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                                                                   EXHIBIT 10.28

               SETTLEMENT, RELEASE AND CONFIDENTIALITY AGREEMENT

     This settlement, release and confidentiality agreement (the "Agreement") is
made and entered into by and between Larry H. Carpenter ("Employee"), his heirs
and assigns, and TGX Corporation, its successors, subsidiaries and affiliates
(the "Company").

                              W I T N E S S E T H:
                              -------------------

     WHEREAS, Employee commenced employment either as a consultant or employee
with the Company on or about March 30, 1992 and has entered into that certain
Personal Service and Employment Agreement dated as of March 31, 1992 and that
further Employment Agreement made as of April 1, 1995 (the "Employment
Agreement"); and

     WHEREAS, Employee's active service for the Company terminated on February
10, 1997; and

     WHEREAS Employee and the Company desire to settle fully and finally all
differences between them, including, any claims that might arise out of:  (i)
Employee's employment with the Company; (ii) the termination thereof; and (iii)
the Employment Agreement.

     NOW THEREFORE, in consideration of the premises and mutual promises herein
contained, it is agreed as follows:

     1.   Employee agrees that his active employment with the Company terminated
          as of February 10, 1997 (the "Termination Date") and as of the
          Termination Date he no longer serves as President or as any other
          officer or an employee of the Company.  Employee agrees that effective
          as of the date upon which the parties hereto execute this Agreement
          and Employee receives the cash payment provided for herein (the
          "Effective Date") Employee agrees that he is no longer a director of
          the Company and Employee shall execute a formal letter of resignation
          as a director.  Employee acknowledges and understands that he will not
          be reemployed by the Company.  Employee specifically waives all claims
          for back pay, front pay, vacation pay, sick pay, bonus pay, or any
          other form of compensation, except as set forth herein.

     2.   Employee represents that he has not filed any claim, complaint,
          charge, or lawsuit against the Company with any governmental agency or
          any court, and that he will not do so at any time hereafter for any
          matter, claim, or incident known or unknown which occurred or arose
          out of occurrences on or prior to the Effective Date; provided,
          however, that this shall not limit Employee from filing a claim or
          lawsuit for the sole purpose of enforcing his rights under this
          Agreement.

     3.   Employee and the Company agree that all claims of any nature
          whatsoever by Employee against the Company, its legal representatives,
          successors, assigns, officers, directors, employees, agents,
          affiliates or attorneys for any matters which arose during the time,
          or as a result of, Employee's employment with the Company, whether
          known or unknown, suspected or unsuspected, including but
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          not limited to, rights under federal, state, or local laws prohibiting
          age, race, religion, or other forms of discrimination; or claims
          growing out of any legal restrictions on the Company's right to
          terminate its employees, except as provided in Paragraph 4 hereof or
          claims arising out of this Agreement shall be resolved and settled on
          the following basis:

          (a)  Upon the execution of this Agreement by Employee, and upon the
               Company's receipt of the certificate representing the Stock,
               defined below, Employee shall receive $225,000 in cash (subject
               to applicable deductions for taxes, F.I.C.A., etc.) less any
               amounts previously paid to Employee for the period after the
               Termination Date.  Such payment shall be in full consideration
               for all accrued and unpaid vacation, sick pay, services or other
               cash compensation Employee may believe he is entitled to receive
               from the Company.

          (b)  Employee hereby waives any and all rights he may have, and hereby
               forfeits, all right, title and interest in 100,000 shares of TGX
               Series A Senior Preferred Stock (the "Stock") which otherwise
               would have become non-forfeitable on April 1, 1997 and the
               Company acknowledges and agrees that after such forfeiture
               Employee shall continue to own all other shares of Stock which
               have heretofore vested and as to which restrictions thereon have
               lapsed pursuant to Section 5 of the Employment Agreement or
               otherwise.  Upon execution of this Agreement, Employee shall
               return to the Company, for cancellation, a certificate he holds
               representing 200,000 shares of the Stock, and in exchange the
               Company shall deliver to Employee a certificate evidencing his
               ownership of 100,000 fully paid and non-assessable shares of the
               Stock.

          (c)  Employee agrees that for a period not to exceed twelve months
               from the Effective Date and up to a maximum of 20 hours during
               such period, Employee will consult with the Company concerning
               operations, litigation, etc. with Employee to be paid at a rate
               of $75 per hour for the next 20 hours and then at a rate of $150
               per hour for each hour thereafter.  Employee's consulting
               obligation shall be effected upon the request of the Chairman of
               the Board of the Company.

     4.   Except for the rights of the Employee and the Company contained in
          this Agreement, Employee, on the one hand, and the Company on the
          other, each mutually RELEASES, ACQUITS, AND FOREVER DISCHARGES the
          other, their legal representatives, successors, assigns, officers,
          directors, employees, agents, affiliates and attorneys, of and from
          any and all claims, obligations, liabilities, suits, complaints,
          debts, obligations, reckonings, promises, covenants, controversies,
          actions, causes of action, trespasses, variances, judgments,
          executions, damages, demands, rights, titles, interests, charges,
          encumbrances or liens of any kind or nature, whether known or unknown,
          whether liquidated or unliquidated, whether in tort or in contract or
          otherwise which Employee or the

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          Company has heretofore held, may now hold, or may hereafter hold,
          arising out of or relating to any act, omission, or occurrence on or
          prior to the Effective Date, including without limitation, any breach
          of fiduciary duty, breach of any duty of good faith or fair dealing,
          breach of confidence, undue influence, duress, economic coercion,
          conflict of interest, negligence, bad faith, malpractice, intentional
          or negligent infliction of emotional or mental distress, employment
          discrimination, sexual harassment, tortious interference with
          corporate governance or prospective business advantage, breach of
          contract, tortious interference with contract, deceptive trade
          practices, libel, slander, conspiracy, usury, fraud,
          misrepresentation, omission, mistake, or violation of any federal or
          state securities law, regulations, or rules.  Specifically, Employee
          and the Company further agree that neither he nor they nor any of his
          or their legal or personal representatives or successors or assigns
          will institute, prosecute, or in any way aid in the institution or
          prosecution of any claim, demand, action, or cause of action now
          existing or hereafter asserted against Employee or the Company or
          their legal and personal representatives, successors, assigns,
          officers, directors, employees, agents, affiliates, or attorneys
          arising out of or relating to any of the foregoing.  Employee and the
          Company specifically acknowledge that they are irrevocably releasing
          each other of any obligations and any rights of Employee or the
          Company under, and each is hereby terminating, any and all employment
          agreements, bonus agreements, rights to equity in the Company, any
          compensation plan or agreement, any bonus plan or agreement, and any
          rights to vacation pay or sick pay, and any stock option, stock
          purchase, or similar plan or agreement with the Company, in effect on
          the date hereof.  Employee, however, does not release any rights he
          may have for indemnification, exculpation, or coverage pursuant to the
          express terms of the Certificate of Incorporation, or By-laws of the
          Company, or under any policies of insurance covering acts or omissions
          of Employee while employed by the Company or pursuant to Section 19 of
          the Employment Agreement.

     5.   Employee and the Company agree that this Agreement shall inure to the
          benefit of any successor, assignee, or legal representative of any of
          the Employee, or the Company, it being understood that this Agreement
          does not purport to grant a release from liabilities or obligations
          originating from acts, omissions, or circumstances arising subsequent
          to the Effective Date and/or in connection with the terms of this
          Agreement.

     6.   If any court or arbitrator shall determine that any of the provisions
          hereof is for any reason, or to any extent, invalid or unenforceable,
          the remaining provisions are not invalidated and their application to
          other persons or circumstances shall continue in full force and effect
          to bind Employee and the Company.

     7.   The parties hereto acknowledge and agree that their execution of this
          Agreement does not constitute in any manner whatsoever any admission
          of liability on their part for any matters covered by or released
          hereby, but that such liability is specifically denied, and that
          entering into this Agreement is simply to

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          compromise, settle and release any and all potential claims relating
          to such matters, if any, which may have been or could have been
          alleged.

     8.   This Agreement shall be governed by, construed and interpreted
          according to the laws of the State of Texas without regard to the
          conflicts of laws principles thereof and venue for any dispute arising
          hereunder shall lie exclusively in Houston, Texas.

     9.   This Agreement may be executed in multiple counterparts, each of which
          shall be deemed an original, but all of which, taken together, shall
          constitute one and the same instrument.

     10.  Employee and the Company represent and agree that they will keep the
          terms, conditions, and amounts of this Agreement and all other
          agreements between themselves completely confidential and that they
          will not hereafter voluntarily disclose any information concerning
          this Agreement and all other agreements between themselves to anyone
          except their immediate families, legal counsel, accountants, and
          financial advisors, provided, however, that they agree to keep this
          information confidential and not disclose it to others.  Employee
          further agrees that upon the Effective Date, he has not, and will not,
          take with him or retain without prior written authorization of the
          Company, any papers, writings or other property which is, or directly
          relates to Confidential Information.  Employee further agrees that all
          such Confidential Information shall at all times belong to and remain
          the property of the Company and that Employee shall return all such
          Confidential Information immediately.  Employee agrees that except as
          may be required by law, or in a judicial proceeding under law,
          Employee will disclose to any person or other entity any Confidential
          Information, directly or indirectly, for a period of three years after
          Employee's employment has terminated with the Company.  Employee
          agrees that he will not use any Confidential Information to compete
          with the Company nor will Employee use any Confidential Information in
          a manner which is detrimental to the Company.  Employee agrees that in
          addition to any other remedy available at law or equity, the Company
          shall be entitled to injunctive relief, without the posting of any
          bond, in the event of a breach of the confidentiality agreement set
          forth in this paragraph.  For the purposes of this Agreement,
          "Confidential Information" shall mean any non-public information as to
          or concerning the profits, revenues, expenses, cash flow, prospects,
          well information, information relating to any of their operations of
          the Company and any other non-public financial or operating
          information concerning any project owned or operated by the Company.
          Confidential Information shall not mean (i) information with regard to
          the Company which is already in the hands of third parties if that
          information is not subject to a confidentiality agreement or other
          obligation of secrecy between the Company and the third party that has
          such information; (ii) information with regard to the Company which
          generally becomes available to the public other than as a result of
          disclosure by Employee; and (iii) information with regard to the
          Company which becomes available to Employee on a non-confidential
          basis from a third party that is not

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          under a duty to, or agreement with, the Company to keep such
          information confidential.

     11.  The language of all parts of this Agreement shall in all cases be
          construed as a whole according to its fair meeting and not strictly
          for or against any of the parties.

     12.  Employee acknowledges that Employee has had the opportunity to consult
          with counsel in connection with the negotiation and execution of this
          Agreement and all other matters contemplated hereby, that Employee has
          had the opportunity to review and reflect on all terms of this
          Agreement and that Employee has not been subject to any undue or
          improper influence interfering with the exercise of Employee's free
          will to execute this Agreement.  Employee does not rely, and has not
          relied, on any representation, promise or inducement concerning this
          Agreement made by the Company, its officers, directors, employees,
          agents or attorneys, with the exception of the consideration expressly
          contained herein in executing the Agreement.

     13.  Employee agrees that for a period of three years from the Effective
          Date neither he nor any Affiliate (as that term is defined in Rule 405
          under the Securities Act of 1933) (regardless of whether such person
          or entity is an Affiliate on the date hereof) will (i) acquire, offer
          to acquire, or agree to acquire, directly or indirectly, by purchase
          or otherwise, any voting securities or direct or indirect rights or
          options to acquire any voting securities of the Company, except
          Employee may purchase Stock which Employee contributed to his ex-
          spouse, (ii) make, or in any participate, directly or indirectly, in
          any "solicitation" of "proxies" to vote (as such terms are used in the
          Proxy Rules of the Securities and Exchange Commission), or seek to
          advise or influence any person or entity with respect to the voting of
          any voting securities of the Company, (iii) form, join, or in any way
          participate in a "group" within the meaning of Section 13(d)(3) of the
          Securities Exchange Act of 1934 with respect to any voting securities
          of the Company (except to the extent you and your ex-spouse are
          considered a "group"), or (iv) otherwise act, alone or in concert with
          others, to seek to control or influence the management, Board of
          Directors, or policies of the Company.


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  NOTICE. THE EXECUTION OF THIS MUTUAL RELEASE WILL RESULT IN IMPORTANT LEGAL
  CONSEQUENCES. YOU SHOULD READ IT CAREFULLY. YOU ACKNOWLEDGE THAT YOU HAVE
  CONSULTED WITH AN ATTORNEY BEFORE SIGNING IT.

     IN WITNESS WHEREOF, the undersigned parties hereto have executed this
Agreement as of the 31st day of March, 1997.



                              -----------------------------------
                              Name:  Larry H. Carpenter


                              TGX CORPORATION


                              By:
                                 --------------------------------
                              Name:     Michael A. Gerlich
                              Title:    Interim President