Stand-Still Letter Agreement


       This is  a one hundred  and fifty (150)  day Stand-Still Agreement  among
       Hondo Oil & Gas Company ("Hondo") (Hondo together with all of its  direct
       and  indirect  subsidiaries,  which  include  without  limitation,  Hondo
       Magdalena Oil  and Gas Limited  ("Magdalena"), Newhall Refining  Company,
       Inc., and  Via Verde Development  Company, are  collectively referred  to
       herein as  "Hondo"), Lonrho PLC., Thamesedge,  Ltd., London Australian  &
       General  Property Company  Limited (collectively,  together with  any  of
       their respective affiliates, parent corporations and direct and  indirect
       subsidiaries  that assert  claims  against Hondo,  "Lonrho"),  and  Amoco
       Colombia Petroleum Company ("Amoco").

       Amoco, Hondo  and Lonrho  agree to  enter into  a one  hundred and  fifty
       (150) day  Stand-Still Period from  May 15, 1998  until October 15,  1998
       (the "Stand-Still  Period") for  the benefit of  Hondo and  all of  their
       creditors in consideration of the following;

       (1)  Hondo hereby assigns  to Amoco, as Operator  of the Opon field:  (I)
            100% of all  reimbursements due to Hondo  by Ecopetrol for the  Opon
            Tier I Project  well facilities and pipeline expenditures that  will
            be received during  the Stand-Still Period, and; (II) The  following
            gas and  liquids sale proceeds and  tariff revenues attributable  to
            natural gas  and liquids sold to  Ecopetrol and/or Termo  Santander,
            S.C.A., E.S.P.  during the  months of  April, May,  June, July,  and
            August, 1998, independently of  when they are received: (a) 100%  of
            Hondo's  proceeds from  the  sales of  natural  gas and  liquids  to
            Ecopetrol, (b)  100% of Hondo's proceeds  from the sales of  natural
            gas to  Termo Santander,  S.C.A., E.S.P.,  and (c)  100% of  Hondo's
            tariff revenues  from the Opon  Tier 1 Pipeline; (all  of the  above
            hereinafter the "Assigned Revenues").

            Amoco shall remit  to Hondo within five (5)  days of receipt of  the
            Assigned Revenues the lesser of an amount equal to Hondo's share  of
            Ecopetrol's Tier  1 Pipeline operating  expenses and  El Centro  gas
            processing fee,  or the  Assigned Revenues.  Any remaining  Assigned
            Revenues  will be  applied to  cover Hondo's  share of  all  current
            operating expenses under  the New Operating Agreement ("JOA")  dated
            August 9, 1993,  in order to continue  the normal operations of  the
            Opon  Block in  the Republic  of Colombia  during the  term of  this
            Agreement, and thereafter, to  any other amounts owed by Hondo  with
            respect  to prior  operating expenses  incurred by  Amoco under  the
            JOA.   In  the event  that there  are any  amounts of  the  Assigned
            Revenues left,  after all  amounts due by  Hondo under  the JOA  are
            paid, such  amounts shall  be remitted  to Hondo  immediately.   For
            purposes of  this Agreement,  the tariff shall  be deemed  to be  US
            $0.25 per MCF.

            It is  understood and agreed  that Hondo shall  continue paying  its
            share  of Ecopetrol's  Tier 1  Pipeline  operating expenses  and  El
            Centro gas processing fee during the Stand-Still Period.

            Hondo  shall  immediately  notify  Ecopetrol  and  Termo  Santander,
            S.C.A., E.S.P.  in writing in  a form satisfactory  to Amoco of  the
            assignment of funds to Amoco.   If any of the Assigned Revenues  are
            received by  Hondo, Hondo will  within five (5)  days of receipt  of
            said Assigned Revenues pay same to Amoco;



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       (2)  Hondo shall  cast its affirmative  vote to approve  pursuant to  the
            JOA  all  prior  years' operating  budgets  presented  by  Amoco  as
            Operator of the  Opon Block, included but  not limited to the  1993,
            1994, 1995, 1996 and 1997 budgets, in their entirety (as  originally
            presented)  during  the next Operating Committee Meeting called  for
            such purpose;

       (3)  Hondo represents and warrants hereby that Lonrho is the largest  and
            most significant creditor of Hondo and that Hondo owes  $112,518,068
            to Lonrho as of March 31, 1998;

       (4)  Lonrho hereby  agrees to a  one hundred and  fifty (150) day  Stand-
            Still Agreement with respect to the foregoing amount owed by  Hondo,
            and agrees  to be  bound by  the terms  of this  Agreement.   Lonrho
            further  agrees,  represents  and  warrants  that  it  will  not  do
            anything, directly  or indirectly,   in detriment of  Hondo or  that
            would  cause  Hondo  to file  bankruptcy  under  the  United  States
            Bankruptcy Code or the bankruptcy laws of any other jurisdiction  or
            to  contest  the  validity  and  enforceability  of  the  provisions
            contained herein and shall be  estopped from so doing.  Amoco  shall
            have a claim and remedies  under this Agreement against Lonrho if  a
            bankruptcy petition  under the Bankruptcy Code  is filed within  the
            one hundred and fifty (150)  day Stand-Still Period, as a result  of
            Lonrho's breach  of its undertaking under  this paragraph.   Without
            limiting the generality of the  foregoing, in the event of a  breach
            of this  undertaking, Amoco shall be  entitled to obtain seek  money
            damages, void agreements,  avoid transfers or seek any other  remedy
            provided under the law;

       (5)  In consideration  of the above Amoco  agrees that during the  Stand-
            Still Period Amoco will:

                 (a)  defer its right to cash call or invoice Hondo; and
                 (b)  defer its right  to exercise its default provisions  under
                 the terms of the New Operating Agreement dated August 9, 1993.

            It is  accepted, agreed and  understood that  the foregoing  Amoco's
            obligations  shall  automatically terminate  in  the  event  of  any
            breach by any Party (other  than Amoco) of any of their  obligations
            under this Agreement;

       (6)  It is not the intention of  the Parties nor shall this Agreement  be
            construed  as  modifying,   changing  or  superseding  any  of   the
            provisions contained in  all prior agreements entered into by  Amoco
            and Hondo  related to the  Opon block in  Colombia.  In  particular,
            this  Agreement does  not modify,  change or  supersede any  of  the
            provisions of the Farmout and new Operating Agreements dated  August
            9, 1993, and the Funding Agreement dated May 5, 1995;

       (7)  The Parties below represent and warrant that they have authority  to
            enter into this  Agreement on behalf of  the Parties for which  they
            sign;

       (8)  This  Agreement constitutes  the  entire agreement  of  the  Parties
            concerning the  matters addressed  herein and  supersedes any  prior
            discussions or  communications whether  written or  oral related  to
            the subject matter  hereof.  This Agreement  may only be amended  or
            modified in a writing that is signed by all the Parties hereto;



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       (9)  This Agreement may  be signed in counterparts, which together  shall
            constitute  one  and  the  same  agreement.    Counterparts  may  be
            communicated by facsimile transmission and facsimiles and copies  of
            such counterparts  shall be enforceable  and admissible as  evidence
            of this Agreement;

       (10) This Agreement  shall be interpreted  according to the  laws of  the
            United  States  and  the  laws  of  the  State  of  Texas,   without
            consideration  of  conflicts  of  law  principles.    Any   disputes
            hereunder shall be resolved in accordance with the following.:

                 (a)  All  disputes  between  two or  more  of  the  Parties  in
                 connection with this Agreement whether arising during its  term
                 or thereafter,  shall be finally  settled by arbitration  under
                 the auspices and rules of the American Arbitration  Association
                 to  be  held,  unless  otherwise  agreed  by  the  Parties,  at
                 Houston, Texas, U.S.A.   The arbitration shall be initiated  by
                 any Party  giving notice to the  named respondent, with  copies
                 to the other  Parties, that it elects  to refer the dispute  to
                 arbitration, and  that such Party  (hereinafter referred to  as
                 the "First  Party") has  so notified  the American  Arbitration
                 Association with the request that a panel of three  arbitrators
                 be appointed  in accordance with Rule  13 to hear the  dispute.
                 Any Party  not named in  the notice who  wishes to  participate
                 shall promptly so  notify the American Arbitration  Association
                 and  the  other Parties  so  that  it may  participate  in  the
                 procedure provided for in Rule 13 if it wishes.

                 (b)  Judgment  on the  award rendered  may  be entered  in  any
                 court  having jurisdiction  or application  may be  made for  a
                 judicial acceptance of the award and an order for  enforcement,
                 as the case may be.   Neither the dispute nor any award may  be
                 referred  to courts  of law  for  further adjudication  on  the
                 merits of the dispute.

                 (c)  For the foregoing purposes, the Parties hereby consent  to
                 the jurisdiction  of the American  Arbitration Association  and
                 of the  aforesaid tribunal, and agree  that this Agreement  may
                 be furnished  to the Association  to confirm  the agreement  of
                 the Parties.


       IN  WITNESS  HEREOF,  this  Agreement  has  been  executed  by  the  duly
       authorized representatives  of the  Parties as of  this 8th  15th day  of
       May, 1998.

       Amoco Colombia Petroleum Company
       By:  /s/ Alec Robinson
            -------------------------------------------

       Hondo Oil & Gas Company
       By:  /s/ John J. Hoey
            -------------------------------------------

       Hondo Magdalena Oil & Gas Limited
       By:  /s/ John J. Hoey
            -------------------------------------------

       Lonrho PLC.


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       By:  /s/ Nicholas J. Morrell
            -------------------------------------------

       Thamesedge, Ltd.
       By:  /s/ Nicholas J. Morrell
            ---------------------------------------------

       London Australian & General Property Company Limited

       By:  /s/ Nicholas J. Morrell
            ---------------------------------------------


















































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