Exhibit 10.16
                      SEVENTH AMENDMENT TO CREDIT AGREEMENT

      This Seventh Amendment to Amended and Restated Credit Agreement (this
"Amendment") is dated as of June 30, 1999 and is made by and among CLIFFWOOD OIL
& GAS CORP., CLIFFWOOD ENERGY COMPANY and CLIFFWOOD PRODUCTION CO. (the
"Borrowers"), COMERICA BANK-TEXAS, as Agent for itself and certain other lenders
(in such capacity, the "Agent") and as a Lender (as defined in the Agreement
described below) and FIRST UNION NATIONAL BANK, as a Lender.

                               R E C I T A L S:

      WHEREAS, Borrowers, Agent and certain Lenders are party to the Amended and
Restated Credit Agreement dated as of August 1, 1997 (as amended through the
date hereof and as it may be further amended, extended, renewed or restated from
time to time, the "Agreement") pursuant to which Lenders made a revolving line
of credit available to Borrowers under the terms and provisions stated therein;
and

      WHEREAS, Borrowers, Agent and Lenders desire to amend the Agreement in
connection with, among other things, redetermination the Borrowing Base;

      NOW, THEREFORE, in consideration of the premises herein contained, the
covenants and agreements set forth below and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows, intending to be legally bound:

                                    ARTICLE I

                                   DEFINITIONS

      Section 1.1 DEFINITIONS AND TERMS. Capitalized terms used in this
Amendment, to the extent not otherwise defined herein, shall have the same
meaning as in the Agreement, as amended hereby, and all references to
"Sections," "clauses," "Articles" and "Exhibits" are references to the
Agreement's sections, clauses, articles and exhibits.

                                   ARTICLE II

                                   AMENDMENTS

      Section 2.1 AMENDMENTS TO SECTION 2.1. Section 2.8(a) is amended in its
entirety to read as follows:

            "The Borrowing Base is acknowledged by the Borrowers, the Agent and
            the Lenders to be $31,000,000. Commencing on September 1, 1999, and
            continuing thereafter on the first day of each month until the next
            redetermination of the Borrowing Base and the amount by which the
            Borrowing Base shall be reduced are orally communicated

SEVENTH AMENDMENT TO CREDIT AGREEMENT - Page 1
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            to the Borrowers pursuant to Section 2.8(c), the amount of the
            Borrowing Base shall be reduced monthly by the amount of $516,666
            (the "Commitment Reduction Schedule")."

      Section 2.2 AMENDMENT TO SECTION 5.2. Section 5.2 is amended as follows:

            (a)   by deleting the word "Deliver" at the beginning  thereof and
      substituting the following words therefor:  "Cause Texoil to deliver";

            (b)   by deleting the words "combined and combining "therefrom and
      substituting the following therefor: "consolidated and consolidating";

            (c)   by adding after the word "Borrowers" each time it appears the
      words "and the Guarantors"; and

            (d)   by deleting the words "each Borrower" and substituting
      therefor the word "Texoil".

      Section 2.3 AMENDMENT TO SECTION 5.3. Section 5.3 is amended by adding the
word "consolidated and consolidating" before the word "Financial" and by adding
the words "and the Guarantors" after the word" Borrowers."

      Section 2.4 AMENDMENT TO SECTION 5.5. Section 5.5 is amended as by adding
the words "or any Guarantor" after the word "Borrower."

      Section 2.5 AMENDMENT TO SECTION 5.6 AND 5.7. Sections 5.6 and 5.7 are
amended by adding the words "and each Guarantor" immediately after each
reference to "Borrower" and "Borrowers".

      Section 2.6 AMENDMENT TO SECTION 6.13. Section 6.13 is amended by adding
the words "of the Borrowers and the Guarantors" after the word "capital" found
therein.

      Section 2.7 AMENDMENT TO SECTION 6.16. Section 6.16 is amended by deleting
therefrom the word "its" and by adding the words "of the Borrowers, the
Guarantors and their respective Subsidiaries."

      Section 2.8 AMENDMENT TO ARTICLE VI. Article VI is amended by adding
thereto a new section, numbered 6.17, reading as follows:

            "6.17 Directly or indirectly, create, enter into any agreement with
      any Person or otherwise cause or suffer to exist or become effective (or
      permit the Guarantors or any Subsidiary so to do) any consensual lien or
      restriction of any kind that by its terms restricts the ability of any
      Borrower, Subsidiary or Guarantor to (a) pay any dividends or make any
      other distributions on its capital stock, (b) pay any Indebtedness of such
      Person, (c) make loans or advances to any Borrower, Subsidiary or
      Guarantor or (d) transfer any of its Property

SEVENTH AMENDMENT TO CREDIT AGREEMENT - Page 2
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      to any Borrower or Guarantor, except any encumbrance or restriction
      contained in this Agreement, the Note Purchase Agreement and any other
      agreement to the extent the same constitute restrictions on the sale or
      other disposition of Property securing Indebtedness permitted hereunder
      that is secured by a Permitted Lien on such Property."

                                   ARTICLE III

              CONDITIONS PRECEDENT AND EFFECTIVENESS OF INCREASES

      Section 3.1 CONDITIONS PRECEDENT. This Amendment shall be effective upon
satisfaction of the following conditions precedent:

            (a) The Agent shall have received, reviewed, and approved the
      following documents and other items, appropriately executed and
      acknowledged when necessary, all in form and substance satisfactory to the
      Agent:

                  (i)   multiple counterparts of this Amendment,  as requested
            by the Agent;

                  (ii)  Amended and Restated Guaranty Agreement; and

                  (iii) such other agreements, documents, instruments, opinions,
            certificates, waivers, consents and evidence as the Agent and the
            Lenders may require.

                                   ARTICLE IV

                                  MISCELLANEOUS

      Section 4.1 RATIFICATIONS, REPRESENTATIONS AND WARRANTIES. Except as
expressly modified and superseded by this Amendment, the terms and provisions of
the Agreement and the other Loan Documents are ratified and confirmed and shall
continue in full force and effect. The representations and warranties contained
herein and in all other Loan Documents, as amended hereby, shall be true and
correct as of, and as if made on, the date hereof. Borrowers, Agent and Lenders
agree that the Agreement as amended hereby shall continue to be legal, valid,
binding and enforceable in accordance with its terms.

      Section 4.2 REFERENCE TO THE AGREEMENT. Each of the Loan Documents,
including the Agreement and any and all other agreements, documents or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Agreement as amended hereby, are hereby amended
so that any reference in such Loan Documents to the Agreement shall mean a
reference to the Agreement as amended hereby.

      Section 4.3 EXPENSES OF AGENT, ETC. As provided for in the Agreement, each
Borrower agrees, jointly and severally, to pay on demand all reasonable cost and
expenses incurred by Agent in connection with the preparation, negotiation,
execution of this Amendment, and the other Loan Documents executed pursuant
hereto and any and all amendments, modifications and supplements

SEVENTH AMENDMENT TO CREDIT AGREEMENT - Page 3
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thereto including, without limitation, the reasonable cost of Agent's legal
counsel, and all reasonable costs and expenses incurred by Agent in connection
with the enforcement or preservation of any rights under the Agreement, as
amended hereby, or any other Loan Documents. In addition, the Borrowers agree to
pay an additional fee of $15,000 if the Loma Novia Field is included in the
Borrowing Base.

      Section 4.4 SEVERABILITY. Any provisions of this Amendment held by court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provisions so held to be invalid or unenforceable.

      Section 4.5 APPLICABLE LAW. This Amendment and all other Loan Documents
executed pursuant hereto shall be governed by and construed in accordance with
the laws of the State of Texas.

      Section 4.6 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and
shall enure to the benefit of Agent, Lenders and Borrowers and their respective
successors and assigns.

      Section 4.7 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original
but all of which when taken together shall constitute one and the same
instrument.

      Section 4.8 HEADINGS. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.

      Section 4.9 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS,
DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS
AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.

                     REMAINDER OF PAGE INTENTIONALLY BLANK.
                             SIGNATURE PAGE FOLLOWS.

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EXECUTED as of the day and year first above written.



                                    CLIFFWOOD OIL & GAS CORP.,
                                    as a BORROWER


                                    By:_______________________________
                                        Frank A. Lodzinski
                                        President


                                    CLIFFWOOD ENERGY COMPANY,
                                    as a BORROWER


                                    By:________________________________
                                        Frank A. Lodzinski
                                        President


                                    CLIFFWOOD PRODUCTION CO.,
                                    as a BORROWER


                                    By:_________________________________
                                        Frank A. Lodzinski
                                        President

SEVENTH AMENDMENT TO CREDIT AGREEMENT - SIGNATURE PAGE 1 OF 2
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                                    COMERICA BANK-TEXAS,
                                    as AGENT and a LENDER


                                    By:_________________________________
                                        James W. Kimble
                                        Vice President

                                    FIRST UNION NATIONAL BANK,
                                    as a LENDER


                                    By:_________________________________
                                        Jay M. Chernosky
                                        Senior Vice President

SEVENTH AMENDMENT TO CREDIT AGREEMENT - SIGNATURE PAGE 2 OF 2