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                                                                   EXHIBIT 10.35



                              PLAINS RESOURCES INC.

                 DIRECTOR'S NONQUALIFIED STOCK OPTION AGREEMENT



         THIS AGREEMENT, made as of the _____ day of ________________, 200__
(the "Grant Date"), between Plains Resources Inc., a Delaware corporation (the
"Company"), and FIELD(First Name) FIELD(Last Name) (the "Optionee").

         WHEREAS, the Company has adopted the Plains Resources Inc. 2001 Stock
Incentive Plan (the "Plan") in order to provide additional incentive to certain
employees, officers, consultants and directors of the Company and its
Subsidiaries, Affiliates and Divisions; and

         WHEREAS, the Committee responsible for administration of the Plan has
determined to grant an option to the Optionee as provided herein;

         NOW, THEREFORE, the parties hereto agree as follows:

         1. Grant of Option.

         1.1 The Company hereby grants to the Optionee the right and option (the
"Option") to purchase all or any part of an aggregate of FIELD(Shares) whole
Shares subject to, and in accordance with, the terms and conditions set forth in
this Agreement.

         1.2 The Option is not intended to qualify as an Incentive Stock Option
within the meaning of Section 422 of the Code.

         1.3 This Agreement shall be construed in accordance and consistent
with, and subject to, the provisions of the Plan (the provisions of which are
incorporated herein by reference) and, except as otherwise expressly set forth
herein, the capitalized terms used in this Agreement shall have the same
definitions as set forth in the Plan.

         2. Purchase Price.

         The price at which the Optionee shall be entitled to purchase Shares
upon the exercise of the Option shall be $________ per Share.

         3. Duration of Option.

         The Option shall be exercisable to the extent and in the manner
provided herein for a period of five (5) years from the Grant Date (or if later,
the first anniversary of the date of the Director's death if such death occurs
prior to such fifth anniversary) (the "Exercise Term"); provided, however, that
the Exercise Term may be modified as provided in Section 6 hereof.

         4. Exercisability of Option.

         Unless otherwise provided in this Agreement or the Plan, the Option
shall entitle the Optionee to purchase, in whole at any time or in part from
time to time, 100% of the total number of Shares covered by the Option on and
after the Grant Date.





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         5. Manner of Exercise and Payment.

         5.1 Subject to the terms and conditions of this Agreement and the Plan,
the Option may be exercised by delivery in person, by telecopy or by mail of
written notice to the Company, at its principal executive office. Such notice
shall state that the Optionee is electing to exercise the Option and the number
of Shares in respect of which the Option is being exercised and shall be signed
by the person or persons exercising the Option. If requested by the Committee,
such person or persons shall (i) deliver this Agreement to the Secretary of the
Company who shall endorse thereon a notation of such exercise and (ii) provide
satisfactory proof as to the right of such person or persons to exercise the
Option.

         5.2 The notice of exercise described in Section 5.1 hereof shall be
accompanied by the full purchase price for the Shares in respect of which the
Option is being exercised in any of the following forms; (i) cash, (ii) the
transfer of Shares to the Company having a Fair Market Value on the day
preceding the date of exercise equal to the cash amount for which such Shares
are substituted and which have been held by the Optionee for at least six (6)
months, or (iii) a combination of cash and the transfer of Shares.

         5.3 Upon receipt of notice of exercise and full payment for the Shares
in respect of which the Option is being exercised, the Company shall, subject to
Section 18 of the Plan, take such action as may be necessary to effect the
transfer to the Optionee of the number of Shares as to which such exercise was
effective.

         5.4 The Optionee shall not be deemed to be the holder of, or to have
any of the rights of a holder with respect to any Shares subject to the Option
until (i) the Option shall have been exercised pursuant to the terms of this
Agreement and the Optionee shall have paid the full purchase price for the
number of Shares in respect of which the Option was exercised, (ii) the Company
shall have issued and delivered the Shares to the Optionee, and (iii) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company, whereupon the Optionee shall have full voting, dividend and
other ownership rights with respect to such Shares.

         6. Termination of Service as a Director.

         6.1 Termination for Other than Disability, Death or Cause. If the
Optionee's service as a Director terminates for any reason other than
Disability, death or Cause, the Optionee may for a period of three (3) months
after such termination exercise the Option, after which time the Option shall
automatically terminate in full; provided, however, that the Option may not be
exercised after the day prior to the fifth anniversary of the Grant Date except
as set forth in Section 6.4 hereof.

         6.2 Termination due to Disability. If the Optionee's service as a
Director terminates by reason of the Optionee's resignation or removal from the
Board due to Disability, the Optionee may, for a period of one (1) year after
such termination, exercise the Option, after which time the Option shall
automatically terminate in full; provided, however, that the Option may not be
exercised after the day prior to the fifth anniversary of the Grant Date except
as set forth in Section 6.4 hereof.

         6.3 Termination for Cause. If the Optionee's service as a Director
terminates for Cause, the Option granted to the Optionee shall immediately
terminate in full and no rights hereunder may be exercised.

         6.4 Termination Due to Death or Death of Director After Termination of
Service. If an Optionee dies while a Director or within three (3) months after
termination of service as a Director as described in Section 6.1 hereof, or
within twelve (12) months after termination of service as a Director as
described in Section 6.2 hereof, the Option granted to the Optionee may be
exercised at any time within twelve (12) months after the Optionee's death by
the person or persons to whom such rights under the Option shall pass by will,
or by the laws of descent or distribution, after which time the Option shall
terminate in full.






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         7. Effect of Change in Control.

         Notwithstanding anything contained in this Agreement to the contrary,
in the event of a Change in Control, the Optionee will be permitted to surrender
for cancellation within ninety (90) days after such Change in Control, the
Option or any portion of the Option to the extent not yet exercised and the
Optionee shall be entitled to receive immediately a cash payment in an amount
equal to the excess, if any, of (x) the greater of (1) the Fair Market Value, on
the date preceding the date of the surrender, of the Shares subject to the
Option or portion thereof surrendered, or (2) the Adjusted Fair Market Value of
the Shares subject to the Option or portion thereof surrendered, over (y) the
aggregate purchase price for such Shares under the Option or portion thereof
surrendered.

         8. Nontransferability.

         The Option shall not be transferable other than by will or by the laws
of descent and distribution or pursuant to a domestic relations order (as
contemplated by the Plan). The Option shall be exercisable only by the Optionee
or the Optionee's guardian or legal representative during the lifetime of the
Optionee.

         9. Adjustments.

         In the event of a Change in Capitalization, the Committee may make
appropriate adjustments to the number and class of Shares or other stock or
securities subject to the Option and the purchase price for such Shares or other
stock or securities. The Committee's adjustment shall be made in accordance with
the provisions of Section 12 of the Plan and shall be effective and final,
binding and conclusive for all purposes of the Plan and this Agreement.

         10. Effect of a Merger, Consolidation or Liquidation.

         Subject to Section 7 hereof, upon the effective date of (i) the
liquidation or dissolution of the Company or (ii) a merger or consolidation of
the Company (a "Transaction"), the Option shall continue in effect in accordance
with its terms and the Optionee shall be entitled to receive in respect of all
Shares subject to the Option, upon exercise of the Option, the same number and
kind of stock, securities, cash, property or other consideration that each
holder of Shares was entitled to receive in the Transaction.

         11. Withholding of Taxes.

         The Company shall have the right to deduct from any distribution of
cash to the Optionee an amount equal to the federal, state and local income
taxes and other amounts as may be required by law to be withheld (the
"Withholding Taxes") with respect to the Option. If the Optionee is entitled to
receive Shares upon exercise of the Option, the Optionee shall pay the
Withholding Taxes to the Company in cash prior to the issuance of such Shares.
In satisfaction of the Withholding Taxes, the Optionee may make a written
election (the "Tax Election") to have withheld a portion of the Shares issuable
to him or her upon exercise of the Option, having an aggregate Fair Market
Value, on the date preceding the date of such issuance, equal to the Withholding
Taxes.

         12. Optionee Bound by the Plan.

         The Optionee hereby acknowledges receipt of a copy of the Plan and
agrees to be bound by all the terms and provisions thereof.

         13. Modification of Agreement.

         This Agreement may be modified, amended, suspended or terminated, and
any terms or conditions may be waived, but only by a written instrument executed
by the parties hereto.






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         14. Severability.

         Should any provision of this Agreement be held by a court of competent
jurisdiction to be unenforceable or invalid for any reason, the remaining
provisions of this Agreement shall not be affected by such holding and shall
continue in full force in accordance with their terms.

         15. Governing Law.

         The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Delaware without giving
effect to the conflicts of laws principles thereof.

         16. Successors in Interest.

         This Agreement shall inure to the benefit of and be binding upon any
successor to the Company. This Agreement shall inure to the benefit of the
Optionee's legal representatives. All obligations imposed upon the Optionee and
all rights granted to the Company under this Agreement shall be final, binding
and conclusive upon the Optionee's heirs, executors, administrators and
successors.

         17. Resolution of Disputes.

         Any dispute or disagreement which may arise under, or as a result of,
or in any way relate to, the interpretation, construction or application of this
Agreement shall be determined by the Committee. Any determination made hereunder
shall be final, binding and conclusive on the Optionee and Company for all
purposes.

         18. Shareholder Approval.

         The effectiveness of this Agreement and of the grant of the Option
pursuant hereto is subject to the approval of the Plan by the stockholders of
the Company in accordance with the terms of the Plan.

                       PLAINS RESOURCES INC.



                       By:
                          -------------------------------------------------
                             James C. Flores, Chairman and CEO



                       ----------------------------------------------------
                       Name of Optionee: FIELD(First Name) FIELD(Last Name)











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