<PAGE>
 
                                                                    EXHIBIT 10.9

                          PURCHASE AND SALE AGREEMENT


                                    BETWEEN


                              EEX OPERATING L.P.

                                      AND

                                EEX CORPORATION


                                   AS SELLER


                                      AND


                           CROSS TIMBERS OIL COMPANY


                                    AS BUYER


                                     DATED


                               FEBRUARY 12, 1998
<PAGE>
 
                               TABLE OF CONTENTS
 
 
 1.  Assets to be Sold and Purchased........................................1

 2.  Purchase Price.........................................................2

 3.  Representations of Seller..............................................2

 4.  Representations of Buyer...............................................3

 5.  Certain Covenants of Seller Pending Closing............................4

 6.  Due Diligence Reviews..................................................5

 7.  Certain Purchase Price Adjustments.....................................9

 8.  Certain Covenants of Buyer Pending Closing............................10

 9.  Conditions Precedent to the Obligations of Buyer......................10

10.  Conditions Precedent to the Obligations of Seller.....................11

11.  Termination of Agreement..............................................11

12.  The Closing...........................................................12

13.  Certain Accounting Adjustments........................................13

14.  Assumption and Indemnification........................................14

15.  Disclaimer of Warranties..............................................15

16.  Commissions...........................................................15

17.  Casualty Loss.........................................................16

18.  Notices...............................................................16

19.  Survival of Provisions................................................16

20.  Operations............................................................17

21.  Miscellaneous Matters.................................................17
 
<PAGE>
 
                          PURCHASE AND SALE AGREEMENT
                          ---------------------------

  This Purchase and Sale Agreement ("AGREEMENT") is entered into this 12 day of
FEBRUARY, 1998, by and between EEX CORPORATION ("EEX") and EEX OPERATING L.P.
("EOP") (collectively "SELLER"), whose mailing address is 4849 Greenville
Avenue, Suite 1200, Dallas, Texas 75206 and CROSS TIMBERS OIL COMPANY ("BUYER"),
whose mailing address is 810 Houston, Ste 2000, FORT WORTH, TX 76102. In
consideration of the mutual covenants and conditions contained in this Agreement
and other good and valuable consideration, the adequacy and sufficiency of which
are hereby acknowledged, the parties agree as follows:

                             W I T N E S S E T H:

  1.  ASSETS TO BE SOLD AND PURCHASED.  Seller agrees to sell and Buyer agrees
to purchase, for the consideration hereinafter set forth, and subject to the
terms and provisions herein contained, the following described properties,
rights and interests:

      (a)  All of Seller's right, title and interest in and to the oil, gas
  and/or mineral leases described in Exhibit "A", EXHIBIT "A-1," and EXHIBIT
  "A-2" (collectively called "Exhibit A") hereto, any ratifications and/or
  amendments to such leases (whether or not such ratifications or amendments are
  described in Exhibit A), subject to the exceptions and reservations contained
  in Exhibit A; and

      (b)  Without limitation of the foregoing, all of Seller's right, title and
  interest (of whatever kind or character, whether legal or equitable, and
  whether vested or contingent) in and to the oil, gas and other minerals in and
  under or that may be produced from the lands or leases described in Exhibit A
  hereto, including, without limitation, interests in all oil, gas and/or
  mineral leases covering such lands, overriding royalties, production payments
  and net profits interests, fee mineral interests, fee royalty interests and
  all other interests in such oil, gas and other minerals, even though Seller's
  interest in such oil, gas and other minerals may be incorrectly described in,
  or omitted from, such Exhibit A, but subject in each case to the exceptions
  and reservations contained in such Exhibit A; and

      (c)  All of Seller's rights, titles and interests in and to, or otherwise
  derived from, all presently existing and valid oil, gas and/or mineral
  unitization, pooling, and/or communitization agreements, declarations and/or
  orders and in and to the properties covered and the units created thereby
  (including, without limitation, all units formed under orders, rules,
  regulations, or other official acts of any federal, state, or other authority
  having jurisdiction, and voluntary unitization agreements, designations and/or
  declarations) relating to the properties described in subsections (a) and (b)
  above; and

      (d)  All of Seller's rights, titles and interests in and to all presently
  existing and valid rights-of-way and easements, production sales contracts,
  operating agreements, unit agreements, and other agreements and contracts
  which relate to any of the properties described in subsections (a), (b) and
  (c) above, provided that Seller will retain all obligations and liabilities
  under any agreements entered into with ENCOGEN ONE PARTNERS, LTD, and Seller
  will indemnify and hold Buyer (and the said properties) harmless from any
  claims, liability or obligations related to the said agreements with ENCOGEN;
  or on the lands identified on Exhibit "E" attached hereto being the Field
  Offices of Seller (which lands, to the extent of the Fee or leasehold interest
  of Seller, are included in the properties conveyed); and

      (e)  All of Seller's rights, titles and interests in and to all materials,
  supplies, machinery, equipment, improvements and other personal property and
  fixtures (including, but not by way of limitation, all wells, wellhead
  equipment, pumping units, flowlines, tanks, buildings, injection facilities,
  saltwater disposal facilities, compression facilities, gathering
<PAGE>
 
  systems, and other equipment) located on the properties described in
  subsections (a), (b) and (c) above and used in connection with the
  exploration, development, operation or maintenance thereof; and

      (f)  All of Seller's lease files, abstracts and title opinions, production
  records, well files, accounting records (but not including general financial
  accounting or tax accounting records), electric logs, geological data and
  records (subject to any contractual or other restrictions relating to the
  transfer of such data and records), and other files, documents and records
  which directly relate to the properties described above, but nothing contained
  herein shall preclude Seller from retaining copies of the same.

The interests of the Seller in the properties and interests specified in the
foregoing subsections (a), (b) and (c) are herein sometimes collectively called
the "OIL AND GAS PROPERTIES," and the interests of the Seller in the properties
and interests specified in the foregoing subsections (a), (b), (c), (d), (e) and
(f) are herein sometimes collectively called the "ASSETS".

  2.  PURCHASE PRICE.  The purchase price for the Assets shall be Two hundred
and Sixty Five Million ($265,000,000.00) (herein called the "BASE PURCHASE
PRICE"). Such Base Purchase Price may be adjusted as provided herein (herein
called the Base Purchase Price, as so adjusted, and as the same may otherwise be
adjusted by mutual agreement of the parties, being herein called the "PURCHASE
PRICE"). The Purchase Price shall be paid in cash at the Closing as hereinafter
provided. Buyer has previously paid to Seller the sum of $26,500,000.00 which
shall hereinafter be referred to as the "DEPOSIT". If Buyer and Seller
consummate the transaction contemplated by this Agreement, the Deposit shall be
applied to the Purchase Price. If Buyer and Seller do not consummate the
transaction contemplated by this Agreement because of a refusal by Seller, in
the absence of a default by Buyer, Seller shall return the Deposit to Buyer.
Except as provided in the preceding sentences, if Buyer fails or refuses to
consummate the transaction contemplated by this Agreement, or if the transaction
contemplated by this Agreement otherwise fails to close on the Closing Date,
Seller shall retain the Deposit as liquidated damages. The parties agree that
damages in such an event would be extremely difficult to determine, that the
Deposit represents a fair and reasonable estimate of such damages under the
circumstances, and that such a retention of the Deposit does not constitute a
penalty.

  3.  REPRESENTATIONS OF SELLER.  Seller represents to Buyer that:

      (a)  EEX is a corporation and EOP is a limited partnership both duly
  organized, and legally existing under the laws of the State of Texas. Seller
  is qualified to do business and is in good standing in each state in which the
  Assets are located where the laws of such state require a corporation and a
  limited partnership owning the Assets located in such state to qualify to do
  business.

      (b)  Seller has full power to enter into and perform its obligations under
  this Agreement and has taken all proper action to authorize entering into this
  Agreement and performance of its obligations hereunder, upon obtaining Board 
  approval pursuant to Section 10(c) below.

      (c)  Other than requirements (if any) that consents to assignment, or
  waivers of preferential rights to purchase, be obtained from third parties,
  and except for approvals ("Routine Governmental Approvals") required to be
  obtained from governmental entities who are lessors under leases forming a
  part of the Oil and Gas Properties, or who administer such leases on

                                       2
<PAGE>
 
  behalf of such lessors, which are customarily obtained post-closing, or as
  otherwise set forth on Schedule 3(c), neither the execution and delivery of
  this Agreement, nor the consummation of the transactions contemplated hereby,
  nor the compliance with the terms hereof, will result in any default under any
  agreement or instrument to which Seller is a party or by which the Assets are
  bound, or violate any order, writ, injunction, decree, statute, rule or
  regulation applicable to Seller or to the Assets.

      (d)  This Agreement and the Conveyance provided for herein to be delivered
  at Closing will, when executed and delivered, constitute the legal, valid and
  binding obligation of Seller, enforceable in accordance with its terms, except
  as limited by bankruptcy or other laws applicable generally to creditor's
  rights and as limited by general equitable principles.

      (e)  Except as set forth on Schedule 3(e) hereto, there are no pending
  suits, actions, or other proceedings in which Seller is a party which affect
  the Assets (including, without limitation, any actions challenging or
  pertaining to Seller's title to any of the Assets), or affecting the execution
  and delivery of this Agreement or the consummation of the transactions
  contemplated hereby.

  4.  REPRESENTATIONS OF BUYER.  Buyer represents to Seller that:

      (a)  Buyer is a corporation duly organized and legally existing under the
  laws of the State of Delaware, and is qualified to do business and is in good
  standing in each of the states in which the Assets are located where the laws
  of such state would require a corporation owning the Assets located in such
  state to qualify to do business.

      (b)  Buyer has full power to enter into and perform its obligations under
  this Agreement and has taken all proper action to authorize entering into this
  Agreement and performance of its obligations hereunder, upon obtaining Board
  approval pursuant to Section 9(c) below.

      (c)  Neither the execution and delivery of this Agreement, nor the
  consummation of the transactions contemplated hereby, nor the compliance with
  the terms hereof, will result in any default under any agreement or instrument
  to which Buyer is a party or by which the Assets are bound, or violate any
  order, writ, injunction, decree, statute, rule or regulation applicable to
  Buyer or to the Assets.

      (d)  This Agreement and the Conveyance provided for herein to be delivered
  at Closing will, when executed and delivered, constitute the legal, valid and
  binding obligation of Buyer, enforceable in accordance with its terms, except
  as limited by bankruptcy or other laws applicable generally to creditor's
  rights and as limited by general equitable principles.

      (e)  There are no pending suits, actions, or other proceedings in which
  Buyer is a party which affect the execution and delivery of this Agreement or
  the consummation of the transactions contemplated hereby.

      (f)  Buyer is a knowledgeable purchaser, owner and operator of oil and gas
  properties, has the ability to evaluate oil and gas properties, and in fact
  has evaluated the Assets for purchase, and is acquiring the Assets based upon
  its own evaluation, and for its own account and not with the intent to make a
  distribution within the meaning of the Securities Act of 1933

                                       3
<PAGE>
 
  (and the rules and regulations pertaining thereto) or a distribution thereof
  in violation of any other applicable securities laws.

      (g)  With regard to those Assets which Buyer seeks to operate, Buyer is
  qualified to operate such Assets under the applicable laws, rules and
  regulations of the jurisdiction in which such Assets are located, or will
  become so qualified before operating such Assets.

  5.  CERTAIN COVENANTS OF SELLER PENDING CLOSING.  Between the date of this
Agreement and the Closing Date:

      (a)  Seller will give Buyer and its attorneys and other representatives
  access at all reasonable times to the Assets and, at Seller's office, to
  Seller's records (including, without limitation, title files, division order
  files, well files, production records, accounting records, marketing files,
  equipment inventories, and production, severance and ad valorem tax records)
  pertaining to the ownership and/or operation of the Assets. Seller shall not
  be obligated to provide Buyer with access to any records or data which Seller
  considers to be proprietary or confidential to it or which Seller cannot
  legally provide to Buyer without, in its opinion, breaching, or risking a
  breach of, confidentiality agreements with other parties. Buyer recognizes and
  agrees that all materials made available to it (whether pursuant to this
  Section or otherwise) in connection with the transaction contemplated hereby
  are made available to it as an accommodation, and without representation or
  warranty of any kind as to the accuracy and completeness of such materials.
  Buyer waives and releases all claims against Seller, its parent or subsidiary
  companies or other affiliates, and its and their directors, officers,
  employees and agents, for injury to, or death of, persons or for damage to
  property arising in any way from the conduct of the investigations and
  examinations contemplated by this Section or the conduct of its employees,
  agents or contractors in connection with such investigations and examinations
  (or the exercise of such rights of access). BUYER SHALL RELEASE, INDEMNIFY,
  DEFEND, AND HOLD HARMLESS SELLER, AND ITS PARENT OR SUBSIDIARY COMPANIES AND
  OTHER AFFILIATES, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
  ATTORNEYS, CONTRACTORS, AND AGENTS (HEREINAFTER COLLECTIVELY REFERRED TO AS
  THE "SELLER GROUP"), FROM ANY AND ALL CLAIMS, ACTIONS, CAUSES OF ACTION,
  LIABILITIES, DAMAGES, LOSSES, COSTS, OR EXPENSES (INCLUDING, WITHOUT
  LIMITATION, COURT COSTS AND ATTORNEYS' FEES), OR LIENS OR ENCUMBRANCES FOR
  LABOR OR MATERIALS ARISING OUT OF OR IN ANY WAY CONNECTED WITH SUCH ACCESS,
  EXAMINATIONS, OR INSPECTIONS. THE FOREGOING RELEASE AND INDEMNIFICATION SHALL
  APPLY WHETHER OR NOT SUCH CLAIMS, ACTIONS, CAUSES OF ACTION, LIABILITIES,
  DAMAGES, LOSSES, COSTS, OR EXPENSES ARISE OUT OF (i) NEGLIGENCE (INCLUDING
  CONCURRENT NEGLIGENCE, ACTIVE NEGLIGENCE, OR PASSIVE NEGLIGENCE, BUT EXPRESSLY
  NOT INCLUDING SOLE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF
  SELLER OR ANY OTHER INDEMNIFIED PARTY, OR (ii) STRICT LIABILITY.

      (b)  Seller will continue the operation of the Assets in the ordinary
  course of its business; where Seller is not the operator of an Asset, Seller
  will continue its actions as a non-operator in the ordinary course of its
  business. Seller will not sell or dispose of any portion of the leases, wells,
  or property or equipment used in the operation of the wells, without the prior
  consent of Buyer.

                                       4
<PAGE>
 
      (c)  Seller will use reasonable efforts, consistent with industry
  practices in transactions of this type, to identify (i) all preferential
  rights to purchase and all rights to require that consents to assignment be
  obtained which would be applicable to the transactions contemplated hereby and
  (ii) the parties holding such rights; in attempting to identify the same,
  Seller shall in no event be obligated to go beyond its own records. Seller
  will request, from the parties so identified (and in accordance with the
  documents creating such rights), waivers of the preferential rights to
  purchase and requirements that consents to assignment be obtained which were
  so identified. Seller shall have no obligation hereunder other than to so
  attempt to identify such preferential rights and requirements for consents to
  assignment and to so request such waivers, and shall in no event be under any
  obligation to obtain such waivers. Except to the extent that Seller failed to
  fulfill the obligations set forth above in this subsection, Buyer shall
  indemnify and hold Seller harmless from and against all claims, actions,
  liabilities, damages, losses, costs or expenses, including, without
  limitation, court costs and attorney's fees, whatsoever that arise out of the
  failure to obtain waivers of preferential rights to purchase or requirements
  for consents to assignment with respect to any transfer by Seller to Buyer of
  any part of the Assets and with respect to any subsequent transfers. If a
  party from whom a waiver of a preferential right to purchase is requested
  fails or refuses to give such waiver, Seller will tender (at a price equal to
  the amount specified in Exhibit B hereto for the wells located on such Asset
  and for the units in which such Asset participates, reduced appropriately, as
  determined by Seller, if less than the entire Asset should be tendered) the
  required interest in the Asset affected by such unwaived preferential right to
  the holder, or holders, of such right who have elected not to waive such
  preferential right to purchase and if, and to the extent that, such
  preferential right to purchase is exercised by such party or parties, and such
  interest in such Asset is actually sold to such party or parties so exercising
  such right, such interest in such Asset will be excluded from the transaction
  contemplated hereby and the Base Purchase Price will be reduced by the amount
  paid to Seller by the party or parties exercising such right.

      (d)  Notwithstanding any other provision in this Section, (i) Seller may
  take any action prohibited by this Section if reasonably necessary under
  emergency conditions provided that Buyer is notified as soon as practicable
  thereafter; (ii) except to the extent that a "Defect" (as hereinafter defined)
  may result therefrom, Seller shall have no liability to Buyer for any
  incorrect payment of delay rentals, royalties, shut-in royalties or similar
  payments or for any failure to make such payments; (iii) Seller's failure to
  comply with any of the requirements of this Section 5 shall not be deemed to
  be a default by Seller hereunder or grant to Buyer the right not to close the
  transaction contemplated hereby, unless such failure has a materially adverse
  impact on the value of the Assets taken as a whole.

  6.  DUE DILIGENCE REVIEWS.

      (a)  Immediately upon execution of this Agreement, Buyer shall, to the
  extent it deems appropriate, conduct, at its sole cost, such title examination
  or investigation, and other examinations and investigations, as it may choose
  to conduct with respect to the Assets. Should, as a result of such
  examinations and investigations, or otherwise, matters come to Buyer's
  attention which would constitute "Defects" (as defined below), and should
  there be one or more of such Defects which Buyer is unwilling to waive and
  close the transaction contemplated hereby notwithstanding the fact that such
  Defects exist, Buyer shall notify Seller in writing of such Defects as soon as
  practicable, but in no event later than April 17, 1998 (herein called the


Seller agrees that it shall promptly (within ten days of execution hereof)
provide Buyer copies of historical financial data for the Properties for the
years 1995, 1996 and 1997, and year-to-date information (including monthly and
calendar quarter summaries within those periods), including but not limited to,
lease operating statements and lease operating costs reports (detailed by
property with related summaries), and shall allow Buyer's employees and
representatives reasonable access upon prior written notice to supporting
records, invoices and other source documents insofar as required to complete
necessary audits and due diligence procedures, and shall reasonably cooperate
with Buyer to enable Buyer to complete audits and due diligence on a timely
basis, provided, however, that Seller shall provide only such data as it has in
its possession and shall not be obligated to generate such data in any
particular form or format.

                                       5
<PAGE>
 
  "DEFECT DATE"). Buyer's notice of Defects (herein called a "DEFECT NOTICE")
  must include (i) a brief description of the matter constituting the Defect so
  asserted, (ii) the title opinion, other reports of experts, or other
  documentation on which Buyer's assertion of a Defect is based, (iii) such
  supporting documents reasonably necessary for Seller (or a title attorney
  retained by Seller, if applicable,) to verify the existence of any such
  Defect, and (iv) Buyer's estimate of the diminution in the sum to be paid at
  Closing resulting from such alleged Defect. Such Defects of which Buyer so
  provides a Defect Notice prior to the Defect Date are herein called "ASSERTED
  DEFECTS". All matters which might constitute a Defect other than Asserted
  Defects will be deemed waived for all purposes under this Agreement. In the
  event that Buyer notifies Seller of Asserted Defects, Seller (i) shall have
  the right (but not the obligation) to attempt to cure, prior to Closing, such
  Asserted Defects; (ii) shall have the right (which may be exercised at any
  time before the Closing Date) to require that the Closing take place, deposit
  the Purchase Price paid by Buyer and attributable to the Assets having the
  Asserted Defects in an escrow account and attempt to cure one or more Asserted
  Defects after the Closing; (iii) shall have the right to elect not to cure the
  Asserted Defect and adjust the Purchase Price as set forth in Section 7 below;
  and (iv) shall have the right in lieu of curing or attempting to cure an
  Asserted Defect, to elect, at any time prior to Closing, to indemnify and hold
  Buyer harmless from and against any actual damages or loss (but specifically
  excluding consequential, special, punitive, or similar damages) Buyer may
  suffer as a result of a third party claim based on such Asserted Defect. Each
  such Asserted Defect shall be treated under this Agreement as cured. Should
  the title opinion or other materials reviewed by Buyer indicate that Seller
  has a higher "NET REVENUE INTEREST" (as hereinafter defined) than that
  specified on Exhibit B, then Buyer shall inform Seller of the same as soon as
  possible, but in any event not later than five (5) days prior to the Closing.

      (b)  Buyer shall have the right to make an environmental assessment of the
  Assets during the period beginning on the date this Agreement is fully
  executed and ending on April 17, 1998 at 5:00 P.M. local time, Dallas, Texas.
  Buyer and its agents shall have the right to enter upon the Assets and all
  buildings and improvements thereon, inspect the same, conduct soil and water
  tests and borings, and generally conduct such tests, examinations,
  investigations, and studies as may be necessary or appropriate for the
  preparation of appropriate engineering and other reports in relation to the
  Assets, their condition, and the presence of Hazardous Substances (as the term
  "HAZARDOUS SUBSTANCE" is defined in the Comprehensive Environmental Response,
  Compensation and Liability Act, 42 U.S.C. Sec. 9601, et seq). Buyer agrees to
  provide Seller with a copy of the environmental assessment promptly upon
  Buyer's completion thereof, including any reports, data, and conclusions.
  Buyer shall keep any data or information acquired by such examinations and the
  results of all analyses of such data and information strictly confidential and
  shall not disclose same to any person or agency without the prior written
  approval of Seller. BUYER SHALL RELEASE, INDEMNIFY, DEFEND, AND HOLD HARMLESS
  THE SELLER GROUP FROM AND AGAINST ANY AND ALL LOSS, COST, DAMAGE, EXPENSE, OR
  LIABILITY WHATSOEVER, INCLUDING ATTORNEYS' FEES, ARISING OUT OF ANY INJURY TO
  OR DEATH OF PERSONS OR DAMAGE TO PROPERTY OCCURRING IN, ON, OR ABOUT THE
  ASSETS AS A RESULT OF SUCH ENVIRONMENTAL ASSESSMENT (EXCEPT ANY SUCH INJURIES
  OR DAMAGES CAUSED SOLELY BY THE GROSS NEGLIGENCE OR WILLFULL MISCONDUCT OF ANY
  MEMBER OF THE SELLER GROUP). After March 18, 1998, Buyer shall be deemed to
  have inspected the properties or waived its right to inspect the Assets for
  all purposes and satisfied itself as to their physical and environmental
  condition, both surface and subsurface, including, but not limited to,
  conditions specifically related to the presence, release, or disposal of
  Hazardous Substances.

                                       6
<PAGE>
 
      (c)  Buyer shall assume full responsibility for, and agrees to indemnify,
  hold harmless and defend Seller from and against all loss, liability, claims,
  fines, expenses, costs (including attorney's fees and expenses) and causes of
  action caused by or arising out of any violation of any environmental law,
  rule or regulation (including common law), relating to the protection of
  health or the environment of any kind or character ("APPLICABLE ENVIRONMENTAL
  LAW(S)") or the presence, disposal, release or threatened release of any
  hazardous substance ("Hazardous Substance") (as the terms "release" and
  "hazardous substance" are defined in the Comprehensive Environmental Response,
  Compensation and Liability Act (CERCLA), 42 U.S.C. (S)(S)9601, et seq.) from
  the Assets into the atmosphere or into or upon land or any water course or
  body of water, including groundwater, whether or not attributable to the
  Seller's activities or the activities of third parties (regardless of whether
  or not the Seller was or is aware of such activities) after the period of
  Seller's ownership of the Assets. This indemnification and assumption shall
  apply, but is not limited to, liability for response actions undertaken
  pursuant to CERCLA or any other environmental law or regulation.

      (d)  As used in this Agreement, the term "DEFECT" shall mean any matter,
  other than a "Permitted Encumbrance" (as hereinafter defined), which causes
  one or more of the following to be a correct statement:

           (i)   Seller's ownership of the Assets is such that, with respect to
      a well or unit listed on Exhibit "B" attached hereto, such ownership shall
      (a) not be sufficient to entitle it to receive its decimal share of the
      oil, gas and other hydrocarbons produced from, or allocated to, such well
      or unit which is at least that decimal share set forth on Exhibit B in
      connection with such well or unit in the column headed "Net Revenue
      Interest" or (b) obligate it to bear its decimal share of the cost of
      operation of such well or unit (herein called the "OPERATING INTEREST")
      greater than the decimal share set forth on Exhibit B in connection with
      such well or unit in the column headed "Operating Interest" (without a
      proportionate increase in Net Revenue Interest above that set forth on
      such exhibits); or

           (ii)  Seller's ownership of an Oil and Gas Property shall be subject
      to an outstanding mortgage, deed of trust, or other enforceable lien or
      encumbrance, or other adverse claim or imperfection in title, which if
      asserted would cause the statement contained in Paragraph (d)(i) to be a
      correct statement; or

           (iii) An Oil and Gas Property is in violation of Applicable
      Environmental Laws in any material respect; or

           (iv)  To the extent Seller has inaccurately represented the amount of
      any gas imbalances as set forth on Exhibit "B".

           (v)   The Net Lease Operating Statements presented with the Core East
      Texas Package do not accurately reflect net operating income to Seller.

      (e)  As used herein, the term "PERMITTED ENCUMBRANCE" shall mean any and
  all of the following:

           (i)   The terms, conditions, restriction, exceptions, reservations
      limitations and other matters contained in the agreements, instruments and
      other documents which create or reserve to Seller its interest in any
      Asset, provided that the same do not reduce the Net Revenue Interest of
      Seller in the Asset affected thereby to less than that set forth on
      Exhibit B hereto;

                                       7
<PAGE>
 
           (ii)   Royalties, overriding royalties (including, without
      limitation, those specifically described on Exhibit A hereto), division
      orders, reversionary interests, production payments, net profits interests
      and similar burdens affecting any Oil and Gas Property if the net
      cumulative effect of such burdens does not operate to reduce the Net
      Revenue Interest in the Asset affected thereby to less than the Net
      Revenue Interest set forth beside the same on Exhibit B hereto;

           (iii)  Preferential rights to purchase and required third party
      consents to assignment and similar agreements with respect to which
      waivers or consents shall have been obtained from the appropriate parties,
      or the appropriate time period for asserting such rights shall have
      expired without an exercise of such rights;

           (iv)   Liens for taxes and assessments which are not yet delinquent
      or which are being contested by Seller in good faith;

           (v)    Rights existing under applicable laws (including without
      limitation statutory liens) or operating agreements or similar contracts
      to assert liens against the Assets, but not including liens and other
      rights which have actually been asserted, unless Seller disputes the
      validity of such liens or the amount claimed to be owed in connection
      therewith, or such lien or other right is not enforceable against the
      interest of Seller;

           (vi)   Conventional rights of reassignment requiring 90 days or less
      notice to the holder of such rights;

           (vii)  Easements, rights-of-way, servitudes, permits, surface leases
      and other rights in respect to surface operations, pipelines, logging,
      canals, ditches, reservoirs or the like; conditions, covenants or other
      restrictions; easements of streets, alleys, highways, pipelines, telephone
      lines, power lines, railways and other easements or rights-of-way on, over
      or with respect of any Asset which does not materially and adversely
      affect the Asset affected thereby or its current use;

           (viii) Any obligations or duties affecting an Asset to any
      municipality or public authority with respect to any franchise, grant,
      license or permit and all applicable laws, rules and order of any
      governmental authority;

           (ix)   All rights to consent by, required notices to, filings with or
      other action by governmental entities in connection with the sale or
      conveyance of oil and gas leases, permits, or interests therein, if the
      same are customarily obtained contemporaneously with or subsequent to such
      sale or conveyance;

           (x)    Existing operating agreements, unit agreements, gas purchase
      contracts and any and all other agreements which are customary in the oil
      and gas exploration, development, production or extraction business or in
      the business of processing of gas and gas condensate or production for the
      extraction of proper products therefrom, to the extent that the same do
      not reduce the Net Revenue Interest of Seller in the Asset affected
      thereby below that set forth on Exhibit B hereto;

                                       8
<PAGE>
 
           (xii)  Any other matter waived or deemed to be waived by Buyer
      pursuant to the provisions of paragraph (a) of this section.

      (f)  Should either Seller or Buyer determine that Seller is entitled to a
  Net Revenue Interest in any Asset in excess of that set forth on Exhibit B
  (herein called an "NRI INCREASE"), notice shall promptly be given to the other
  party, and the adjustments to be made under Section 7 below shall include
  adjustments which are the subject of such notice.

  7.  CERTAIN PURCHASE PRICE ADJUSTMENTS.  In the event that, as a part of the
due diligence reviews provided for in Section 6 above, (i) Asserted Defects are
presented to Seller and Seller is unable (or unwilling) to cure such Asserted
Defects prior to the Defect Cure Date, (ii) in the event that Buyer has elected
to treat an Oil and Gas Property affected by a casualty loss as if it was an Oil
and Gas Property affected by an Asserted Defect, or (iii) should there be a NRI
Increase, then:

      (a)  Buyer and Seller shall, with respect to each Oil and Gas Property
  affected by such matters, attempt to agree upon an appropriate adjustment to
  the Purchase Price to account for such matters; and

      (b)  with respect to each Oil and Gas Property as to which Buyer and
  Seller are unable to agree upon appropriate adjustment with respect to all
  such matters affecting such Oil and Gas Property, then:

           (i)    If the Asserted Defect is a mortgage, lien, encumbrance or
      other charge which is undisputed and liquidated in amount, then (subject
      to the provisions of paragraph (iv) below) the adjustment shall be the
      amount necessary to be paid to remove the Asserted Defect from the
      affected Asset;

           (ii)   If there shall be an Asserted Defect or NRI Increase which (a)
      represents a discrepancy between (1) the Net Revenue Interest to which
      Seller is entitled to receive from any Asset and (2) the Net Revenue
      Interest stated on Exhibit B, and (b) there is a Operating Interest change
      proportionate to the change in the Net Revenue Interest resulting from the
      Asserted Defect or NRI Increase, then the amount of the adjustment shall
      be the product of the value allocated to such Asset as set forth on
      Exhibit B (herein called the "ALLOCATED VALUE") multiplied by a fraction,
      the numerator shall be the change in the Net Revenue Interest and the
      denominator of which shall be the Net Revenue Interest set forth on
      Exhibit B;

           (iii)  If the Asserted Defect represents an obligation, encumbrance,
      burden, discrepancy or charge upon or other defect in title to the
      affected Asset of a type not described in paragraphs (i) or (ii) above,
      the adjustment amount shall be determined by taking into account the
      Allocated Value of the Asset so affected, the portion of the Asset
      affected by the Asserted Defect, the legal effect of the Asserted Defect,
      the potential economic effect of the Asserted Defect over the life of the
      affected Asset and such other factors as are necessary to make a proper
      evaluation of the value of the Asserted Defect;

                                       9
<PAGE>
 
           (iv)   Notwithstanding any other provision contained herein, (a) the
      aggregate adjustment attributable to the effect of all Asserted Defects
      related to a given Asset shall not exceed the Allocated Value of such
      Property, provided that if the Asserted Defects exceed the Allocated Value
      of such Property, the Buyer may elect to exclude such Property and the
      Purchase Price will be reduced by the Allocated Value of the wells on such
      Property; and (b) no adjustment shall be made with respect to an Asserted
      Defect if the diminution in the Allocated Value resulting therefrom will
      not exceed $1,000.00.

           (v)    Should the parties be unable to agree upon an appropriate
      adjustment in light of the factors set forth above, then, subject to the
      final two sentences of this Section 7, Seller may elect to either (a)
      exclude such Oil and Gas Property from the transaction contemplated
      hereby, and the Purchase Price will be reduced by the Allocated Value of
      the wells located on such Oil and Gas Property and the units in which such
      Oil and Gas Property participates; or (b) employ for the purpose of
      Closing, an average of the Seller's and Buyer's estimates of the value of
      the Asserted Defect, subject to final resolution in the context of the
      final accounting under the provisions of Section 13 hereof; or (c)
      indemnify and hold Buyer harmless from and against any actual damages or
      loss (but specifically excluding consequential, special or similar
      damages) Buyer may suffer as a result of a third-party claim based on such
      Asserted Defect.

If the Purchase Price reduction which would result from the above provided for
procedure does not exceed five percent (5%) of the Base Purchase Price, then the
Purchase Price shall not be adjusted, and none of the Oil and Gas Properties
which would be excluded by such procedure (except for those properties which
Buyer, may, nevertheless, elect to have excluded notwithstanding the fact that
no Purchase Price adjustment occurs) shall be excluded.  If the Purchase Price
increase which would result from the above provided for procedure exceeds five
percent (5%) of the Base Purchase Price, the Purchase Price shall be adjusted by
the amount by which such increase exceeds five percent (5%) of the Base Purchase
Price.

  8.  CERTAIN COVENANTS OF BUYER PENDING CLOSING.  From and after the date of
this Agreement, Buyer will give Seller and its attorneys and other
representatives access at all reasonable times and upon reasonable notice for a
period of seven (7) years from and after the Closing, to all files and records
(including all computer records) delivered by or on behalf of Seller in
connection with the transaction contemplated hereby, and shall permit Seller to
make copies of any such files and records. Should the Assets be subsequently
transferred by Buyer, Buyer agrees to take all action in its contractual
arrangements relating to such transfer necessary to allow Seller to have
continued access to all such files and records.

  9.  CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER.  The obligations of
Buyer under this Agreement are subject to each of the following conditions being
met:

      (a)  Each and every representation of Seller under this Agreement shall be
  true and accurate in all material respects as of Closing except as to changes
  specifically contemplated by this Agreement or consented to by Buyer.

      (b)  Seller shall have performed and complied in all material respects
  with (or compliance therewith shall have been waived by Buyer) each and every
  covenant, agreement and condition required by this Agreement to be performed
  or complied with by Seller prior to or at the Closing.

                                      10
<PAGE>
 
      (c)  On or before February 24, 1998, Buyer shall have obtained the 
  approval of its Board of Directors to enter into this Agreement and to 
  consummate the transactions contemplated by this Agreement.

      (d)  No suit, action or other proceedings shall, on the date of Closing,
  be pending or threatened before any court or governmental agency seeking to
  restrain, prohibit, or obtain damages or other relief in connection with the
  consummation of the transactions contemplated by this Agreement.

  10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER.  The obligations of
Seller under this Agreement are subject to each of the following conditions
being met:

      (a)  Each and every representation of Buyer under this Agreement shall be
  true and accurate in all material respects as of Closing except as to changes
  specifically contemplated by this Agreement or consented to by Seller.

      (b)  Buyer shall have performed and complied in all material respects with
  (or compliance therewith shall have been waived by Seller) each and every
  covenant, agreement and condition required by this Agreement to be performed
  or complied with by Buyer prior to or at the Closing.

      (c)  On or before February 24, 1998, Seller shall each have obtained the 
  approval of their respective Board of Directors to enter into this Agreement
  and to consummate the transactions contemplated by this Agreement.

      (d)  No suit, action or other proceedings shall, on the date of Closing,
  be pending or threatened before any court or governmental agency seeking to
  restrain, prohibit, or obtain damages or other relief in connection with the
  consummation of the transactions contemplated by this Agreement.

  11. TERMINATION OF AGREEMENT.

      (a)  If any condition on the obligations of Buyer as set forth in Section
  9 above is not met as of the Closing Date, or in the event the Closing does
  not occur on or before May 1, 1998, the "TERMINATION DATE", and in either case
  Buyer is not in breach of its obligations hereunder, this Agreement may, at
  the option of Buyer, be terminated. Upon such termination, the parties shall
  have no further obligations to one another hereunder (other than the
  obligations under Section 16 hereof and under Section 5(a) hereof, which will
  survive such termination).

      (b)  If any condition to the obligations of Seller as set forth in Section
  10 is not met as of the Closing Date, or in the event the Closing does not
  occur on or before the Termination Date, and in either case Seller is not in
  breach of its obligations hereunder (unless Buyer shall also be in breach of
  its Obligations hereunder), this Agreement may, at the option of Seller, be
  terminated. Thereafter, the parties shall have no further obligations to one
  another hereunder (other than the obligations under Section 16 hereof and
  under Section 5(a) hereof, which will survive such termination).

      (c)  Upon the termination of this Agreement, whether pursuant to paragraph
  (a) or (b) above, Seller shall be free to sell the Assets (or any portion
  thereof) to any other party without any limitation under or by reason of this
  Agreement, unless at such time a condition of Seller Default shall exist.
  Buyer shall cooperate with Seller in effectuating any such sale and shall
  promptly execute any instrument evidencing the termination of Buyer's right to
  acquire the Assets as may be reasonably requested by Seller. Buyer shall also
  immediately return to Seller all data and other information (and all copies
  thereof) furnished to Buyer by or on behalf of Seller in connection with this
  transaction

                                      11
<PAGE>
 
  12. THE CLOSING.  The closing (herein called the "CLOSING") of the transaction
contemplated hereby shall take place in the offices of Seller, in Dallas, Texas,
on April 24, 1998, at 10:00 a.m. Central Time, or at such other date and time as
the Buyer and Seller may mutually agree upon, being herein called the "CLOSING
DATE"). At the Closing:

      (a)  Seller shall:

           (i)    execute, acknowledge and deliver to Buyer a conveyance of the
      Assets, (herein called the "CONVEYANCE"), in the form attached hereto as
      Exhibit C (and with Exhibit A hereto being attached thereto), effective as
      to runs of oil and deliveries of gas as of 7 o'clock a.m., Central
      Standard Time on January 1, 1998 (herein called the "EFFECTIVE DATE"); and

           (ii)   execute and deliver to Buyer letters in lieu of transfer
      orders (or similar documentation), in form acceptable to both parties; and

           (iii)  deliver to Buyer an affidavit or other certification (as
      permitted by such code) that Seller is not a "foreign person" within the
      meaning of Section 1445 (or similar provisions) of the Internal Revenue
      Code of 1986 as amended; and

           (iv)   turn over possession of the Assets; and

           (v)    provide Buyer with Seller's Officer Certificate having the
      form and language of Exhibit "D-1", which is attached hereto and made a
      part hereof for all purposes. Such certificate shall certify that Seller
      has complied with and performed or waived all provisions and conditions
      pertaining to Seller, to be performed prior to the Closing.

      (b)  Buyer shall:

           (i)    deliver to the Seller, by wire transfer to an account
      designated by Seller in a bank located in the United States, an amount
      equal to (a) the Purchase Price, less (b) the Deposit, less (or plus, as
      the case may be) (c) any adjustments made at Closing under Section 13
      hereof; and

           (ii)   with respect to the Assets operated by Seller, execute and
      deliver to Seller appropriate evidence reflecting change of operator as
      required by applicable authorities (including, without limitation, Form P-
      4 for filing with the Railroad Commission of Texas), and such evidence as
      Seller may require that Buyer is qualified with such authorities to
      succeed Seller as operator; and

           (iii)  provide Seller with Buyer's Officer Certificate having the
      form and language of Exhibit "D-2" which is attached hereto and made a
      part hereof for all purposes. Such Certificate shall certify that Buyer
      has complied with and performed or waived all provisions and conditions
      pertaining to Buyer, to be performed prior to the Closing.

                                      12
<PAGE>
 
  Within twenty (20) days after Closing, Seller will deliver to Buyer the
  records and other materials described in Section 1(f) above. With respect to
  each Asset with respect to which Seller is disbursing proceeds of production
  attributable to other parties entitled thereto, (i) Seller shall continue to
  collect proceeds of production during the month in which Closing occurs and
  shall be responsible for making disbursements, in accordance with its normal
  procedures (and at normal times), of such proceeds of production so collected
  to the parties entitled to same, with any proceeds of production thereafter
  collected by Seller to be promptly forwarded to Buyer (who shall thereafter
  account for same to the parties entitled thereto), (ii) Seller shall, as
  promptly as possible after Closing, deliver to Buyer (a) a copy of its
  "proceeds distribution list" for each such Asset (which proceeds distribution
  list shall include the name, address, social security number and applicable
  share of proceeds of production for each party to whom Seller is disbursing
  proceeds of production with respect to such Asset), (b) a list of all parties
  for whom it is holding in suspense proceeds of production, (c) a list of all
  parties for whom it is holding any advance payments made by other working
  interest owners for operations to be conducted on the Assets, and (d) a check
  (which shall be delivered within 30 days after the end of the month in which
  Closing occurs) in an amount equal to all suspended funds and advance
  payments. Following delivery of the materials referred to in clause (ii),
  Buyer shall become responsible for all disbursements of proceeds of production
  (including suspense and other disbursements attributable to periods prior to
  the Effective Date) and such disbursement activities shall be included in the
  matters which Buyer assumes, and indemnifies Seller with respect to, under
  Section 14 below. It is understood and agreed that Seller does not represent
  or warrant to Buyer the accuracy of the "proceeds distribution lists" so
  delivered.

  13. CERTAIN ACCOUNTING ADJUSTMENTS.

      (a)  Appropriate adjustments shall be made between Buyer and Seller so
  that (i) all expenses which are incurred in the operation of the Assets before
  the Effective Date will be borne by Seller and all proceeds (net of applicable
  production, severance, and similar taxes) from sale of oil, gas and/or other
  minerals produced therefrom before the Effective Date will be received by
  Seller, and (ii) all expenses which are incurred in the ownership and/or
  operation of the Assets after the Effective Date will be borne by Buyer and
  all proceeds (net of applicable production, severance, and similar taxes) from
  the sale of oil, gas and/or other minerals produced therefrom after the
  Effective Date will be received by Buyer. It is agreed that, in making such
  adjustments: (i) oil which was produced from the Oil and Gas Properties and
  which was, on the Effective Date, stored in tanks located on the Oil and Gas
  Properties (or located elsewhere but used by Seller to store oil produced from
  the Oil and Gas Properties prior to delivery to oil purchasers) and above
  pipeline connections shall be deemed to have been produced before the
  Effective Date, (ii) ad valorem taxes assessed with respect to a period which
  the Effective Date splits, regardless of the basis on which such taxes are
  computed, shall be prorated based on the number of days in such period which
  fall on each side of the Effective Date (with the day on which the Effective
  Date falls being counted in the period after the Effective Date), and shall,
  where the current year's taxes are not yet known, be based on the previous
  year's taxes, and (iii) no consideration shall be given to the local, state or
  federal income tax liabilities of any party.

      (b)  On or before five (5) days before Closing, Seller shall prepare and
  submit to Buyer, in accordance with this Agreement a proposed statement
  (herein called the "CLOSING STATEMENT") setting forth the amount by which the
  Purchase Price shall be adjusted (either upward or downward) based upon the
  adjustments provided in paragraph (a) above and

                                      13
<PAGE>
 
  otherwise in this Agreement. Not later than two days prior to the Closing
  Date, Buyer shall deliver to Seller a written report containing such changes,
  if any, which Buyer proposes be made to the Purchase Price Adjustment
  Statement. Seller and Buyer shall make every reasonable effort to agree upon a
  mutually acceptable Purchase Price prior to Closing, but if the parties fail
  to reach such Agreement, Seller's estimation of the adjustments shall be
  employed for the purpose of Closing.

      (c)  As soon as practicable after Closing, but in any event within sixty
  (60) days thereafter, Seller shall prepare and submit to Buyer, in accordance
  with this Agreement a proposed statement (herein called the "FINAL
  STATEMENT"), which shall show the final calculation of the Purchase Price
  (herein called the "FINAL SETTLEMENT PRICE"). As soon as possible after
  receipt of the Final Statement, but in any event within sixty (60) days after
  receipt thereof, Buyer shall deliver to Seller a written report containing the
  changes, if any, which Buyer proposes being made to the Final Statement. In
  the event no response is made by Buyer within such sixty (60) day period, it
  shall be conclusively presumed that Buyer concurs with the Final Statement,
  and such Final Statement shall be the basis for the Final Settlement Price. In
  the event that Buyer submits a response, the parties shall exercise all
  reasonable efforts to agree with respect to the amounts due not later than one
  hundred twenty (120) days after the Closing, but in any event prior to August
  15, 1998. After agreement upon a Final Settlement Price setting forth the
  amount by which the Purchase Price shall be adjusted (either upward or
  downward), the amount due shall be paid within five (5) business days
  thereafter by the party owing the same in immediately available funds.

  14. ASSUMPTION AND INDEMNIFICATION.  Buyer shall, on the date of Closing,
agree (and, upon the delivery to Buyer of the Conveyance shall be deemed to have
agreed) (a) to assume, and to timely pay and perform, all duties, obligations
and liabilities relating to the ownership and/or operation of the Assets after
the Effective Date (including, without limitation, those arising under the
contracts and agreements described in Section 1(d) above), and (b) to release,
indemnify and hold the Seller Group harmless from and against any and all
claims, actions, liabilities, losses, damages, costs or expenses (including
court costs and attorneys' fees) of any kind or character arising out of or
otherwise relating to the ownership and/or operation of the Assets after the
Effective Date.  In connection with (but not in limitation of) the foregoing, it
is specifically understood and agreed that matters arising out of or otherwise
relating to the ownership and/or operation of the Assets after the Effective
Date shall be deemed to include all matters arising out of the condition of the
Assets on the Effective Date (including, without limitation, within such matters
all obligations to properly plug and abandon, or replug and re-abandon, wells
located on the Assets, to restore the surface of the Assets and to comply with,
or to bring the Assets into compliance with, Applicable Environmental Laws
including all liability and expense for any restoration, clean-up, disposal, or
removal that may be incurred as a result of the existence or discovery of
Hazardous Substances or other deleterious substances in, on, or under the
Assets, regardless of when the events occurred that give rise to such condition,
and the assumptions, and indemnifications by Buyer set forth in this Section
shall expressly cover and include such matters.  THE ASSUMPTIONS AND
INDEMNIFICATIONS SET FORTH IN THIS SECTION SHALL APPLY WHETHER OR NOT SUCH
DUTIES, OBLIGATIONS, OR LIABILITIES, OR SUCH CLAIMS, ACTIONS, CAUSES OF ACTION,
LIABILITIES, DAMAGES, LOSSES, COSTS, OR EXPENSES ARISE OUT OF (i) NEGLIGENCE
(INCLUDING CONCURRENT NEGLIGENCE, ACTIVE OR PASSIVE NEGLIGENCE, BUT EXPRESSLY
NOT INCLUDING SOLE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF SELLER
OR ANY OTHER INDEMNIFIED PARTY, OR (ii) STRICT LIABILITY.

                                      14
<PAGE>
 
  15. DISCLAIMER OF WARRANTIES.  THE EXPRESS REPRESENTATIONS AND WARRANTIES OF
SELLER CONTAINED IN SECTION 3. (OR IN THE CONVEYANCE EXECUTED PURSUANT TO THIS
AGREEMENT) ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND
WARRANTIES, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, AND SELLER EXPRESSLY
DISCLAIMS ANY AND ALL SUCH OTHER REPRESENTATIONS AND WARRANTIES.  WITHOUT
LIMITATION OF THE FOREGOING, THE ASSETS SHALL BE CONVEYED PURSUANT HERETO
WITHOUT ANY WARRANTY OR REPRESENTATION, WHETHER EXPRESS, IMPLIED, STATUTORY, OR
OTHERWISE RELATING TO THE CONDITION, QUANTITY, QUALITY, FITNESS FOR A PARTICULAR
PURPOSE, CONFORMITY TO THE MODELS OR SAMPLES OF MATERIALS, OR MERCHANTABILITY OF
ANY EQUIPMENT OR ITS FITNESS FOR ANY PURPOSE, AND, EXCEPT AS PROVIDED OTHERWISE
IN THE FIRST SENTENCE OF THIS PARAGRAPH, WITHOUT ANY OTHER EXPRESS, IMPLIED,
STATUTORY, OR OTHER WARRANTY OR REPRESENTATION WHATSOEVER.  BUYER SHALL HAVE
INSPECTED, OR WAIVED (AND UPON CLOSING SHALL BE DEEMED TO HAVE WAIVED) ITS RIGHT
TO INSPECT THE ASSETS FOR ALL PURPOSES AND SATISFIED ITSELF AS TO THEIR PHYSICAL
AND ENVIRONMENTAL CONDITION, BOTH SURFACE AND SUBSURFACE, INCLUDING, BUT NOT
LIMITED TO, CONDITIONS SPECIFICALLY RELATED TO THE PRESENCE, RELEASE, OR
DISPOSAL OF HAZARDOUS SUBSTANCES, SOLID WASTES, ASBESTOS OR OTHER MANMADE FIBERS
OR NATURALLY OCCURRING RADIOACTIVE MATERIALS ("NORM") IN, ON, OR UNDER THE
ASSETS.  BUYER IS RELYING SOLELY UPON ITS OWN INSPECTION OF THE ASSETS, AND
BUYER SHALL, EXCEPT AS PROVIDED OTHERWISE HEREIN, ACCEPT ALL OF THE SAME "AS IS,
WHERE IS".  WITHOUT LIMITATION OF THE FOREGOING, SELLER MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, AS TO THE ACCURACY OR
COMPLETENESS OF ANY DATA REPORTS, RECORDS, PROJECTIONS, INFORMATION, OR
MATERIALS NOW HERETOFORE, OR HEREAFTER FURNISHED OR MADE AVAILABLE TO BUYER IN
CONNECTION WITH THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION PRICING
ASSUMPTIONS OR QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE
TO THE ASSETS OR THE ABILITY OR POTENTIAL OF THE ASSETS TO PRODUCE HYDROCARBONS
OR THE ENVIRONMENTAL CONDITION OF THE ASSETS OR ANY OTHER MATERIALS FURNISHED OR
MADE AVAILABLE TO BUYER BY SELLER OR BY SELLER'S AGENTS OR REPRESENTATIVES.  ANY
AND ALL SUCH DATA, RECORDS, REPORTS, PROJECTIONS, INFORMATION, AND OTHER
MATERIALS (WRITTEN OR ORAL) FURNISHED BY SELLER OR OTHERWISE MADE AVAILABLE OR
DISCLOSED TO BUYER ARE PROVIDED TO BUYER AS A CONVENIENCE AND SHALL NOT CREATE
OR GIVE RISE TO ANY LIABILITY OF OR AGAINST SELLER, AND ANY RELIANCE ON OR USE
OF THE SAME SHALL BE AT BUYER'S SOLE RISK TO THE MAXIMUM EXTENT PERMITTED BY
LAW.

  16. COMMISSIONS.  Seller agrees to indemnify and hold harmless Buyer from and
against any and all claims, obligations, actions, liabilities, losses, damages,
costs or expenses (including court costs and attorneys fees) of any kind or
character arising out of or resulting from any agreement, arrangement or
understanding alleged to have been made by, or on behalf of, Seller with any
broker or finder in connection with this Agreement or the transaction
contemplated hereby.  Buyer agrees to indemnify and hold harmless Seller from
and against any and all claims, obligations, actions, liabilities, losses,
damages, costs or expenses (including court costs and attorneys fees) of any
kind or character arising out of or resulting from any agreement, arrangement or
understanding alleged to have been made 

                                      15
<PAGE>
 
by, or on behalf of, Buyer with any broker or finder in connection with this
Agreement or the transaction contemplated hereby.

  17. CASUALTY LOSS.  In the event of damage by fire or other casualty to the
Assets prior to the Closing, then this Agreement shall remain in full force and
effect, and (unless Buyer and Seller shall otherwise agree) in such event:

      (a)  as to each such Asset so damaged which is an Oil and Gas Property,
  then, at Buyer's election, either (i) such Asset shall be treated as if it had
  an Asserted Defect associated with it and the procedure provided for in
  Section 6 shall be applicable thereto, or (ii) the Purchase Price will not be
  adjusted, and if Seller should be entitled to make any claims under any
  insurance policy with respect to such damage, Seller shall, at Seller's
  election, either collect (and when collected pay over to Buyer), or assign to
  Buyer, such claims; and

      (b)  as to each such Asset which is other than an Oil and Gas Property,
  Seller shall, at Seller's election, either collect for (and when collected pay
  over to Buyer), or assign to Buyer, any and all insurance claims relating to
  such loss, and Buyer shall take title to the Asset affected by such loss
  without reduction of the Purchase Price.

  18. NOTICES.  All notices and other communications required under this
Agreement shall (unless otherwise specifically provided herein) be in writing
and be delivered personally, by recognized commercial courier or delivery
service (which provides a receipt), by telex or telecopier (with receipt
acknowledged), during normal business hours or by registered or certified mail
(postage prepaid), at the following addresses:

  If to Seller:   EEX Corporation
                  EEX Operating L.P.
                  4849 Greenville Avenue
                  Suite 1200
                  Dallas, Texas 75206
                  Attention:  Ms. Leslie Wylie
                  Fax:  (214) 987-6682

  If to Buyer:    Cross Timbers Oil Company
                  810 Houston St.
                  Suite 2000
                  Fort Worth, Texas 76102
                  Attention:  Mr. Vaughn O. Vennerberg, II
                  Fax:  (817) 882-7224

and shall be considered delivered on the date of receipt.  Either Buyer or
Seller may specify as its proper address any other post office address within
the continental limits of the United States by giving notice to the other party,
in the manner provided in this Section, at least ten (10) days prior to the
effective date of such change of address.

  19. SURVIVAL OF PROVISIONS.  The obligations covered by the representations
made herein by Seller in Section 3 and by Buyer in Section 4 shall be true and
correct on the Closing Date and shall thereafter terminate two (2) years after
the Closing Date. The obligations of the parties under Section 6 

                                      16
<PAGE>
 
(to the extent the same are, by mutual agreement, not performed at Closing), and
Sections 13, 14, 15, 16, 18, and 21 shall survive the Closing and the delivery
of the Conveyance.

  20. OPERATIONS.  Subject to the terms and provisions of any existing
agreements covering the Assets, Seller agrees to turn over to Buyer, at Closing,
the operations of those Assets for which it is currently serving as operator.
Seller shall take all reasonable actions necessary to cause Buyer to become
operator as contemplated herein.

  21. MISCELLANEOUS MATTERS.

      (a)  After the Closing, Seller and Buyer shall execute and deliver, and
  shall otherwise cause to be executed and delivered, from time to time, such
  further instruments, notices, division orders, transfer orders and other
  documents, and do such other and further acts as reasonably may be necessary
  to more fully and effectively grant, convey and assign the Assets to Buyer.

      (b)  Except as provided in the following sentence, neither party shall
  have the right to assign its rights under this Agreement and any such
  assignment in violation of this provision shall be void. Without Buyer's
  consent, Seller may assign its rights under this Agreement to a direct or
  indirect parent of Seller, to a direct or indirect subsidiary of Seller, or to
  an entity that is a direct or indirect subsidiary of a direct or indirect
  parent of Seller.

      (c)  No waiver of any provision of this Agreement shall be deemed or shall
  constitute a waiver of any provision of this Agreement (whether or not
  similar), nor shall such waiver constitute a continuing waiver unless
  otherwise expressly provided.

      (d)  To the extent applicable to the transaction contemplated hereby, or
  any portion thereof, Buyer waives the provisions of the Texas Deceptive Trade
  Practices Act, Chapter 17, Subchapter E, Sections 17.41 through 17.63,
  inclusive (other than Section 17.555 which is not waived), Texas Business and
  Commerce Code. In connection with such waiver, Buyer hereby represents and
  warrants to Seller that Buyer (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 Five Million and No/100 Dollars ($5,000,000.00) or more
  according to its most recent financial statement, (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.

      (e)  In connection with Buyer's evaluation of the Assets, Seller shall
  disclose to Buyer certain confidential information, which is proprietary, and
  includes, but is not necessarily limited to, geological and geophysical data;
  maps, models, and interpretations; and commercial, contractual, and financial
  information. All such data disclosed by Seller to Buyer shall hereinafter be
  referred to as the "CONFIDENTIAL INFORMATION". If, for any reason the Closing
  does not occur, Buyer agrees that the Confidential Information shall be kept
  strictly confidential and shall not be sold, traded, published, or otherwise
  disclosed to anyone in any manner whatsoever, including by means of photocopy
  or reproduction, without Seller's prior written consent, except as provided in
  Sections 21.e(i), 21.e(ii), and 21.e.(iii) below.

           (i)    Buyer may disclose the Confidential Information without
      Seller's prior written consent only to the extent such information:

                                      17
<PAGE>
 
                  (a)  is already known to Buyer as of the date of disclosure
           hereunder;

                  (b)  is already in possession of the public or becomes
           available to the public other than through the act or omission of
           Buyer;

                  (c)  is required to be disclosed under applicable law or by a
           governmental order, decree, regulation, or rule (provided that Buyer
           shall give written notice to Seller prior to such disclosure); or

                  (d)  is acquired independently from a third party that has the
           right to disseminate such information at the time it is acquired by
           Buyer.

           (ii)   Buyer may disclose the Confidential Information without
      Seller's prior written consent to an Affiliated Company (as hereinafter
      defined), provided that Buyer guarantees the adherence of such Affiliated
      Company to the terms of this Agreement. "AFFILIATED COMPANY" shall mean
      any company or legal entity that (a) controls either directly or
      indirectly a party, or (b) that is controlled directly or indirectly by
      such party, or (c) is directly or indirectly controlled by a company or
      entity that directly or indirectly controls such party. "CONTROL" means
      the right to exercise fifty percent (50%) or more of the voting rights in
      the appointment of the directors of such company.

           (iii)  Buyer shall be entitled to disclose the Confidential
      Information without Seller's prior written consent to such of the
      following persons who have a clear need to know in order to evaluate
      Seller's petroleum exploration and production rights:

                  (a)  employees, officers, and directors of Buyer;

                  (b)  employees, officers, and directors of an Affiliated
           Company;

                  (c)  any professional consultant or agent retained by Buyer
           for the purpose of evaluating the Confidential Information.

           (iv)   Prior to making any such disclosures to persons under
      subparagraph 21.e.(iii)(c) above, however, Buyer shall obtain an
      undertaking of confidentiality, in the same form and content as this
      Agreement, from each such person.

           (v)    Buyer and its Affiliated Companies, if any, shall use, or
      permit the use of the Confidential Information disclosed under Section
      21.(e)(ii) or 21.(e)(iii) above, only to evaluate petroleum exploration
      and production rights held by Seller.

           (vi)   Buyer shall be responsible for ensuring that all persons to
      whom the Confidential Information is disclosed under this Agreement shall
      keep such information confidential and shall not disclose or divulge the
      same to any unauthorized person. Neither party shall be liable in an
      action initiated by one against the other for special, indirect, or
      consequential damages resulting from or arising out of this Agreement,
      including, without limitation, loss of profit or business interruptions,
      however same may be caused.

                                      18
<PAGE>
 
           (vii)  The Confidential Information shall remain the property of
      Seller, and Seller may demand the return thereof at any time upon giving
      written notice to Buyer. Within ten (10) days of receipt of such notice,
      Buyer shall return all of the original Confidential Information and shall
      destroy all copies and reproductions (both written and electronic) in its
      possession and in the possession of persons to whom it was disclosed
      pursuant to Sections 21.(e)(ii) and 21.(e)(iii) hereof.

           (viii) The term of this Section 21.(e) and the rights and obligations
      created hereunder shall commence upon the date hereof and shall continue
      for a period of two (2) years thereafter.

           (ix)   Seller makes no representations or warranties, express or
      implied, as to the quality, accuracy, and completeness of the Confidential
      Information disclosed hereunder. Seller and its Affiliated Companies, and
      their officers, directors, employees, shall have no liability whatsoever
      with respect to the use of or reliance upon the Confidential Information
      by Buyer.

      (f)  This Agreement and that certain Confidentiality Agreement dated
  February 10, 1998 between Seller and Buyer contain the entire understanding of
  the parties hereto with respect to the subject matter hereof and supersede all
  prior agreements, understandings, negotiations, and discussions among the
  parties with respect to such subject matter between Seller and Buyer. The
  headings contained in this Agreement are for convenience only and shall not
  control or affect the meaning or construction of any provision of this
  Agreement. Within this Agreement, words of any gender shall be held and
  construed to cover any other gender, and words in the singular shall be held
  and construed to cover the plural, unless the context otherwise requires. Time
  is of the essence in this Agreement.

      (g)  This Agreement may be amended, modified, supplemented, restated, or
  discharged (and provisions hereof may be waived) only by an instrument in
  writing signed by the party against whom enforcement of the amendment,
  modification, supplement, restatement, or discharge (or waiver) is sought.

      (h)  Each party shall bear and pay all expenses it incurred in connection
  with the transaction contemplated by this Agreement.

      (i)  This Agreement shall be binding on the parties hereto and their
  respective successors and assigns.

      (j)  This Agreement shall not confer any rights or remedies upon any
  person other than Seller and Buyer and their respective successors and
  permitted assigns.

      (k)  All production from oil and gas wells, and all proceeds from the sale
  thereof, including proceeds from the sale of any oil in storage above the
  pipeline connection, and any accounts receivable balances, funds held in
  suspense or escrow, any of which are attributable to production prior to the
  Effective Date, shall be the property of Seller. All production from oil and
  gas wells, and all proceeds from the sale thereof attributable to production
  after the Effective Date shall be the property of Buyer.

                                      19
<PAGE>
 
      (l)  This Agreement may be executed in two or more counterparts, each of
  which shall be deemed an original, but all of which shall constitute one and
  the same instrument. It shall not be necessary for both parties to sign the
  same counterpart.

      (m)  Buyer shall properly execute, acknowledge and file the Conveyance for
  record immediately upon receipt thereof and will furnish to Seller a copy of
  the recorded document promptly after Buyer's receipt of such recorded
  instrument from the clerk in the county or parish in which the Conveyance is
  recorded. In addition, where applicable, Buyer shall execute any forms
  required to effect a change of operator for all wells conveyed herein.

      (n)  Pursuant to the Federal Arbitration Act, the parties hereby agree
  that any controversy, claim, or alleged breach, including but not limited to
  torts and statutory claims, arising out of or related to this Agreement shall
  be settled by binding arbitration administered by the American Arbitration
  Association ("AAA") in accordance with its Commercial Arbitration Rules.
  Demand for arbitration may be made no later than the time that such action
  would be permitted under the applicable Texas statute of limitation. Any
  disputes regarding the timeliness of the demand for arbitration shall be
  decided by the arbitrator(s). Judgment upon the award rendered by the
  arbitrator(s) may be entered in any Court having jurisdiction thereof in order
  to obtain compliance therewith. Any case in which any claim, or combination of
  claims, exceeds $500,000.00 shall be subject to the AAA's Large, Complex Case
  Procedures and decided by the majority of a panel of three (3) neutral
  arbitrators. In rendering the award, the arbitrator's shall determine the
  rights and obligations of the parties according to the laws of the State of
  Texas. The arbitration proceedings and hearings shall be conducted at the
  Houston Regional Office of the AAA or at such other place as may be selected
  by mutual agreement. No party nor the arbitrator(s) may disclose the
  existence, content, or results of any arbitration hereunder without the prior
  written consent of all parties.

      (o)  Prior to and subsequent to Closing, Buyer shall not issue any
  publicity or press release concerning this Agreement or the transaction
  contemplated hereby without the prior written consent of Seller, unless, in
  the written opinion of legal counsel acceptable to Seller, such disclosure is
  required by applicable law or other applicable rules or regulations of any
  governmental authority or stock exchange and such publicity or press release
  contains no more than the minimum information necessary to comply therewith.
  This provision shall not replace or restrict any provision in any prior
  agreement between the parties affecting confidentiality or the disclosure of
  information about the Assets.

  IN WITNESS WHEREOF, this Agreement is executed by the parties hereto on the
date set forth above.

SELLER:                                   BUYER:
EEX CORPORATION                           CROSS TIMBERS OIL COMPANY



By: /s/ C. L. ELSEY                       By: /s/ BOB R. SIMPSON
   -------------------------------------     -----------------------------------
Name:   C. L. Elsey                       Name:   Bob R. Simpson
Title:  Attorney-In-Fact                  Title:  Chairman


                                      20
<PAGE>
 
EEX OPERATING L.P.
By:  EEX CORPORATION
     GENERAL PARTNER



By: /s/ C. L. ELSEY
   -------------------------------------
Name:   C. L. Elsey
Title:  Attorney-In-Fact

                                        
                                      21
<PAGE>
 
                               ACKNOWLEDGEMENTS
                               ----------------

                                        
STATE OF TEXAS                   (S)
                                 (S)
COUNTY OF TARRANT                (S)

     This instrument was acknowledged before me, Notary Public, this 16th day of
February, 1998, by C. L. Elsey, Attorney-In-Fact of EEX CORPORATION, GENERAL
PARTNER FOR EEX OPERATING L.P., a Texas limited liability partnership, on behalf
of the partnership.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.


[NOTARY    KIM FIELDS RHOADS     /s/ KIM FIELDS RHOADS                          
 SEAL      NOTARY PUBLIC         -----------------------------------------------
 APPEARS   STATE OF TEXAS        Notary Public                                  
 HERE]         

My commission expires:
     
    11/13/99     
--------------------   



STATE OF TEXAS                   (S)
                                 (S)
COUNTY OF TARRANT                (S)

     This instrument was acknowledged before me, Notary Public, this 16th day of
February, 1998, by C. L. Elsey, Attorney-In-Fact of EEX CORPORATION, a Texas
corporation, on behalf of the corporation.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.


[NOTARY    KIM FIELDS RHOADS     /s/ KIM FIELDS RHOADS                          
 SEAL      NOTARY PUBLIC         -----------------------------------------------
 APPEARS   STATE OF TEXAS        Notary Public                                  
 HERE]                                                    

My commission expires:

     11/13/99                                                            
-------------------- 

                                     22  

<PAGE>
 
STATE OF TEXAS                   (S)
                                 (S)
COUNTY OF TARRANT                (S)

     This instrument was acknowledged before me, Notary Public, this 16 day of
February, 1998, by Bob R. Simpson, Chairman of Cross Timbers Oil Company, a
Delaware corporation, on behalf of the corporation.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.


[NOTARY    KIM FIELDS RHOADS     /s/ KIM FIELDS RHOADS
 SEAL      NOTARY PUBLIC         -----------------------------------------------
 APPEARS   STATE OF TEXAS        Notary Public
 HERE]

My commission expires:
      
     11/13/99
--------------------


                                      23