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                                                                    EXHIBIT 10.5




                                    GUARANTY

         THIS GUARANTY is made as of May 15, 1998, by each of the undersigned
(each individually a "Guarantor" and collectively, "Guarantors"), in favor of
ING (U.S.) CAPITAL CORPORATION, in its capacity as agent for itself and certain
other Lenders, as such term is defined in the Credit Agreement described below
(in such capacity, "Agent").


                                   RECITALS:

         1.  UNITED STATES EXPLORATION, INC., a Colorado corporation
("Borrower"), Agent, and the other financial institutions named therein as
Lenders ("Lenders") are parties to a Credit Agreement of even date herewith
(the "Credit Agreement").

         2.  Pursuant to the Credit Agreement, Borrower has executed in favor
of the initial Lender a certain promissory note payable to the order of the
initial Lender in the aggregate principal amount of $35,000,000 (such
promissory notes, as from time to time amended, and all promissory notes given
in substitution, renewal or extension therefor or thereof, in whole or in part,
being herein collectively called the "Note").

         3.  It is a condition precedent to Lenders' obligations to advance
funds pursuant to the Credit Agreement that each Guarantor shall execute and
deliver to Agent a satisfactory guaranty of Borrower's obligations under the
Note and the Credit Agreement.

         4.  Borrower, owns directly, or indirectly through one or more
subsidiaries, one hundred percent (100%) of the outstanding capital stock or
other ownership interests of each Guarantor.

         NOW, THEREFORE, in consideration of the premises, of the benefits
which will inure to Guarantors from Lenders' advances of funds to Borrower
under the Credit Agreement, and of Ten Dollars and other good and valuable
consideration, the receipt and sufficiency of all of which are hereby
acknowledged, and in order to induce Lenders to advance funds under the Credit
Agreement, each Guarantor hereby agrees with Agent, for the benefit of Agent
and Lenders as follows:


                                   AGREEMENTS

         Section 1.  Definitions.  Reference is hereby made to the Credit
Agreement for all purposes.  All terms used in this Guaranty which are defined
in the Credit Agreement and not otherwise defined herein shall have the same
meanings when used herein.  All references herein to any Obligation Document,
Loan Document, or other document or instrument refer to


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the same as from time to time amended, supplemented or restated.  As used
herein the following terms shall have the following meanings:

         "Agent" means the Person who, at the time in question, is the "Agent"
under the Credit Agreement.  Whenever there is only one Lender under the Credit
Agreement, "Agent" shall also refer to such Lender in such capacity as the only
Lender.

         "Lenders" means ING (U.S.) Capital Corporation and all other Persons
who at any time are "Lenders" under the Credit Agreement.

         "Obligations" means collectively all of the indebtedness, obligations,
and undertakings which are guaranteed by Guarantor and described in subsections
(a) and (b) of Section 2.

         "Obligation Documents" means this Guaranty, the Note, the Credit
Agreement, the Loan Documents, all other documents and instruments under, by
reason of which, or pursuant to which any or all of the Obligations are
evidenced, governed, secured, or otherwise dealt with, and all other documents,
instruments, agreements, certificates, legal opinions and other writings
heretofore or hereafter delivered in connection herewith or therewith.

         "Obligors" means Borrower, Guarantor and any other endorsers,
guarantors or obligors, primary or secondary, of any or all of the Obligations.

         "Security" means any rights, properties, or interests of Agent or
Lenders, under the Obligation Documents or otherwise, which provide recourse or
other benefits to Agent or Lenders in connection with the Obligations or the
non-payment or non-performance thereof, including without limitation collateral
(whether real or personal, tangible or intangible) in which Agent or Lenders
have rights under or pursuant to any Obligation Documents, guaranties of the
payment or performance of any Obligation, bonds, surety agreements, keep-well
agreements, letters of credit, rights of subrogation, rights of offset, and
rights pursuant to which other claims are subordinated to the Obligations.

         Section 2.  Guaranty.

         (a)  Each Guarantor hereby irrevocably, absolutely, and
unconditionally jointly and severally guarantees to Agent and each Lender the
prompt, complete, and full payment when due, and no matter how the same shall
become due, of:

                 (i)      All indebtedness and other obligations now or
         hereafter incurred or arising pursuant to or permitted by the
         provisions of the Note, the Credit Agreement, or any other instrument
         now or hereafter evidencing, governing, guaranteeing or securing the
         Obligations or any part thereof or otherwise executed in connection
         with any advance or loan evidenced or governed by the Note or the
         Credit Agreement;

                 (ii)     All present or future "Hedging Obligations" incurred
         or owing by Borrower to any one or more members of the "Credit Group,"
         as hereinafter defined; as





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         used in this paragraph and the following paragraph (iii): "Credit
         Group" means ING (U.S.) Capital Corporation, any other party from time
         to time constituting a Lender under the Credit Agreement, and/or any
         affiliate of any such party, and "Hedging Obligations" means any
         indebtedness or obligations, however arising, to make payments or take
         actions under or pursuant to any present or future agreement
         (including any individual agreement or any master agreement and the
         various transactions and confirmations made thereunder) governing any
         swap, put, call, cap, floor or collar transaction, or other type of
         agreement or transaction relating to interest rates, currency exchange
         rates, or the price or delivery (at any one or more locations or in
         any one or more markets) of crude oil, natural gas, natural gas
         liquids, petroleum products, other hydrocarbons, agricultural
         products, precious metals, stocks or bonds or indices thereof, or any
         other commodity, contract or other item of property traded in any
         market, and all interest thereon and expenses and other amounts
         payable in connection therewith (any agreement or document, however
         entitled or described, evidencing or governing and Hedging Obligations
         owing by Borrower to any one or more members of the Credit Group being
         herein called a "Hedging Agreement");

                 (iii)    All present or future indebtedness or obligations
         incurred or owing to any one or more members of the Credit Group by
         Borrower, however arising, to make reimbursements or similar payments
         to any one or more members of the Credit Group as a result of or
         relating to any payments made by any one or more members of the Credit
         Group to any third person on account of or for the benefit of
         Borrower, including without limitation any obligation to reimburse any
         one or more members of the Credit Group for payments it makes under or
         pursuant to any letter of credit, bond, guaranty, or indemnity
         agreement issued or made for the account of or for the benefit of
         Borrower (such as a letter of credit, guaranty or indemnity by any one
         or more members of the Credit Group of any Hedging Obligations owed by
         Borrower to a third person) and all interest thereon and expenses and
         other amounts payable in connection therewith;

                 (iv)  Any and all other indebtedness or liabilities which
         Borrower may at any time owe to Agent or any Lender, whether incurred
         heretofore or hereafter or concurrently herewith, voluntarily or
         involuntarily, whether owed alone or with others, whether fixed,
         contingent, absolute, inchoate, liquidated or unliquidated, whether
         such indebtedness or liability arises by notes, discounts, overdrafts,
         open account indebtedness or in any other manner whatsoever, and
         including interest, attorneys' fees and collection costs as may be
         provided by law or in any instrument evidencing any such indebtedness
         or liability; and

                 (v)      All renewals, extensions, amendments, modifications,
         supplements, or restatements of or substitutions for any of the
         foregoing.


Without limiting the generality of the foregoing, each Guarantor's liability
hereunder shall extend to and include all post-petition interest, expenses, and
other duties and liabilities of Borrower described above in this subsection
(a), or below in the following subsection (b), which would be owed by Borrower
but for the fact that they are unenforceable or not allowable





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due to the existence of a bankruptcy, reorganization, or similar proceeding
involving Borrower.

         (b)  Each Guarantor hereby irrevocably, absolutely, and
unconditionally jointly and severally guarantees to Agent and each Lender the
prompt, complete and full performance, when due, and no matter how the same
shall become due, of all obligations and undertakings of Borrower to Agent or
such Lender under, by reason of, or pursuant to any of the Obligation
Documents.

         (c)  If Borrower shall for any reason fail to pay any Obligation, as
and when such Obligation shall become due and payable, whether at its stated
maturity, as a result of the exercise of any power to accelerate, or otherwise,
Guarantors will, forthwith upon demand by Agent, pay such Obligation in full to
Agent for the benefit of Agent or the Lender to whom such Obligation is owed.
If Borrower shall for any reason fail to perform promptly any Obligation,
Guarantors will, forthwith upon demand by Agent, cause such Obligation to be
performed or, if specified by Agent, provide sufficient funds, in such amount
and manner as Agent shall in good faith determine, for the prompt, full and
faithful performance of such Obligation by Agent or such other Person as Agent
shall designate.

         (d)  If either Borrower or any Guarantor fails to pay or perform any
Obligation as described in the immediately preceding subsections (a), (b), or
(c) Guarantors will incur the additional obligation to pay to Agent, and
Guarantors will forthwith upon demand by Agent pay to Agent, the amount of any
and all expenses, including fees and disbursements of Agent's counsel and of
any experts or Agents retained by Agent, which Agent may incur as a result of
such failure.

         (e)  As between each Guarantor and Agent or Lenders, this Guaranty
shall be considered a primary and liquidated liability of each Guarantor.

         (f) The liability of each Guarantor hereunder shall be limited to the
maximum amount of liability that can be incurred without rendering this
Guaranty, as it relates to such Guarantor, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount.

         Section 3.  Unconditional Guaranty.

         (a)  No action which Agent or any Lender may take or omit to take in
connection with any of the Obligation Documents, any of the Obligations (or any
other indebtedness owing by Borrower to Agent or any Lender), or any Security,
and no course of dealing of Agent or any Lender with any Obligor or any other
Person, shall release or diminish any Guarantor's obligations, liabilities,
agreements or duties hereunder, affect this Guaranty in any way, or afford any
Guarantor any recourse against Agent or any Lender, regardless of whether any
such action or inaction may increase any risks to or liabilities of Agent or
any Lender or any Obligor or increase any risk to or diminish any safeguard of
any Security.  Without limiting





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the foregoing, each Guarantor hereby expressly agrees that Agent and Lenders
may, from time to time, without notice to or the consent of such Guarantor, do
any or all of the following:

                 (i)  Amend, change or modify, in whole or in part, any one or
         more of the Obligation Documents and give or refuse to give any
         waivers or other indulgences with respect thereto.

                 (ii)  Neglect, delay, fail, or refuse to take or prosecute any
         action for the collection or enforcement of any of the Obligations, to
         foreclose or take or prosecute any action in connection with any
         Security or Obligation Document, to bring suit against any Obligor or
         any other Person, or to take any other action concerning the
         Obligations or the Obligation Documents.

                 (iii)  Accelerate, change, rearrange, extend, or renew the
         time, rate, terms, or manner for payment or performance of any one or
         more of the Obligations (whether for principal, interest, fees,
         expenses, indemnifications, affirmative or negative covenants, or
         otherwise).

                 (iv)  Compromise or settle any unpaid or unperformed
         Obligation or any other obligation or amount due or owing, or claimed
         to be due or owing, under any one or more of the Obligation Documents.

                 (v)  Take, exchange, amend, eliminate, surrender, release, or
         subordinate any or all Security for any or all of the Obligations,
         accept additional or substituted Security therefor, and perfect or
         fail to perfect Agent's or Lenders' rights in any or all Security.

                 (vi)  Discharge, release, substitute or add Obligors.

                 (vii)  Apply all monies received from Obligors or others, or
         from any Security for any of the Obligations, as Agent or Lenders may
         determine to be in their best interest, without in any way being
         required to marshall Security or assets or to apply all or any part of
         such monies upon any particular Obligations.

         (b)  No action or inaction of any Obligor or any other Person, and no
change of law or circumstances, shall release or diminish any Guarantor's
obligations, liabilities, agreements, or duties hereunder, affect this Guaranty
in any way, or afford any Guarantor any recourse against Agent or any Lender.
Without limiting the foregoing, the obligations, liabilities, agreements, and
duties of Guarantors under this Guaranty shall not be released, diminished,
impaired, reduced, or affected by the occurrence of any or all of the following
from time to time, even if occurring without notice to or without the consent
of Guarantors:

                 (i)  Any voluntary or involuntary liquidation, dissolution,
         sale of all or substantially all assets, marshalling of assets or
         liabilities, receivership, conservatorship, assignment for the benefit
         of creditors, insolvency, bankruptcy, reorganization, arrangement, or
         composition of any Obligor or any other proceedings





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         involving any Obligor or any of the assets of any Obligor under laws
         for the protection of debtors, or any discharge, impairment,
         modification, release, or limitation of the liability of, or stay of
         actions or lien enforcement proceedings against, any Obligor, any
         properties of any Obligor, or the estate in bankruptcy of any Obligor
         in the course of or resulting from any such proceedings.

                 (ii)  The failure by Agent or any Lender to file or enforce a
         claim in any proceeding described in the immediately preceding
         subsection (i) or to take any other action in any proceeding to which
         any Obligor is a party.

                 (iii)  The release by operation of law of any Obligor from any
         of the Obligations or any other obligations to Agent or any Lender.

                 (iv)  The invalidity, deficiency, illegality, or
         unenforceability of any of the Obligations or the Obligation
         Documents, in whole or in part, any bar by any statute of limitations
         or other law of recovery on any of the Obligations, or any defense or
         excuse for failure to perform on account of force majeure, act of God,
         casualty, impossibility, impracticability, or other defense or excuse
         whatsoever.

                 (v)  The failure of any Obligor or any other Person to sign
         any guaranty or other instrument or agreement within the contemplation
         of any Obligor, Agent or any Lender.

                 (vi)  The fact that any Guarantor may have incurred directly
         part of the Obligations or is otherwise primarily liable therefor.

                 (vii)  Without limiting any of the foregoing, any fact or
         event (whether or not similar to any of the foregoing) which in the
         absence of this provision would or might constitute or afford a legal
         or equitable discharge or release of or defense to a guarantor or
         surety other than the actual payment and performance by Guarantors
         under this Guaranty.

         (c)  Agent and Lenders may invoke the benefits of this Guaranty before
pursuing any remedies against any Obligor or any other Person and before
proceeding against any Security now or hereafter existing for the payment or
performance of any of the Obligations.  Agent and Lenders may maintain an
action against any Guarantor on this Guaranty without joining any other Obligor
therein and without bringing a separate action against any other Obligor.

         (d)  If any payment to Agent or any Lender by any Obligor is held to
constitute a preference or a voidable transfer under applicable state or
federal laws, or if for any other reason Agent or any Lender is required to
refund such payment to the payor thereof or to pay the amount thereof to any
other Person, such payment to Agent or such Lender shall not constitute a
release of any Guarantor from any liability hereunder, and each Guarantor
agrees to pay such amount to Agent or such Lender on demand and agrees and
acknowledges that this Guaranty shall continue to be effective or shall be
reinstated, as the case may be, to the extent





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of any such payment or payments.  Any transfer by subrogation which is made as
contemplated in Section 6 prior to any such payment or payments shall
(regardless of the terms of such transfer) be automatically voided upon the
making of any such payment or payments, and all rights so transferred shall
thereupon revert to and be vested in Agent and Lenders.

         (e)  This is a continuing guaranty and shall apply to and cover all
Obligations and renewals and extensions thereof and substitutions therefor from
time to time.

         Section 4.  Waiver.  Each Guarantor hereby waives, with respect to the
Obligations, this Guaranty, and the other Obligation Documents:

         (a)  notice of the incurrence of any Obligation by Borrower, and
notice of any kind concerning the assets, liabilities, financial condition,
creditworthiness, businesses, prospects, or other affairs of Borrower (it being
understood and agreed that: (i) each Guarantor shall take full responsibility
for informing itself of such matters, (ii) neither Agent nor any Lender shall
have any responsibility of any kind to inform any Guarantor of such matters,
and (iii) Agent and Lenders are hereby authorized to assume that each
Guarantor, by virtue of its relationships with Borrower which are independent
of this Guaranty, has full and complete knowledge of such matters whenever
Lenders extend credit to Borrower or take any other action which may change or
increase such Guarantor's liabilities or losses hereunder).

         (b)  notice that Agent, any Lender, any Obligor, or any other Person
has taken or omitted to take any action under any Obligation Document or any
other agreement or instrument relating thereto or relating to any Obligation.

         (c)  notice of acceptance of this Guaranty.

         (d)  demand, presentment for payment, and notice of demand, dishonor,
nonpayment, or nonperformance.

         (e)  notice of intention to accelerate, notice of acceleration,
protest, notice of protest, notice of any exercise of remedies (as described in
the following Section 5 or otherwise), and all other notices of any kind
whatsoever.

         Section 5.  Exercise of Remedies.  Agent, at the direction of Majority
Lenders, shall have the right to enforce, from time to time, in any order and
at Majority Lender's sole discretion, any rights, powers and remedies which
Agent may have under the Obligation Documents or otherwise, including judicial
foreclosure, the exercise of rights of power of sale, the taking of a deed or
assignment in lieu of foreclosure, the appointment of a receiver to collect
rents, issues and profits, the exercise of remedies against personal property,
or the enforcement of any assignment of leases, rentals, oil or gas production,
or other properties or rights, whether real or personal, tangible or
intangible; and each Guarantor shall be liable to Agent and each Lender
hereunder for any deficiency resulting from the exercise by Agent of any such
right or remedy even though any rights which Guarantors may have against
Borrower or others may be destroyed or diminished by exercise of any such right
or remedy.  No failure





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on the part of Agent or any Majority Lenders to exercise, and no delay in
exercising, any right hereunder or under any other Obligation Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right preclude any other or further exercise thereof or the exercise of any
other right.  The rights, powers and remedies of Agent provided herein and in
the other Obligation Documents are cumulative and are in addition to, and not
exclusive of, any other rights, powers or remedies provided by law or in
equity.  The rights of Agent hereunder are not conditional or contingent on any
attempt by Agent to exercise any of its rights under any other Obligation
Document against any Obligor or any other Person.

         Section 6.  Limited Subrogation.  Until all of the Obligations have
been paid and performed in full, no Guarantor shall have any right to exercise
any right of subrogation, reimbursement, indemnity, exoneration, contribution
or any other claim which it may now or hereafter have against or to any Obligor
or any Security in connection with this Guaranty, and each Guarantor hereby
waives any rights to enforce any remedy which such Guarantor may have against
Borrower and any right to participate in any Security until such time.  If any
amount shall be paid to any Guarantor on account of any such subrogation or
other rights, any such other remedy, or any Security at any time when all of
the Obligations and all other expenses guaranteed pursuant hereto shall not
have been paid in full, such amount shall be held in trust for the benefit of
Lenders, shall be segregated from the other funds of such Guarantor and shall
forthwith be paid over to Agent to be held by Agent as collateral for, or then
or at any time thereafter applied in whole or in part by Agent against, all or
any portion of the Obligations, whether matured or unmatured, in such order as
Agent shall elect.  If any Guarantor shall make payment to Agent of all or any
portion of the Obligations and if all of the Obligations shall be finally paid
in full, Agent will, at such Guarantor's request and expense, execute and
deliver to such Guarantor (without recourse, representation or warranty)
appropriate documents necessary to evidence the transfer by subrogation to such
Guarantor of an interest in the Obligations resulting from such payment by such
Guarantor; provided that such transfer shall be subject to Section 3(d) above
and that without the consent of Agent (which Agent may withhold in its
discretion) such Guarantor shall not have the right to be subrogated to any
claim or right against any Obligor which has become owned by Agent or any
Lender, whose ownership has otherwise changed in the course of enforcement of
the Obligation Documents, or which Agent otherwise has released or wishes to
release from its Obligations.

         Section 7.  Successors and Assigns.  No Guarantor's rights or
obligations hereunder may be assigned or delegated, but this Guaranty and such
obligations shall pass to and be fully binding upon the successors of each
Guarantor, as well as each Guarantor.  This Guaranty shall apply to and inure
to the benefit of Agent and Lenders and their successors or assigns.  Without
limiting the generality of the immediately preceding sentence, Agent and each
Lender may, if in accordance with the terms and conditions set forth in the
Credit Agreement,  assign, grant a participation in, or otherwise transfer any
Obligation held by it or any portion thereof, and Agent and each Lender may
assign or otherwise transfer its rights or any portion thereof under any
Obligation Document, to any other Person, and such other Person shall thereupon
become vested with all of the benefits in respect thereof granted to Agent or
such Lender





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hereunder unless otherwise expressly provided by Agent or such Lender in
connection with such assignment or transfer.

         Section 8.  Subordination.  Each Guarantor hereby subordinates and
makes inferior to the Obligations any and all indebtedness now or at any time
hereafter owed by Borrower to any Guarantor.  Each Guarantor agrees that after
the occurrence of any Default or Event of Default it will neither permit
Borrower to repay such indebtedness or any part thereof nor accept payment from
Borrower of such indebtedness or any part thereof without the prior written
consent of Agent and Lenders.  If any Guarantor receives any such payment
without the prior written consent of Agent and Lenders, the amount so paid
shall be held in trust for the benefit of Lenders, shall be segregated from the
other funds of such Guarantor, and shall forthwith be paid over to Agent to be
held by Agent as collateral for, or then or at any time thereafter applied in
whole or in part by Agent against, all or any portion of the Obligations,
whether matured or unmatured, in such order as Agent shall elect.

         Section 9.  Representations and Warranties.  Each Guarantor hereby
represents and warrants to Lender as follows:

         (a)  The Recitals at the beginning of this Guaranty are true and
correct in all respects.

         (b)  Each Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the state of its or incorporation as set
forth opposite its name on the signature page to this Guaranty; and each
Guarantor has all requisite corporate power and authority to execute, deliver
and perform this Guaranty.

         (c)  The execution, delivery and performance by each Guarantor of this
Guaranty have been duly authorized by all necessary corporate action and do not
and will not contravene its certificate or articles of incorporation or bylaws.

         (d)  The execution, delivery and performance by each Guarantor of this
Guaranty do not and will not contravene any law or governmental regulation or
any contractual restriction binding on or affecting such Guarantor or any of
its Affiliates or properties, and do not and will not result in or require the
creation of any lien, security interest or other charge or encumbrance upon or
with respect to any of its properties.

         (e)  No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or other regulatory body or third
party is required for the due execution, delivery and performance by any
Guarantor of this Guaranty.

         (f)  This Guaranty is a legal, valid and binding obligation of each
Guarantor, enforceable against such Guarantor in accordance with its terms
except as limited by bankruptcy, insolvency or similar laws of general
application relating to the enforcement of creditors' rights.





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         (g) Except as disclosed in the Credit Agreement, there is no action,
suit or proceeding pending or, to the knowledge of any Guarantor, threatened
against or otherwise affecting any Guarantor before any court, arbitrator or
governmental department, commission, board, bureau, agency or instrumentality
which may materially and adversely affect any Guarantor's financial condition
or its ability to perform its obligations hereunder.

         Section 10.  No Oral Change.  No amendment of any provision of this
Guaranty shall be effective unless it is in writing and signed by Guarantors
and Lenders, and no waiver of any provision of this Guaranty, and no consent to
any departure by any Guarantor therefrom, shall be effective unless it is in
writing and signed by Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

         Section  11. Invalidity of Particular Provisions.  If any term or
provision of this Guaranty shall be determined to be illegal or unenforceable
all other terms and provisions hereof shall nevertheless remain effective and
shall be enforced to the fullest extent permitted by applicable law.

         Section 12.  Headings and References.  The headings used herein are
for purposes of convenience only and shall not be used in construing the
provisions hereof.  The words "this Guaranty," "this instrument," "herein,"
"hereof," "hereby" and words of similar import refer to this Guaranty as a
whole and not to any particular subdivision unless expressly so limited.  The
phrases "this section" and "this subsection" and similar phrases refer only to
the subdivisions hereof in which such phrases occur.  The word "or" is not
exclusive, and the word "including" (in its various forms) means "including
without limitation".  Pronouns in masculine, feminine and neuter genders shall
be construed to include any other gender, and words in the singular form shall
be construed to include the plural and vice versa, unless the context otherwise
requires.

         Section 13.  Term.  This Guaranty shall be irrevocable until all of
the Obligations have been completely and finally paid and performed, no Lender
has any obligation to make any loans or other advances to Borrower, and all
obligations and undertakings of Borrower under, by reason of, or pursuant to
the Obligation Documents have been completely performed, and this Guaranty is
thereafter subject to reinstatement as provided in Section 3(d). All extensions
of credit and financial accommodations heretofore or hereafter made by Agent or
Lenders to Borrower shall be conclusively presumed to have been made in
acceptance hereof and in reliance hereon.

         Section 14.  Notices. Any notice or communication required or
permitted hereunder shall be given as provided in the Credit Agreement

         Section 15.  Limitation on Interest. Agent, Lenders and Guarantors
intend to contract in strict compliance with applicable usury law from time to
time in effect, and the provisions of the Credit Agreement limiting the
interest for which any Guarantor is obligated are expressly incorporated herein
by reference.





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         Section 16.  Loan Document.  This Guaranty is a Loan Document, as
defined in the Credit Agreement, and is subject to the provisions of the Credit
Agreement governing Loan Documents.  Each Guarantor hereby ratifies, confirms
and approves the Credit Agreement and the other Loan Documents and, in
particular, any provisions thereof which relate to such Guarantor.

         Section 17.  Counterparts.  This Guaranty may be executed in any
number of counterparts, each of which when so executed shall be deemed to
constitute one and the same Guaranty.

         SECTION 18.  GOVERNING LAW.  THIS GUARANTY IS TO BE PERFORMED IN THE
STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF SUCH STATE WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.  EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS ITSELF TO THE
NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS OF SUCH STATE.  EACH
GUARANTOR AGREES THAT SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK SHALL APPLY TO THE LOAN DOCUMENTS AND WAIVES ANY RIGHT
TO STAY OR TO DISMISS ANY ACTION OR PROCEEDING BROUGHT BEFORE SAID COURTS ON
THE BASIS OF FORUM NON CONVENIENS.  IN FURTHERANCE OF THE FOREGOING, EACH
GUARANTOR HEREBY IRREVOCABLY DESIGNATES AND APPOINTS CT CORPORATION SYSTEM,
1633 BROADWAY, NEW YORK, NEW YORK, AS AGENT OF EACH GUARANTOR TO RECEIVE
SERVICE OF ALL PROCESS BROUGHT AGAINST EACH GUARANTOR WITH RESPECT TO ANY SUCH
PROCEEDING IN ANY SUCH COURT IN NEW YORK, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED BY EACH GUARANTOR TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT.  COPIES OF ANY SUCH PROCESS SO SERVED SHALL ALSO, IF PERMITTED BY LAW,
BE SENT BY REGISTERED MAIL TO EACH GUARANTOR AT ITS ADDRESS SET FORTH BELOW AND
BY REGULAR MAIL, REGISTERED MAIL COURIER OR MESSENGER TO EACH GUARANTOR AT ITS
ADDRESS SET FORTH BELOW, BUT THE FAILURE OF EACH GUARANTOR TO RECEIVE SUCH
COPIES SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS AS AFORESAID.
EACH GUARANTOR SHALL FURNISH TO AGENT A CONSENT OF CT CORPORATION SYSTEM
AGREEING TO ACT HEREUNDER PRIOR TO THE EFFECTIVE DATE OF THIS AGREEMENT.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF AGENT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF AGENT TO BRING PROCEEDINGS
AGAINST EACH GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION.  IF FOR ANY
REASON CT CORPORATION SHALL RESIGN OR OTHERWISE CEASE TO ACT AS EACH
GUARANTOR'S AGENT, EACH GUARANTOR HEREBY IRREVOCABLY AGREES TO (a) IMMEDIATELY
DESIGNATE AND APPOINT A NEW AGENT ACCEPTABLE TO AGENT TO SERVE IN SUCH CAPACITY
AND, IN SUCH EVENT, SUCH NEW AGENT SHALL BE DEEMED TO BE SUBSTITUTED FOR CT





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<PAGE>   12
CORPORATION SYSTEM FOR ALL PURPOSES HEREOF AND (b) PROMPTLY DELIVER TO AGENT
THE WRITTEN CONSENT (IN FORM AND SUBSTANCE SATISFACTORY TO AGENT) OF SUCH NEW
AGENT AGREEING TO SERVE IN SUCH CAPACITY.

         THIS WRITTEN GUARANTY AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

         THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]





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<PAGE>   13
         IN WITNESS WHEREOF, each Guarantor has executed and delivered this
Guaranty as of the date first written above.


                               PERFORMANCE PETROLEUM CO., A
                               COLORADO CORPORATION


                               By: /s/ Bruce D. Benson         
                                   ----------------------------------------
                                       Name: Bruce D. Benson
                                       Title: President

                               UNITED STATES GAS GATHERING CO., INC., A
                               DELAWARE CORPORATION


                               By: /s/ Bruce D. Benson         
                                   ----------------------------------------
                                       Name: Bruce D. Benson
                                       Title: President


                               PACIFIC OSAGE, INC., AN OKLAHOMA CORPORATION


                               By: /s/ Bruce D. Benson           
                                   ----------------------------------------
                                       Name: Bruce D. Benson
                                       Title: President

                               PRODUCERS SERVICE INCORPORATED, A
                               KANSAS CORPORATION


                               By: /s/ Bruce D. Benson            
                                   ----------------------------------------
                                       Name: Bruce D. Benson
                                       Title: President

                               Address for Notices:

                               1560 Broadway, Suite 1900
                               Denver, Colorado 80202






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