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                                December 28, 2000



CONFIDENTIAL


Mr. Raymond A. Foutch
President and Chief Executive Officer
Lariat Petroleum, Inc.
110 West 7th
Suite 1300
Tulsa, Oklahoma 74119

Dear Randy:

         This letter is intended to describe your role in Newfield Exploration
Company and its subsidiary, NFX Development, Inc. (to be renamed following the
merger) upon the merger of Lariat Petroleum, Inc. into NFX Development, Inc.
("Newfield Sub") and to confirm certain other benefits which will be granted to
you after the merger is effective.

         You will be named and elected as the President of Newfield Sub and will
serve in the capacity of its chief executive officer. You will also be named to
the Board of Directors of Newfield Sub. In addition, you will be named a Vice
President of the parent company, Newfield Exploration Company, and will be a
member of the Leadership Team. To the extent practicable, you will participate
in all meetings of the Leadership Team. You will be expected to participate in
formulating the long term growth and operating strategy of Newfield and will
have a primary role in implementing that strategy in the Midcontinent, the
Rockies and Canada. As an officer of Newfield, you will participate in meetings
of the Board of Directors to the same extent as other officers who are not
members of the Board.

         On the effective date of the merger, the existing Employment Agreement
between you and Lariat shall remain in full force and effect with the following
modifications and amendments:

         (a)      Section 1.2 - delete "and Chairman of the Board".

         (b)      You waive the right to terminate under Section 2.3 (i)(C) as a
                  result of the Lariat - Newfield Sub merger, and upon the
                  effective time of the merger, Section 2.3 (i)(D) shall be
                  deleted in its entirety and Section 2.3 (i)(C) shall be
                  amended to read:



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Mr. Raymond A. Foutch
December 28, 2000
Page 2


                           "(C) a change of control, as defined in the Newfield
                           Exploration Company 2000 Omnibus Stock Plan, has
                           occurred within the prior 60 days."

         (c)      Section 3.3 shall be modified to read:

                           "During his employment hereunder, Executive shall be
                           afforded perquisites consistent with those provided
                           to other Vice Presidents of the parent company,
                           Newfield Exploration Company."

         (d)      Section 5.1 shall be amended by deleting the last five lines
                  thereof beginning with "provided, however ..."

         (e)      Section 8.1 shall be amended to provide that notices to
                  Company shall be to:

                                    Newfield Exploration Company
                                    363 N. Sam Houston Parkway East, Suite 2020
                                    Houston, Texas 77060
                                    Attention: Chief Executive Officer

         Except as specifically provided in the immediately preceding paragraph,
this letter in no way modifies or amends your existing Employment Agreement.
Except as provided in your existing Employment Agreement, your employment will
be at will and you will serve at the discretion of the Board of Directors of
Newfield Sub. This letter does not constitute a guarantee of employment for any
specific term or in any specific capacity.

         Your current base salary at Newfield Sub will initially equal your
current annual base salary of $225,000. Newfield makes salary adjustments in
February of each year and your salary will be reviewed in February, 2001. Any
adjustment will take into account the date and amount of your last salary
increase.

         For 2001 and subsequent years, you will be eligible to participate in
Newfield's Incentive Compensation Plan, which is described in the attachment.
Bonuses payable under the Plan are paid in February of the following year.

         As of the effective date of the merger, you will be granted 25,000
shares of Restricted Stock and options to purchase 100,000 shares of Newfield
Exploration Company common stock at the average of the high and low sale price
per share of Newfield common stock on the New York Stock Exchange on such
effective date. The Restricted Stock and options will vest over a



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Mr. Raymond A. Foutch
December 28, 2000
Page 3


five (5) year period with the first 40% vesting on the second anniversary of the
grant and the remainder vesting 20% on each of the third, fourth and fifth
anniversaries of the grant. A summary of the Plan under which the Restricted
Stock and options are granted is attached.

                                       Sincerely,



DAT/dvv
Atts.



ACCEPTED by the undersigned Raymond A. Foutch this 28th day of December, 2000 to
be effective on the effective date of the merger of Lariat into Newfield Sub.


/s/ RAYMOND A. FOUTCH
---------------------------------
Raymond A. Foutch