, Buyer anticipates that it will continue to be able to meet such bonding
requirements. As soon as possible after Closing, Buyer shall use its best
efforts to become qualified to own the

                                      -7-
<PAGE>
 
Properties. The consummation of the transactions contemplated hereby will not
cause Buyer to be disqualified to be an owner of federal, oil, gas, and mineral
leases in the Gulf of Mexico region, or to exceed any acreage limitation imposed
by any law, statute, rule or regulation. Buyer is not aware of any fact that
could reasonably be expected to cause the Minerals Management Service or other
governmental authorities to fail to unconditionally approve the assignment of
the Properties to Buyer.

   4.7. QUALIFIED PURCHASER. Buyer is an experienced and knowledgeable investor
and operator in the oil and gas business. Buyer is acquiring the Properties for
its own account and not with a view to, or for offer of resale in connection
with, a distribution thereof, within the meaning of the Securities Act of 1933,
15 U.S.C. (S) 77a et seq., and any other rules, regulations, and laws pertaining
to the distribution of securities.

   4.8. AVAILABLE FUNDS. Buyer has arranged to have available by the Closing
Date sufficient funds to enable the payment to Seller by wire transfer, the
Adjusted Purchase Price in accordance with Section 9.4, and to otherwise perform
Buyer's obligations under this Agreement.

5. COVENANTS OF SELLER PENDING CLOSING.

   5.1. CONDUCT OF BUSINESS PENDING CLOSING. Seller covenants that from the date
hereof to the Closing Date, except (a) as provided herein, (b) as required by
any obligation, agreement, lease, contract, or instrument referred to on the
Exhibit, or (c) as otherwise consented to in writing by Buyer, Seller will:

        5.1.1. Not (i) operate or in any manner deal with, incur obligations
with respect to, or undertake any transactions relating to, the Properties other
than transactions (A) in the normal, usual and customary manner, (B) of a nature
and in an amount consistent with prior practice, and (C) in the ordinary and
regular course of business of owning and operating the Properties; (ii) dispose
of, encumber or relinquish any of the Properties (other than relinquishments
resulting from the expiration of leases that Seller has no right or option to
renew); (iii) waive, compromise or settle any right or claim that would
materially and adversely affect the ownership, operation or value of any of the
Properties after the Effective Date, or (iv) participate in any operation if the
estimated cost exceeds $20,000.00.

        5.1.2. Make or give all notifications, filings, consents or approvals,
from, to or with all governmental authorities, and take all other actions
reasonably requested by Buyer, necessary for, and cooperate with Buyer in
obtaining, the issuance, assignment or transfer, as the case may be, by each
such authority of such Permits as may be necessary for


                                      -8-
<PAGE>
 
Buyer to own and operate the Properties following the consummation of the
transactions contemplated in this Agreement.

        5.1.3. Notify Buyer of the discovery by Seller that any representation
or warranty of Seller contained in this Agreement is, becomes or will be untrue
in any material respect on the Closing Date.

        5.1.4. Maintain in effect insurance providing the same type coverage, in
the same amounts with the same deductibles as the insurance maintained in effect
by Seller or its affiliates on the Effective Date.

   5.2. ACCESS. Seller shall afford to Buyer and its authorized representatives
from the date hereof until the Closing Date, during normal business hours,
reasonable access to the Properties operated by Seller and to Seller's title,
contract, and legal materials and operating data and information available as of
the date hereof and that becomes available to Seller at any time prior to the
Closing Date, other than any documents that are protected by an attorney-client
privilege.

   5.3. ANTITRUST NOTIFICATION. Seller will file, within five Business Days
after the execution of this Agreement, with the Federal Trade Commission and the
Department of Justice the notification and report form required for the
transactions contemplated hereby and any supplemental information that may be
reasonably requested in connection therewith pursuant to the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and the rules and regulations promulgated
thereunder (the "HSR Act"), which notification and report form and supplemental
information will comply in all material respects with the requirements of the
HSR Act. Seller will seek early termination of the waiting period.

6. COVENANTS OF BUYER PENDING CLOSING.

   6.1. ANTITRUST NOTIFICATION. Buyer will file, within five Business Days after
the execution of this Agreement, with the Federal Trade Commission and the
Department of Justice the notification and report form required for the
transactions contemplated hereby and any supplemental information that may be
reasonably requested in connection therewith pursuant to the HSR Act, which
notification and report form and supplemental information will comply in all
material respects with the requirements of the HSR Act. Buyer will seek early
termination of the waiting period.

   6.2. NOTIFICATIONS. Buyer will notify Seller promptly after the discovery by
Buyer that any representation or warranty of Seller contained in this Agreement
is, becomes or will be untrue in any material respect on the Closing Date. In
addition, Buyer will notify Seller


                                      -9-
<PAGE>
 
of the discovery by Buyer that any representation or warranty of Buyer contained
in this Agreement is, becomes or will be untrue in any material respect on the
Closing Date.

   6.3. GOVERNMENTAL BONDS. Promptly after Closing, Buyer shall deliver to
Seller evidence of the posting of bonds or other security with the Minerals
Management Service and all other applicable governmental authorities meeting the
requirements of those authorities to own and, where appropriate, operate, the
Oil and Gas Properties.

7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER. The obligations of Buyer to
be performed at Closing are subject to the fulfillment, before or at Closing, of
each of the following conditions:

   7.1. REPRESENTATIONS AND WARRANTIES. The representations and warranties by
Seller set forth in this Agreement (considered collectively) shall be true and
correct in all material respects on the date of this Agreement and as of the
Closing Date except for changes therein specifically contemplated by this
Agreement.

   7.2. COMPLIANCE. Seller shall have performed and complied in all material
respects with each of the covenants and conditions required by this Agreement of
which performance or compliance is required prior to or at the Closing.

   7.3. CONSENTS. The necessary consents have been obtained and any applicable
preferential rights have been waived or have expired.

   7.4. NO PENDING SUITS. At the Closing Date, no suit, action or other
proceeding shall be pending or threatened before any court or governmental
agency in which it is sought to restrain or prohibit the performance of or to
obtain damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated hereby.

   7.5. PURCHASE PRICE ADJUSTMENTS. The aggregate of all adjustments to the
Purchase Price and all adjustments asserted by Buyer in good faith that have not
been resolved prior to the Closing Date shall not exceed 5% of the Purchase
Price less the deductible in Section 2.2.2(c).

   7.6. HSR ACT. The waiting period under the HSR Act applicable to the
transactions contemplated in this Agreement shall have expired or been
terminated.

8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER. The obligations of Seller
to be performed at Closing are subject to the fulfillments before or at Closing,
of each of the following conditions:


                                     -10-
<PAGE>
 
   8.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties by
Buyer set forth in this Agreement (considered collectively) shall be true and
correct in all material respects on the date of this Agreement and as of the
Closing Date except for changes therein specifically contemplated by this
Agreement.

   8.2. COMPLIANCE. Buyer shall have performed and complied in all material
respects with each of the covenants and conditions required by this Agreement of
which performance or compliance is required prior to or at the Closing.

   8.3. CONSENTS. The necessary consents have been obtained and any applicable
preferential rights have been waived or have expired.

   8.4. NO PENDING SUITS. At the Closing Date, no suit, action or other
proceeding shall be pending or threatened before any court or governmental
agency in which it is sought to restrain or prohibit the performance of or to
obtain damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated hereby.

   8.5. PURCHASE PRICE ADJUSTMENTS. The aggregate of all adjustments to the
purchase price pursuant to Annex I shall not exceed 5% of the Purchase Price
less the deductible in Section 2.2.2(c).

   8.6. HSR ACT. The waiting period under the HSR Act applicable to the
transactions contemplated in this Agreement shall have expired or been
terminated.

   8.7. FINANCIAL CONDITION. Buyer shall have provided to Seller evidence of
Buyer's financial condition that satisfies Seller, in Seller's sole discretion,
that Buyer can comply with all obligations of Buyer under this Agreement.

   8.8. TRANSITION OPERATING AGREEMENT. Buyer shall have executed a Transition
Operating Agreement between Buyer and TOC in the form attached to the Exhibit
and covering the Oil and Gas Properties other than the Excluded Assets, whereby
TOC operates such properties for a period not greater than six (6) months as
determined by Buyer; provided, however TOC shall continue to operate the
applicable Oil and Gas Properties under the Transition Agreement until Buyer
delivers to Seller the information required in Section 6.3.

9. CLOSING.

   9.1. THE CLOSING. The assignment and purchase of the Properties pursuant to
this Agreement (the "Closing") shall be consummated in Houston, Texas, at the
offices of the


                                     -11-
<PAGE>
 
Seller before 11:00 p.m. on the later of (a) the third Business Day after the
day that all necessary requirements of the provisions of the HSR Act shall have
been complied with and the applicable waiting period under the HSR Act shall
have expired or been terminated or (b) the 30th day of June, 1997 (the "Closing
Date").

   9.2. DOCUMENTS TO BE DELIVERED AT CLOSING.

        9.2.1. At the Closing, Seller shall deliver to Buyer the following
instruments, dated the Closing Date, properly executed by authorized officers
and, where appropriate, acknowledged:

        (a) Counterparts of an Assignment of Leases and Bill of Sale in the form
of Annex V sufficient to convey to Buyer title in and to the Properties;

        (b) Such other instruments as are necessary to effectuate the conveyance
of the Properties to Buyer;

        (c) Letters in lieu of division orders addressed to each purchaser of
the Substances;

        (d) With respect to any Wells that Seller owns less than all of the
operating rights or leasehold interests and is designated as the operator, other
than the TOC Operated Properties specified in the Exhibit, (i) letters to all
working interest owners in which Seller or Torch Operating Company resigns as
the operator and recommends Buyer as the successor operator and (ii) any forms
promulgated by the appropriate governmental authority and completed by Buyer
designating Buyer as the operator that Seller is required to execute by the
governmental authority. With respect to any Wells that Seller owns all of the
leasehold interests or operating rights and is designated as the operator, any
forms promulgated by the appropriate governmental authority and completed by
Buyer designating Buyer as the operator that Seller is required to execute by
the governmental authority; and

        (e) A certificate in the form of Annex III.

        9.2.2. At the Closing, Buyer shall deliver to Seller the following
instruments, dated the Closing Date, properly executed by authorized officers
and, where appropriate, acknowledged:

        (a) Transition Operating Agreement between Buyer and Torch Operating
Company;

                                     -12-
<PAGE>
 
        (b) a certificate in the form of Annex IV dated the Closing Date and
properly executed by an authorized officer; and

        (c) A resolution of Buyer's Board of Directors, certified by its
Secretary, authorizing the execution, delivery and performance of this
Agreement, the Assignment and Bill of Sale, and all other actions to be taken by
Buyer hereunder.

   9.3. POSSESSION. At the Closing, Seller shall deliver to Buyer possession of
the Properties other than the Data. Within five Business Days after Closing,
Seller shall deliver to Buyer at Seller's offices all of the Data.

   9.4. PAYMENT OF PURCHASE PRICE. At the Closing, against delivery of the
documents and materials described in Section 9.2, Buyer shall pay to Seller the
estimated Adjusted Purchase Price, less the amount of the Deposit, by wire
transfer of immediately available funds.

10. CASUALTY LOSS. As used herein, the term "Casualty Loss" shall mean, with
respect to all or any major portion of any of the Properties, any destruction by
fire, blowout, storm or other casualty or any taking, or pending or threatened
taking, in condemnation or expropriation or under the right of eminent domain of
any of the Properties or portion thereof, in each case prior to Closing. Seller
shall promptly notify Buyer of any Casualty Loss of which Seller becomes aware.
If any Casualty Loss occurs during the Closing Period, Seller shall (i) transfer
to Buyer all of the interest of Seller in the Properties other than Excluded
Assets, (ii) transfer to Buyer all unpaid insurance proceeds, claims, awards and
other payments arising out of such Casualty Loss, and (iii) pay to Buyer all
sums paid to Seller as insurance proceeds, awards or other payments arising out
of such Casualty Loss. Seller shall not voluntarily compromise, settle or adjust
any amounts payable by reason of any Casualty Loss without first obtaining the
written consent of Buyer.

11. TERMINATION.

    11.1.  EVENTS OF TERMINATION. This Agreement may be terminated at any time
prior to the Closing:

           11.1.1. By the mutual written consent of Buyer and Seller;

           11.1.2. By Seller if Buyer shall (i) fail to perform in any material
respect its covenants contained herein required to be performed by it on or
prior to the Closing Date, or (ii) any of its representations contained herein
shall be incorrect in any material respect on the Closing Date, and such failure
or misrepresentation is not cured within ten days after

                                     -13-
<PAGE>
 
Seller shall have notified Buyer of its intent to terminate this Agreement
pursuant to this Section 11.1.2;

           11.1.3. By Buyer if Seller shall (i) fail to perform in any material
respect its covenants contained herein required to be performed by it on or
prior to the Closing Date, or (ii) any of its representations contained herein
shall be incorrect in any material respect on the Closing Date, and such failure
or misrepresentation is not cured within ten days after Buyer has notified
Seller of its intent to terminate this Agreement pursuant to this Section
11.1.3;

           11.1.4. By Buyer or Seller if the aggregate of all Environmental
Defect Amounts exceeds 5% of the Purchase Price. Notwithstanding the above,
Seller shall not have the right to terminate this Agreement in the event that
Buyer elects, in its sole discretion, to bear the cost of curing the
Environmental Defects that would otherwise exceed 5% of the Purchase Price;

           11.1.5. By Buyer or Seller if the adjustments to the Purchase Price
for Title Defects under Annex I exceed 5% of the Purchase Price. Notwithstanding
the above, Seller shall not have the right to terminate this Agreement in the
event that Buyer elects, in its sole discretion, not to adjust the Purchase
Price by and to bear the cost of curing the Title Defects which otherwise would
result in adjustments to the Purchase Price that exceed 5% of the Purchase
Price;

           11.1.6. By Buyer or Seller if the Properties suffer a Casualty Loss
or Casualty Losses after the Effective Date and prior to the Closing Date in the
aggregate that exceed(s) 5% of the Purchase Price; and

           11.1.7. By either Seller or Buyer if for any reason the Closing has
not occurred on or before June 30, 1997.

    11.2.  EFFECT OF TERMINATION.

           11.2.1. If the purchase and sale of the Properties is not consummated
as contemplated in this Agreement and either (a) Buyer shall have failed to
perform in any material respect its covenants contained herein required to be
performed by it on or prior to the Closing Date, or (b) any of its
representations contained herein shall be incorrect in any material respect on
the Closing Date, and such failure or misrepresentation is not cured within the
time period provided in Section ll.l, then Seller may elect to retain the
Deposit as liquidated damages or return the Deposit to Buyer and seek such
damages as may be appropriate. Buyer acknowledges that the extent of damages to
Seller occasioned by any


                                     -14-
<PAGE>
 
breach or misrepresentation by Buyer would be impossible or extremely difficult
to ascertain and that the amount of the Deposit is a fair and reasonable
estimate of such damages under the circumstances.

           11.2.2. If the purchase and sale of the Properties is not consummated
as contemplated in this Agreement and (a) Buyer shall have performed in all
material respects its covenants contained herein required to be performed by it
on or prior to the Closing Date and (b) all of its representations contained
herein shall be correct in all material respects on the Closing Date, then
Seller shall refund to Buyer the Deposit within three Business Days after the
date of termination of this Agreement.

12. TAXES, PRORATIONS AND ASSUMPTION OF OBLIGATIONS.

    12.1. TAX PRORATIONS. Real and personal property taxes for the Properties
shall be prorated between Buyer and Seller as of the Effective Date. If the
actual taxes are not known on the Closing Date, Seller's share of such taxes
shall be determined by using (a) the rates and millage for the year prior to the
year in which the Closing occurs, with appropriate adjustments for any known and
verifiable changes thereto, and (b) the assessed values for the year in which
Closing occurs. When Buyer receives the actual tax statements for the Properties
from the appropriate taxing authorities, Buyer shall deliver to Seller a copy of
such statements, together with the amount, if any, by which Seller's proration
exceeds the proration that would have been made had actual tax statements been
used to calculate Seller's proration. If the proration for Seller that would
have been made using actual tax statements exceeds that made at Closing, Seller
shall pay to Buyer such difference within three Business Days of receipt of such
statement.

    12.2. ASSUMPTION BY BUYER. At Closing, Buyer shall assume (a) the obligation
to (i) plug and abandon or remove and dispose of all Wells, platforms,
structures, flow lines, pipelines, and the other equipment now or hereafter
located on the Oil and Gas Properties within such time as required by, in
conformance with, and satisfying the terms and conditions of the oil, gas and
mineral leases comprising part of the Properties, the Contracts and applicable
laws, rules, orders and regulations of any governmental authority having
jurisdiction, (ii) cap and bury all flow lines and other pipelines now or
hereafter located on the Oil and Gas Properties, and (iii) dispose of naturally
occurring radioactive material and all other pollutants, wastes, contaminants,
or hazardous, extremely hazardous, or toxic materials, substances, chemicals or
wastes now or hereafter located on the Oil and Gas Properties; (b) the
obligation to restore the lands covered by or used in connection with the
Properties within such time as required by, in conformance with, and satisfying
the terms and conditions of the oil, gas and mineral leases comprising part of
the Properties the Contracts and applicable laws, rules, orders and regulations
of any governmental authority having

                                     -15-
<PAGE>
 
jurisdiction; and (c) all other costs, obligations and liabilities that relate
to the ownership or operation of the Oil and Gas Properties or arise under the
Contracts or otherwise relate to the Properties and, in each case, arise from or
relate to events occurring or conditions existing whether before, on or after
the Effective Date including, without limitation, (i) all obligations and
liabilities arising from or in connection with any gas production, pipeline,
storage, processing or other imbalance attributable to Substances produced from
Oil and Gas Properties; (ii) any and all claims arising under all federal and
state environmental statues and (iii) all obligations and liabilities arising
from or in connection with any of the litigation described on the Exhibit,
including, without limitation, any claims by other working interest owners
against Seller or Torch Operating Company, where Torch Operating Company resigns
as operator of the Properties pursuant to this Agreement. All such plugging,
replugging, abandonment, removal, disposal, and restoration operations shall be
in compliance with applicable laws and regulations and contracts, and shall be
conducted in a good and workmanlike manner.

13. FINAL ACCOUNTING.

    13.1. SETTLEMENT STATEMENT. As soon as practical and, in any event, no later
than ninety calendar days after the Closing Date, Seller shall prepare and
deliver to Buyer a statement (the "Final Settlement Statement") setting forth
the adjustments to the Purchase Price in accordance with Section 2.2. The Final
Settlement Statement shall be prepared in accordance with customary accounting
principles used in the oil and gas industry. The Final Settlement Statement
shall reflect all amounts shown on the Closing Statement and shall deduct all
such amounts from the amounts calculated under the Final Settlement Statement.
Within thirty calendar days after Buyer's receipt of the Final Settlement
Statement (but not earlier than ninety calendar days after the Closing Date),
Buyer and Seller shall endeavor to agree on the final accounting.

    13.2. ARBITRATION OF FINAL SETTLEMENT. If Seller and Buyer cannot agree upon
the Final Settlement Statement, the Houston Office of the firm of Ernst & Young
is designated to act as an arbitrator and to decide all points of disagreement
with respect to the Final Settlement Statement, such decision to be binding on
both parties. If such firm is unwilling or unable to serve in such capacity,
Seller and Buyer shall attempt to, in good faith, designate another acceptable
person as the sole arbitrator under this Section. If the parties are unable to
agree upon the designation of a person as substitute arbitrator, then Seller or
Buyer, or both of them, may in writing request the Judge of the United States
District Court for the Southern District of Texas senior in term of service to
appoint the substitute arbitrator. The arbitration shall be conducted under the
Texas General Arbitration Act and the rules of the American Arbitration
Association to the extent such rules do not conflict with the terms of such Act
and the terms hereof. The costs and expenses of the arbitrator, whether the firm

                                     -16-
<PAGE>
 
designated above, or a third party appointed pursuant to the preceding sentence
shall be shared equally by Seller and Buyer.

    13.3. PAYMENT. Within five Business Days after the agreement of Seller and
Buyer on the Final Settlement Statement or after the decision of the arbitrator,
Buyer or Seller, as the case may be, shall promptly make a cash payment to the
other equal to the sums as may be found to be due in the Final Settlement
Statement.

14. SURVIVAL AND INDEMNIFICATION.

    14.1. SURVIVAL. The liability of Buyer and Seller under each of their
respective representations, warranties, covenants, agreements and indemnities
shall survive the Closing and execution and delivery of the assignments
contemplated hereby.

    14.2. INDEMNIFICATION BY SELLER. After the Closing, Seller shall be
responsible for, shall pay on a current basis, and shall indemnify, save, hold
harmless, discharge and release Buyer, all of its affiliates, successors and,
permitted assignees, and all of its and their respective stockholders,
directors, officers, employees, agents and representatives (collectively, "Buyer
Indemnified Parties") from and against any and all payments, charges, judgments,
assessments, liabilities, damages, penalties, fines or costs and expenses paid
or incurred by the person seeking indemnification, including any legal or other
expenses reasonably incurred in connection therewith (collectively,
"Liabilities"), arising from, based upon, related to or associated with (a) any
act or omission by Seller involving or relating to the Excluded Assets whether
occurring before, on or after the Effective Date; and (b) the fees of any
brokers' or finders' fees or commissions arising with respect to brokers or
finders retained or engaged by Seller and resulting from or relating to the
transactions contemplated in this Agreement.

    14.3. INDEMNIFICATION BY BUYER. After the Closing, Buyer shall assume, be
responsible for, shall pay on a current basis, and shall indemnify, save, hold
harmless, discharge and release Seller, its affiliates, its and their successors
and permitted assigns, and all of their respective stockholders, directors,
officers, employees, agents and representatives (collectively, "Seller
Indemnified Parties") from and against any and all Liabilities arising from,
based upon, related to or associated with (a) any act, omission, event,
condition or circumstance involving or relating to the Properties whether
occurring on or after the Effective Date; (b) liabilities and obligations
assumed by Buyer pursuant to Section 12; and (c) the failure to obtain any
consent or waiver of any preferential right for the assignment of the Properties
to Buyer; and (d) any brokers' or finders' fees or commissions arising with
respect to brokers or finders retained or engaged by any person other than
Seller and resulting from or relating to the transactions contemplated in this
Agreement.


                                     -17-
<PAGE>
 
    14.4. LIABILITY LIMITATIONS.

          14.4.1. After the Closing, any assertion by any Buyer Indemnified
 Party that Seller is liable (a) for the inaccuracy of any representation or
 warranty, (b) for the breach of any covenant, (c) for indemnity under the terms
 of this Agreement or (d) otherwise in connection with the transactions
 contemplated in this Agreement, must be made by Buyer in writing and must be
 given to Seller on or prior to the last preceding Business Day before the first
 anniversary of the Closing Date. Nothing in this Section 14.4 shall restrict or
 limit the right of any Buyer Indemnified Party to make a claim pursuant to any
 express warranty made by Seller in the Assignment and Bill of Sale dated of
 even date herewith between Buyer and Seller. The notice shall state the facts
 known to Buyer that give rise to such notice in sufficient detail to allow
 Seller to evaluate the assertion.

          14.4.2. The amount of any Liabilities for which any of the Buyer
 Indemnified Parties or Seller Indemnified Parties is entitled to
 indemnification or other compensation under this Agreement or in connection
 with or with respect to the transactions contemplated in this Agreement shall
 be reduced by any corresponding (a) tax benefit created or generated or (b)
 insurance proceeds realized or that could reasonably be expected to be realized
 by such party if a claim were properly pursued under the relevant insurance
 arrangements.

          14.4.3. None of the Buyer Indemnified Parties nor the Seller
 Indemnified Parties shall be entitled to recover from Seller or Buyer,
 respectively, for any losses, costs, expenses, or damages arising under this
 Agreement or in connection with or with respect to the transactions
 contemplated in this Agreement any amount in excess of the actual compensatory
 damages, court costs and reasonable attorney fees, suffered by such party.
 Buyer on behalf of each of the Buyer Indemnified Parties and Seller on behalf
 of each of the Seller Indemnified Parties waives any right to recover punitive,
 special, exemplary and consequential damages arising in connection with or with
 respect to the transactions contemplated in this Agreement.

          14.4.4. The sole and exclusive remedy of each of the Buyer Indemnified
 Parties and the Seller Indemnified Parties with respect to the purchase and
 sale of the Properties shall be pursuant to the express provisions of this
 Agreement. Any and all (a) claims relating to the representations, warranties,
 covenants and agreements contained in this Agreement, (b) other claims pursuant
 to or in connection with this Agreement or (c) other claims relating to the
 Properties and the purchase and sale thereof shall be subject to the provisions
 set forth in this Section 14. Buyer on behalf of each of the Buyer Indemnified
 Parties and Seller on behalf of each of the Seller Indemnified Parties is
 hereby deemed to have waived, to the fullest extent permitted under applicable
 law, any right of contribution against Seller or any of its affiliates or Buyer
 or any of its affiliates and any and all rights,


                                     -18-
<PAGE>
 
 claims and causes of action it may have against Seller or any of its affiliates
 or Buyer or any of its affiliates, respectively, arising under or based on any
 federal, state or local statute, law, ordinance, rule or regulation or common
 law or otherwise.

          14.4.5. No person entitled to indemnification hereunder or otherwise
 to damages in connection with or with respect to the transactions contemplated
 in this Agreement shall settle, compromise or take any other action with
 respect to any claim, demand, assertion of liability or legal proceeding that
 could prejudice or otherwise adversely impact the ability of the person
 providing such indemnification or potentially liable for such damages to defend
 or otherwise settle or compromise with respect to such claim, demand, assertion
 of liability or legal proceeding.

          14.4.6. Seller and Buyer acknowledge that the payment of money, as
 limited by the terms of this Agreement, shall be adequate compensation for
 breach of any representation, warranty, covenant or agreement contained herein
 or for any other claim arising in connection with or with respect to the
 transactions contemplated in this Agreement. As the payment of money shall be
 adequate compensation, Buyer and Seller waive any right to rescind this
 Agreement or any of the transactions contemplated hereby.

          14.4.7. Each person entitled to indemnification hereunder or otherwise
 to damages in connection with the transactions contemplated in this Agreement
 shall take all reasonable steps to mitigate all losses, costs, expenses and
 damages after becoming aware of any event or circumstance that could reasonably
 be expected to give rise to any losses, costs, expenses and damages that are
 indemnifiable or recoverable hereunder or in connection herewith.

          14.4.8. THE INDEMNIFICATION, RELEASE AND ASSUMPTION PROVISIONS
 PROVIDED FOR IN THIS AGREEMENT SHALL BE APPLICABLE WHETHER OR NOT THE
 LOSSES, COSTS, EXPENSES AND DAMAGES IN QUESTION AROSE SOLELY OR IN PART FROM
 THE GROSS, ACTIVE, PASSIVE OR CONCURRENT NEGLIGENCE, OR OTHER FAULT OF ANY
 INDEMNIFIED PARTY. BUYER AND SELLER ACKNOWLEDGE THAT THIS STATEMENT COMPLIES
 WITH THE EXPRESS NEGLIGENCE RULE AND IS CONSPICUOUS.

          14.4.9. Neither Seller nor Buyer shall have any obligation or
 liability under this Agreement or in connection with or with respect to the
 transactions contemplated in this Agreement for (a) any breach,
 misrepresentation or noncompliance with respect to any representation,
 warranty, covenant or obligation if such breach, misrepresentation or
 noncompliance shall have been waived by the other party, or (b) any
 misrepresentation or


                                     -19-
<PAGE>
 
breach of warranty if such other party had knowledge of the misrepresentation or
breach of warranty at or before Closing.

          14.4.10. The exclusive remedy of Buyer for Environmental Defects and
Environmental Conditions shall be pursuant to Section 11.1.

    14.5. WAIVER OF REPRESENTATIONS.

          14.5.1. THE EXPRESS REPRESENTATIONS OF SELLER CONTAINED IN THIS
AGREEMENT ARE EXCLUSIVE AND ARE IN LIEU OF, ANY OTHER REPRESENTATION OR WARRANTY
WITH RESPECT TO THE ENVIRONMENTAL CONDITION, BOTH SURFACE AND SUBSURFACE, OR
OTHER CONDITION OF THE PROPERTIES; OR THE OWNERSHIP OR OPERATION OF THE
PROPERTIES OR ANY PART THEREOF.

          14.5.2. SELLER EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER HEREBY
WAIVES, (I) ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THE QUALITY, QUANTITY
OR VOLUME OF THE RESERVES, IF ANY, OF OIL, GAS OR OTHER HYDROCARBONS IN OR UNDER
THE OIL AND GAS PROPERTIES; (II) ANY WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, AS TO THE QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
CONFORMITY TO SAMPLES, OR CONDITION OF ANY OF THE PROPERTIES OR ANY PART
THERETO; AND (III) ALL REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED OR
STATUTORY, OTHER THAN THE EXPRESS REPRESENTATIONS CONTAINED IN THIS AGREEMENT.

          14.5.3. THE ITEMS OF PERSONAL PROPERTY, EQUIPMENT, IMPROVEMENTS,
FIXTURES AND APPURTENANCES CONVEYED AS PART OF THE PROPERTIES ARE SOLD, AND
BUYER ACCEPTS SUCH ITEMS "AS IS, WITH ALL FAULTS."

          14.5.4. THERE ARE NO WARRANTIES THAT EXTEND BEYOND THE FACE OF THIS
AGREEMENT.

          14.5.5. BUYER ACKNOWLEDGES THAT THE WAIVERS IN THIS SECTION 14.5 ARE
CONSPICUOUS.

    14.6. DTPA WAIVER. Buyer hereby waives the provisions of the Texas
Deceptive Trade Practices Act, Chapter 17, Subchapter E, Sections 17.41 through
17.63, inclusive



                                     -20-
<PAGE>
 
(other than Section 17.555, which is not waived), of the Texas Business and
Commerce Code. To evidence its ability to grant such waiver, Buyer represents to
Seller that it (a) is in the business of seeking or acquiring, by purchase or
lease, goods or services for commercial or business use, (b) has assets of $5
million or more according to its most recent financial statement prepared in
accordance with generally accepted accounting principles, (c) has knowledge and
experience in financial and business matters that enable it to evaluate the
merits and risks of the transaction contemplated hereby and (d) is not in a
significantly disparate bargaining position.

15. FURTHER ASSURANCES.

    15.1. GENERAL. After the Closing, Seller and Buyer shall execute,
acknowledge and deliver or cause to be executed, acknowledged and delivered such
instruments and take such other action as may be necessary or advisable to carry
out their obligations under this Agreement and under any exhibit, document,
certificate or other instrument delivered pursuant hereto.

    15.2. FILINGS, NOTICES AND CERTAIN GOVERNMENTAL APPROVALS. Promptly after
Closing Buyer shall (a) record the assignments of the Properties executed at the
Closing in all applicable real property records, (b) send notices to vendors
supplying goods and services for the Properties of the assignment of the
Properties to Buyer and, if applicable, the designation of Buyer as the operator
thereof, (c) actively pursue the unconditional approval by the Minerals
Management Service and all other applicable governmental authorities of the
assignment of the Properties to Buyer and the designation of Buyer as the
operator thereof, and (d) actively pursue all other consents and approvals that
may be required in connection with the assignment of the Properties to Buyer,
and the assumption of the liabilities assumed by Buyer hereunder, and that shall
not have been obtained prior to Closing. Buyer obligates itself to take any and
all action required by the Minerals Management Service or any other regulatory
agency in order to obtain such unconditional approval, including but not limited
to, the posting of any and all bonds or other security that may be required in
excess of its existing lease, pipeline or area-wide bond.

    15.3. LOGOS AND NAMES. As soon as practicable after the Closing, Buyer will
remove or cause to be removed the names and marks used by Seller and all
variations and derivatives thereof and logos relating thereto from the
Properties.

16. ACCESS BY SELLER AFTER CLOSING. After the Closing Date, Seller and its
authorized representatives shall have reasonable access (at Seller's sole cost
and expense) during Buyer's normal business hours to (i) all books and records
of Buyer pertaining to the Properties for periods prior to the Effective Date
and (ii) the Properties for the purpose of prosecuting or


                                     -21-
<PAGE>
 
defending claims, lawsuits or other proceedings, for audit purposes, or to
comply with legal process, rules, regulations or orders of any governmental
authority. Seller, at its sole expense, may copy such records that it deems
appropriate. Buyer agrees to maintain such books and records for a minimum of
six years after Closing.

17. NOTICES. All notices required or permitted under this Agreement shall be in
writing and, (a) if by air courier, shall be deemed to have been given one
Business Day after the date deposited with a recognized carrier of overnight
mail, with all freight or other charges prepaid, (b) if by telecopier, shall be
deemed to have been given when actually received, and (c) if mailed, shall be
deemed to have been given three Business Days after the date when sent by
registered or certified mail, postage prepaid, addressed as follows:

To Seller:          Bellwether Exploration Company
                    1221 Lamar, Suite 1600
                    Houston, Texas 77010

                    Attn: Roland E. Sledge
                    Telecopier: (713) 655-1866

To Buyer:           Jay Resources Corporation
                    One Houston Center
                    1221 McKinney, Suite 3100
                    Houston, Texas 77010

                    Attn: Reuven Hollo
                    Telecopier: 759-0360

"Business Day" shall mean a day other than Saturday or Sunday or any legal
holiday for commercial banking institutions under the laws of the State of
Texas.

18. ASSIGNMENT. Neither Seller nor Buyer may assign its rights or delegate its
duties or obligations arising under this Agreement, in whole or in part, by
operation of law or otherwise, before or after Closing, without the prior
written consent of the other party. Buyer may assign its rights and delegate its
duties or obligations to an affiliate of Buyer provided that Buyer provide to
Seller evidence of the affiliate's financial condition, which evidence satisfies
Seller, in Seller's sole discretion, that the affiliate can comply with all
obligations of Buyer under this Agreement.

19. GOVERNING LAW. This Agreement shall be governed and construed in accordance
with the laws of the State of Texas without giving effect to any principles of
conflicts of

                                     -22-
<PAGE>
 
laws. The validity of the various conveyances affecting the title to real
property shall be governed and construed in accordance with the laws of the
jurisdiction in which such property is situated. The representations and
warranties contained in such conveyances and the remedies available because of a
breach of such representations and warranties shall be governed by and construed
in accordance with the laws of the State of Texas without giving effect to the
principles of conflicts of laws.

20. EXPENSES AND FEES. Whether or not the transactions contemplated by this
Agreement are consummated, each of the parties hereto shall pay the fees and
expense of its counsel, accountants and other experts incident to the
negotiation and preparation of this Agreement and consummation of the
transactions contemplated hereby. Buyer shall be responsible for the cost of all
fees for the recording of transfer documents and any sales, transfer, stamp or
other excise taxes resulting from the transfer of the Properties to Buyer. All
other costs shall be borne by the party incurring such costs.

21. INTEGRATION. This Agreement, including the Exhibit, and the other agreements
to be entered into by the parties under the provisions of this Agreement and the
Confidentiality Agreement dated May 10, 1997, executed by Buyer and the Advisor
(the "Confidentiality Agreement") set forth the entire agreement and
understanding of the parties in respect of the transactions contemplated hereby
and supersede all prior agreements, prior arrangements and prior understandings
relating to the subject matter hereof.

22. WAIVER OR MODIFICATION. This Agreement may be amended, modified, superseded
or cancelled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by a duly
authorized officer of Buyer and Seller, or, in the case of a waiver or consent,
by or on behalf of the party or parties waiving compliance or giving such
consent. The failure of any party at any time or times to require performance of
any provision of this Agreement shall not affect its right at a later time to
enforce such provision. No waiver by any party of any condition, or of any
breach of any covenant, agreement, representation or warranty contained in this
Agreement, in any one or more instances, shall be deemed to be or construed as a
further or continuing waiver of any such condition or breach or waiver of any
other condition or of any breach of any other covenant, agreement,
representation or warranty.

23. HEADINGS. The Section headings contained in this Agreement are for
convenient reference only and shall not in any way affect the meaning or
interpretation of this Agreement.

24. INVALID PROVISIONS. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provi-

                                     -23-
<PAGE>
 
sion shall be fully severable; this Agreement shall be construed and enforced as
if such illegal, invalid or unenforceable provision had never comprised a part
hereof; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement.

25. WAIVER OF JURY TRIAL. SELLER AND BUYER HEREBY IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, SUIT OR OTHER LEGAL PROCEEDING BASED ON, ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN.

26. MULTIPLE COUNTERPARTS. This Agreement may be executed in a number of
identical counterparts, each of which for all purposes is to be deemed an
original, and all of which constitute, collectively, one agreement. In addition,
this Agreement may be executed in a number of counterparts, any one of which may
contain the execution of either Buyer or Seller, and all of such counterparts
taken together shall constitute one completely executed original agreement.

27. PUBLIC ANNOUNCEMENTS. Buyer and Seller agree that prior to making any public
announcement or statement with respect to the transaction contemplated by this
Agreement, the party desiring to make such public announcement or statement
shall consult with the other party hereto and exercise its best efforts to (a)
agree upon the text of a joint public announcement or statement to be made by
both Buyer and Seller or (b) obtain approval of the other party hereto the text
of a public announcement or statement to be made solely by Seller or Buyer, as
the case may be. Nothing contained in this section shall be construed to require
either party to obtain approval of the other party hereto to disclose
information with respect to the transaction contemplated by this Agreement to
any state or federal governmental authority or agency to the extent required by
applicable law or by any applicable rules, regulations or orders of any
governmental authority or agency having jurisdiction or necessary to comply with
disclosure requirements of the applicable stock exchange or any applicable
securities laws.

28. ARBITRATION.

    28.1 BINDING ARBITRATION. On the request of any party hereto, whether made
before or after the institution of any legal proceeding, any action, dispute,
claim or controversy of any kind now existing or hereafter arising between any
of the parties hereto in any way arising out of, pertaining to or in connection
with this Agreement (a "Dispute")




                                     -24-
<PAGE>
 
shall be resolved by binding arbitration in accordance with the terms hereof.
Any party may, by summary proceedings, bring an action in court to compel
arbitration of any Dispute.

   28.2. GOVERNING RULES. Any arbitration shall be administered by the American
Arbitration Association (the "AAA") in accordance with the terms of this
Section, the Commercial Arbitration Rules of the AAA, and, to the maximum extent
applicable, the Federal Arbitration Act. Judgment on any award rendered by an
arbitrator may be entered in any court having jurisdiction.

   28.3. ARBITRATORS. Any arbitration shall be conducted before one arbitrator.
The arbitrator shall be a practicing attorney licensed to practice in the State
of Texas who is knowledgeable in the subject matter of the Dispute selected by
agreement between the parties hereto. If the parties cannot agree on an
arbitrator within 30 days after the request for an arbitration, then any party
may request the AAA to select an arbitrator. The arbitrator may engage
engineers, accountants or other consultants that the arbitrator deems necessary
to render a conclusion in the arbitration proceeding.

   28.4. Conduct of Arbitration. To the maximum extent practicable, an
arbitration proceeding hereunder shall be concluded within 180 days of the
filing of the Dispute with the AAA. Arbitration proceedings shall be conducted
in Houston, Texas. Arbitrators shall be empowered to impose sanctions and to
take such other actions as the arbitrators deem necessary to the same extent a
judge could impose sanctions or take such other actions pursuant to the Federal
Rules of Civil Procedure and applicable law. At the conclusion of any
arbitration proceeding, the arbitrator shall make specific written findings of
fact and conclusions of law. The arbitrator shall have the power to award
recovery of all costs and fees to the prevailing party. Each party agrees to
keep all Disputes and arbitration proceedings strictly confidential except for
disclosure of information required by applicable law.

   28.5. COSTS OF ARBITRATION. All fees of the arbitrator and any engineer,
accountant or other consultant engaged by the arbitrator, shall be paid by Buyer
and Seller equally unless otherwise awarded by the arbitrator.
 
   29. LIABILITY. Each of the representations, warranties and covenants of
Andrews Oil and Gas, Inc. ("Andrews") in this Agreement is made severally and
only by


                                     -25-
<PAGE>
 
Andrews with respect to itself and its interest in the Properties. The liability
of Andrews under or in connection with this Agreement shall be several and not
joint.

EXECUTED as of the date first set forth above.

                           BUYER:                                          
                                                                           
                           JAY RESOURCES CORPORATION                       
                                                                           
                                                                           
                           By: /s/ Reuven Hollo                                
                               --------------------------     
                           Name: Reuven Hollo                              
                                -------------------------     
                           Title: President                                
                                 ------------------------     
                                                                           
                           SELLER:                                         
                                                                           
                           BELLWETHER EXPLORATION COMPANY                  
                                                                           
                           By: /s/ J. Darby Sere
                               ---------------------------
                               J. Darby Sere, President                        
                                                          
                 
                           BLACK HAWK OIL COMPANY                          
                                                                           
                           By: /s/ J. Darby Sere 
                               ----------------------------
                               J. Darby Sere, President 
                                              

                                     -26-
<PAGE>
 
                            1988-II TEAI LIMITED PARTNERSHIP       
                            By: BLACK HAWK OIL COMPANY             
                                Its General Partner                
                                                                   
                            By: /s/ J. Darby Sere
                                --------------------------------       
                                 J. Darby Sere, President              
                                                                 
                           
                            1989-I TEAI LIMITED PARTNERSHIP              
                            By: BLACK HAWK OIL COMPANY                   
                                Its General Partner                      
                                                                         
                            By:  /s/ J. Darby Sere
                                 -------------------------------    
                                 J. Darby Sere, President           
                                                                    
                            TEAI VIII-A LIMITED PARTNERSHIP         
                            By: BLACK HAWK OIL COMPANY              
                                Its General Partner                 
                                                                    
                            By: /s/ J. Darby Sere 
                                ---------------------------------   
                                 J. Darby Sere, President           
                                                                  

                            TEAI OIL & GAS COMPANY


                            By: /s/ J. Darby Sere
                                ---------------------------------  
                                 J. Darby Sere, President


                                     -27-


                          
<PAGE>
 
                            ANDREWS OIL AND GAS, INC.




                            By: /s/ J. Darby Sere  
                                -------------------------------
                                    J. Darby Sere, President 




                                     -28-
<PAGE>
 
                                    ANNEX I

                            TITLE TO THE PROPERTIES

 1. DEFINITIONS. This Annex I incorporates the defined terms contained in the
 Agreement and also includes the following definitions:

    1.1. "Allocated Value" means the value allocated to each Oil and Gas
 Property as set forth on the Exhibit, reflecting the portion of the Purchase
 Price associated with each Oil and Gas Property.

    1.2. "Liens" means any encumbrance, lien, security interest, claim or
burden.

    1.3. "Marketable Title" means, for the Title Properties, such title as (a)
 will enable Buyer, as Seller's successor in title, to receive from a particular
 Title Property at least the "Net Revenue Interest" for the Title Properties set
 forth on the Exhibit as being associated with such Title Property, without
 reduction, suspension or termination throughout the productive life of Wells
 located on such Oil and Gas Properties, except for any reduction, suspension or
 termination caused by Buyer, that arises as a result of Permitted Encumbrances
 or set forth in the Exhibit; (b) will obligate Buyer, as Seller's successor in
 title, to bear no greater "Working Interest" than the Working Interest for each
 of the Title Properties identified on the Exhibit as being associated with such
 Title Property, without increase throughout the productive life of such Well,
 except for any increase caused by Buyer, that arises as result of Permitted
 Encumbrances or set forth in the Exhibit; and (c) is free and clear of all
 Liens, except for Permitted Encumbrances.

    1.4. "Notice Date" means 12:00 noon (Houston time) on June 25, 1997.

    1.5. "Permitted Encumbrances" means (a) Liens securing payments to mechanics
 and materialmen, payments of taxes or claims arising by statute to secure or
 protect any other payment obligation that are, in each case, not yet delinquent
 or, if delinquent, are being contested in good faith in the normal course of
 business; (b) any matters disclosed on the Exhibit or in any agreement or
 instrument disclosed in the Exhibit; (c) Title Defects that Buyer fails to
 assert in accordance with the provisions of this Annex prior to the Notice
 Date; (d) consents to assignment by a governmental authority that are obtained
 by the Closing Date or that are customarily obtained after the consummation of
 transactions of the nature contemplated in this Agreement; and (e) other minor
 defects or irregularities of title affecting any portion of any Title Property
 that individually or in the aggregate do not materially interfere with the
 operation, value or use of any Title Property.
<PAGE>
 
    1.6. "Title Defect" means any Lien, other than a Permitted Encumbrance or
 matter specifically waived by Buyer in writing, that is identified by Buyer on
 or before the Notice Date, and that renders title to a Title Property (or any
 portion thereof) less than Marketable Title.

    1.7. "Title Defect Amount" means, with respect to any reduction of the Net
 Revenue Interest set forth in the Exhibit for any Title Properties, an amount
 calculated by multiplying the reduction in Net Revenue Interest by the
 Allocated Value of such Oil and Gas Property; with respect to any increase in
 the Working Interest set forth in the Exhibit for any Title Properties, an
 amount calculated by multiplying the increase in the Working Interest by the
 lease operating and capital expense items as shown in the Reserve Report
 delivered by Albrecht & Associates as attached to the Letter of Intent over the
 life of such Title Properties; and with respect to any Title Defect that does
 not cause the Net Revenue Interest set forth in the Exhibit for Title
 Properties to decrease or cause the Working Interest set forth in the Exhibit
 for any Title Properties to increase, an amount determined by evaluating the
 portion of the Title Properties affected by such Title Defect, the legal effect
 of the Title Defect, and the potential economic effect of the Title Defect over
 the life of the Oil and Gas Property affected. The Title Defect Amount as to
 any particular Title Property, however, shall never exceed the Allocated Value
 therefor.

    1.8. "Title Properties" means those Properties listed on the Exhibit as
 Title Properties.

 2. TITLE PROCEDURE.

    2.1. NOTICE OF TITLE DEFECTS. On or before the Notice Date, Buyer shall
 notify Seller of any Title Defect discovered by Buyer affecting a Title
 Property. The notice shall be in writing and shall describe the alleged Title
 Defect, specify the Title Property affected and set forth Buyer's assessment of
 the Title Defect Amount.

    2.2. SELLER'S ELECTION TO CURE. Seller may notify Buyer in writing on or
 before the Closing Date that it elects to cure the alleged Title Defect. If
 Seller has elected to cure the Title Defect, then Seller shall use commercially
 reasonable efforts to cure such Title Defect during a period ending sixty days
 after Closing (the "Cure Period").


                                      -2-
<PAGE>
 
    2.3. UNCURED TITLE DEFECTS. If at the Closing Date, a Title Defect
 identified by Buyer pursuant to Section 2.1 of this Annex I remains uncured and
 Seller has not notified Buyer of its election to cure such Title Defect, then
 the Purchase Price to be paid at the Closing shall be reduced by an amount
 equal to the Title Defect Amount. There shall not be any reduction of the
 Purchase Price at Closing for any Title Defects that Seller has elected to cure
 or has disputed. If after the Cure Period, a Title Defect that Seller has
 elected to cure remains uncured, then the Purchase Price shall be reduced in
 the Final Settlement Statement by an amount equal to the Title Defect Amount.

 3. DISPUTE RESOLUTION. If a Dispute exists as to whether a matter referred to
 in any notice furnished by Buyer to Seller pursuant to Section 2.1 of this
 Annex I constitutes a Title Defect, whether a Title Defect has been cured, or
 the amount of any Title Defect Amount, either Buyer or Seller may request
 arbitration of such dispute pursuant to Section 28 of this Agreement.


                                      -3-
<PAGE>
 
                                    ANNEX II

                     ENVIRONMENTAL AND PHYSICAL ASSESSMENT

    1.1. DEFINITIONS. This Annex II incorporates the defined terms contained in
 the Agreement and also includes the following definitions:

         1.1.1. "Environmental Condition" as used herein means any condition
 relating to the Properties listed on the Exhibit that involves contamination of
 soil, air or water or the generation, storage or transportation of
 contaminants, pollutants, hazardous waste or hazardous substances.

         1.1.2. "Environmental Defect" means any Environmental Condition that
 violates any applicable law, regulation, ordinance, rule or order, and any
 material objection to the Physical Condition of the Properties, other than a
 matter specifically waived by Buyer in writing, that is identified by Buyer on
 or before the Environmental Notice Date.
   
         1.1.3. "Environmental Defect Amount" means the cost estimated in good
 faith by Buyer to remediate Environmental Defects.

         1.1.4. "Environmental Notice Date" means 12:00 noon (Houston time) on
 June 25, 1997.

         1.1.5. "Physical Condition" as used herein means any physical condition
 relating to the Properties listed on the Exhibit.

    1.2. ENVIRONMENTAL PROCEDURE.

         1.2.1. ENVIRONMENTAL INSPECTION. (a) Subject to the conditions set
 forth herein, Buyer or its designated representative(s) shall have access to
 the Properties of any Excluded Assets for the purpose of inspecting the
 Properties and conducting such tests, examinations, investigation and
 assessments as may be necessary or appropriate in Buyer's opinion to evaluate
 the Environmental Condition and the Physical Condition of the Properties. Buyer
 shall schedule such tests with Seller at least twenty-four hours prior to any
 testing and shall conduct such tests during normal business hours. A
 representative of Seller shall be available to Buyer during normal business
 hours for scheduled tests to enable Buyer or Buyer's representative(s) to
 perform the inspection and assessment of the Environmental
<PAGE>
 
 Condition(s) and Physical Condition. Seller shall have the right to have its
 representative accompany Buyer or Buyer's representative(s) during such
 activities and shall have the right, at Seller's option, to split any samples
 taken by Buyer or Buyer's representative(s) during such activities. Buyer
 agrees to promptly provide to Seller all information obtained by Buyer
 regarding the Properties, including copies of any environmental assessments,
 all reports, data and conclusions whether prepared by the third party
 consultant(s) hired by Buyer or otherwise. Until Closing, Buyer and Seller
 shall keep any and all data or information acquired by all such examinations
 and results of all analyses of such data and information strictly confidential
 and shall not disclose same to any person or agency without prior written
 approval of the other unless disclosure of such data or information is required
 by law or by order of a court or agency, in which case, the party required to
 make such disclosure shall notify the other party as soon as reasonably
 possible and prior to such disclosure, so that the non-disclosing party may
 assert any legal rights to prevent disclosure. In the event Closing does not
 occur, the foregoing obligation of confidentiality shall survive Closing and
 continue after termination of this Agreement.

          1.2.2. NOTICE OF ENVIRONMENTAL DEFECTS. On or before the Environmental
 Notice Date, Buyer shall notify Seller of the existence and nature of any
 Environmental Defect affecting the Properties discovered by Buyer. The notice
 shall be in writing and shall describe the alleged Environmental Defect,
 including data and support thereof, and shall set forth Buyer's good faith
 assessment of the Environmental Defect Amount.


                                      -2-
<PAGE>
 
                                   ANNEX III

                             CERTIFICATE OF SELLER

 Pursuant to the Agreement for Purchase and Sale ("Agreement") dated June 9,
 1997 by and between Bellwether Exploration Company and Black Hawk Oil Company,
 1988-II TEAI Limited Partnership, 1989-I TEAI Limited Partnership, TEAI VIII-A
 Limited Partnership, TEAI Oil & Gas Company and Andrews Oil and Gas, Inc.
 (collectively, "Seller") and Jay Resources Corporation ("Buyer"), Seller hereby
 represents, warrants and affirms to Buyer as follows:

     l. Seller has performed and complied in all material respects with each of
 the covenants and conditions required by the Agreement to be performed or
 complied with by it before or at the time of execution of this Certificate; and

     2. Each of the representations and warranties made by Seller under the
 Agreement are true and correct as of the date hereof except for (i) changes
 specifically contemplated by the Agreement, (ii) inaccuracies in such
 representations and warranties deemed to be waived by Buyer pursuant to the
 terms of the Agreement and (iii) inaccuracies set forth in the Schedule
 attached to this Certificate.

 This Certificate is executed this ______ day of _________, 1997.

                                    BELLWETHER EXPLORATION COMPANY

                                    By: _____________________________
                                        J. Darby Sere, President

                                    BLACK HAWK OIL COMPANY

                                    By: _____________________________
                                        J. Darby Sere, President
<PAGE>
 
                           1988-II TEAI LIMITED PARTNERSHIP
                           By: BLACK HAWK OIL COMPANY
                               Its General Partner


                           By: 
                               ------------------------------
                               J. Darby Sere, President


                           1989-I TEAI LIMITED PARTNERSHIP
                           By: BLACK HAWK OIL COMPANY
                               Its General Partner

                           By:
                               ------------------------------
                               J. Darby Sere, President


                           TEAI VIII-A LIMITED PARTNERSHIP
                           By: BLACK HAWK OIL COMPANY
                               Its General Partner

                           By:
                               ------------------------------
                               J. Darby Sere, President


                           TEAI OIL & GAS COMPANY

                           By:
                               ------------------------------
                               J. Darby Sere, President



                                      -2-
<PAGE>
 
                          ANDREWS OIL & GAS, INC.


                          By:
                              ------------------------------
                              J. Darby Sere, President


                                      -3-
<PAGE>
 
                                   ANNEX IV

                             CERTIFICATE OF BUYER

Pursuant to the Agreement for Purchase and Sale ("Agreement") by and between 
Bellwether Exploration Company, Black Hawk Oil Company, 1988-II TEAI Limited 
Partnership, 1989-I TEAI Limited Partnership, TEAI VIII-A Limited Partnership, 
TEAI Oil & Gas Company and Andrews Oil and Gas, Inc. (collectively, "Seller"), 
and Jay Resources Corporation ("Buyer"), Buyer hereby represents, warrants and 
affirms to Seller as follows:

       1. Buyer has performed and complied in all material respects with each of
the covenants and conditions required by the Agreement to be performed or 
complied with by it before or at the time of execution of this Certificate; and

       2. Each of the representations and warranties made by Buyer under the 
Agreemetn are true and correct as of the date hereof except for (i) changes 
specifically contemplated by the Agreement, (ii) inaccuracies in such 
representations and warranties deemed to be waived by Seller pursuant to the 
terms of the Agreement and (iii) inaccuracies set forth in the Schedule attached
to this Certificate.

       This Certificate is executed this _____ day of __________, 1997.


                                           JAY RESOURCES CORPORATION



                                           By: 
                                               -------------------------------
                                                       Authorized Officer
<PAGE>
 
                                    ANNEX V


                          ASSIGNMENT AND BILL OF SALE



THE STATE OF TEXAS



COUNTY OF ________



This Assignment and Bill of Sale ("Assignment") is executed and delivered by
Bellwether Exploration Company, a Delaware corporation, Black Hawk Oil Company,
a Delaware corporation, 1988-II TEAI Limited Partnership, a Texas limited
partnership, 1989-I TEAI Limited Partnership, a Texas limited partnership, TEAI
VIII-A Limited Partnership, a Texas limited partnership, TEAI Oil & Gas Company,
a Delaware corporation, and Andrews Oil and Gas, Inc., a ________ corporation
(collectively, "Assignor"), to Jay Resources Corporation, a Texas corporation
("Assignee").

Assignor, for valuable considerations, the receipt and sufficiency of which are
hereby acknowledged, does by these presents GRANT, BARGAIN, SELL, CONVEY,
ASSIGN, TRANSFER, SET OVER and DELIVER unto Assignee all of Assignor's interests
in and to the following properties, other than the Excluded Assets (the
"Properties"):

     A. OIL AND GAS PROPERTIES. All leasehold interests, mineral interests, net
profits interests, overrides or other interests or operating rights in the oil
and gas leases as set forth in the Agreement (as herein defined) (the "Oil and
Gas Properties").

     B. WELLS. All oil, condensate or natural gas wells and water and other
types of injection wells located on the Oil and Gas Properties, whether
producing, operating, shut-in or temporarily abandoned.

     C. SEVERED SUBSTANCES. All severed crude oil, natural gas, casinghead gas,
drip gasoline, natural gasoline, petroleum, natural gas liquids, condensate,
products, liquids and other hydrocarbons and other minerals or materials of
every kind and description produced from the Oil and Gas Properties and either
(a) in storage tanks on the Effective Date, (b) in pipelines on the Effective
Date or (c) sold on or after the Effective Date (the "Substances").

     D. SURFACE CONTRACTS. All right-of-way agreements or other agreements
relating to the use or ownership of surface properties that are used or held for
use for flow lines in connection with the production of Substances from the Oil
and Gas Properties. including the rights-of-way agreements and other agreements
described in the Exhibit.
<PAGE>
 
     E. EQUIPMENT. All equipment, fixtures and physical facilities of every type
and description located on the Oil and Gas Properties.

     F. INFORMATION AND DATA. All title opinions, lease and land files, filings
with and reports to regulatory agencies, gas and sales contract files, division
order files and other books, files and records to the extent that they are
directly related to Oil and Gas Properties and the transfer thereof is not
prohibited by existing contractual obligations.

     G. CONTRACTS. All contracts and arrangements that directly relate to the
Properties and the production, storage, treatment, transportation, processing,
purchase, sale, disposal or other disposition of Substances therefrom and any
and all amendments, ratifications or extensions of the foregoing, to the extent
that any of the foregoing relate to periods on or after the Effective Date (the
"Contracts"), and all rights to make claims and receive proceeds under any
insurance policy held by or on behalf of Assignor in connection with the
Properties for any claim that arises from the Effective Date through the Closing
Date in connection with the Properties.

     H. PERMITS. All franchises, licenses, permits, approvals, consents,
certificates and other authorizations and other rights granted by governmental
authorities and all certificates of convenience or necessity, immunities,
privileges, grants and other rights, that relate to the Properties or the
ownership or operation of any thereof, including, without limitation, the
permits described in the Exhibit.

As used herein, "Excluded Assets" means (a) Assignor's and Torch Operating
Company's operating rights in and to the oil and gas leases described in the
Exhibit; (b) all trade credits and all accounts, instruments and general
intangibles (as such terms are defined in the Texas Uniform Commercial Code)
attributable to the Properties with respect to any period of time prior to the
Effective Date; (c) all claims and causes of action of Assignor (i) arising from
acts, omissions or events, or damage to or destruction of property, occurring
prior to the Effective Date, (ii) arising under or with respect to any of the
Contracts that are attributable to periods of time prior to the Effective Date
(including claims for adjustments or refunds), or (iii) with respect to any of
the Excluded Assets; (d) all rights and interests of Assignor (i) under any
policy or agreement of insurance or indemnity, (ii) under any bond, or (iii) to
any insurance or condemnation proceeds or awards arising, in each case, from
acts, omissions or events, or damage to or destruction of property, occurring
prior to the Effective Date; (e)

                                      -2-
<PAGE>
 
all Substances produced and sold from the Oil and Gas Properties with respect to
all periods prior to the Effective Date, together with all proceeds from or of
such Substances; (f) claims of Assignor for refunds of or loss carry forwards
with respect to (i) production or any other taxes attributable to any period
prior to the Effective Date, (ii) income or franchise taxes, or (iii) any taxes
attributable to the Excluded Assets; (g) all amounts due or payable to Assignor
as adjustments to insurance premiums related to the Properties with respect to
any period prior to the Effective Date; (h) all proceeds, income or revenues
(and any security or other deposits made) attributable to (i) the Properties for
any period prior to the Effective Date, or (ii) any Excluded Assets; (i) all
personal computers and associated peripherals and all radio and telephone
equipment; (j) all of Assignor's proprietary computer software, patents, trade
secrets, copyrights, names, trademarks, logos and other intellectual property;
(k) all of Assignor's interpretations of geological and geophysical data; (l)
all documents and instruments of Assignor that may be protected by an attorney-
client privilege; (m) data that cannot be disclosed or assigned to Assignee as a
result of confidentiality arrangements under agreements with persons
unaffiliated with Assignor; (n) all audit rights arising under any of the
Contracts or otherwise with respect to any period prior to the Effective Date or
to any of the Excluded Assets; and (o) all (i) agreements and correspondence
between Assignor and Torch Energy Advisors Incorporated and any affiliates
thereof (the "Advisor") relating to the transactions contemplated in this
Agreement, (ii) lists of prospective purchasers for such transactions compiled
by either Assignor or the Advisor, (iii) bids submitted by other prospective
purchasers of the Properties, (iv) analyses by Assignor or the Advisor of any
bids submitted by any prospective purchaser. (v) correspondence between or among
Assignor or Advisor, or either of their respective representatives, and any
prospective purchaser other than Assignee, and (vi) correspondence between
Assignor or Advisor or any of their respective representatives with respect to
any of the bids, the prospective purchasers, the engagement or activities of the
Advisor or the transactions contemplated in this Agreement.

TO HAVE AND TO HOLD all and singular the Properties, together with all rights,
titles, interests, estates, remedies, powers and privileges "hereunto
appertaining unto Assignee and their respective successors, legal
representatives and assigns forever, subject to the Permitted Encumbrances (as
defined in the Agreement for Purchase and Sale dated June 9, 1997, between
Assignee and Assignor (the "Agreement")). Assignor hereby binds itself, its
successors, legal representatives and assigns, to warrant and forever defend the
Properties unto Assignee, their respective successors, legal representatives and
assigns, against every

                                      -3-
<PAGE>
 
person whomsoever lawfully claiming or to claim the same or any part thereof,
by, through or under Assignor, but not otherwise.

In accordance with the terms of the Agreement, Assignee has assumed certain
obligations and liabilities. A complete description of the obligations of
Assignee are contained in the Agreement, and all such obligations are binding on
the successors and assigns of Assignee.

This Assignment may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same Assignment.

IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be duly
executed on this, the _______ day of ________, 1997. This Assignment shall be
effective at 7:00 a.m. at the location of the Properties on April 1, 1997 (the
"Effective Date").



                             ASSIGNOR:

                             BELLWETHER EXPLORATION COMPANY



                             By:__________________________________________
                             Name:________________________________________
                             Title:_______________________________________


                             BLACK HAWK OIL COMPANY


                             By:__________________________________________
                             Name:________________________________________
                             Title:_______________________________________


                                      -4-
<PAGE>
 
                             1988-II TEAI LIMITED PARTNERSHIP
                             By: BLACK HAWK OIL COMPANY
                                 Its General Partner


                             By:__________________________________________
                             Name:________________________________________
                             Title:_______________________________________


                             1989-I TEAI LIMITED PARTNERSHIP
                             By: BLACK HAWK OIL COMPANY
                                 Its General Partner


                             By:__________________________________________
                             Name:________________________________________
                             Title:_______________________________________


                             TEAI VIII-A LIMITED PARTNERSHIP
                             By: BLACK HAWK OIL COMPANY
                                 Its General Partner

                             By:__________________________________________
                             Name:________________________________________
                             Title:_______________________________________



                                      -5-
<PAGE>
 
                             TEAI OIL & GAS COMPANY



                             By:__________________________________________
                             Name:________________________________________
                             Title:_______________________________________


                             ANDREWS OIL AND GAS, INC.


                             By:__________________________________________
                             Name:________________________________________
                             Title:_______________________________________



                             ASSIGNEE:

                             JAY RESOURCES CORPORATION


                             By:__________________________________________
                             Name:________________________________________
                             Title:_______________________________________




     Address of Assignor:              Address of Assignee:

     1221 Lamar, Suite 1600            1221 McKinney, Suite 3100
     Houston, Texas 77010              Houston, Texas 77010


                                      -6-
<PAGE>
 
STATE OF TEXAS   (S)
                 (S)
COUNTY OF HARRIS (S)



This instrument was acknowledged before me on _______, 1997, by _______, _______
of Bellwether Exploration Company, a Delaware corporation, on behalf of said
corporation.


                                __________________________________________
                                Notary Public in and for
                                The State of Texas
                                Name:_____________________________________
                                My Commission Expires:____________________



STATE OF TEXAS   (S)
                 (S)
COUNTY OF HARRIS (S)

This instrument was acknowledged before me on _______, 1997, by ________,
________ of Black Hawk Oil Company, a Delaware corporation, on behalf of said
corporation.


                                __________________________________________
                                Notary Public in and for
                                The State of Texas
                                Name:_____________________________________
                                My Commission Expires:____________________



                                      -7-
<PAGE>
 
STATE OF TEXAS   (S)
                 (S)
COUNTY OF HARRIS (S)



This instrument was acknowledged before me on ___________, by ___________,
________ of Black Hawk Oil Company, a Delaware corporation, on behalf of said
corporation, as general partner of 1988-II TEAI Limited Partnership, a Texas
limited partnership.


                                __________________________________________
                                Notary Public in and for
                                The State of Texas
                                Name:_____________________________________
                                My Commission Expires:____________________



STATE OF TEXAS   (S)
                 (S)
COUNTY OF HARRIS (S)

This instrument was acknowledged before me on _______________, 1997, by
______________, _________ of Black Hawk Oil Company, a Delaware corporation, on
behalf of said corporation, as general partner of 1989-I TEAI Limited
Partnership, a Texas limited partnership.


                                __________________________________________
                                Notary Public in and for
                                The State of Texas
                                Name:_____________________________________
                                My Commission Expires:____________________


                                      -8-
<PAGE>
 
STATE OF TEXAS   (S)
                 (S)
COUNTY OF HARRIS (S)

This instrument was acknowledged before me on __________, 1997, by
_______________, __________ of Black Hawk Oil Company, a Delaware corporation,
on behalf of said corporation, as general partner of TEAI VIII-A Limited
Partnership, a Texas limited partnership.


                                __________________________________________
                                Notary Public in and for
                                The State of Texas
                                Name:_____________________________________
                                My Commission Expires:____________________


STATE OF TEXAS   (S)
                 (S)
COUNTY OF HARRIS (S)

This instrument was acknowledged before me on _____________, 1997, by _________,
___________ of TEAI Oil & Gas Company, a Delaware corporation, on behalf of said
corporation.


                                __________________________________________
                                Notary Public in and for
                                The State of Texas
                                Name:_____________________________________
                                My Commission Expires:____________________



                                      -9-
<PAGE>
 
STATE OF TEXAS   (S)
                 (S)
COUNTY OF HARRIS (S)

This instrument was acknowledged before me on __________, 1997, by ________,
____________ of Andrews Oil and Gas, Inc., a Texas corporation, on behalf of
said corporation.


                                __________________________________________
                                Notary Public in and for
                                The State of Texas
                                Name:_____________________________________
                                My Commission Expires:____________________


STATE OF TEXAS   (S)
                 (S)
COUNTY OF HARRIS (S)

This instrument was acknowledged before me on____________, 1997, by ________,
______________ of Jay Resources Corporation, a Texas corporation, on behalf of
said corporation.


                                __________________________________________
                                Notary Public in and for
                                The State of Texas
                                Name:_____________________________________
                                My Commission Expires:____________________



                                     -10-
<PAGE>
 
                                  THE EXHIBIT
                      TO AGREEMENT FOR PURCHASE AND SALE
                                BY AND BETWEEN
                        BELLWETHER EXPLORATION COMPANY
                                      AND
                           JAY RESOURCES CORPORATION



     PART I -  OIL AND GAS PROPERTIES, WORKING INTERESTS, NET
               REVENUE INTERESTS AND ALLOCATED VALUES

     PART II - LITIGATION AND CLAIMS

     PART IV-  TOC OPERATED PROPERTIES

     PART V -  TITLE PROPERTIES
<PAGE>
 
                                 EXHIBIT PART I
                                        
   OIL AND GAS PROPERTIES, WORKING INTERESTS, NET REVENUE INTERESTS AND
   ALLOCATED VALUE
                                        
30-Jun-97

<TABLE>
<CAPTION>
 
 
         PROPERTY NAME                 WORKING INTEREST    NET REVENUE INTEREST     TITLE PROPERTY     ALLOCATED VALUE
--------------------------------       ----------------    --------------------     --------------     ---------------
<S>                                    <C>                 <C>                      <C>                <C>
COLUMBIA COUNTY, AR

     FIELD-WALKER CREEK

     Walker Crk Un Bodcaw 1A                 0.0000000                0.0034179          No
     Walker Crk Un Bodcaw Un 2               0.0019531                0.0016022         Yes                $  l,527.00  
     Walker Crk Un Bodcaw Un 3               0.0019531                0.0016022         Yes                $  1,743.00  
     Walker Crk Un Bodcaw Un 4               0.0000000                0.0012417         Yes                $     14.00  
     Walker Crk Un Burton Es 1               0.1250000                0.1032447         Yes                $ 79,898.00  
     Walker Crk Un Jack Un 1                 0.0093750                0.0082031         Yes                $  8,212.00  
     Walker Crk Un Shirey Un 1               0.0130200                0.0107422         Yes                $  5,662.00  
     Walker Crk Un Stuart Un 2               0.0774037                0.0646307         Yes                $ 63,893.00  

LAFAYETTE COUNTY, AR                                                                                                    

     FIELD-WALKER CREEK                                                                                                 

     Walker Creek Ut                         0.0085518                0.0066014         Yes                $      0.00  
     Walker Crk Un Boyette 1                 0.0452400                0.0375529         Yes                $  3,587.00  
     Walker Crk Un Burton Un 1               0.0208330                0.0176595         Yes                $ 20,097.00  
     Walker Crk Un Helms Un 1                0.0208330                0.0176595         Yes                $ 20,183.00  
     Walker Crk Un Hughes Un 1               0.0208330                0.0176595         Yes                $ 19,060.00  
     Walker Crk Un Ipco Un 2                 0.0140627                0.0123047         Yes                $ 11,756.00  
     Walker Crk Un Kasek Un 1                0.0104767                0.0084237         Yes                $ 11,007.00  
     Walker Crk Un Umphries 1                0.0208330                0.0182295         Yes                $ 23,281.00  
     Walker Crk Un Whitehead l               0.0208330                0.0176595         Yes                $ 18,916.00  
                                                                                                                        
ACADIA PARISH, LA                                                                                                       
                                                                                                                        
     FIELD-IOTA                                                                                                         
                                                                                                                        
     Iota Nonion Struma Sd Un                0.2274898                0.1706364         Yes                $123,796.00  
                                                                                                                        
CAMERON PARISH, LA                                                                                                      
                                                                                                                        
     FIELD-CAMERON                                                                                                      
                                                                                                                        
     Burton WT Ind # 1                       0.2143154                0.1553787         No                 $      0.00  

IBERIA PARISH, LA                                                                                                       

     FIELD-WEEKS ISL                                                                                                    

     Myles 28                                0.0004677                0.0002830         No                 $      0.00  
     Provost # 4                             0.0024592                0.0022895         No                 $ 18,504.00  
     Provost # 4D()                          0.0024592                0.0022895         No                 $  9,627.00  
</TABLE>

                                                                Page 1 of 18
<PAGE>
 
<TABLE>
<CAPTION>

     PROPERTY NAME                      WORKING INTEREST    NET REVENUE INTEREST     TITLE PROPERTY     ALLOCATED VALUE
--------------------------------        ----------------    --------------------     --------------     ---------------
<S>                                    <C>                 <C>                      <C>                <C>
     Provost Cyr # 1                          0.0001597                0.0022428          No                $ 12,861.00
     Provost Cyr # ID()                       0.0001001                0.0022895          No                $    699.00
     Provost Cyr # 3                          0.0037834                0.0022895          No                $  7,855.00
     Provost Cyr #3                           0.0000194                0.0023055          No                $  7,855.00
     Provost Cyr #3D()                        0.0024592                0.0022895          No                $ 15,147.00
     Provost Cyr # 5                          0.0024592                0.0022895          No                $ 13,818.00
     Provost Cyr # 6                          0.0024592                0.0022895          No                $      0.00
     Provost Cyr #8S                          0.0023994                0.0011455          No                $      0.00
     Rainold # 2                              0.0035918                0.0024190          No                $      0.00
     Shell Smith State Un C #7                0.0003011                0.0002066          No                $      0.G0
     Shell Smith State Un E #7                0.0000000                0.0000177          No                $    426.00
     Smith # 7 SWD                            0.0024400                0.0000000          No                $      0.00
     Smith Heirs # 2                          0.0032196                0.0000000          No                $      0.00
     Smith Heirs # 3                          0.0035918                0.0028313          No                $      0.00
     Smith Heirs # 6                          0.0035886                0.0023518          No                $      0.00
     Smith State Un C #12                     0.0004677                0.0002830          No                $      0.00

JEFFERSON PARISH, LA                                                                                                   

     FIELD-PONTCHARTRAIN W BLK 41-OB                                                                                   

     S/L 4041 # 2D                            0.0329690                0.0274740          No                $      0.00
     Wlpe Blk 41                              0.0250240                0.0208540          No                $ 20,889.00

LIVINGSTON PARISH, LA                                                                                                  

     FIELD-LOCKHART CROSSING                                                                                           

     Barnett Heirs # 4 & 4D                   0.0895500                0.0701971          No                           
     Buckel Davidson # 1                      0.0823887                0.0508313          No                $      0.00
     LKTX WX 1 RASU                           0.0358570                0.0300028          No                $ 40,813.00
     Lockhart Crossing Fac                    0.0117698                0.0000000          No                $ 18,267.00

OFFSHORE PARISH, LA                                                                                                    

     FIELD-EUGENE ISL BLK 45 (EI 43)                                                                                   

     OCS-G-3148                               0.1888175                0.1573478          No                $ 43,522.00
                                                                                                                       
     FIELD-EUGENE ISL SA BLK 273                                                                                       
                                                                                                                       
     OCS-G-0987                               0.0538282                0.0448570          No                           
                                                                                                                       
     FIELD-S MRSH IS SA BLK 142                                                                                        
                                                                                                                       
     OCS-G-1217 SMI 142/143 Un                0.0607690                0.0456439         Yes                $300,000.00
     OCS-G-1217 SMI 143 Non-Un                0.1178464                0.0982053          No                $650,000.00 
                                                                                            
     FIELD-VERMILION BLK 68                                                                 
                                                                                            
     OCS-G-8662 # 1                           0.0000000                0.0199283          No 

     FIELD-VERMILION BLK 84
</TABLE> 
                                                           Page 2 of 18
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                      WORKING INTEREST    NET REVENUE INTEREST     TITLE PROPERTY     ALLOCATED VALUE
--------------------------------        ----------------    --------------------     --------------     ---------------
<S>                                    <C>                 <C>                      <C>                <C>
     OCS-G-3124 #A-1                          0.7684643                0.6403867           No               $205,254.00
     OCS-G-3124 #A-2                          0.7684643                0.6403867           No               $      0.00
     OCS-G-3124 #A-3                          0.7684643                0.6403867           No               $      0.00
     OCS-G-3124 #A-4                          0.7684643                0.6403867           No               $      0.00
                                                                                                                       
     Field-Vermilion SA Blk 277                                                                                        
                                                                                                                       
     OCS-G-3398                               0.0000000                0.0031954           No                          
                                                                                                                       
     Field-Vermilion SA BLk 287                                                                                        
                                                                                                                       
     OCS-G-3137                               0.0000000                0.0064330           No               $ 36,840.00
     Field-W Cameron SA Blk 463                                                                                        
     OCS-G4093                                0.1297440                0.1081200           No               $ 28,270.00
     OCS-G4093 #A-2                           0.1297440                0.1081200           No                          

PLAQUEMINES PARISH, LA                                                                                                 

     Field-Garden Isl Bay                                                                                              
     Garden Isl Facility                      0.1535912                0.0000000           No               $      0.00
     S/L 3942 # 1                             0.1358735                0.1039346          Yes               $ 83,710.00
     S/L 8063 # 1 SWD                         0.1518710                0.0000000           No               $      0.00
     S/L 8063 # 3                             0.1570312                0.1191365           No               $  6,747.00
     S/L 8063 # 4                             0.1678689                0.1253821           No               $ 68,724.00
     Field-Stella                                                                                                      
     Hero # 2                                 0.4932813                0.3933540          Yes               $238,721.00
     Hero # 3                                 0.4932813                0.3933540          Yes               $205,704.00
     Hero # 4                                 0.4932813                0.3933540          Yes               $105,595.00
     Hero SWD # 1                             0.5011638                0.0000000           No               $      0.00
     Hero SWD # 2                             0.5011638                0.0000000           No               $      0.00

ST HELENA PARISH, LA                                                                                                   

     Field-Greensburg                                                                                                  
     Carter # 2                               0.0212798                0.0154329           No               $  4,583.00
     Freiler # 2D                             0.0370186                0.0261003           No               $      0.00
     H&H Billups # 1A                         0.0027403                0.0019182           No               $      0.00
     Pritchett # 1                            0.0282111                0.0222499           No               $  9,661.00
     Riggs # 1                                0.0296248                0.0229242           No               $      0.00
     Riggs # 2                                0.0296248                0.0232988           No               $      0.00
     Riggs # 4                                0.0296248                0.0000000           No               $      0.00
     Riggs # 5                                0.0313321                0.0237449           No               $  2,161.00
     Riggs Robert # 6                         0.0296248                0.0232988           No               $ 19,768.00
     Stephens # 1                             0.0293396                0.0218488           No               $     51.00
     Turnipseed Charlotte # 1                 0.0320527                0.0245443           No               $      0.00 

ST MARY PARISH, LA
</TABLE>
                                                           Page 3 of 18
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                      WORKING INTEREST    NET REVENUE INTEREST     TITLE PROPERTY     ALLOCATED VALUE
--------------------------------        ----------------    --------------------     --------------     ---------------
<S>                                    <C>                 <C>                      <C>                <C>
     FIELD-FRANKLIN E
     Bailey F F # 1                           0.1158416                0.0834059            No              $ 90,725.00 

TERREBONNE PARISH, LA                                                                         

     FIELD-FOUR LEAGUE BAY                                                                    

     LL&E # 1                                 0.0946667                0.0658880           Yes              $110,117.00
     LL&E # Fl                                0.0000000                0.0007644            No              $    613.00
     S/L 9414 # 1D                            0.1264000                0.1011676            No              $ 19,219.00 
     S/L 9414 # 2 D()                         0.1175258                0.0851986            No              $ 16,016.00
     SIL 9414 # 3                             0.1246836                0.0915457            No              $      0.00
     S/L 9414 # 4                             0.1420001                0.1020519            No              $ 32,071.00
     S/L 9414 # 5                             0.1420001                0.1063296           Yes              $114,597.00
     State Lease 9414 # 3 (SWD)               0.1283000                                     No              $      0.00
                                                                                                                       
     FIELD-HUMPHREYS                                                                                                   
                                                                                                                       
     Blanchard Joseph # 1                     0.0244775                0.0184757            No              $ 13,597.00
                                                                                                                       
     FIELD-LAKE BOUDREAUX                                                                                              
                                                                                                                       
     S/L 13211 # 2                            0.2125000                0.1583125           Yes              $273,636.00

     FIELD-MONTEGUT                                                                                                    

     MTG TEX W SU Southshore 2                0.0442000                0.0322660           Yes              $ 48,094.00
     Waterford (MTG TEX W-4 RC SUA)           0.1722500                0.1257425            No 

VERMILION PARISH, LA                                                                                                   

     Field-Parcperdue                                                                                                  
     Broussard # 2                            0.0175784                0.0135900            No              $      0.00
     Broussard # 1                            0.0234632                0.0197206            No              $      0.00
     Duhon # 1D                               0.0075698                0.0052620            No              $      0.00
     Greene # 1                               0.0243175                0.0319358            No              $      0.00
     Greene S&K # 3                           0.0231794                0.0278939            No              $    835.00
     Herpin # 1                               0.0190606                0.0149254            No              $      0.00
     Leblanc # 1                              0.0214633                0.0233623            No              $ 27,179.00
     Leblanc # 2                              0.0215086                0.0151980            No              $      0.00
     Leblanc # 3                              0.0215086                0.0151980            No              $      0.00
     Richard # 1-Vermilion                    0.0144914                0.0173612            No              $      0.00

     FIELD-WRIGHT                                                                                                      

     Abshire # 1                              0.7684643                0.6355894           Yes              $711,892.00
     Meaux Eratha Broussard SWD               0.7684643                                     No              $      0.00
                                                                                                                       
ARENAC, MI                                                                                                             

     FIELD-AU GRES                                                                                                                 

     Au Gres 1-11A                            0.7500000                0.0000000            No              $      0.00 
</TABLE>
                                                           Page 4 of 18
<PAGE>
 
<TABLE>
<CAPTION>

     PROPERTY NAME                      WORKING INTEREST    NET REVENUE INTEREST     TITLE PROPERTY     ALLOCATED VALUE
--------------------------------        ----------------    --------------------     --------------     ---------------
<S>                                    <C>                 <C>                      <C>                <C>
     Au Gres 1-12                             0.4926993                0.3668621            No              $ 49,568.00    
     Au Gres 2-12                             0.3621933                0.0000000            No              $      0.00    
     State Sims 1-7                           0.5258261                0.3986000            No              $      0.00    
     State Sims 2-7                           0.3562500                0.2700412            No              $ 35,994.00   
 
IOSCO, MI
 
     FIELD-NATIONAL CITY
     State Sherman 1-16                       0.2000000                0.1341549            No              $  9,253.00

HINDS COUNTY, MS                                                                                                       

     FIELD-UTICA                                                                                                       

     Caldwell l4-6 # 1                        0.1968750                0.1493086            No              $      0.00
     Hammond l5-7 # 1                         0.1971596                0.1474849            No              $ 16,155.00
     Morrison 10-16 # 1                       0.1974363                0.1479250            Yes             $212,355.00
     Utica II Gas Plant & Pipe                0.1970000                0.1970000            No              $ 11,179.00

LAWRENCE COUNTY, MS                                                                                                    

     FIELD-TOPEKA                                                                                                      

     Federal Land Bank 6-1                    0.0059418                0.0043451            No              $    869.00
     Lambert A E # 1                          0.0087786                0.0062626            No              $  3,118.00
                                                                                                                       
LINCOLN COUNTY,.MS                                                                                                     
                                                                                                                       
     FIELD-HURRICANE LAKE E                                                                                            
                                                                                                                       
     Fauver J A Un # 1                        0.3531312                0.2976468            Yes             $ 78,729.00

RICHLAND COUNTY, MT                                                                                                    

     FIELD-NOHLY                                                                                                       

     Cayko # 2                                0.0146921                0.0122610            No              $  9,218.00
     Cayko # 3                                0.0146910                0.0121138            No              $  2,300.00
     Cayko 34-41                              0.0058771                0.0048624            No              $  2,539.00
     Filler 1-26                              0.0061021                0.0049325            No              $  7,037.00
     Filler 26-13                             0.0058770                0.0049040            No              $  2,147.00
     Filler 26-32                             0.0114460                0.0339851            No              $  8,195.00
     Nohly # 1                                0.0058770                0.0049040            No              $  3,425.00
     Nohly # 2                                0.0058771                0.0049046            No              $  l,789.00
     Nohly # 3F                               0.0036272                0.0030701            No              $    784.00
                                                                                                                       
     Rasmussen 1-22                           0.0000514                0.0000425            No              $     17.00
     Rasmussen 1-27                           0.0030510                0.0024663            No              $  l,482.00 
                                                                                              
TUSCARAWAS COUNTY, OH                                                                         
                                                                                              
     FIELD-FARM E.  
                                                                                              
     Snyder J # 1                             0.0000000                0.1250000            No 
BEAVER COUNTY, OK
</TABLE>
                                                           Page 5 of 18
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                     WORKING INTEREST     NET REVENUE INTEREST   TITLE PROPERTY     ALLOCATED VALUE
------------------------------------   ----------------     --------------------   --------------     ---------------
<S>                                     <C>                 <C>                     <C>                <C>
     FIELD-DOMBEY
     Cleo B # 1                               0.1250000                0.1093750          No              $  l,380.00 
     FIELD-MOCANE-LAVERNE GAS AR                                                            
     Barby 1-36                               0.0078125                0.0056836          No              $    358.00
BECKHAM COUNTY, OK                                                                                                   
     FIELD-CARTER N                                                                                                  
     Chandler Cruz 1-4                        0.1374610                0.0057417          No                         
     FIELD-ELK CITY                                                                                                  
     Harmon 1-17                              0.0000000                0.0001460          No                         
     Harmon 2-17                              0.0249730                0.0003110          No                         
     Harmon 3-17                              0.0000000                0.0011180          No                         
     Mikles 1-12                              0.0615234                0.0455273          No              $ 25,864.00
     Music 1-23                               0.0468366                0.0351275          No              $  8,417.00
     Music 3-24                               0.0712448                0.0561255          No              $ 19,785.00
BLAINE COUNTY, OK                                                                                                    
     FIELD-CANTON                                                                                                    
     Demoss A 1-7                             0.1642512                0.1374408          No                         
     Gerlach 1-11                             0.2000000                0.1700010          No                         
     Striking 1-18                            0.2023913                0.1730446          No                         
     FIELD-CANTON S                                                                                                  
     Okeene Gas Plant                         0.0307850                0.0000000          No              $  2,334.00
CADDO COUNTY, OK                                                                                                     
     FIELD-ANADARKO                                                                                                  
     Verma 1-34                               0.0054857                0.0045750          No              $  8,401.00
     FIELD-EAKLY-WEATHERFORD TREND-O                                                                                 
     McGlone 1-35                             0.0359420                0.0281443          No                         
CANADIAN COUNTY, OK                                                                                                  
     FIELD-UNION CITY                                                                                                
     Schieber 1-21                            0.3333333                0.2804843         Yes              $ 45,656.00
     Schieber 2-21                            0.3333000                0.2804840         Yes              $204.254.00
     White Farms A 1-4 & 2-4                  0.0466580                0.0429994          No              $ 18,183.00
     White Farms A 3                          0.0491798                0.0467014          No              $ 21,081.00
     FIELD-WATONGA-CHICKASHA TREND-O                                                                                 
     Inez 1-30                                0.2343800                0.1794433         Yes              $ 13,224.00
     Kephart 2-20                             0.2999311                0.2509738          No                         
     Kephart 2-20                             0.2999311                0.2509738          No              $      0.00
     Kephart 1-20                             0.2999311                0.2509738          No              $      0.00 
</TABLE>
                                                           Page 6 of 18
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                     WORKING INTEREST     NET REVENUE INTEREST   TITLE PROPERTY     ALLOCATED VALUE
------------------------------------   ----------------     --------------------   --------------     ---------------
<S>                                     <C>                 <C>                     <C>                <C>
     Red Sage 1-30                            0.2343750                0.1794433         Yes              $ 83,286.00 
CUSTER COUNTY, OK                                                                           
     FIELD-ANADARKO (STAFFORD NR.)                                                          
     Snider 1-36                              0.5112492                0.3902194         Yes              $ 89,863.00
     FIELD-CANUTE N                                                                                                  
     Elliott 1-16                             0.0594987                0.0406567          No              $ 24,887.00
     Elliott 2-16                             0.0556484                0.0395547          No              $ 15,692.00
     Elliott 3-16                             0.0925794                0.0663340          No              $      0.00
     Kephart 1-17                             0.1146048                0.0904388         Yes              $  6,179.00
     Kephart 1-20                             0.1230780                0.0933820          No              $ 25,714.00
     Kephart 2-20                             0.1250227                0.0955941          No                         
     Kephart 2-20                             0.1250227                0.0955941          No              $      0.00
     Libby Hoover 1-17                        0.1494095                0.1179119         Yes              $ 62,015.00
     Preston 1-18                             0.0389857                0.0306952          No              $ 31,131.00
     FIELD-INDIANAPOLIS                                                                                              
     Schapansky 1-32                          0.3378602                0.2505888         Yes              $ 33,815.00
     Williams 1-31                            0.1570802                0.1203523          No              $      0.00
     Williams 2-31                            0.1570801                0.1203524          No              $ 19,049.00
     FIELD-MOOREWOOD NE                                                                                              
     Broadbent 1-25                           0.1261714                0.1077000         Yes              $ 58,355.00
     Hutcheson 1-22                           0.0372255                0.0313875          No              $  5,912.00
     Hutcheson 2-22                           0.0475771                0.0403875          No              $  7,616.00
     Hutcheson 3-22                           0.0372260                0.0313875          No              $  5,214.00
     Moseley 1-25                             0.0987430                0.0837000          No              $ 73,009.00
     Moseley 2-25                             0.0987429                0.0837000          No              $  5,810.00
     Moseley 5-25                             0.0987430                0.0837000         Yes              $ 25,984.00
     Moseley 7-25                             0.0987430                0.0837000         Yes                         
     Moseley Emma 1-22                        0.0372260                0.0313875          No              $  3,851.00
     Touchstone 1-14                          0.1152000                0.0976501          No              $ 10,853.00
     Touchstone 2-14                          0.1317340                0.1114177          No              $ 14,653.00
     Touchstone 3-14                          0.1477571                0.1246598         Yes              $ 29,604.00
     FIELD-WEATHERFORD                                                                                               
     Frizzell A 1-32                          0.0771429                0.0655712         Yes              $ 66,833.00
DEWEY COUNTY, OK                                                                                                     
     Field-Putnam                                                                                                    
     Craig 1-35                               0.1431675                0.1213568         Yes              $ 53,283.00 
ELLIS COUNTY, OK
</TABLE>
                                                           Page 7 of 18
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                     WORKING INTEREST     NET REVENUE INTEREST   TITLE PROPERTY     ALLOCATED VALUE
------------------------------------   ----------------     --------------------   --------------     ---------------
<S>                                     <C>                 <C>                     <C>                <C>
     FIELD-HIGGINS S
     Fox 1-10                                 0.0625000                0.0468750          No              $      0.00 
GRADY COUNTY, OK                                                                            
     FIELD-MIDDLEBURG SE (AMBER NE)                                                         
     Crosswhite 1-24                          0.2299626                0.1701723         Yes              $ 68,945.00
     Shockey 2-25                             0.1561842                0.1154771          No              $  6,083.00
     FIELD-NORGE SW                                                                                                  
     Methvin 1-12                             0.4108255                0.3371687         Yes              $ 69,142.00
     Methvin 2-12                             0.4035628                0.3316088          No              $    273.00
KINGFISHER COUNTY, OK                                                                                                
     FIELD-EDMOND W                                                                                                  
     Koller A # 1                             0.1875000                0.1504687          No              $  6,986.00
     Tharp 1-29                               0.1875000                0.1504687          No              $  l,550.00
     FIELD-OKARCHE N                                                                                                 
     Annuschat 1-11                           0.0720469                0.0542153          No              $  2,556.00
     Ellis 1- 1                               0.3047063                0.2498593         Yes              $ 53,141.00
     Petty 1- 7                               0.4422537                0.3307819          No              $ 12,745.00
     Senn 1-6                                 0.2502435                0.1876826          No              $      0.00
     Snow 1- 5                                0.4422537                0.3299128         Yes              $ 24.106.00
     Vogt Retha 1-11                          0.2325469                0.1749924          No              $  8,363.00
     FIELD-SOONER TREND                                                                                              
     Themer 10-2                              0.8717898                0.6974319         Yes              $ 40,188.00
LATIMER COUNTY, OK                                                                                                   
     FIELD-WILBURTON                                                                                                 
     Hunter Tucker 1-31                       0.1101504                0.0931283          No              $ 25,830.00
LOGAN COUNTY, OK                                                                                                     
     FIELD-EDMOND W                                                                                                  
     Messenbaugh # 2                          0.5000000                0.4375000          No              $  8,843.00
MAJOR COUNTY, OK                                                                                                     
     FIELD-CEDARDALE NE                                                                                              
     Barnes D # 4                             0.1006016                0.0860145         Yes              $ 63,486.00
     Barnes Un D 2-23                         0.1006016                0.0860145          No              $ 14,380.00
     Barnes Un G 3-23                         0.0000000                0.0107833          No              $  l,942.00
     Butler 2-20                              0.7911483                0.6613098         Yes              $448,491.00
     Butler 3-20                              0.8150000                0.6817028          No              $ 71,629.00
     Butler 4-20                              0.8150000                0.6817028          No              $ 75,531.00
     Butler Un 1-20                           0.7911485                0.6613098          No              $ 75,719.00 
</TABLE>

                                                           Page 8 of 18
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                     WORKING INTEREST     NET REVENUE INTEREST   TITLE PROPERTY     ALLOCATED VALUE
------------------------------------   ----------------     --------------------   --------------     ---------------
<S>                                     <C>                 <C>                     <C>                <C>
     Culp 1-19                                0.7645963                0.6537297         No               $ 75,000.00 
     Culp 2-19                                0.8150000                0.6892645         No               $ 79,774.00
     Culp 3-19                                0.8150000                0.6968250         No               $ 55,000.00
     Foster 2-21(Chester)                     0.4444297                0.3736202        Yes               $ 78,167.00
     Foster 3-21                              0.4039427                0.3405956        Yes               $ 59,211.00
     Kepner 1-29                              0.0738589                0.0620029         No               $    204.00
     Kepner 4-29                              0.0840289                0.0706986         No               $  8,281.00
     Schlarb 2-22                             0.1141080                0.0974942         No               $  5,895.00
     Schlarb 3-22U                            0.6056344                0.5157184        Yes               $114,581.00
     FIELD-RINGWOOD                                                                                                  
     Cornelson 1-7                            0.3309991                0.2830043         No               $ 10,410.00
     Herbert 1-7                              0.0000000                0.0330245         No               $  7,224.00
     MHC 1-7                                  0.0000000                0.0164737         No               $  l,363.00
     Rexroat 1- 9                             0.3000000                0.2565000        Yes               $ 33,648.00
     Rexroat 2-9                              0.3000000                0.2565000        Yes               $ 32,219.00
     Rexroat 3- 9                             0.3000000                0.2565000        Yes               $ 14,5,3.00
     Rose 1-12                                0.1698240                0.1451995         No               $ 19,357.00
     Rose 2-12                                0.1698240                0.1451995         No               $      0.00
     Slack C 1- 5                             0.3000000                0.2565000         No               $      0.00
     Slack C 2- 5                                                                        No                          
     Wahl 1-7                                 0.1279373                0.1093865         No               $      0.00
     Warfield Un 1-5                          0.6398714                0.4998072        Yes               $ 43,798.00
     Warfield Un 2-5                          0.6398714                0.4998072        Yes               $ 24,617.00
     FIELD-RINGWOOD (OKEEN, NW)                                                                                      
     Weaver Un 5-20                           0.1000000                0.0855000         No               $     68.00
     FIELD-SEILING NE                                                                                                
     Bensch 1-23                              0.5074999                0.4047114        Yes               $372,431.00
     Bensch 2-23                              0.5074999                0.4047114         No               $ 50,460.00
     Louthan Un 1-22                          0.3000000                0.2502500         No               $    835.00
MC CLAIN, OK                                                                                                         
     FIELD-WASHINGTON - OBO - OK                                                                                     
     Lucy 1-19                                0.2565726                0.2067304         No               $ 12,268.00
OKLAHOMA COUNTY, OK                                                                                                  
     FIELD-EDMOND W                                                                                                  
     Cargil O A                               1.0000000                0.8203125        Yes               $ 90,938.00
ROGER MILLS COUNTY, OK                                                                                               
     FIELD-CHEYENNE W                                                                                                
     Berry 2-12                               0.0302083                0.0264323         No               $      0 00 
</TABLE>

                                                           Page 9 of 18
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                          WORKING INTEREST   NET REVENUE INTEREST   TITLE PROPERTY     ALLOCATED VALUE
--------------------------------------      ----------------   --------------------   --------------     ---------------
<S>                                     <C>                 <C>                     <C>                <C>
     Field-Dempsey
     Walker 1-12                                   0.0435050              0.0321940           No             $  8,027.00 
     Field-Strong City District                                                                 
     Harden # 2-25                                 0.0026563              0.0026563           No             $      0.00
     Field-Strong City District (Calvert)                                                                               
     Lone Elk 27-1                                 0.0878979              0.0706358           No             $  3,936.00
     Savage 1-27                                   0.0878979              0.0696679           No             $ 15,252.00
     Field-Strong City SE                                                                                               
     Morton 1-23                                   0.0511440              0.0393809           No             $  7,960.00
WASHITA COUNTY, OK                                                                                                      
     Field-Canute N                                                                                                     
     Rowlan 1-3                                    0.2046220              0.1554200          Yes             $ 20,565.00
     Field-Elk City                                                                                                     
     Walter J C 3-19                               0.0238000              0.0206582           No             $  8,076.00
WOODS COUNTY, OK                                                                                                        
     Field-Avard                                                                                                        
     Eggleston 1-36                                0.8000000              0.6500000           No             $ 33,023.00
     Gardner 2-35                                  0.3979166              0.3401059           No             $    801.00
     Hull 1-3                                      0.3868722              0.3281670           No             $ 12,182.00
     Hull 2-3                                      0.3987435              0.3383171           No             $ 11,145.00
     Oshel 2-30                                    0.8000000              0.6840000          Yes             $ 41,785.00
     Field-Oakdale                                                                                                      
     Dietz A 1-28                                  0.2000000              0.1600620           No             $  9,831.00
     Farris 1-30                                   0.4509450              0.3814305           No             $ 51,228.00
     Gisson 2-33L(Mississippi                      0.7383100              0.5934588          Yes             $816,461.00
     Gisson 3-33L(Mississippi                      0.4458101              0.3811676          Yes             $458,478.00
     Gisson 4-33                                   0.4626925              0.3714772          Yes             $232,497.00
     Morstain 1-32                                 0.3000784              0.2565686           No             $ 40,000.00
     Perkins B 1-28                                0.0000000              0.0100624           No             $ 42,113.00
     Rich 1-32                                     0.3000785              0.2545749           No             $ 67,960.00
     Rich 2-32                                     0.4440280              0.3796440           No             $ 40,000.00
     Rich 2-32L                                    0.4440280              0.3796440           No             $ 47,292.00
     Sagebrush 1-32                                0.0000000              0.0340000           No             $ 42,965.00
     Stewart A 1-28                                0.0000000              0.0100624           No             $ 40,170.00
     Veatch 1-24                                   0.3874999              0.3217421           No             $  2,471.00
     Veatch 2-24                                   0.3874999              0.3217421          Yes             $ 58,971.00
     Whiteneck 1-28                                0.2000000              0.1600625           No             $105,186.00 
</TABLE>

                                                           Page 10 of 18
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                          WORKING INTEREST   NET REVENUE INTEREST   TITLE PROPERTY     ALLOCATED VALUE
--------------------------------------      ----------------   --------------------   --------------     ---------------
<S>                                          <C>               <C>                    <C>                 <C>
     Whiteneck B # 1                               0.2857144              0.2339956          No              $ 96,854.00 
     Wilt A 1-19                                   0.3108524              0.2552816          No              $ 30,000.00
     Wilt A 2-19                                   0.7557648              0.5890299         Yes              $228,743.00

WOODWARD COUNTY, OK                                                                                                     

     FIELD-CEDARDALE NE                                                                                                 

     Garvie 3-23                                   0.8150000              0.6480547          No              $ 21,530.00
     State 1-24                                    0.8150000              0.6693665          No              $      0.00
     State 2-24L(Oswego)                           0.8150000              0.6693661         Yes              $  5,429.00
     State 2-24U                                   0.8150000              0.6693660         Yes              $166,614.00
     State 3-24                                    0.8150000              0.6693661         Yes              $ 65,677.00

     FIELD-CHESTER W                                                                                                    

     Huffman 2-20                                  0.8000000              0.6840001          No              $ 17,432.00
     Huffman 3-20                                  0.8000000              0.6840001          No              $      0.00

     FIELD-FT SUPPLY E                                                                                                  

     Cooper 1-19                                   0.2291060              0.0000000          No                         

BEE COUNTY, TX                                                                                                          

     FIELD-BURNELL                                                                                                      

     Burnell Un                                    0.0107502              0.0094064          No              $      0.00

     FIELD-PLUMMER-WILCOX                                                                                              

     Borroum B # 1                                 0.7000000              0.5906250         Yes              $ 16,088.00
     Dougherty # 2                                 0.7000000              0.4666667          No              $      0.00
     Dougherty Est #1 & #2                         0.7000000              0.4666667          No              $ 17,192.00

BRAZORIA COUNTY, TX                                                                                                     

     FIELD-CHOCOLATE BAYOU S                                                                                            

     I P Farms # 2U                                0.0656275              0.0491061          No              $ 21,199.00
     I P Farms # 3                                 0.0684479              0.0000000          No              $      0.00
     I P Farms Lease                               0.0666667              0.0484175          No              $  4,839.00

     FIELD-HASTINGS E                                                                                                   

     Beers W F                                     0.0000000              0.0288000          No                         
     Brown Cecil                                   0.0000000              0.1983000          No                         
     Haden R D                                     0.0000000              0.0018800          No                         
     Schaeffer A                                   0.0000000              0.0384000          No                         
     Surface R O                                   0.0000000              0.0063000          No                         
     Turner B L                                    0 0000000              0.0041000          No                         

     FIELD-OLD OCEAN N                                                                                                  

     Texas Gulf Fee # 1                            0.0332368                                 No              $  2,471.00 

     CHAMBERS COUNTY, TX
</TABLE>

                                                           Page 11 of 18
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                          WORKING INTEREST   NET REVENUE INTEREST   TITLE PROPERTY     ALLOCATED VALUE
--------------------------------------      ----------------   --------------------   --------------     ---------------
<S>                                          <C>               <C>                    <C>                 <C>
     FIELD-ELWOOD

     Colby Claypool # 1                            0.0000000              0.0244142         Yes              $ 37,829.00   

HARDIN COUNTY, TX                                                                              

     FIELD-JOHN VICKERS (VICKERS)                                                              

     Arco Vickers # 1                              1.0000000              0.7250000         Yes              $ 81,729.00

HARRISON COUNTY, TX                                                                                                     

     FIELD-BLOCKER                                                                                                      

     Daniels A # 1 GU                              0.1219880              0.1016623          No              $ 13,580.00

     FIELD-HALLSVILLE                                                                                                   

     Deadmon                                       0.1219880              0.0995596          No              $  5,929.00

HEMPHILL COUNTY, TX                                                                                                     

     FIELD-MATHERS RANCH                                                                                                

     Federal 1-161                                 0.0265360              0.0219130          No              $  1,363.00

HOCKLEY COUNTY, TX                                                                                                      

     FIELD-SMYER                                                                                                        

     Smyer April Harless                           0.1874193              0.0000000         Yes              $      0.00
     Smyer Lockhart                                0.0646246              0.0000000         Yes              $      0.00
     Smyer Lockhart A                              0.0229561              0.0000000         Yes              $      0.00
     Smyer Un NE                                   0.2750000              0.2255000         Yes              $390,091.00

HOPKINS COUNTY, TX                                                                                                      

     FIELD-BRANTLEY JACKSON                                                                                             

     Brantley Jackson Un                           0.1869938              0.1510408         Yes              $174,067.00

KENT COUNTY, TX                                                                                                         

     FIELD-ATKINS-FLEMING                                                                                               

     Fleming # 1                                   0.8000000              0.6400000         Yes              $ 71,890.00

LIVE OAK COUNTY, TX                                                                                                     

     FIELD-MIKESKA                                                                                                      

     Amine Un                                      0.2499999              0.0000000          No              $      0.00
     Bennett State GU # 1                          0.2500000              0.2043219         Yes              $ 86,041.00
     Bennett State GU # 2                          0.2499999              0.2043219          No              $ 15,455.00
     Bennett State GU # 3                          0.2499999              0.2043219          No              $ 11,707.00
     Bennett State GU # 4                          0.0000000              0.0159597          No              $    886.00
     Bennett State GU # 5                          0.2499999              0.2043219          No              $      0.00

LOVING COUNTY, TX                                                                                                       

     FIELD-HALEY                                                                                                        

     Harrison Nell 14-1                            0.0480470              0.0373050          No              $  6,423 00
     Harrison Nell 22-1                            0.0393230              0.0298450         Yes              $153,552.00 
</TABLE>

                                                           Page 12 of 18
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                          WORKING INTEREST   NET REVENUE INTEREST   TITLE PROPERTY     ALLOCATED VALUE
--------------------------------------      ----------------   --------------------   --------------     ---------------
<S>                                          <C>               <C>                    <C>                 <C>
     Harrison Nell 26-1                            0.0438200              0.0333940         No             $    3,748.00  
     Harrison Nell 28-1A                           0.0422530              0.0321890        Yes             $   33,667.00  

LUBBOCK COUNTY, TX                                                                                                        

     FIELD-EDMISSON                                                                                                       

     Broadview Un E                                0.3195384              0.2632593        Yes             $l,306,987.00  

     FIELD-IDALOU                                                                                                         

     Idalou Un                                     0.2797272              0.2097950        Yes             $  219,722.00  

MATAGORDA COUNTY, TX                                                                                                      

     FIELD-MATAGORDA ISL BLK 485                                                                                          

     El Gordo Pipeline                             0.0070510              0.0000000         No             $      239.00  
     S/T 485 L # 1                                 0.0793197              0.0637204         No             $    9,269.00  
     S/T 485 L # 3-                                0.7905165              0.5290034         No             $        0.00  
     S/T 485 L # 4                                 0.4617863              0.3069760         No             $        0.00  
     S/T 485 L # 5                                 0.3944985              0.2661222         No             $    4,089.00  
     S/T 485 L # 6                                 0.0670124              0.0000000         No             $        0.00  

     FIELD-MIDDLE BANK REEF                                                                                               

     S/T 367 L # 2                                 0.1931803              0.1558882         No             $        0.00  
     S/T 367 L # 3                                 0.2418546              0.1681976         No             $        0.00  
     S/T 367 L # 3 (Mioc 5880)                     0.0000000              0.1978689         No             $   11,639.00  

     FIELD-MIDDLEBANK REEF                                                                                                

     S/T 367 L # 4                                 0.2876934               0.234691        Yes             $  107,692.00  

MC MULLEN, TX                                                                                                             

     FIELD-A W P                                                                                                          
     Billings # 1                                  0.0500000              0.0369245         No             $    2,070.00  
     Billings # 3                                  0.0250000              0.0182500         No             $    l,010.00  
     Billings # 5                                  0.0250000              0.0182500         No             $        0.00  
     Discher # 9                                   0.0281250              0.0234560         No             $    2,267.00  
     Discher # 11                                  0.0298845              0.0249005         No             $       99.00  
     Discher A # 4                                 0.0218242              0.0181889         No             $    l,601.00  
     Discher H A # 1                               0.0496875              0.0388809         No             $    l,601.00  
     Discher H A # 1A                              0.0281250              0.0234560         No             $        0.00  
     Discher H A # 2                               0.0281250              0.0234560         No             $        0.00  
     Discher H A # 3                               0.0281250              0.0234560         No             $      394.00  
     Discher H A # 4                               0.0348482              0.0575280         No             $      271.00  
     Discher H A # 7                               0.0281250              0.0234560         No             $       49.00  
     Discher H A # 8                               0.0281250              0.0234560         No             $    2,316.00  
     Dusek H # 1                                   0.0348500              0.0287640         No             $      788.00  
     Dusek H # 2                                   0.0331700              0.0275383         No             $      813.00  
</TABLE>
                                                           Page 13 of 18
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                          WORKING INTEREST   NET REVENUE INTEREST   TITLE PROPERTY     ALLOCATED VALUE
--------------------------------------      ----------------   --------------------   --------------     ---------------
<S>                                          <C>               <C>                    <C>                 <C>
     Elliott # 7                                   0.0700000              0.0507200         No                $10,520.00  
     Elliott # 8                                   0.0700000              0.0507200         No                $ 7,071.00
     Elliott # 9                                   0.0700000              0.0507200         No                $ 8,451.00
     Elliott # 10                                  0.0700000              0.0507200         No                $11,457.00
     Elliott R E # 1                               0.0700000              0.0507200         No                $ 7,293.00
     Elliott R E # 2                               0.0700000              0.0507200         No                $ 4,607.00
     Elliott R E # 3                               0.0700000              0.0507200         No                $14,241.00
     Elliott R E # 4                               0.0700000              0.0507200         No                $ 5,100.00
     Elliott R E # 5                               0.0700000              0.0507200         No                $ 3,006.00
     Elliott R E # 6                               0.0700000              0.0507200         No                $     0.00
     Henry # 1                                     0.0500000              0.0369245         No                $ 4,952.00
     Henry # 2                                     0.0500000              0.0369250         No                $ 5,346.00
     Henry # 3                                     0.0500000              0.0369250         No                $ 7,613.00
     Henry E G # 1                                 0.1164365              0.0873274         No                $67,261.00
     Henry E G # 2                                 0.1164365              0.0873274         No                $ 3,277.00
     Henry E G # 3                                 0.1275726              0.0956795         No                $ 8,155.00
     Henry E G # 4                                 0.1164365              0.0873274         No                $     0.00
     Henry E G 4 5                                 0.1164365              0.0873274         No                $ 5,962.00
     Henry E G # 6                                 0.1164365              0.0873274         No                $ 6,012.00
     Henry E G # 7                                 0.1164365              0.0873274         No                $ 2,341.00
     Henry E G # 7                                 0.0512551              0.0384410         No                $ 2,341.00
     Henry E G # 8                                 0.1164365              0.0873274         No                $   616.00
     Henry E G # 9                                 0.1164365              0.0873274         No                $     0.00
     Henry E G # 10                                0.1164365              0.0873274         No                $ 6,332.00
     Henry E G # 11                                0.1164365              0.0873274         No                $ l,404.00
     Henry E G # 12                                0.1164365              0.0873274         No                $ 9,091.00
     Henry E G # 13                                0.1237582              0.0928932         No                $19,957.00
     Henry E G # 14                                0.1591387              0.1200698         No                $ 6,455.00
     Henry E G Lease                               0.1164365              0.0873274         No                $     0.00
     Horton # 1                                    0.0000000              0.0068000         No                $   271.00
     Horton # 2                                    0.0888900              0.0722220         No                $ 2,196.00
     Horton # 8                                    0.0500000              0.0369245         No                $15,691.00
     Horton # 9                                    0.0500000              0.0369245         No                $ 5,445.00
     Horton #10                                    0.0500000              0 0369245         No                $ 3,794.00
     Horton R P 4-1                                0.0500000              0.0354240         No                $ 2,242.00
     Horton R P # 1                                0.0500000              0.0354240         No                $   641.00
     Horton R P # 2                                0.0500000              0.0354240         No                $ 1,577.00
     Horton R P # 3                                0.0500000              0.0354240         No                $ l,552.00
     Horton R P # 5                                0.0500000              0.0354240         No                $ 3,178.00 
</TABLE>

                                                           Page 14 of 18
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                          WORKING INTEREST   NET REVENUE INTEREST   TITLE PROPERTY     ALLOCATED VALUE
--------------------------------------      ----------------   --------------------   --------------     ---------------
<S>                                          <C>               <C>                    <C>                 <C>
     Horton R P # 6                                0.0500000              0.0354240         No                $     0.00  
     Horton R P # 7                                0.0500000              0.0354250         No                $   123.00
     Horton Richard # 1                            0.0888900              0.0722220         No                $ 7,296.00
     Horton Richard # 4                            0.0888900              0.0722220         No                $ 7,936.00
     Horton Richard # 5                            0.0888900              0.0722220         No                $ 6,162.00
     Horton Richard # 6                            0.0888900              0.0722220         No                $     0.00
     Horton Richard # 7                            0.0888900              0.0722220         No                $ 9,732.00
     Horton Richard # 8                            0.0888900              0.0722220         No                $ 5,817.00
     Horton Richard # 9                            0.0888900              0.0000000         No                $ 9,190.00
     Horton Richard #10                            0.0888900              0.0722220         No                $ 4,164.00
     Horton Richard #ll                            0.0888900              0.0722220         No                $10,129.00
     Horton Richard #12                            0.0888900              0.0722220         No                $ 7,887.00
     Horton Richard #13                            0.0888900              0.0722220         No                $ 7,736.00
     Horton Richard #14                            0.0888900              0.0722220         No                $ 4,635.00
     Horton Richard #16                            0.0888900              0.0722220         No                $ 7,490.00
     Horton Richard #17                            0.0888900              0.0722220         No                $ 6,064.00
     Horton Richard #19                            0.0888900              0.0722220         No                $ 6,283.00
     Horton Richard #21                            0.0888900              0.0722220         No                $ 6,332.00
     Horton Richard #22                            0.0888900              0.0000000         No                $     0.00
     Horton Richard #23                            0.0888900              0.0722220         No                $13,948.00
     Horton Richard #24                            0.0888900              0.0722220         No                $ 3,846.00
     Horton Richard #25                            0.0888900              0.0722220         No                $12,423.00
     Isbel Clarence H Jr # 1                       0.0281250              0.0234560         No                $   764.00
     Isbel Clarence H Jr # 2                       0.0281250              0.0234560         No                $ 1,774.00
     Killough B # 1                                0.0500000              0.0369245         No                $ 2,143.00
     Killough B # 2                                0.0500000              0.0369245         No                $ 6,307.00
     Lange # 4                                     0.0500000              0.0000000         No                $     0.00
     Lange E # 1                                   0.0500000              0.0369245         No                $20,003.00
     Lange E # 2                                   0.0500000              0.0369245         No                $13,080.00
     Lange E # 3                                   0.0500000              0.0369245         No                $11,675.00
     Lange Eleanora A # 1                          0.0500000              0.0000000         No                $     0.00
     Lasiter A L # 1                               0.0500000              0.0369245         No                $ 5,100.00
     Lasiter A L # 2                               0.0500000              0.0369245         No                $   246.00
     Lasiter A L # 3                               0.0500000              0.0369245         No                $ 1,848.00
     Layton K F # 1                                0.0375000              0.0281500         No                $ 3,252.00
     Morales #ll                                   0.0500000              0.0369245         No                $17,391.00
     Morales #14                                   0.0500000              0.0369245         No                $15,223.00
     Morales Felix #13                             0.0500000              0.0369245         No                $15,519.00
     Morales Felix H # 2                           0 0500000              0.0369245         No                $ 1,675.00 
</TABLE>

                                                           Page 15 of 18
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                          WORKING INTEREST   NET REVENUE INTEREST   TITLE PROPERTY     ALLOCATED VALUE
--------------------------------------      ----------------   --------------------   --------------     ---------------
<S>                                          <C>               <C>                    <C>                 <C>
     Morales Felix H # 3                           0.0500000              0.0369245         No                $14,583.00  
     Morales Felix H # 4                           0.0500000              0.0369245         No                $   148.00
     Morales Felix H # 5                           0.0500000              0.0369245         No                $ 2,759.00
     Morales Felix H # 6                           0.0500000              0.0369245         No                $14,829.00
     Morales Felix H # 7                           0.0500000              0.0369245         No                $14,041.00
     Morales Felix H # 8                           0.0500000              0.0369245         No                $15,100.00
     Morales Felix H # 9                           0.0500000              0.0369245         No                $ 4,139.00
     Morales Felix H #10                           0.0500000              0.0369245         No                $ 4,410.00
     Morales Felix H #12                           0.0500000              0.0369245         No                $ 4,435.00
     Morales Felix H # 1                           0.0500000              0.0369245         No                $   838.00
     Morgan # 3                                    0.0500000              0.0369245         No                $   690.00
     Morgan # 4                                    0.0500000              0.0369245         No                $     0.00
     Morgan Et Al # 1                              0.0500000              0.0369245         No                $ 4,139.00
     Morgan Et Al # 2                              0.0500000              0.0369245         No                $     0.00
     Rutherford W C A # 3                          0.0281310              0.0234560         No                $ 3,203.00
     Rutherford W C A # 4                          0.0500000              0.0369245         No                $ 4,681.00
     Rutherford W C Est # l                        0.0500000              0.0369245         No                $ 1,651.00
     Rutherford W C Est # 2                        0.0500000              0.0369245         No                $ 4,139.00
     Rutherford W C Est # 3                        0.0500000              0.0369245         No                $ 3,868.00
     Rutherford W C Jr A # 1                       0.0375000              0.0281500         No                $ 3,055.00
     Rutherford W C Jr A # 2                       0.0281310              0.0234560         No                $ 5,199.00
     Shenkir # 2                                   0.0297423              0.0248037         No                $ 4,386.00
     Shenkir H # 1                                 0.0281250              0.0234560         No                          
     Shenkir H # 1                                 0.0281250              0.0234560         No                $ 2,710.00
     Shenkir H A # 1                               0.0281250              0.0234560         No                          
     Shenkir  H A # 1                              0.0281250              0.0234560         No                $ 2,710.00
     Taylor # 4                                    0.0281250              0.0234560         No                $ l,404.00
     Taylor Harold D # 1                           0.0281250              0.0234560         No                $ l,971.00
     Taylor Harold D # 2                           0.0281250              0.0234560         No                $     0.00
     Taylor Harold D # 3                           0.0281250              0.0234560         No                $ 2,168.00
     Wheeler # 6                                   0.0500000              0.0000000         No                $     0.00
     Wheeler # 7                                   0.0500000              0.0369250         No                $26,529.00
     Wheeler Nora # 1                              0.0500000              0.0369245         No                $ 4,583.00
     Wheeler Nora # 2                              0.0500000              0.0369240         No                $ 3,080.00
     Wheeler Nora # 3                              0.0500000              0.0369240         No                $ 3,449.00
     Wheeler Nora # 4                              0.0500000              0.0000000         No                $     0.00
     Wheeler Nora # 5                              0.0506666              0.0373694         No                $ 5,001.00
     Williams A # 1                                0.0250000              0.0184625         No                $ 4,065.00
     Williams Grant H # 1                          0.0500000              0.0369245         No                $ 4,854.00 
</TABLE>

                                                           Page 16 of 18
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                          WORKING INTEREST   NET REVENUE INTEREST   TITLE PROPERTY     ALLOCATED VALUE
--------------------------------------      ----------------   --------------------   --------------     ---------------
<S>                                          <C>               <C>                    <C>                 <C>
     Williams Grant H # 2                          0.0500000              0.0369250         No                $ 3,548.00  
     Winborn # 1                                   0.0500000              0.0369245         No                $   862.00
     Winborn # 2                                   0.0500000              0.0369245         No                $     0.00

OFFSHORE COUNTY, TX                                                                                                     

     FIELD-HIGH ISL SA BLK A448                                                                                         

     OCS-G-2359                                    0.0288410              0.0240341         No                $24,800.00
     OCS-G-2360                                    0.1260701              0.1050585         No                $71,663.00
     OCS-G-2360 #A-9                               0.1197493              0.0997917         No                $12,711.00
     OCS-G-2360 B                                  0.0949567              0.0791306         No                $     0.00
     OCS-G-2361                                    0.0735408              0.0612840         No                          
     OCS-G-2361 #A-4                               0.0735408              0.0612840         No                $30,000.00
     OCS-G-4579/2360                               0.1111259              0.1079132         No                $   460.00

     FIELD-HIGH ISL SA BLK A532                                                                                         

     OCS-G-2380                                    0.2206222              0.1838518         No                $     0.00

VICTORIA COUNTY, TX                                                                                                     

     FIELD-HEYSER                                                                                                       

     Crabtree # 1                                  0.9524891              0.7499583         No                $85,444.00
     Crabtree # 5                                  0.9137500              0.7194564         No                $ l,312.00

     FIELD-HEYSER E                                                                                                    

     Crabtree # 2                                  0.9524891              0.7499583         No                $     0.00
     Crabtree # 4 SWD                              0.9137500              0.0000000         No                $     0.00
     Crabtree Lease                                0.9524891              0.7194564         No                $     0.00

WEBB COUNTY, TX                                                                                                         

     FIELD-GATO CREEK                                                                                                   

     Alley # 1                                     0.1048890              0.0742457         No                $ 9,831.00
     Alley # 3                                     0.1048890              0.0742457        Yes                $47,839.00

     FIELD-MUJERES CREEK                                                                                                

     Olmitos Ranch # 1                             0.0593878              0.0460966         No                $ 3,919.00
     Olmitos Ranch # 2                             0.0861119              0.0638765         No                $ 5,129.00
     Olmitos Ranch # 4                             0.0861119              0.0638765         No                $   443.00
     Olmitos Ranch # 5                             0.0861119              0.0638765         No                $   647.00
     Olmitos Ranch # 6                             0.0807300              0.0597725         No                $     0.00
     Olmitos Ranch # 8                             0.0861119              0.0638765         No                $10,087.00
     Olmitos Ranch # 12                            0.0861119              0.0638769         No                $11,434.00
     Olmitos Ranch # 13                            0.0861119              0.0638769         No                $10,205.00

     FIELD-NICHOLSON                                                                                                    

     Olmitos Ranch # 7                             0.0785452              0.0577742         No                $11,501.00 
</TABLE>

                                                           Page 17 of 18
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                          WORKING INTEREST   NET REVENUE INTEREST   TITLE PROPERTY     ALLOCATED VALUE
--------------------------------------      ----------------   --------------------   --------------     ---------------
<S>                                          <C>               <C>                    <C>                 <C>
     FIELD-RANCHO VIEJO

     Alley # 20                                    0.1048890              0.0742457         No                $33,976.00 
     Alley # 4                                     0.1048899              0.0742457        Yes                $42,471.00
     Alley # 5                                     0.1049000              0.0742457        Yes                $28,578.00
     Alley # 6                                     0.1049000              0.0742457         No                $     0.00
     Alley # 7                                     0.1049000              0.0742457         No                $ 4,294.00
     Alley # 8                                     0.1049000              0.0742457         No                $19,799.00
     Alley # 9                                     0.1048889              0.0742457         No                $     0.00
     Applegate Alley # l GU                        0.0157350              0.0112505         No                $ 2,811.00

     FIELD-THOMPSONVILLE NE                                                                                             

     Bruni D GU                                    0.3333333              0.2708334        Yes                $50,136.00
     Thompsonville CS & Dehy                       0.0914540              0.0000000         No                $     0.00 

</TABLE>

                                                           Page 18 of 18
<PAGE>
 
                                EXHIBIT PART II


Cause No. 10,651; The State of Texas, et al. v. Union Pacific Resources Company,
et al. (including TOC and TEMI); In the 335th Judicial District Court of Lee
County, Texas

Purported class action lawsuit brought by the State of Texas and other working
and/or royalty interest owners regarding the sale of oil and/or gas in Texas at
posted prices verses market price. Torch Energy Advisors Incorporated and Torch
Energy Marketing, Inc. are named parties to the suit, but the claims also run
against the working interest owners for whom the Torch companies operate. This
case has only recently been initiated and no discovery or other pre-trial
activities have taken place. Accordingly, it is impossible at this time to
predict the outcome of this litigation.

Cause No. 423587; State of Louisiana and Department of Taxation v. Torch Energy
Corporation; In the 19th District Court of the Parish of East Baton Rouge,
Louisiana, Div. F

This lawsuit involves a claim by the state of Louisiana that severance taxes
have been underpaid on Torch operated properties in Louisiana. The underpayment
is attributed to the alleged undervaluation of production by Torch in the sale
of oil and gas. All partnerships owning any Louisiana leases could be affected
by this case.

Cause No. 423588; State of Louisiana and Department of Taxation v. Torch
Operating Company; In the 19th District Court of the Parish of East Baton Rouge,
Louisiana, Div. I

This lawsuit involves a claim by the state of Louisiana that severance taxes
have been underpaid on Torch operated properties in Louisiana. The underpayment
is attributed to the alleged undervaluation of production by Torch in the sale
of oil and gas. All partnerships owning any Louisiana leases could be affected
by this case.

Cause No. 96-022435; Rose Marie Mixon v. Nuevo Energy Company; In the 127th
Judicial District Court of Harris County, Texas

Plaintiff filed this suit on May 3, 1996. Plaintiff alleges that she is a
successor to an incremental gas revenue interest in certain off-shore oil and
gas leases. Plaintiff alleges that Nuevo failed to pay all sums due under the
incremental gas revenue interest. Plaintiff claims breach of
<PAGE>
 
contract, seeking as damages $104,630.00 in alleged underpayment by Nuevo,
together with interest and attorneys' fees. As part of the settlement with
Florida Gas, Nuevo assigned its interest to the 1991 Specified Oil & Gas Program
and Black Hawk Oil Company. Nuevo filed a summary judgment motion which has been
scheduled to be heard on June 13, 1997.

Cause No. 15059; Ronald Harrell, et al. v. Torch Operating Company, et al.; In
the 21st Judicial District Court of the Parish of St. Helena, Louisiana

Plaintiff, an adjacent landowner to the Pritchell Oil Well No. 1 located in St.
Helena Parish, Louisiana, is suing for alleged damages to his property allegedly
caused by well operations and also for noise and odor pollution. This case is
dormant at this time with a tentative settlement offer to the Plaintiff of
$20,000 on the table.

Cause No. 69102-F; Edwin B. Lutgring, Jr., et al. v. Torch Operating Company; In
the 15th Judicial District Court of the Parish of Vermilion, Louisiana

Plaintiffs are leasehold owners in the Herpin No. l well located in Vermilion
Parish, Louisiana. Plaintiffs brought this suit seeking judgment by the Court
that TOC plug and abandon the property, remove all equipment, and restore the
property to its original condition. This case has only recently been initiated
and no discovery or other pre-trial activities have taken place. The well has
already been plugged and abandoned and we are working to satisfy the landowner
concerning the restoration of the surface.

Additional MMS Claims - U.S. Department of Justice Inquiry Letter

Although not yet asserted, there seems to be a movement afoot by the MMS to
challenge the price paid the MMS for production on all MMS managed properties.
While we do not believe the partnerships have paid royalties improperly or face
any exposure in such audits, the partnerships that have interests in federal
leases could be subjected to claims arising out of such audits. On February l2,
1997 the Department of Justice forwarded to Torch Operating Company a request
for information and documents relating to oil and gas royalties on Indian and
MMS lands paid by Torch Operating Company on behalf of the Partnerships, among
others. Torch Operating Company is in the process of analyzing the scope of the
request and has communicated its willingness to fully cooperate in this
information gathering process. At this time it is difficult to predict what
liabilities, if any, could be faced by the Partnerships for any such alleged
underpayment of royalties.
<PAGE>
 
CLAIMS BY OTHER TAXING AUTHORITIES

Every taxing authority in every state in which the partnerships own properties
could make claims similar to those asserted in the State of Louisiana and
Department of Taxation v. Torch Energy Corporation, above.

Claims by Other Royalty and Mineral Owners

Every royalty and mineral owner in every state in which the partnerships own
properties could make claims similar to those asserted in the State of Texas, et
al. v U.P.R.C., et al.
<PAGE>
 
===============================================================================
                                Exhibit Part IV

                            TOC Operated Properties

30-Jun-97
===============================================================================
<TABLE>
<CAPTION>
          FIELD                              NAME
===============================================================================
<S>                                          <C>
     IBERIA PARISH, LA
          Weeks Isl                          Rainold # 2              
          Weeks Isl                          Smith Heirs # 2          
          Weeks Isl                          Smith Heirs # 3          
          Weeks Isl                          Smith Heirs # 6          
     ST HELENA PARISH, LA                                             
          Greensburg                         Carter # 2               
          Greensburg                         Freiler # 2D             
          Greensburg                         Pritchett # 1            
          Greensburg                         Riggs # 1                
          Greensburg                         Riggs # 2                
          Greensburg                         Riggs # 4                
          Greensburg                         Riggs # 5                
          Greensburg                         Riggs Robert E # 6       
          Greensburg                         Stephens # 1              
          Greensburg                         Turnipseed Charlotte # 1 
     VERMILION PARISH, LA                                             
          Parcperdue                         Broussard # 2            
          Parcperdue                         Broussard # 1            
          Parcperdue                         Greene # 1               
          Paroperdue                         Greene S & K # 3         
          Parcperdue                         Herpin # 1               
          Parcperdue                         Leblanc # 1               
</TABLE>
<PAGE>
 
<TABLE> 
<CAPTION> 
===============================================================================
          FIELD                              NAME
===============================================================================
<S>                                          <C>
          Parcperdue                         Leblanc # 2
          Parcperdue                         Leblanc # 3
     HARRISON COUNTY, TX
          Blocker                            Daniels A # 1 GU
          Hallsville                         Deadmon

</TABLE> 
<PAGE>
 
                                 EXHIBIT PART V

                                TITLE PROPERTIES
                                        

30-Jun-97
<TABLE>
<CAPTION>
 
     PROPERTY NAME                                WORKING INTEREST  NET REVENUE INTEREST  TITLE PROPERTY         
------------------------------------------        ----------------  --------------------  --------------         
<S>                                               <C>               <C>                   <C>                    
COLUMBIA COUNTY, AR                                                                                              
     FIELD-WALKER CREEK                                                                                          
     Walker Crk Un Bodcaw Un 2                           0.0019531             0.0016022       Yes               
     Walker Crk Un Bodcaw Un 3                           0.0019531             0.0016022       Yes               
     Walker Crk Un Bodcaw Un 4                           0.0000000             0.0012417       Yes               
     Walker Crk Un Burton Es I                           0.1250000             0.1032447       Yes               
     Walker Crk Un Jack Un 1                             0.0093750             0.0082031       Yes               
     Walker Crk Un Shirey Un I                           0.0130200             0.0107422       Yes               
     Walker Crk Un Stuart Un 2                           0.0774037             0.0646307       Yes               
LAFAYETTE COUNTY, AR                                                                                             
     FIELD-WALKER CREEK                                                                                          
     Walker Creek Ut                                     0.0085518             0.0066014       Yes               
     Walker Crk Un Boyette 1                             0.0452400             0.0375529       Yes               
     Walker Crk Un Burton Un l                           0.0208330             0.0176595       Yes               
     Walker Crk Un Helms Un 1                            0.0208330             0.0176595       Yes               
     Walker Crk Un Hughes Un l                           0.0208330             0.0176595       Yes               
     Walker Crk Un Ipco Un 2                             0.0140627             0.0123047       Yes               
     Walker Crk Un Kasek Un 1                            0.0104767             0.0084237       Yes               
     Walker Crk Un Umphries 1                            0.0208330             0.0182295       Yes               
     Walker Crk Un Whitehead l                           0.0208330             0.0176595       Yes               
ACADIA PARISH, LA                                                                                                
     FIELD-IOTA                                                                                                  
     Iota Nonion Struma Sd Un                            0.2274898             0.1706364       Yes               
OFFSHORE PARISH, LA                                                                                              
     FIELD-S MRSH IS SA BLK 142                                                                                  
     OCS-G-1217 SMI 142/143 Un                           0.0607690             0.0456439       Yes               
PLAQUEMINES PARISH, LA                                                                                           
     FIELD-GARDEN ISL BAY                                                                                        
     S/L 3942 # 1                                        0.1358735             0.1039346       Yes               
     FIELD-STELLA                                                                                                
     Hero # 2                                            0.4932813             0.3933540       Yes               
     Hero # 3                                            0.4932813             0.3933540       Yes                
</TABLE>

                                                           Page 1 of 5
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                                    WORKING INTEREST  NET REVENUE INTEREST  TITLE PROPERTY                  
-----------------------------------------------       ----------------  --------------------  --------------                  
<S>                                                   <C>               <C>                   <C>                             
     Hero # 4                                                0.4932813             0.3933540       Yes                        
TERREBONNE PARISH, LA                                                                                                         
     FIELD-FOUR LEAGUE BAY                                                                                                    
     LL#E # 1                                                0.0946667             0.0658880       Yes                        
     S/L 9414 # 5                                            0.1420001             0.1063296       Yes                        
     FIELD-LAKE BOUDREAUX                                                                                                     
     S/L 13211 # 2                                           0.2125000             0.1583125       Yes                        
     FIELD-MONTEGUT                                                                                                           
     MTG TEX W SU Southshore 2                               0.0442000             0.0322660       Yes                        
VERMILION PARISH, LA                                                                                                          
     FIELD-WRIGHT                                                                                                             
     Abshire # 1                                             0.7684643             0.6355894       Yes                        
HINDS COUNTY, MS                                                                                                              
     FIELD-UTICA                                                                                                              
     Morrison 10-16 # 1                                      0.1974363             0.1479250       Yes                        
LINCOLN COUNTY, MS                                                                                                            
     FIELD-HURRICANE LAKE E                                                                                                   
     Fauva J A Un 1 # 1                                      0.3531312             0.2976468       Yes                        
CANADIAN COUNTY, OK                                                                                                           
     FIELD-UNION CITY                                                                                                         
     Schieber 1-21                                           0.3333333             0.2804843       Yes                        
     Schieber 2-21                                           0.3333000             0.2804840       Yes                        
     FIELD-WATONGA-CHICKASHA TREND-O                                                                                          
     Inez 1-30                                               0.2343800             0.1794433       Yes                        
     Red Sage 1-30                                           0.2343750             0.1794433       Yes                        
CUSTER COUNTY, OK                                                                                                             
     FIELD-ANADARKO (STAFFORD N)                                                                                              
     Snider 1-36                                             0.5112492             0.3S02194       Yes                        
     FIELD-CANUTE N                                                                                                           
     Kephart 1-17                                            0.1146048             0.0904388       Yes                        
     Libby Hooter 1-17                                       0.1494095             0.1179119       Yes                        
     Rowlan 1-3                                              0.2046220             0.1554200       Yes                        
     FIELD-INDIANAPOLIS                                                                                                       
     Schapansky 1-32                                         0.3378602             0.2505888       Yes                        
     FIELD-MOOREWOOD NE                                                                                                       
     Broadbent 1-25                                          0.1261714             0.1077000       Yes                        
</TABLE>

                                                           Page 2 of 5
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                                 WORKING INTEREST  NET REVENUE INTEREST  TITLE PROPERTY     
--------------------------------------------       ----------------  --------------------  --------------     
<S>                                                <C>               <C>                   <C>                
     Moseley 5-25                                         0.0987430             0.0837000       Yes           
     Moseley 7-25                                         0.0987430             0.0837000       Yes           
     Touchstone 3-14                                      0.1477571             0.1246598       Yes           
     FIELD-WEATHERFORD                                                                                        
     Frizzell A 1-32                                      0.0771429             0.0655712       Yea           
DEWEY COUNTY, OK                                                                                              
     FIELD-PUTNAM                                                                                             
     Craig 1-35                                           0.1431675             0.1213568       Yes           
GRADY COUNTY, OK                                                                                              
     FIELD-MIDDLEBURG SE (AMBER NE)                                                                           
     Crosswhite 1-24                                      0.2299626             0.1701723       Yes           
     FIELD-NORGE SW                                                                                           
     Methvin 1-12                                         0.4108255             0.3371687       Yes           
KINGFISHER COUNTY, OK                                                                                         
     FIELD-OKARCHE N                                                                                          
     Ellis 1- 1                                           0.3047063             0.2498593       Yes           
     Snow 1- 5                                            0.4422538             0.3299128       Yes           
     FIELD-SOONER TREND                                                                                       
     Themer 10- 2                                         0.8717898             0.6974319       Yes           
MAJOR COUNTY, OK                                                                                              
     FIELD-CEDARDALE NE                                                                                       
     Barnes D#4                                           0.1006016             0.0860145       Yes           
     Butler 2-20                                          0.7911483             0.6613098       Yes           
     Foster 2-21L(Chester)                                0.4444297             0.3736202       Yes           
     Foster3-21                                           0.4039427             0.3405956       Yes           
     Schlarb 3-22U                                        0.6056344             0.5157184       Yes           
     FIELD-RINGWOOD                                                                                           
     Rexroat 1- 9                                         0.3000000             0.2565000       Yes           
     Rexroat 2- 9                                         0.3000000             0.2565000       Yes           
     Rexroat 3-9                                          0.3000000             0.2565000       Yes           
     Warfield Un 1-5                                      0.6398714             0.4998072       Yes           
     Warfield Un 2-5                                      0.6398714             0.4998072       Yes           
     FIELD-SEILING NE                                                                                         
     Bensch 1-23                                          0.5074999             0.4047114       Yes           
OKLAHOMA COUNTY, OK                                                                                           
     FIELD-EDMOND W                                                                                           
     Cargill O A                                          1.0000000             0.8203125       Yes            
</TABLE>

                                                           Page 3 of 5
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                               WORKING INTEREST  NET REVENUE INTEREST  TITLE PROPERTY    
------------------------------------------       ----------------  --------------------  --------------    
<S>                                              <C>               <C>                   <C>               
WOODS COUNTY, OK                                                                                           
     FIELD-AVARD                                                                                           
     Oshel 2-30                                         0.8000000             0.6840000       Yes          
     FIELD-OAKDALE                                                                                         
     Gisson 2-33L(Mississippi                           0.7383100             0.5934588       Yes          
     Gisson 3-33L(Mississippi                           0.4458101             0.3811676       Yes          
     Gisson 4-33                                        0.4626925             0.3714772       Yes          
     Veatch 2-24                                        0.3874999             0.3217421       Yes          
     Wilt A 2-19                                        0.7557648             0.5890299       Yes          
WOODWARD COUNTY, OK                                                                                        
     FIELD-CEDARDALE NE                                                                                    
     State 2-24L(Oswego)                                0.8150000             0.6693661       Yes          
     State 2-24U                                        0.8150000             0.6693660       Yes          
     State 3-24                                         0.8150000             0.6693661       Yes          
BEE COUNTY, TX                                                                                             
     FIELD-PLUMMER-WILCOX                                                                                  
     Borroum B # 1                                      0.7000000             0.5906250       Yes          
CHAMBERS COUNTY, TX                                                                                        
     FIELD-ELWOOD                                                                                          
     Colby Claypool # 1                                 0.0000000             0.0244142       Yes          
HARDIN COUNTY, TX                                                                                          
     FIELD-JOHN VICKERS (VICKERS)                                                                          
     Arco Vickers # 1                                   1.0000000             0.7250000       Yes          
HOCKLEY COUNTY, TX                                                                                         
     FIELD-SMYER                                                                                           
     Smyer April Harless                                0.1874193             0.0000000       Yes          
     Smyer Lockhart                                     0.0646246             0.0000000       Yes          
     Smyer Lockhart A                                   0.0229561             0.0000000       Yes          
     Smyer Un NE                                        0.2750000             0.2255000       Yes          
HOPKINS COUNTY, TX                                                                                         
     FIELD-BRANTLEY JACKSON                                                                                
     Brantley Jackson Un                                0.1869938             0.1510408       Yes          
KENT COUNTY, TX                                                                                            
     FIELD-ATKINS-FLEMING                                                                                  
     Fleming # 1                                        0.8000000             0.6400000       Yes           
LIVE OAK COUNTY, TX
</TABLE>
     FIELD-MIKESKA

                                                           Page 4 of 5
<PAGE>
 
<TABLE>
<CAPTION>
     PROPERTY NAME                         WORKING INTEREST  NET REVENUE INTEREST  TITLE PROPERTY      
-------------------------------------      ----------------  --------------------  --------------      
<S>                                        <C>               <C>                   <C>                 
     Bennett State GU # 1                         0.2500000             0.2043219       Yes            
LOVING COUNTY, TX                                                                                      
     FIELD-HALEY                                                                                       
     Harrison Nell 22-1                           0.0393230             0.0298450       Yes            
     Harrison Nell 28-1A                          0.0422530             0.0321890       Yes            
LUBBOCK COUNTY, TX                                                                                     
     FIELD-EDMISSON                                                                                    
     Broadview Un E                               0.3195384             0.2632593       Yes            
     FIELD-LDALOU                                                                                      
     Idalou Un                                    0.2797272             0.2097950       Yes            
MATAGORDA COUNTY, TX                                                                                   
     FIELD-MIDDLEBANK REEF                                                                             
     S/T 367 L # 4                                0.2876934             0.2346491       Yes            
WEBB COUNTY, TX                                                                                        
     FIELD-GATO CMK                                                                                    
     Alley # 3                                    0.1048890             0.0742457       Yes            
     FIELD-RANCHO VIEJO                                                                                
     Alley # 4                                    0.1048899             0.0742457       Yes            
     Alley # 5                                    0.1049000             0.0742457       Yes            
     FIELD-THOMPSONVILLE NE                                                                            
     Bruni D GU                                   0.3333333             0.2708334       Yes             
 
</TABLE>


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