Execution Copy
                                                                 


                          CREDIT AGREEMENT

                                                     


                 DEVON ENERGY CORPORATION (NEVADA),

                            as Borrower,


                    DEVON ENERGY CORPORATION and

                DEVON ENERGY OPERATING CORPORATION,

                           as Guarantors,


                     NATIONSBANK OF TEXAS, N.A.

                             as Agent,


                                and


         NATIONSBANK OF TEXAS, N.A., BANK ONE, TEXAS, N.A.,

                        BANK OF MONTREAL and

            FIRST UNION NATIONAL BANK OF NORTH CAROLINA

                             as Lenders


                                                     


                        $300,000,000 (U.S.)


                          August 30, 1996

                         CREDIT AGREEMENT

                         Table of Contents
                                                             Page

  ARTICLE I -- Definitions and References . . . . . . . . .     1
       Section 1.1.  Defined Terms  . . . . . . . . . . . .     1
       Section 1.2.  Exhibits and Schedules; Additional
            Definitions . . . . . . . . . . . . . . . . . .    12
       Section 1.3.  Amendment of Defined Instruments . . .    12
       Section 1.4.  References and Titles  . . . . . . . .    12
       Section 1.5.  Calculations and Determinations  . . .    12

  ARTICLE II -- The Loans . . . . . . . . . . . . . . . . .    12
       Section 2.1.  Loans  . . . . . . . . . . . . . . . .    12
       Section 2.2.  Requests for Advances  . . . . . . . .    13
       Section 2.3.  Proportionate and Disproportionate
            Loans . . . . . . . . . . . . . . . . . . . . .    14
       Section 2.4.  Cancellation of Old Agreement  . . . .    15
       Section 2.5.  Use of Proceeds  . . . . . . . . . . .    15
       Section 2.6.  Rate Elections . . . . . . . . . . . .    16
       Section 2.7.  Advances Constituting Offered Rate
            Portions  . . . . . . . . . . . . . . . . . . .    17
       Section 2.8.  Fees . . . . . . . . . . . . . . . . .    18
       Section 2.9.  Optional Prepayments . . . . . . . . .    18
       Section 2.10.  Mandatory Prepayments . . . . . . . .    18
       Section 2.11.  Payments to Lenders . . . . . . . . .    19
       Section 2.12.  Initial Borrowing Base  . . . . . . .    19
       Section 2.13.  Subsequent Determinations of
            Borrowing Base  . . . . . . . . . . . . . . . .    20
       Section 2.14.  Borrower's Designation of Borrowing
            Base Reduction  . . . . . . . . . . . . . . . .    20
       Section 2.15.  Increased Cost of Fixed Rate Portions    20
       Section 2.16.  Change of Law . . . . . . . . . . . .    21
       Section 2.17.  Funding Losses  . . . . . . . . . . .    21
       Section 2.18.  Reimbursable Taxes; Capital Adequacy     22

  ARTICLE II-A -- Letters of Credit . . . . . . . . . . . .    23
       Section 2A.1.  Letters of Credit . . . . . . . . . .    23
       Section 2A.2.  Requesting Letters of Credit  . . . .    24
       Section 2A.3.  Reimbursement and Participations  . .    24
       Section 2A.4.  Letter of Credit Fees . . . . . . . .    26
       Section 2A.5.  No Duty to Inquire  . . . . . . . . .    26
       Section 2A.6.  LC Collateral . . . . . . . . . . . .    27

  ARTICLE III -- Conditions Precedent to Lending  . . . . .    28
       Section 3.1.  Documents to be Delivered  . . . . . .    28
       Section 3.2.  Additional Conditions Precedent  . . .    29

  ARTICLE IV -- Representations and Warranties  . . . . . .    30
       Section 4.1.  Borrower's, Parent's and DEOC's
            Representations and Warranties  . . . . . . . .    30
       Section 4.2.  Representation by Lenders  . . . . . .    33

  ARTICLE V -- Covenants of Borrower, Parent  . . . . . . .    34
       Section 5.1.  Affirmative Covenants  . . . . . . . .    34
       Section 5.2.  Negative Covenants . . . . . . . . . .    39
       Section 5.3.  Investing Subsidiary . . . . . . . . .    49

  ARTICLE VI -- Guaranties and Offset . . . . . . . . . . .    50
       Section 6.1.  Bank Accounts; Offset  . . . . . . . .    50
       Section 6.2.  Guaranties of Subsidiaries . . . . . .    51
       Section 6.3.  Guarantors' Right of Setoff  . . . . .    51

  ARTICLE VII -- Events of Default and Remedies . . . . . .    51
       Section 7.1.  Events of Default  . . . . . . . . . .    51
       Section 7.2.  Remedies . . . . . . . . . . . . . . .    54

  ARTICLE VIII -- Agent . . . . . . . . . . . . . . . . . .    54
       Section 8.1.  Appointment and Authority  . . . . . .    54
       Section 8.2.  Agent's Reliance, Etc. . . . . . . . .    55
       Section 8.3.  Lenders' Credit Decisions  . . . . . .    55
       Section 8.4.  Indemnification  . . . . . . . . . . .    56
       Section 8.5.  Rights as Lender . . . . . . . . . . .    56
       Section 8.6.  Sharing of Set-Offs and Other Payments    56
       Section 8.7.  Investments  . . . . . . . . . . . . .    57
       Section 8.8.  Benefit of Article VIII  . . . . . . .    57
       Section 8.9.  Resignation  . . . . . . . . . . . . .    57

  ARTICLE IX -- Miscellaneous . . . . . . . . . . . . . . .    58
       Section 9.1.  Waivers and Amendments;
            Acknowledgements  . . . . . . . . . . . . . . .    58
       Section 9.2.  Survival of Agreements; Cumulative
            Nature  . . . . . . . . . . . . . . . . . . . .    59
       Section 9.3.  Notices  . . . . . . . . . . . . . . .    60
       Section 9.4.  Joint and Several Liability; Parties
            in Interest; Purchases of Notes . . . . . . . .    60
       SECTION 9.5.  GOVERNING LAW; WAIVER OF JURY TRIAL;
            ETC.  . . . . . . . . . . . . . . . . . . . . .    60
       Section 9.6.  Limitation on Interest . . . . . . . .    61
       Section 9.7.  Optional Termination . . . . . . . . .    62
       Section 9.8.  Severability . . . . . . . . . . . . .    63
       Section 9.9.  Counterparts . . . . . . . . . . . . .    63

                   LIST OF SCHEDULES AND EXHIBITS

  Schedule 1 - Disclosure Schedule

  Exhibit A   -- Promissory Note
  Exhibit B   -- Request for Advances
  Exhibit C   -- Rate Election
  Exhibit D   -- Officer's Certificate Accompanying Financial Statements
  Exhibit E   -- Opinion of McAfee & Taft, A Professional Corporation
                 Counsel for Borrower, Parent, DEOC and Avon
  Exhibit F-1 -- Guaranty of Parent
  Exhibit F-2 -- Guaranty of DEOC
  Exhibit G   -- Notice of Final Agreement
  Exhibit H   -- Letter of Credit Application and Agreement


                           CREDIT AGREEMENT

       THIS CREDIT AGREEMENT is made as of the 30th day of
  August, 1996, by and among Devon Energy Corporation (Nevada),
  a Nevada corporation, as Borrower ("Borrower"), Devon Energy
  Corporation, an Oklahoma corporation ("Parent"), and Devon
  Energy Operating Corporation, an Oklahoma corporation
  ("DEOC"), as Guarantors, NationsBank of Texas, N.A., a
  national banking association, as Agent ("Agent"), and the
  financial institutions named below, as Lenders ("Lenders"). 
  In consideration of the mutual covenants and agreements
  contained herein the parties hereto agree as follows:

              ARTICLE I -- Definitions and References

       Section 1.1.  Defined Terms.  As used in this Agreement,
  each of the following terms has the meaning given it in this
  Section 1.1 or in the sections and subsections referred to
  below:

       "Adjusted Eurodollar Rate" means, with respect to each
  particular Eurodollar Portion of a Loan and the associated
  Eurodollar Rate and Reserve Percentage, the rate per annum
  calculated by Agent (rounded upwards, if necessary, to the
  next higher 0.01%) determined on a daily basis pursuant to the
  following formula:

       Adjusted Eurodollar Rate =

  Eurodollar Rate             + Euro Margin
  100.0% - Reserve Percentage

  Such Adjusted Eurodollar Rate shall change as the Euro Margin
  and the associated Reserve Percentage change.

       "Advance" means an advance under Section 2.1 or 2.7(a).

       "Affiliate" means, as to any Person, each other Person
  that directly or indirectly (through one or more
  intermediaries or otherwise) controls, is controlled by, or is
  under common control with, such Person.

       "Agent" means NationsBank, as Agent hereunder and as
  issuer of Letters of Credit hereunder, and its successors in
  such capacity.

       "Agreement" means this Credit Agreement.

       "Approved Additional Debt" means unsecured Debt of
  Borrower or Parent for money borrowed from banks, provided
  that Majority Lenders have given prior approval at the time in
  question to the terms of each such borrowing.  For the
  purposes of this paragraph, Lenders hereby consent to Borrower
  and Parent entering into the letter agreement dated August __,
  1996 between Borrower or Parent and Bank of Oklahoma, N.A and
  to any replacement letter among the same parties on
  substantially the same terms, provided that no more than
  $10,000,000 of principalindebtedness may be outstanding at any
  time under such original letter agreement or any such replacement letter
  agreement.

       "Authorized Officer" means, with respect to any act to be
  performed or duty to be discharged by or on behalf of any
  Person who is not an individual, any officer, agent or
  representative thereof who is at the time in question
  authorized to perform such act or discharge such duty on
  behalf of such Person.

       "Available Borrowing Base" means, at the particular time
  in question, the remainder of (a) the Borrowing Base, minus
  (b) the Borrowing Base Reduction.

       "Avon" means Avon Energy Corporation, a Delaware
  corporation.

       "Base Rate" means the per annum rate of interest equal to
  Agent's Prime Rate.  As used in this paragraph, Agent's "Prime
  Rate" means the rate of interest established by Agent from
  time to time as its "prime rate".  Such rate is set by Agent
  as a general reference rate of interest, taking into account
  such factors as it may deem appropriate, it being understood
  that many of Agent's commercial or other loans are priced in
  relation to such rate, that it is not necessarily the lowest
  or the best rate actually charged to any customer, that it may
  not correspond with further increases or decreases in interest
  rates charged by other lenders or market rates in general and
  that Agent may make various commercial or other loans at rates
  of interest having no relationship to such rate.  If Agent's
  Prime Rate changes after the date hereof the Base Rate shall
  be automatically increased or decreased, as the case may be,
  without notice to Borrower from time to time as of the
  effective time of each change in Agent's Prime Rate.

       "Base Rate Portion" means that portion of the unpaid
  principal balance of any Loan which is not made up of Fixed
  Rate Portions.

       "Borrower" means Devon Energy Corporation (Nevada), a
  Nevada corporation.

       "Borrowing Base" means, at the particular time in
  question, either the amount provided for in Section 2.12 or
  the amount determined by Agent in accordance with the
  provisions of Section 2.13.  At no time shall the Borrowing
  Base exceed the sum of the Maximum Loan Amounts.

       "Borrowing Base Deficiency" has the meaning given it in
  Section 2.10.

       "Borrowing Base Reduction" means, at the particular time
  in question, either the amount provided for in Section 2.12 or
  the amount designated by Borrower in accordance with the
  provisions of Section 2.14.

       "Business Day" means a day on which commercial banks are
  open for business with the public in Dallas, Texas.  Any
  Business Day in any way relating to Eurodollar Portions (such
  as the day on which a Eurodollar Interest Period begins or
  ends) must also be a day on which, in the judgment of Agent, significant
  transactions in dollars are carried out in the interbank
  eurocurrency market.

       "Commitment Period" means the period from and including
  the date on which the Notes are delivered and accepted as
  contemplated in Section 2.4 until and including August 31,
  2002 (or any date on which the Notes otherwise become due and
  payable in full as provided in the Loan Documents).

       "Consolidated" refers to the consolidation of any Person,
  in accordance with GAAP, with its properly consolidated
  subsidiaries.  References herein to a Person's Consolidated
  financial statements, financial position, financial condition,
  liabilities, etc. refer to the consolidated financial
  statements, financial position, financial condition,
  liabilities, etc. of such Person and its properly consolidated
  subsidiaries.

       "Debt" means, as to any Person, all indebtedness,
  liabilities and obligations of such Person, whether matured or
  unmatured, liquidated or unliquidated, primary or secondary,
  direct or indirect, absolute, fixed or contingent, and whether
  or not required to be considered pursuant to GAAP.

       "Default" means any Event of Default and any default,
  event or condition which would, with the giving of any
  requisite notices and the passage of any requisite periods of
  time, constitute an Event of Default.

       "DEOC" means Devon Energy Operating Corporation, an
  Oklahoma corporation.

       "Determination Date" has the meaning given it in Section
  2.13.

       "Devon Trust" means Devon Financing Trust, a statutory
  business trust formed under the laws of the State of Delaware.

       "Devon Trust Securities" means those certain Trust
  Convertible Preferred Securities, issued by Devon Trust in an
  amount of 2,990,000.

       "Disclosure Schedule" means (a) Schedule 1 hereto and (b)
  any documents listed on such schedule and expressly
  incorporated therein by reference, so long as Borrower has
  heretofore delivered true and correct copies of such documents
  to Agent and each Lender.  Insofar as any representations and
  warranties made herein are incorporated by reference or
  otherwise remade in Loan Documents delivered as of a date
  after the date hereof, the term "Disclosure Schedule" shall in
  such representations and warranties be deemed to refer as well
  to (i) all documents which Borrower has at the time in
  question delivered to Agent and each Lender under Sections
  5.1(b), (c), or (d), and (ii) all other documents which
  Borrower has at the time in question delivered to Agent and
  each Lender and which expressly refer to the Disclosure
  Schedule and state that they are given to supplement or amend
  it.

       "Drawing Amount" means, with respect to each Letter of
  Credit at the time in question, the maximum amount which Agent
  would be called upon to advance under such Letter of Credit if
  such Letter of Credit were then drawn
  upon in full.  If any Letter of Credit provides that the
  amount which may be drawn upon thereunder shall increase or
  decrease according to a schedule set forth therein, the
  Drawing Amount for such Letter of Credit shall increase or
  decrease in accordance with such schedule.

       "Engineering Report" means any of the Initial Engineering
  Report, the final engineering reports delivered under Section
  5.1(b)(iv), and the supplemental engineering reports delivered
  under Section 5.1(b)(v).

       "ERISA" means the Employee Retirement Income Security Act
  of 1974, as amended, together with all rules and regulations
  promulgated with respect thereto.

       "ERISA Plan" means any pension benefit plan subject to
  Title IV of ERISA maintained by any Related Person or any
  Affiliate thereof to which any Related Person has a fixed or
  contingent liability.

       "Euro Margin"  means:

       (a)  one-half percent (0.5%) per annum whenever the Loan
            Balance is equal to or greater than 75% of the
            Borrowing Base in effect at the time in question; or

       (b)  one-quarter percent (0.25%) per annum whenever the
            Loan Balance is less than 75% of the Borrowing Base
            in effect at the time in question.

       "Eurodollar Interest Period" means, with respect to each
  particular Eurodollar Portion of a Loan, a period of 1, 2, or
  3 months, as specified in the Rate Election applicable
  thereto, beginning on and including the date specified in such
  Rate Election (which must be a Business Day), and ending on
  but not including the same day of the month as the day on
  which it began (e.g., a period beginning on the third day of
  one month shall end on but not include the third day of
  another month), provided that each Eurodollar Interest Period
  which would otherwise end on a day which is not a Business Day
  shall end on the next succeeding Business Day (unless such
  next succeeding Business Day is the first Business Day of a
  calendar month, in which case such Eurodollar Interest Period
  shall end on the immediately preceding Business Day).  No
  Eurodollar Interest Period may be elected which would extend
  past the date on which the associated Note is due and payable
  in full.

       "Eurodollar Portion" means any portion of the unpaid
  principal balance of a Loan which Borrower designates as such
  in a Rate Election.

       "Eurodollar Rate" means, with respect to each particular
  Eurodollar Portion within a Tranche and with respect to the
  related Interest Period, the rate of interest per annum
  determined by Agent in accordance with its customary general
  practices to be representative of the rates at which deposits
  of dollars are offered to Agent at approximately 9:00 a.m.
  Dallas, Texas time two Business Days prior to the first day of
  such Interest Period (by prime banks in the interbank
  eurocurrency market which have been selected by Agent in accordance
  with its customary general practices) for delivery on the first day
  of such Interest Period in an amount equal or comparable to the amount
  of Agent's Eurodollar Portion within such Tranche and for a
  period of time equal or comparable to the length of such
  Interest Period.  The Eurodollar Rate determined by Agent with
  respect to a particular Eurodollar Portion shall be fixed at
  such rate for the duration of the associated Interest Period. 
  If Agent is unable so to determine the Eurodollar Rate for any
  Eurodollar Portion, Borrower shall be deemed not to have
  elected such Eurodollar Portion.

       "Evaluating Lenders"  means Agent and Lenders whose
  aggregate Percentage Shares equal or exceed ninety percent
  (90%).

       "Event of Default" has the meaning given it in Section
  7.1.

       "Fiscal Quarter" means a three-month period ending on
  March 31, June 30, September 30 or December 31 of any year.

       "Fiscal Year" means a twelve-month period ending on
  December 31 of any year.

       "Fixed Rate" means, with respect to any Fixed Rate
  Portion, the related Adjusted Eurodollar Rate or Offered Rate.

       "Fixed Rate Portion" means any Eurodollar Portion or
  Offered Rate Portion.

       "GAAP" means those generally accepted accounting
  principles and practices which are recognized as such by the
  Financial Accounting Standards Board (or any generally
  recognized successor) and which, in the case of Parent and its
  Consolidated subsidiaries, (i) are applied for all periods
  after the date hereof in a manner consistent with the manner
  in which such principles and practices were applied to the
  audited Initial Financial Statements of Parent, and (ii) are
  consistently applied for all periods after the date hereof so
  as to properly reflect the financial condition, and the
  results of operations and cash flows, of Parent and, on a
  Consolidated basis, of Parent and its Consolidated
  subsidiaries.  If any change in any accounting principle or
  practice is required by the Financial Accounting Standards
  Board (or any such successor) in order for such principle or
  practice to continue as a generally accepted accounting
  principle or practice, all reports, financial statements and
  calculations required hereunder may be prepared in accordance
  with such change only after notice of such change is given to
  Agent and after Borrower and Majority Lenders agree to such
  change and to any appropriate corresponding changes to the
  provisions hereof.

       "Grace Period" has the meaning given it in Section 7.1.

       "Guarantor" means any Person who has guaranteed some or
  all of the Obligations and who has been recognized in writing
  by Agent as a Guarantor.  Parent, DEOC and Avon are each
  hereby recognized as a Guarantor.

       "Guaranties" means the Guaranties of even date herewith,
  given by each of Parent and DEOC to Agent, substantially in
  the forms of Exhibits F-1 and F-2 hereto, and the Guaranty of
  Avon of even date herewith.

       "Initial Engineering Report" means: the engineering
  report concerning the oil and gas properties of Borrower
  (including certain indirect interests) dated January 31, 1996,
  prepared by LaRoche & Associates as of December 31, 1995, a
  true and correct copy of which report has been furnished to
  Agent and each Lender.

       "Initial Financial Statements" means (a) the audited
  annual Consolidated financial statements of Parent dated as of
  December 31, 1995, and (b) the unaudited consolidating and
  Consolidated financial statements of Parent dated as of June
  30, 1996, copies of all of which financial statements have
  heretofore been delivered to Agent and each Lender.

       "Interest Period" means, with respect to any Fixed Rate
  Portion, the related Eurodollar Interest Period or Offered
  Rate Interest Period.

       "Investing Subsidiary" means a single wholly owned
  Subsidiary of Borrower, organized under the laws of one of the
  United States, which did not conduct any business, or receive
  any assets from any Related Person (other than cash not
  exceeding $10,000) prior to December 10, 1990.

       "Late Payment Rate" means at the time in question four
  percent (4.0%) per annum plus the Base Rate then in effect;
  provided that, with respect to any Fixed Rate Portion of a
  Loan with an Interest Period extending beyond the date such
  Fixed Rate Portion becomes due and payable, "Late Payment
  Rate" shall mean four percent (4.0%) per annum plus the
  related Fixed Rate.

       "LC Application" means any application for a letter of
  credit hereafter made by Borrower to Agent.

       "LC Collateral" has the meaning given it in Section
  2A.6(a).

       "LC Obligations" means at the time in question, the sum
  of the Matured LC Obligations plus the Maximum Drawing Amount. 
  A "Lender's LC Obligations" means at the time in question, the
  sum of (i) the portion of the Maximum Drawing Amount for which
  such Lender is liable to purchase participations under Section
  2A.3(c), plus (ii) the Matured LC Obligations which have been
  funded by such Lender under such section.

       "Lenders" means NationsBank, Bank One, Texas, N.A., Bank
  of Montreal, First Union National Bank of North Carolina and
  their respective successors and assigns.  "Lender" means any
  of the Lenders.

       "Letter of Credit Rate" means one-half percent (0.5%) per
  annum.

       "Letters of Credit" means any letter of credit issued
  hereunder by Agent at the application of Borrower.Section 1.1

       "Lien" means, with respect to any property or assets, any
  right or interest therein of a creditor to secure Debt owed to
  such creditor or any other arrangement with such creditor
  which provides for the payment of such Debt out of such
  property or assets or which allows him to have such Debt
  satisfied out of such property or assets prior to the general
  creditors of any owner thereof, including any lien, mortgage,
  security interest, pledge, deposit, production payment, rights
  of a vendor under any title retention or conditional sale
  agreement or lease substantially equivalent thereto, tax lien,
  mechanic's or materialman's lien, or any other charge or
  encumbrance for security purposes, whether arising by law or
  agreement or otherwise, but excluding any right of offset
  which arises in the ordinary course of business.

       "Loan" has the meaning given it in Section 2.1.

       "Loan Balance" means, at the time in question, the sum of
  the outstanding principal balances of the Loans at such time
  plus the LC Obligations at such time.

       "Loan Documents" means this Agreement, the Notes, the LC
  Applications, the Letters of Credit, the Guaranties, and all
  other agreements, certificates, legal opinions and other
  documents, instruments and writings heretofore or hereafter
  delivered in connection herewith or therewith (exclusive of
  commitment letters, term sheets, and similar documents used in
  the negotiation hereof, except to the extent the same contain
  information about Borrower, Parent, DEOC, or their Affiliates,
  properties, businesses or prospects).

       "Majority Lenders" means Agent and Lenders whose
  aggregate Percentage Shares equal or exceed ninety percent
  (90%), provided that whenever the Loan Balance is less than
  seventy-five percent (75%) of the Borrowing Base in effect at
  the time in question and Lenders have been requested to give a
  waiver (as opposed to a permanent amendment) of one or more
  provisions of Sections 5.2(d), (f), or (g), such waiver shall
  be deemed to have been given by "Majority Lenders" when given
  by Agent and Lenders whose aggregate Percentage Shares equal
  or exceed sixty-six percent (66%).

       "Matured LC Obligations" means all amounts paid by Agent
  on drafts or demands for payment drawn or made under or
  purported to be under any Letter of Credit (or under or in
  connection with any LC Application) which have not been repaid
  to Agent by or on behalf of Borrower (with the proceeds of an
  Advance or otherwise, but excluding payments made by Lenders
  on account of their participation interests hereunder).

       "Maximum Drawing Amount" means at the time in question
  the sum of all Drawing Amounts at such time for all Letters of
  Credit then outstanding.

       "Maximum Loan Amount" means, with respect to each Lender,
  the amount set forth opposite its name on the signature pages
  hereto, and "Maximum Loan Amounts" means the sum of all such
  amounts; provided,

            (a)  on August 31, 1999, the Maximum Loan Amounts
       shall be automatically ratably reduced to the Available
       Borrowing Base which is in effect on such date; and

            (b)  on the last day of each November, February, May
       and August, commencing November 30, 1999, the Maximum
       Loan Amounts shall be further automatically ratably
       reduced by the Quarterly Reduction Amount; and

            (c)  on August 31, 2002, the Maximum Loan Amounts
       shall be automatically reduced to zero.

  As used herein, "Quarterly Reduction Amount" shall mean an
  amount equal to eight and one-third percent (8.33%) of the
  Available Borrowing Base as of August 31, 1999.

       "NationsBank" means NationsBank of Texas, N.A.

       "Note" has the meaning given it in Section 2.1.

       "Obligations" means all Debt from time to time owing by
  any of the Related Persons to Agent or any Lender under or
  pursuant to any of the Loan Documents, including all LC
  Obligations.  "Obligation" means any part of the Obligations.

       "Offered Rate" has the meaning given it in Section 2.7.

       "Offered Rate Portion" has the meaning given it in
  Section 2.7.

       "Old Agreement" has the meaning given it in Section 2.4.

       "Parent" means Devon Energy Corporation, an Oklahoma
  corporation.

       "Parent's Cumulative Consolidated Net Income" means, on a
  cumulative basis, the Consolidated net income (or net loss) of
  Parent, determined on a cumulative basis for the period
  beginning May 1, 1996 and ending on the last day of the most
  recent Fiscal Quarter as of the time in question, calculated
  in accordance with GAAP.

       "Percentage Share" means, with respect to any Lender (a)
  when used in Sections 2.1, 2.3, 2.8, Article II-A, or in any
  Request for Advances (other than a Request for Advances
  constituting an Offered Rate Portion) or when no Default
  exists or when the Loan Balance equals zero, the percentage
  obtained by dividing (i) such Lender's Maximum Loan Amount, by
  (ii) $300,000,000, and (b) when used when a Default exists and
  the Loan Balance at such time is greater than zero, the
  percentage obtained by dividing (i) the sum of (A) the unpaid
  principal balance of such Lender's Loans at the time in
  question plus (B) such Lender's LC Obligations at such time,
  by (ii) the Loan Balance at such time.

       "Person" means an individual, corporation, partnership,
  association, joint stock company, trust or trustee thereof,
  estate or executor thereof, unincorporated organization
  or joint venture, court or governmental unit or any agency or
  subdivision thereof, or any other legally recognizable entity.

       "Portfolio Company" means any corporation, limited
  partnership, or partnership (other than Parent or any of its
  present Affiliates) organized under the laws of one of the
  United States, which is engaged primarily in the oil and gas
  business.

       "Prohibited Lien" means any Lien not expressly allowed
  under Section 5.2(b).

       "Proved Properties" means oil and gas processing plants,
  oil and gas pipelines and gathering systems, and those
  portions of oil and gas properties to which are properly
  attributable proved developed producing reserves, proved
  developed non-producing reserves, or proved undeveloped
  reserves.

       "Rate Election" has the meaning given it in Section 2.6.

       "Regulation D" means Regulation D of the Board of
  Governors of the Federal Reserve System as from time to time
  in effect.

       "Related Person" means any of Borrower, Parent, DEOC,
  Guarantors, and the Subsidiaries of Borrower or of Parent,
  including Avon; provided, the following Subsidiaries of Parent
  shall not be deemed to be Related Persons:

       (a)  BN Co. A Limited Partnership, a New Mexico limited
  partnership;
       (b)  BN Coal, L.L.C., a New Mexico limited liability
  company;
       (c)  BN Non-Coal, L.L.C., a New Mexico limited liability
  company; and
       (d)  Devon-Blanco Company, an Oklahoma general
  partnership.

       "Request for Advances" means a written or telephonic
  request, or a written confirmation, made by Borrower which
  meets the requirements of Section 2.2.

       "Reserve Percentage" means, in relation to each
  particular Eurodollar Portion in a Tranche, the maximum
  reserve requirement, as determined by Agent (including without
  limitation any basic, supplemental, marginal, emergency or
  similar reserves), expressed as a percentage and rounded to
  the next higher 0.01%, which would apply to Agent under
  Regulation D on the first day of the associated Interest
  Period with respect to "Eurocurrency liabilities" (as such
  term is defined in Regulation D) equal in amount to Agent's
  Eurodollar Portion in such Tranche, were Agent to have any
  such "Eurocurrency liabilities".

       "Restricted Debt" means all Debt of any Person:

       (a) for borrowed money,

       (b) constituting an obligation to pay the deferred
  purchase price of property,

       (c) evidenced by bonds, debentures, notes or similar
  instruments,

       (d) upon which interest or finance charges are
  customarily paid,

       (e) arising under conditional sales or other title
  retention agreements or under leases of any kind (including
  operating leases and leases serving as a source of financing
  or otherwise capitalized in accordance with GAAP but excluding
  customary oil, gas or mineral leases),

       (f) under direct or indirect guaranties of Debt of any
  Person or constituting obligations to purchase or acquire or
  to otherwise protect or insure a creditor against loss in
  respect of Debt of any Person (such as obligations under
  working capital maintenance agreements, agreements to
  keep-well, or agreements to purchase Debt, assets, goods,
  securities or services, but excluding endorsements in the
  ordinary course of business of negotiable instruments in the
  course of collection),

       (g) with respect to letters of credit or applications or
  reimbursement agreements therefor, or

       (h) with respect to payments received in consideration of
  oil, gas, or other minerals yet to be produced at the time of
  payment (including without limitation obligations under
  "take-or-pay" contracts to deliver gas in return for payments
  already received and the undischarged balance of any
  production payment created by such Person or for the creation
  of which such Person directly or indirectly received payment)
  or with respect to other obligations to deliver goods or
  services in consideration of advance payments therefor;
  provided, however, that the term "Restricted Debt" shall not
  include Debt which is thirty days or less past due that was
  incurred on ordinary trade terms and is owed by the Person
  incurring the same to vendors, suppliers, or other Persons
  providing goods and services for use by such Person in the
  ordinary course of its business.  Any Restricted Debt owed by
  a partnership shall be deemed Restricted Debt of any partner
  in such partnership to the extent such partner has any
  liability of any kind therefor.

       "Restricted Person" means any Related Person which is not
  an Unrestricted Person.

       "SEC Case" has the meaning given it in Section
  5.1(b)(iv).

       "Subordinated Debt" has the meaning given it in Section
  5.2(a)(v).

       "Subordinated Parent Debentures" means those certain
  Convertible Junior Subordinated Debentures issued by Parent to
  Devon Trust pursuant to the Subordinated Parent Indenture and
  subordinated to the Obligations, in the aggregate principal
  amount of approximately $154,500,000.

       "Subordinated Parent Guarantee" means that certain
  Guarantee dated July 1, 1996, by Parent in favor of the
  holders of the Devon Trust Securities pursuant to the
  Subordinated Parent Indenture and subordinated to the
  Obligations, guaranteeing certain payments to be made by Devon
  Trust pursuant to the Devon Trust Securities.

       "Subordinated Parent Indenture" means that certain Trust
  Indenture dated July 1, 1996, between Parent and The Bank of
  New York, as indenture trustee.

       "Subordination Agreement" means that certain
  Subordination Agreement of even date herewith among Borrower,
  Parent, DEOC, Avon, other Guarantors from time to time a party
  thereto, Agent and Lenders.

       "Subsidiary" means, with respect to any Person, any
  corporation, association, partnership, joint venture, or other
  business or corporate entity, enterprise or organization which
  is directly or indirectly (through one or more intermediaries)
  controlled by or owned fifty percent or more by such Person,
  provided that associations, joint ventures or other
  relationships (a) which are established pursuant to a standard
  form operating agreement or similar agreement or which are
  partnerships for purposes of federal income taxation only, (b)
  which are not corporations or partnerships (or subject to the
  Uniform Partnership Act) under applicable state law, and (c)
  whose businesses are limited to the exploration, development
  and operation of oil, gas or mineral properties and interests
  owned directly by the parties in such associations, joint
  ventures or relationships, shall not be deemed to be
  "Subsidiaries" of such Person.

       "Termination Event" means (a) the occurrence with respect
  to any ERISA Plan of (i) a reportable event described in
  Sections 4043(b)(5) or (6) of ERISA or (ii) any other
  reportable event described in Section 4043(b) of ERISA other
  than a reportable event not subject to the provision for
  30-day notice to the Pension Benefit Guaranty Corporation
  pursuant to a waiver by such corporation under Section 4043(a)
  of ERISA, or (b) the withdrawal of any Related Person or of
  any Affiliate of any Related Person from an ERISA Plan during
  a plan year in which it was a "substantial employer" as
  defined in Section 4001(a)(2) of ERISA, or (c) the filing of a
  notice of intent to terminate any ERISA Plan or the treatment
  of any ERISA Plan amendment as a termination under Section
  4041 of ERISA, or (d) the institution of proceedings to
  terminate any ERISA Plan by the Pension Benefit Guaranty
  Corporation under Section 4042 of ERISA, or (e) any other
  event or condition which might constitute grounds under
  Section 4042 of ERISA for the termination of, or the
  appointment of a trustee to administer, any ERISA Plan.

       "Tranche" has the meaning given it in Section 2.6.

       "Unrestricted Person" means any corporation or limited
  partnership in which Parent does not presently own an interest
  (directly or indirectly) which hereafter becomes a Subsidiary
  of Parent and which, within 90 days thereafter, is designated
  as an Unrestricted Person by Parent to Agent, provided that
  Parent may not designate as an Unrestricted Person any
  Subsidiary in which it has invested more than $1,000,000
  (directly or indirectly) by any means other than newly issued
  stock or treasury stock of Parent, which may be invested in
  Unrestricted Persons without limit.

       Section 1.2.  Exhibits and Schedules; Additional
  Definitions.  All Exhibits and Schedules attached to this
  Agreement are a part hereof for all purposes.

       Section 1.3.  Amendment of Defined Instruments.  Unless
  the context otherwise requires or unless otherwise provided
  herein the terms defined in this Agreement which refer to a
  particular agreement, instrument or document also refer to and
  include all renewals, extensions, modifications, amendments
  and restatements of such agreement, instrument or document,
  provided that nothing contained in this section shall be
  construed to authorize any such renewal, extension,
  modification, amendment or restatement.

       Section 1.4.  References and Titles.  All references in
  this Agreement to Exhibits, Schedules, articles, sections,
  subsections and other subdivisions refer to the Exhibits,
  Schedules, articles, sections, subsections and other
  subdivisions of this Agreement unless expressly provided
  otherwise.  Titles appearing at the beginning of any
  subdivisions are for convenience only and do not constitute
  any part of such subdivisions and shall be disregarded in
  construing the language contained in such subdivisions.  The
  words "this Agreement", "this instrument", "herein", "hereof",
  "hereby", "hereunder" and words of similar import refer to
  this Agreement 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 sections or subsections 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 1.5.  Calculations and Determinations.  All
  calculations under the Loan Documents of interest chargeable
  with respect to Fixed Rate Portions and of fees shall be on
  the basis of actual days elapsed (including the first day but
  excluding the last) and a year of 360 days.  All other
  calculations of interest made under the Loan Documents shall
  be made on the basis of actual days elapsed (including the
  first day but excluding the last) and a year of 365 or 366
  days, as appropriate.  Each determination by Agent or a Lender
  of amounts to be paid under Sections 2.15 through 2.18 or any
  other matters which are to be determined hereunder by Agent or
  any Lender (such as any Adjusted Eurodollar Rate, Eurodollar
  Rate, Business Day, Interest Period, or Reserve Percentage)
  shall, in the absence of manifest error, be conclusive and
  binding.  Unless otherwise expressly provided herein or unless
  Majority Lenders otherwise consent all financial statements
  and financial reports furnished to Agent or any Lender
  hereunder shall be prepared and all financial computations and
  financial determinations pursuant hereto shall be made in
  accordance with GAAP.

                      ARTICLE II -- The Loans

       Section 2.1.  Loans.  Subject to the terms and conditions
  hereof, each Lender agrees to make Advances to Borrower from
  time to time during the Commitment Period so long as (i) the
  aggregate outstanding amount of such Lender's Advances under
  this Section 2.1, plus (ii) such Lender's LC Obligations, does
  not exceed such Lender's Percentage Share of the Available
  Borrowing Base in effect, all determined as of the date on which
  the requested Advances under this Section 2.1 are to be made.  
  The aggregate amount of such Advances under this Section 2.1 requested
  of all Lenders in any Request for Advances under this Section 2.1
  must be an integral multiple of $100,000 which equals or
  exceeds $200,000 or must equal the unadvanced portion of the
  Available Borrowing Base.  The obligation of Borrower to repay
  to each Lender the aggregate amount of all Advances (whether
  under this Section 2.1 or Section 2.7(a)) made by such Lender
  (herein called such Lender's "Loan"), together with interest
  accruing in connection therewith, shall be evidenced by a
  single promissory note (herein called such Lender's "Note")
  made by Borrower payable to the order of such Lender in the
  form of Exhibit A with appropriate insertions.  The amount of
  principal owing on any Lender's Note at any given time shall
  be the aggregate amount of all Advances (whether under this
  Section 2.1 or Section 2.7(a)) theretofore made by such Lender
  minus all payments of principal theretofore received by such
  Lender on such Note.  Interest on each Note shall accrue and
  be due and payable as provided herein and therein.  Subject to
  the terms and conditions hereof, Borrower may borrow, repay,
  and reborrow under the Notes.

       Section 2.2.  Requests for Advances.  Prior to 11:00 a.m.
  Dallas time, on the date requested by Borrower for the making
  of any Advances, Borrower must give to Agent written notice,
  or telephonic notice promptly confirmed in writing, of such
  request, after which Agent shall give each Lender prompt
  notice thereof.  Each such written request or confirmation
  must be made in the form and substance of the "Request for
  Advances" attached hereto as Exhibit B, duly completed and
  signed by an Authorized Officer of Borrower, Parent and DEOC. 
  Each such telephonic request shall be deemed a representation,
  warranty, acknowledgement and agreement by Borrower, Parent
  and DEOC as to the matters which are required to be set out in
  such written confirmation.  If all conditions precedent to
  such Advances have been met, each Lender will promptly remit
  to Agent in favor of Borrower the amount of such Lender's
  Advance in immediately available funds, and upon receipt of
  such funds, unless to its actual knowledge any conditions
  precedent to such Advances have neither been met nor waived by
  Lenders as provided herein, Agent shall promptly make the
  Advances available to Borrower in immediately available funds
  at Agent's office in Dallas, Texas.  Each Request for Advances
  shall be irrevocable and binding on Borrower.  Unless Agent
  shall have received prompt notice from a Lender that such
  Lender will not make available to Agent such Lender's Advance,
  Agent may in its discretion assume that such Lender has made
  such Advance available to Agent in accordance with this
  section and Agent may if it chooses, in reliance upon such
  assumption, make such Advance available to Borrower.  If and
  to the extent such Lender shall not so make its Advance
  available to Agent, such Lender and Borrower severally agree
  to pay or repay to Agent within three days after demand the
  amount of such Advance together with interest thereon, for
  each day from the date such amount is made available to
  Borrower until the date such amount is paid or repaid to
  Agent, at the interest rate applicable at the time to the
  other Advances made on such date.  The failure of any Lender
  to make any Advance to be made by it hereunder shall not
  relieve any other Lender of its obligation hereunder, if any,
  to make its Advance, but no Lender shall be responsible for
  the failure of any other Lender to make any Advance to be made
  by such other Lender.

       Section 2.3.  Proportionate and Disproportionate Loans.

       (a)  So long as no Offered Rate Portions or
  disproportionate Advances made pursuant to Section 2.3(b)
  below are outstanding, all Advances (other than Advances
  constituting Offered Rate Portions under Section 2.7(a))
  requested by Borrower shall be made pro rata by each Lender in
  proportion to the Lenders' respective Percentage Shares.

       (b)  If any Offered Rate Portions or disproportionate
  Advances previously made pursuant to this Section 2.3(b) are
  outstanding, all Advances (other than Advances constituting
  Offered Rate Portions under Section 2.7(a)) requested by
  Borrower shall be made disproportionately by each Lender
  according to such Lender's Adjusted Advance Amount. 
  Furthermore, any such Advance consisting of Fixed Rate
  Portions shall be for an Interest Period ending on the latest
  termination date of all outstanding Offered Rate Portions at
  such time, such date to be designated a "Reconciliation Date",
  provided, however, that in the event a Reconciliation Date has
  been previously designated pursuant to this Section 2.3(b),
  such Interest Period shall end on such previously designated
  Reconciliation Date.

  For purposes of this Section 2.3(b), the following terms shall
  be defined as follows:

            "Advance Amount" means, with respect to each Lender
       at the time in question, the remainder (if positive or
       negative) of:

            (i)  such Lender's Percentage Share times the Loan
                 Balance (including requested Advances) minus

           (ii)  the aggregate amount of such Lender's
  outstanding Loan.

            "Advancing Lender" means, with respect to any
       requested Advance (other than an Advance constituting an
       Offered Rate Portion under Section 2.7(a)), any Lender
       whose Advance Amount is greater than zero.

            "Non-Advancing Lender" means, with respect to any
       requested Advance (other than an Advance constituting an
       Offered Rate Portion under Section 2.7(a)), any Lender
       whose Advance Amount is less than or equal to zero.

            "Adjusted Advance Amount" means, with respect to
       each Lender at the time in question:

            (i)  if each Lender is an Advancing Lender, such
                 Lender's Advance Amount; or

           (ii)  if any Lender is a Non-Advancing Lender:

                 (A)  if such Lender is a Non-Advancing Lender,
  zero, andSection 2.3(b)

                 (B)  if such Lender is an Advancing Lender,

                      (I)  such Lender's Percentage Share
                           divided by the sum of all Advancing
                           Lenders' Percentage Shares times

                     (II)  the amount of the requested Advance.

       (c)  At the termination of any Offered Rate Interest
  Period, the related Offered Rate Portion of such Lender's Loan
  shall automatically terminate and become part of the Base Rate
  Portion of such Lender's Loan, provided that Borrower may (i)
  request Advances under Section 2.1 and/or Section 2.7(a), if
  all conditions to Advances have been met, or (ii) prepay such
  Lender's Loan in an amount equal to the terminating Offered
  Rate Portion, or (iii) take such other action allowed
  hereunder as may be necessary to cause the Loans to be held
  pro rata by Lenders in accordance with their respective
  Percentage Shares, after giving effect to any outstanding
  Offered Rate Portions.

       (d)  Notwithstanding anything in this section to the
  contrary, no Lender may make any Advance under any Note which
  would cause the aggregate outstanding principal balance of
  such Note to exceed the stated maximum principal balance of
  such Note, nor may any Lender make any Advance which would
  cause the sum of (A) the Loan Balance, plus (B) the aggregate
  outstanding principal balance of the Approved Additional Debt
  to exceed the sum of (C) the Available Borrowing Base then in
  effect, plus (D) $10,000,000.

       Section 2.4.  Cancellation of Old Agreement.  Borrower
  has heretofore been indebted to Lenders under a Credit
  Agreement dated as of October 7, 1994 (as heretofore amended,
  herein called the "Old Agreement") originally entered into by
  Borrower, Parent, DEOC, Agent and Lenders.  As of the date
  hereof, no "Loans" (as such term is defined in the Old
  Agreement) are outstanding under the Old Agreement.  Upon the
  execution and delivery of this Agreement by each of the
  parties hereto:

            (a)  Any letters of credit issued under the Old
       Agreement and outstanding as of the date hereof shall be
       deemed Letters of Credit issued hereunder as of the date
       hereof and shall be subject to the terms and conditions
       hereof, including without limitation Borrower's
       reimbursement obligations under Section 2A.3(a) and
       Lenders' participation obligations under Section 2A.3(c);
       and

            (b)  Borrower shall be deemed to have terminated the
       Old Agreement as provided in Section 9.7 thereof.

       Section 2.5.  Use of Proceeds.  Borrower shall use all
  funds from Advances (a) as provided in Sections 2.4, 5.2(f)
  and 5.3(b), (b) to refinance its Matured LC Obligations, (c)
  to finance the acquisition of oil and gas properties, (d) to
  finance working capital and capital expenditures that are
  standard in the oil and gas industry, and (e) for other
  general corporate purposes.  Borrower shall use all Letters of
  Credit for its general corporate purposes.  In no event,
  except as provided in Section 5.3 hereof, shall the
  funds from any Advance or any Letter of Credit be used
  directly or indirectly for the purpose, whether immediate,
  incidental or ultimate, of purchasing, acquiring or carrying
  any "margin stock" or any "margin securities" (as such terms
  are defined respectively in Regulation U and Regulation G
  promulgated by the Board of Governors of the Federal Reserve
  System) or to extend credit to others directly or indirectly
  for the purpose of purchasing or carrying any such margin
  stock or margin securities.  Borrower represents and warrants
  to Lenders that Borrower is not engaged principally, or as one
  of its important activities, in the business of extending
  credit to others for the purpose of purchasing or carrying
  such margin stock or margin securities.

       Section 2.6.  Rate Elections.  Borrower may from time to
  time designate all or any portions of the Loans (including any
  yet to be made Advances which are to be made prior to or at
  the beginning of the designated Interest Period but excluding
  any portions of the Loans which are required to be repaid
  prior to the end of the designated Interest Period) as a
  "Tranche", which term refers to a set of Eurodollar Portions
  of the same type with identical Interest Periods.  The amounts
  of Lenders' Eurodollar Portions within a Tranche shall be in
  proportion to their respective Percentage Shares, subject to
  the provisions of Section 2.3.  Borrower may make no such
  election during the continuance of a Default, and Borrower may
  make such an election with respect to already existing Fixed
  Rate Portions only if such election will take effect at or
  after the termination of the Interest Period applicable to
  such already existing Fixed Rate Portions.  Each election by
  Borrower of a Tranche shall:

            (a)  Be made by written notice to Agent or by
       telephonic notice to Agent promptly confirmed in writing,
       in the form and substance of the "Rate Election" attached
       hereto as Exhibit C, duly completed and signed by an
       Authorized Officer of Borrower.

            (b)  Specify the aggregate amount of the Loans which
       Borrower desires to designate as such Tranche, the first
       day of the Interest Period which is to apply thereto, and
       the length of such Interest Period; and

            (c)  Be received by Agent not later than 9:00 a.m.,
       Dallas time, on the second Business Day preceding the
       first day of the specified Interest Period.

  Promptly after receiving any such election (herein called a
  "Rate Election") which meets the requirements of this section,
  Agent shall notify each Lender of the contents thereof.  Each
  Rate Election shall be irrevocable.  Borrower may make no Rate
  Election which does not specify an Interest Period complying
  with the definition of "Eurodollar Interest Period" in Section
  1.1, and the aggregate amount of each Tranche elected in any
  Rate Election must be $1,000,000 or a higher integral multiple
  of $500,000.  Upon the termination of each Interest Period the
  portion of each Loan theretofore constituting the related
  Fixed Rate Portion shall, unless the subject of a new Rate
  Election then taking effect, automatically become a part of
  the Base Rate Portion of such Loan and become subject to all
  provisions of the Loan Documents governing such Base Rate
  Portion.  Borrower shall have no more than six Tranches or
  Offered Rate Portions in effect at any time.

       Section 2.7.  Advances Constituting Offered Rate
  Portions.

       (a)  Borrower may from time to time request each Lender
  to quote an interest rate for a specified interest period
  (identifying the days on which such interest period is to
  begin and end) and a specified portion of the unpaid principal
  balance of (or amounts available for borrowing under) such
  Lender's Note; provided that no such request may be made with
  respect to an already existing Fixed Rate Portion unless it is
  to take effect at or after the termination of the Interest
  Period applicable to such already existing Fixed Rate portion. 
  Any amounts so requested by Borrower must be $1,000,000 or a
  multiple thereof.  Each such request must be made to all
  Lenders and may be made no later than 9:00 a.m. (Dallas time)
  on the day such interest period is to begin.  No Lender has
  any obligation to make any such quotation and may do so or
  decline to do so (and may make quotations for interest periods
  and amounts different from those specified by Borrower) in its
  sole and absolute discretion.  Any Lender which makes such a
  quotation, however, must do so by telecopy or telex (or by
  telephone notice promptly confirmed by telecopy or telex) to
  Borrower no later than 10:15 a.m. (Dallas time) on the day
  such interest period is to begin, specifying an interest rate,
  the amount to which such interest rate is to apply, and the
  days on which the related interest period is to begin and end. 
  The rate (if any) quoted by such Lender is herein called an
  "Offered Rate"; the amount of the Loan to which such Offered
  Rate is to apply is herein called an "Offered Rate Portion" of
  such Loan; and the period during which such rate is to apply
  is herein called the related "Offered Rate Interest Period". 
  Borrower may choose to accept or reject any such quotation in
  its sole and absolute discretion; to accept any such quotation
  Borrower must, by 11:30 a.m. (Dallas time) on the same day,
  give written notice (or telephonic notice promptly confirmed
  by telecopy, telex or letter) to the Lender making such
  quotation.  After accepting any such quotation from a Lender,
  Borrower may not revoke its acceptance without the consent of
  such Lender, and such Lender shall in accordance with Section
  2.7(d) make an Advance constituting such Offered Rate Portion. 
  After accepting or rejecting any such quotation from any
  Lender, Borrower shall on the same day notify all Lenders of
  the terms of the quotations, if any, made by each.

       (b)  Notwithstanding anything in this section to the
  contrary, Borrower may not, without the consent of all
  Lenders:  (i) agree with any Lender on any Offered Rate
  Interest Period which is longer than three months, (ii) agree
  with any Lender for any Offered Rate Portion when any Default
  is continuing, or (iii) have more than six Offered Rate
  Portions outstanding at the same time.

       (c)  For the purposes of Section 2.17 hereof, any
  agreement as to an Offered Rate Portion shall be deemed a
  "Rate Election".

       (d)  Prior to or concurrently with any such Advance
  constituting an Offered Rate Portion under Section 2.7(a),
  Borrower shall deliver a Request for Advances, modified to
  specify the Lender who is making such Advance, and otherwise
  comply with the requirements of Section 2.2.

       Section 2.8.  Fees.

       (a)  Facility Fee.  In consideration of each Lender's
  commitment to make Advances, Borrower will pay to Agent for
  the account of each Lender a facility fee, determined on a
  daily basis, equal to one-quarter percent (0.25%) per annum on
  the greater of (a) the Borrowing Base in effect on such day,
  or (b) the Loan Balance on such day.  The facility fee shall
  be due and payable in arrears on the last day of each August,
  November, February and May, beginning August 31, 1996, and at
  the termination of the Commitment Period.

       (b)  Agency Fee.  In addition to all other amounts due to
  Agent under the Loan Documents, Borrower will pay to Agent an
  annual agency fee pursuant to a letter agreement of even date
  herewith between Agent and Borrower.

       Section 2.9.  Optional Prepayments.  Borrower may, upon
  concurrent notice to Agent (which shall give each Lender
  prompt notice thereof), from time to time and without premium
  or penalty prepay the Loans, in whole or in part, so long as
  all partial prepayments of principal concurrently paid on the
  Loans are in increments of $100,000 and in an aggregate amount
  greater than or equal to $200,000 and so long as Borrower does
  not prepay any Fixed Rate Portion.  Each prepayment of
  principal under this section shall be accompanied by all
  interest then accrued and unpaid on the principal so prepaid. 
  Any principal or interest prepaid pursuant to this section
  shall be in addition to, and not in lieu of, all payments
  otherwise required to be paid under the Loan Documents at the
  time of such prepayment.

       Section 2.10.  Mandatory Prepayments.  If the Loan
  Balance ever exceeds the Available Borrowing Base (a
  "Borrowing Base Deficiency"), Borrower shall, within thirty
  Business Days after Agent gives written notice of such fact to
  Borrower, either (a) make a single prepayment of the principal
  of the Loans in an amount at least equal to such Borrowing
  Base Deficiency, (b) provide additional assets to be included
  in the Borrowing Base with a Borrowing Base value (as
  determined by Agent and Lenders pursuant to Section 2.13) at
  least equal to such Borrowing Base Deficiency, or (c) give
  written notice to Agent electing to prepay the principal of
  the Loans in six (or fewer) installments in an aggregate
  amount at least equal to such Borrowing Base Deficiency;
  provided, that if such Borrowing Base Deficiency is greater
  than the aggregate principal balance of the Loans, Borrower
  will also, after the Loans have been paid in full, continue to
  make such payments as contemplated in Section 2A.6(a).  Each
  such installment shall equal or exceed one-sixth of such
  Borrowing Base Deficiency; the first installment shall be paid
  with the giving of such notice and the subsequent installments
  shall be due and payable at one month intervals thereafter
  until the Available Borrowing Base equals or exceeds the Loan
  Balance.  Each prepayment of principal under this section
  shall be accompanied by all interest then accrued and unpaid
  on the principal so prepaid.  Any principal or interest
  prepaid pursuant to this section shall be in addition to, and
  not in lieu of, all payments otherwise required to be paid
  under the Loan Documents at the time of such
  prepayment.

       Section 2.11.  Payments to Lenders.  Borrower will make
  each payment which it owes under the Loan Documents to Agent
  for the account of the Lender to whom such payment is owed. 
  Each such payment must be received by Agent not later than
  11:00 a.m. Dallas, Texas time, on the date such payment
  becomes due and payable, in lawful money of the United States
  of America and in immediately available funds.  Any payment
  received by Agent after such time will be deemed to have been
  made on the next following Business Day.  Agent will promptly
  remit each such payment to such Lender.  Should any such
  payment become due and payable on a day other than a Business
  Day, the maturity of such payment shall be extended to the
  next succeeding Business Day, and, in the case of a payment of
  principal or past due interest, interest shall accrue and be
  payable thereon for the period of such extension as provided
  in the Loan Document under which such payment is due.  Each
  payment under a Loan Document shall be due and payable at the
  place provided therein and, if no specific place of payment is
  provided, shall be due and payable at Agent's office at
  NationsBank Plaza, 901 Main Street, Dallas, Dallas County,
  Texas.  When Agent collects or receives money on account of
  the Obligations, Agent shall distribute all money so collected
  or received, and Lenders shall apply all such money they
  receive from Agent, as follows:

            (a)  first, to the payment of all Obligations which
       are then due (and if such money is insufficient to pay
       all such Obligations, first to any reimbursements due
       Agent under Section 5.1(i) or (j) and then to the partial
       payment of all other Obligations then due in proportion
       to the amounts thereof, or as Lenders shall otherwise
       agree);

            (b)  then to the prepayment of amounts owing under
       the Loan Documents (other than principal on the Notes) if
       so specified by Borrower;

            (c)  then to the prepayment of principal on the
       Notes, together with accrued and unpaid interest on the
       principal so prepaid; and

            (d)  last, to the payment or prepayment of any other
       Obligations.

  All payments applied to principal or interest on any Note
  shall be applied first to any interest then due and payable,
  then to principal then due and payable, and last to any
  prepayment of principal and interest in compliance with
  Sections 2.9 and 2.10.  All distributions of amounts described
  in any of subsections (b), (c), or (d) above shall be made by
  Agent pro rata to Agent and each Lender then owed Obligations
  described in such subsection in proportion to all amounts owed
  to Agent and all Lenders which are described in such
  subsection; provided that if any Lender then owes payments to
  Agent for the purchase of a participation under Section
  2A.3(c), any amounts otherwise distributable under this
  section to such Lender shall be deemed to belong to Agent, to
  the extent of such unpaid payments, and Agent shall apply such
  amounts to make such unpaid payments rather than distribute
  such amounts to such Lender.

       Section 2.12.  Initial Borrowing Base.  During the period
  from the date hereof to the first Determination Date, the
  Borrowing Base shall be $250,000,000 and the Borrowing Base
  Reduction shall be zero.

       Section 2.13.  Subsequent Determinations of Borrowing
  Base.  By February 1 of each year (and, at the option of
  Borrower or Majority Lenders, a date specified by Borrower or
  Majority Lenders as of which the Borrowing Base shall be
  redetermined, provided, that Borrower shall not be entitled to
  request any such optional redetermination more than once
  during any calendar year and Majority Lenders shall not be
  entitled to request any such optional redetermination more
  than once during any calendar year), Borrower, Parent and DEOC
  shall furnish to Agent and each Lender all information,
  reports and data which Agent or any Lender has then requested
  concerning the Related Persons' businesses and properties
  (including their oil and gas properties and interests and the
  reserves and production relating thereto), together with the
  engineering report described in Section 5.1(b)(iv) which has
  then become due.  By the March 15 following each such February
  1 (or by the 30th day following receipt by Agent of any final
  Engineering Report delivered under Section 5.1(b)(iv) which
  indicates materially lower values than the preliminary report
  delivered under such section or pursuant to such
  redetermination) (or by the forty-fifth day following an
  optional redetermination date as specified by Borrower or
  Majority Lenders as set forth above), Agent shall by notice to
  Borrower, Parent and DEOC designate, with the concurrence of
  Evaluating Lenders, the new Borrowing Base for the period
  beginning on and including the date such written notice is
  sent (herein called a "Determination Date") and continuing
  until but not including the next date as of which the
  Borrowing Base is redetermined.  If Borrower, Parent and DEOC
  do not furnish all such information, reports and data by the
  dates specified in the first sentence of this section, Agent
  may nonetheless designate the Borrowing Base at any amount
  which Agent determines and may redesignate the Borrowing Base
  from time to time thereafter until Agent receives all such
  information, reports and data, whereupon Agent shall designate
  a new Borrowing Base as described above.  Agent and Lenders
  shall determine the amount of the Borrowing Base based upon
  such factors of any kind as they in their discretion deem
  significant.

       Section 2.14.  Borrower's Designation of Borrowing Base
  Reduction.  Borrower may, during the two Business Days
  following each Determination Date, designate any amount as the
  Borrowing Base Reduction (provided that Borrower may not
  thereby reduce the Available Borrowing Base below zero).  To
  exercise such option Borrower must send notice to Agent of the
  amount of the Borrowing Base Reduction designated by Borrower. 
  If Borrower does not affirmatively exercise this option by
  such second Business Day following any Determination Date, the
  Borrowing Base Reduction shall be deemed to have been
  designated as zero on such second Business Day.  Any such
  designation (or deemed designation) of a Borrowing Base
  Reduction shall continue in effect until the next date as of
  which the Borrowing Base Reduction is redesignated.

       Section 2.15.  Increased Cost of Fixed Rate Portions.  If
  any applicable domestic or foreign law, treaty, rule or
  regulation (whether now in effect or hereinafter enacted or
  promulgated, including Regulation D) or any interpretation or
  administration thereof by any governmental authority charged
  with the interpretation or administration thereof (whether or
  not having the force of law):

            (a)  shall change the basis of taxation of payments
       to Agent or any Lender of any principal, interest, or
       other amounts attributable to any Fixed Rate
       Portion or otherwise due under this Agreement in respect
       of any Fixed Rate Portion or Letter of Credit (other than
       taxes imposed on the overall net income of Agent or such
       Lender or any lending office of Agent or such Lender by
       any jurisdiction in which Agent or such Lender or any
       such lending office is located); or

            (b)  shall change, impose, modify, apply or deem
       applicable any insurance fees or premiums or any reserve,
       special deposit or similar requirements in respect of any
       Fixed Rate Portion or Letter of Credit (excluding those
       for which there is full compensation pursuant to
       adjustments made in the definition of Adjusted Eurodollar
       Rate) or against assets of, deposits with or for the
       account of, or credit extended by, Agent or any Lender;
       or

            (c)  shall impose on Agent or any Lender or the
       interbank eurocurrency deposit market any other condition
       affecting any Fixed Rate Portion or Letter of Credit, the
       result of which is to increase the cost to Agent or any
       Lender of funding or maintaining any Fixed Rate Portion
       or of issuing any Letter of Credit or to reduce the
       amount of any sum receivable by Agent or any Lender in
       respect of any Fixed Rate Portion or Letter of Credit by
       an amount deemed by Agent or such Lender to be material,

  then Agent or such Lender shall promptly notify Borrower in
  writing (with a copy to Agent) of the happening of such event
  and (1) Borrower shall upon demand pay to Agent for the
  account of Agent or such Lender such additional amount or
  amounts as will compensate Agent or such Lender for such event
  and (2) Borrower may elect, by giving to Agent and such Lender
  not less than three Business Days' notice, to convert all (but
  not less than all) of any such Fixed Rate Portion into a part
  of the Base Rate Portion.

       Section 2.16.  Change of Law.  If any change in
  applicable laws, treaties, rules or regulations or in the
  interpretation or administration thereof or in any
  jurisdiction whatsoever, domestic or foreign, shall make it
  unlawful or impracticable for any Lender to fund or maintain
  Fixed Rate Portions, or shall materially restrict the
  authority of Agent or any Lender to purchase, sell or take
  offshore deposits of dollars (i.e., "eurodollars") or to issue
  or participate in Letters of Credit, then Borrower's right to
  elect Fixed Rate Portions or to apply for Letters of Credit
  shall be suspended to the extent and for the duration of such
  illegality, impracticability or restriction and all Fixed Rate
  Portions (or portions thereof) which are then outstanding or
  are then the subject of any Rate Election and which cannot
  lawfully or practicably be maintained or funded shall
  immediately become or remain part of the Base Rate Portion of
  the related Loan.  Borrower agrees to indemnify Agent and any
  such Lender and hold it harmless against all costs, expenses,
  claims, penalties, liabilities and damages which actually
  result from any such change in law, treaty, rule, regulation,
  interpretation or administration.

       Section 2.17.  Funding Losses.  Borrower will indemnify
  Agent and each Lender against, and reimburse Agent and each
  Lender on demand for, any loss or expense incurred or
  sustained by Agent or such Lender (including without
  limitation any loss or expense incurred by reason of the
  liquidation or reemployment of deposits or other funds acquired
  by such Lender to fund or maintain Fixed Rate Portions or Advances
  hereunder), as a result of (a) any payment or prepayment (whether
  authorized or required hereunder or otherwise) of all or a portion of a
  Fixed Rate Portion on a day other than the day on which the
  applicable Interest Period ends, (b) any payment or
  prepayment, whether required hereunder or otherwise, of a Loan
  made after the delivery, but before the effective date, of a
  Rate Election, if such payment or prepayment prevents such
  Rate Election from becoming fully effective, (c) the failure
  of any Advance to be made hereunder or of any Rate Election to
  become effective due to any condition precedent to such
  Advance not being satisfied or due to any other action or
  inaction of any Related Person, or (d) any conversion (whether
  authorized or required hereunder or otherwise) of all or any
  portion of any Fixed Rate Portion into a Base Rate Portion or
  into a different Fixed Rate Portion on a day other than the
  day on which the applicable Interest Period ends.

       Section 2.18.  Reimbursable Taxes; Capital Adequacy. 
  Borrower covenants and agrees that, whether or not any Fixed
  Rate Portion is ever elected:

            (a)  Borrower will reimburse Agent and each Lender
       on demand, on an after-tax basis, for all present and
       future income, stamp and other taxes, levies, costs and
       charges whatsoever actually paid by Agent or such Lender
       (or required to be withheld and paid on account of Agent
       or such Lender) in respect of any Fixed Rate Portions or
       Letters of Credit, excluding, however, any thereof
       imposed on or measured by the overall net income of Agent
       or any Lender or any lending office of Agent or any
       Lender by any jurisdiction in which Agent or any Lender
       or any such lending office is located (all such
       non-excluded taxes, levies, costs and charges being
       collectively called "Reimbursable Taxes" in this
       section), and Borrower will pay directly to the
       appropriate authority any Reimbursable Taxes which
       Borrower is required to withhold and pay.  Promptly after
       the date on which payment of any such Reimbursable Tax to
       be paid directly by Borrower is due or claimed to be due,
       Borrower will, at the request of Agent or any Lender,
       furnish to Agent and such Lender evidence in form and
       substance satisfactory to Agent and such Lender that
       Borrower has met its obligation under this section.

            (b)  Borrower will indemnify Agent and each Lender
       against any loss, liability, claim or expense, including
       interest, penalties and legal fees, that Agent or such
       Lender may incur at any time arising out of or in
       connection with the failure of Borrower to make any
       reimbursement required under subsection (a) above or to
       make any payment, when due or claimed to be due, of
       Reimbursable Taxes to be withheld and paid directly by
       Borrower.

            (c)  All payments on account of the principal of,
       and interest on, the Loans and the Notes, and all other
       amounts payable by Borrower to Agent or any Lender
       hereunder shall be made free and clear of and without
       reduction by reason of any Reimbursable Taxes, all of
       which will be for the account of Borrower and reimbursed
       or paid by Borrower.

            (d)  If Borrower is ever required to reimburse or
       pay any Reimbursable Tax with respect to any Fixed Rate
       Portion, Borrower may elect, by giving to Agent and each
       Lender not less than three Business Days' notice, to
       convert all (but not less than all) of any such Fixed
       Rate Portion into a part of the Base Rate Portion of the
       related Loan, but such election shall not diminish
       Borrower's obligation to pay all Reimbursable Taxes.

            (e)  If at any time after the date hereof, and from
       time to time, Agent or any Lender determines that the
       adoption or modification of any applicable law, rule or
       regulation regarding taxation, Agent's or such Lender's
       required levels of reserves, deposits, insurance or
       capital (including any allocation of capital requirements
       or conditions), or similar requirements, or any
       interpretation or administration thereof by any
       governmental authority, central bank or comparable agency
       charged with the interpretation, administration or
       compliance of Agent or such Lender with any of such
       requirements (including any interpretation at any time
       made with respect to any Letter of Credit, whether on,
       before or after the date hereof, that requires Agent or
       any Lender to allocate capital, maintain reserves, or
       take any other action or incur any cost based on an
       amount higher than the Drawing Amount from time to time
       in effect under such Letter of Credit), has or would have
       the effect of (a) increasing Agent's or such Lender's
       costs relating to the Obligations or the Letters of
       Credit, or (b) reducing the yield or rate of return of
       Agent or such Lender on the Obligations or the Letters of
       Credit, to a level below that which Agent or such Lender
       could have achieved but for such adoption, modification,
       interpretation or application, then Borrower shall,
       within 15 days after any request by Agent or such Lender,
       pay to Agent or such Lender such additional amounts as
       (in Agent's or such Lender's sole judgment, after
       reasonable computation) will compensate Agent or such
       Lender for such increase in costs or reduction in yield
       or rate of return.  No failure by Agent or any Lender to
       immediately demand payment of any additional amounts
       payable hereunder shall constitute a waiver of Agent's or
       such Lender's right to demand payment of such amounts at
       any subsequent time.  Nothing herein contained shall be
       construed or so operate as to require Borrower to pay any
       interest, fees, costs or charges not permitted by Section
       9.6.

                 ARTICLE II-A -- Letters of Credit

       Section 2A.1.  Letters of Credit.  Subject to the terms
  and conditions hereof, Borrower may during the Commitment
  Period request Agent to issue one or more Letters of Credit,
  provided that, after taking such Letter of Credit into
  account:

            (a) the sum of the aggregate amount of Advances
       outstanding at such time plus the aggregate amount of LC
       Obligations at such time does not exceed the Available
       Borrowing Base at such time; and

            (b) the aggregate amount of LC Obligations at such
       time does not exceed $30,000,000; and

            (c) the expiration date of such Letter of Credit is
       prior to the end of the Commitment Period;

       and further provided that:

            (d) such Letter of Credit is to be used for general
       corporate purposes of Borrower;

            (e) such Letter of Credit is not directly or
       indirectly used to assure payment of or otherwise support
       any Person's Restricted Debt other than Restricted Debt
       permitted under Section 5.2(a)(vii);

            (f) the issuance of such Letter of Credit will be in
       compliance with all applicable governmental restrictions,
       policies, and guidelines and will not subject Agent to
       any cost not anticipated on the date hereof;

            (g) the form and terms of such Letter of Credit are
       acceptable to Agent in its sole and absolute discretion;
       and

            (h) all other conditions in this Agreement to the
       issuance of such Letter of Credit have been satisfied.

  Agent will honor any such request if the foregoing conditions
  (a) through (h) (in the following Section 2A.2 called the "LC
  Conditions") have been met as of the date of issuance of such
  Letter of Credit.

       Section 2A.2.  Requesting Letters of Credit.  Borrower
  must make written application for any Letter of Credit at
  least three Business Days before the date on which Borrower
  desires for Agent to issue such Letter of Credit.  By making
  any such written application Borrower shall be deemed to have
  represented and warranted that the LC Conditions described in
  Section 2A.1 will be met as of the date of issuance of such
  Letter of Credit.  Each such written application for a Standby
  Letter of Credit must be made in writing in the form and
  substance of Exhibit H, the terms and provisions of which are
  hereby incorporated herein by reference (or in such other form
  as may mutually be agreed upon by Agent and Borrower).  Three
  Business Days after the LC Conditions for a Letter of Credit
  have been met as described in Section 2A.1 (or if Agent
  otherwise desires to issue such Letter of Credit), Agent will
  issue such Letter of Credit at Agent's office in Dallas,
  Texas.  If any provisions of any LC Application conflict with
  any provisions of this Agreement, the provisions of this
  Agreement shall govern and control.

       Section 2A.3.  Reimbursement and Participations.

       (a)  Reimbursement by Borrower.  Each Matured LC
  Obligation shall constitute a loan by Agent to Borrower. 
  Borrower hereby promises to pay to Agent, or to Agent's order,
  on demand, the full amount of each Matured LC Obligation,
  together with interest thereon at the Late Payment
  Rate.

       (b)  Letter of Credit Advances.  If the beneficiary of
  any Letter of Credit presents a draft or other demand for
  payment thereunder then Borrower may, during the interval
  between the presentation thereof and the honoring thereof by
  Agent, request Lenders to make Advances to Borrower in the
  amount of such draft or demand, which Advances shall be made
  concurrently with Agent's payment of such draft or demand and
  shall be immediately used by Agent to repay the amount of the
  resulting Matured LC Obligation.  Such a request by Borrower
  shall be made in compliance with all of the provisions hereof,
  provided that for the purposes of the first sentence of
  Section 2.1 the amount of such Advances shall be considered
  but the amount of the Matured LC Obligation to be concurrently
  paid by such Advances shall not be considered.

       (c)  Participation by Lenders.  Agent irrevocably agrees
  to grant and hereby grants to each Lender, and -- to induce
  Agent to issue Letters of Credit hereunder -- each Lender
  irrevocably agrees to accept and purchase and hereby accepts
  and purchases from Agent, on the terms and conditions
  hereinafter stated and for such Lender's own account and risk,
  an undivided interest equal to such Lender's Percentage Share
  of Agent's obligations and rights under each Letter of Credit
  issued hereunder and the amount of each Matured LC Obligation
  paid by Agent thereunder.  Each Lender unconditionally and
  irrevocably agrees with Agent that, if a Matured LC Obligation
  is paid under any Letter of Credit for which Agent is not
  reimbursed in full by Borrower in accordance with the terms of
  this Agreement and the related LC Application (including any
  reimbursement by means of concurrent Advances or by the
  application of LC Collateral), such Lender shall (in all
  circumstances and without set-off or counterclaim) pay to
  Agent on demand, in immediately available funds at Agent's
  address for notices hereunder, such Lender's Percentage Share
  of such Matured LC Obligation (or any portion thereof which
  has not been reimbursed by Borrower).  Each Lender's
  obligation to pay Agent pursuant to the terms of this
  subsection is irrevocable and unconditional.  If any amount
  required to be paid by any Lender to Agent pursuant to this
  subsection is paid by such Lender to Agent within three
  Business Days after the date such payment is due, Agent shall
  in addition to such amount be entitled to recover from such
  Lender, on demand, interest thereon calculated from such due
  date at the Base Rate.  If any amount required to be paid by
  any Lender to Agent pursuant to this subsection is not paid by
  such Lender to Agent within three Business Days after the date
  such payment is due, Agent shall in addition to such amount be
  entitled to recover from such Lender, on demand, interest
  thereon calculated from such due date at the Late Payment
  Rate.

       (d)  Distributions to Participants.  Whenever Agent has
  in accordance with this section received from any Lender
  payment of such Lender's Percentage Share of any Matured LC
  Obligation, if Agent thereafter receives any payment of such
  Matured LC Obligation or any payment of interest thereon
  (whether directly from Borrower or by application of LC
  Collateral or otherwise, and excluding only interest for any
  period prior to Agent's demand that such Lender make such
  payment of its Percentage Share), Agent will distribute to
  such Lender its Percentage Share of the amounts so received by
  Agent; provided, however, that if any such payment received by
  Agent must thereafter be returned by Agent, such Lender shall
  return to Agent the portion thereof which Agent has previously
  distributed to it.

       (e)  Calculations.  A written advice setting forth in
  reasonable detail the amounts owing under this section,
  submitted by Agent to Borrower or any Lender from time to
  time, shall be conclusive, absent manifest error, as to the
  amounts thereof.

       Section 2A.4.  Letter of Credit Fees.  In consideration
  of Agent's issuance of any Letter of Credit and each other
  Lender's agreement to purchase a risk participation therein,
  Borrower agrees to pay a letter of credit fee to Agent (for
  the account of the Lenders) for each Letter of Credit in the
  amount of the Letter of Credit Rate times the Drawing Amount
  for such Letter of Credit.  Each letter of credit fee will be
  calculated on a daily basis (on the basis of a year of 360
  days) based on the Drawing Amount of such Letter of Credit and
  the applicable Letter of Credit Rate in effect on each day and
  shall be payable quarterly in arrears and at the expiration or
  termination of such Letter of Credit.  Upon receipt of such
  letter of credit fee for each Letter of Credit, Agent will pay
  to each Lender such Lender's Percentage Share of such fee.  In
  addition, Borrower agrees to pay a fronting fee to Agent (for
  its own account) for each Letter of Credit, in an amount to be
  agreed on by Borrower and Agent for each separate Letter of
  Credit.  Each such fronting fee will be for the account of
  Agent alone, and no other Lender shall have any right or
  interest therein.

       Section 2A.5.  No Duty to Inquire.

       (a)  Drafts and Demands.  Agent is authorized and
  instructed to accept and pay drafts and demands for payment
  under any Letter of Credit without requiring, and without
  responsibility for, any determination as to the existence of
  any event giving rise to said draft, either at the time of
  acceptance of payment or thereafter.  Agent and Lenders are
  under no duty to determine the proper identity of anyone
  presenting such a draft or making such a demand (whether by
  tested telex or otherwise) as the officer, representative or
  agent of any beneficiary under any Letter of Credit, and
  payment by Agent to any such beneficiary when requested by any
  such purported officer, representative or agent is hereby
  authorized and approved.  Borrower agrees to hold Agent and
  each Lender harmless and indemnified against any liability or
  claim in connection with or arising out of the subject matter
  of this section, WHICH INDEMNITY SHALL APPLY WHETHER OR NOT
  ANY SUCH LIABILITY OR CLAIM IS IN ANY WAY OR TO ANY EXTENT
  CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION
  OF ANY KIND BY AGENT OR ANY LENDER, provided only that neither
  Agent nor any Lender shall be entitled to indemnification for
  that portion, if any, of any liability or claim which is
  proximately caused by its own individual gross negligence or
  willful misconduct, as determined in a final judgment.

       (b)  Extension of Maturity.  If the maturity of any
  Letter of Credit is extended by its terms or by law or
  governmental action, if any extension of the maturity or time
  for presentation of drafts or any other modification of the
  terms of any Letter of Credit is made at the request of any
  Related Person, or if the amount of any Letter of Credit is
  increased at the request of any Related Person, the Loan
  Documents shall be binding upon all Related Persons with
  respect to such Letter of Credit as so extended, increased or
  otherwise modified, with respect to drafts and property
  covered thereby, and with respect to any action taken by Agent 
  or any of Agent's correspondents in accordance with such extension, 
  increase or other modification.

       (c)  Transferees of Letters of Credit.  If any Letter of
  Credit provides that it is transferable, Agent shall have no
  duty to determine the proper identity of anyone appearing as
  transferee of such Letter of Credit, nor shall Agent be
  charged with responsibility of any nature or character for the
  validity or correctness of any transfer or successive
  transfers, and payment by Agent to any purported transferee or
  transferees as determined by Agent is hereby authorized and
  approved, and Borrower further agrees to hold Agent and each
  Lender harmless and indemnified against any liability or claim
  in connection with or arising out of the foregoing, WHICH
  INDEMNITY SHALL APPLY WHETHER OR NOT ANY SUCH LIABILITY OR
  CLAIM IS IN ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN
  PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY AGENT OR
  ANY LENDER, provided only that neither Agent nor any Lender
  shall be entitled to indemnification for that portion, if any,
  of any liability or claim which is proximately caused by its
  own individual gross negligence or willful misconduct, as
  determined in a final judgment.

       Section 2A.6.  LC Collateral.

       (a)  LC Obligations in Excess of Available Borrowing
  Base.  Section 2.10 requires Borrower to make certain
  mandatory prepayments if a Borrowing Base Deficiency exists. 
  These payments shall be applied to the payment of the Loans
  and any Matured LC Obligations before being held as LC
  Collateral as provided below.  If, however, such Borrowing
  Base Deficiency is greater than the unpaid balance of the
  Loans and any Matured LC Obligations and, after the Loans are
  paid in full, the remaining outstanding LC Obligations will
  exceed the Available Borrowing Base, then Borrower will
  continue to make such payments and Agent will hold the same as
  security for the remaining LC Obligations (all such amounts
  held as security for LC Obligations being herein collectively
  called "LC Collateral") until such LC Obligations become
  Matured LC Obligations, at which time such LC Collateral may
  be applied to such Matured LC Obligations.  Neither this
  subsection nor the following subsection shall, however, limit
  or impair any rights which Agent may have under any other
  document or agreement relating to any Letter of Credit or LC
  Obligation, including any LC Application, or any rights which
  Agent or Lenders may have to otherwise apply any payments by
  Borrower and any LC Collateral under Section 2.11.

       (b)  Acceleration of LC Obligations.  If the Obligations
  or any part thereof become immediately due and payable
  pursuant to Section 7.1 then, unless Majority Lenders
  otherwise specifically elect to the contrary (which election
  may thereafter be retracted by Majority Lenders at any time),
  all LC Obligations shall become immediately due and payable
  without regard to whether or not actual drawings or payments
  on the Letters of Credit have occurred, and Borrower shall be
  obligated to pay to Agent immediately an amount equal to the
  aggregate LC Obligations which are then outstanding.  All
  amounts so paid shall first be applied to Matured LC
  Obligations and then held by Agent as LC Collateral until the
  remaining LC Obligations become MaturedSection 2A.6(b)

  LC Obligations, at which time such LC Collateral shall be
  applied to such Matured LC Obligations.

       (c)  Investment of LC Collateral.  Pending application
  thereof, all LC Collateral shall be invested by Agent in such
  investments as Agent may choose in its sole discretion.  All
  interest on such investments shall be reinvested or applied to
  Matured LC Obligations and other past due Obligations.  When
  all Obligations have been satisfied in full, including all LC
  Obligations, all Letters of Credit have expired or been
  terminated, and all of Borrower's reimbursement obligations in
  connection therewith have been satisfied in full, Agent shall
  release any remaining LC Collateral.  Borrower hereby assigns
  and grants to Agent a continuing security interest in all LC
  Collateral at any time held by Agent, all investments
  purchased with such LC Collateral, and all proceeds thereof to
  secure its Matured LC Obligations and its Obligations under
  this Agreement, the Note, and the other Loan Documents. 
  Borrower further agrees that Agent shall have all of the
  rights and remedies of a secured party under the Uniform
  Commercial Code as adopted in the State of Texas with respect
  to such security interest and that an Event of Default under
  this Agreement shall constitute a default for purposes of such
  security interest.

       (d)  Payment of LC Collateral.  When Borrower is required
  to provide LC Collateral for any reason and fails to do so on
  the day required, Agent may without notice to Borrower or any
  other Related Person provide such LC Collateral (whether by
  application of proceeds of other Collateral, by transfers from
  other accounts maintained with Agent, or otherwise) using any
  available funds of Borrower or any other Person also liable to
  make such payments.  Any such amounts which are required to be
  provided as LC Collateral and which are not provided on the
  date required shall be considered past due Obligations owing
  hereunder, and Agent and Lenders are hereby authorized to
  exercise their respective rights to obtain such amounts.

           ARTICLE III -- Conditions Precedent to Lending

       Section 3.1.  Documents to be Delivered.  No Lender has
  any obligation to make its first Advance unless Agent shall
  have received all of the following, at Agent's office in
  Dallas, Texas, duly executed and delivered and in form,
  substance and date satisfactory to Agent:

            (a)  Each Note, the Guaranties and the Subordination
       Agreement.

            (b)  An "Omnibus Certificate" of the Secretary or
       Assistant Secretary and of the Chairman of the Board,
       President, Executive Vice President or Vice President-
       Finance of each of Borrower, Parent and DEOC, which shall
       contain the names and signatures of the officers of
       Borrower, Parent and DEOC authorized to execute Loan
       Documents and which shall certify to the truth,
       correctness and completeness of the following exhibits
       attached thereto:  (i) copies of resolutions duly adopted
       by the Boards of Directors of Borrower, Parent and DEOC
       and in full force and effect at the time this Agreement
       is entered into, authorizing the execution of this
       Agreement and the other Loan Documents
       delivered or to be delivered in connection herewith and
       the consummation of the transactions contemplated herein
       and therein, (ii) a copy of the charter of Borrower and
       all amendments thereto, certified by the appropriate
       official of the State of Nevada, a copy of the charter of
       Parent and all amendments thereto, certified by the
       appropriate official of the State of Oklahoma, a copy of
       the charter of DEOC and all amendments thereto, certified
       by the appropriate official of the State of Oklahoma, and
       (iii) copies of the bylaws of Borrower, Parent and DEOC.

            (c)  A certificate (or certificates) of the due
       organization, valid existence and good standing of
       Borrower in the State of Nevada, issued by the
       appropriate official of the State of Nevada, a similar
       "long-form" certificate with respect to Parent in the
       State of Oklahoma, and a similar certificate with respect
       to DEOC in the State of Oklahoma.

            (d)  A "Compliance Certificate" of the Chairman of
       the Board, President, or Executive Vice President and of
       the Vice President-Finance of each of Borrower, Parent
       and DEOC, of even date with such first Advance, in which
       such officers certify to the satisfaction of the
       conditions set out in subsections (a), (b) and (c) of
       Section 3.2.

            (e)  A favorable opinion of McAfee & Taft, A
       Professional Corporation, counsel for Borrower, Parent,
       DEOC and Avon, substantially in the form set forth in
       Exhibit E.

            (f)  Documents similar to those specified in
       subsections (b) and (c) of this section with respect to
       each Guarantor other than Parent and DEOC, including
       Avon, and the execution by it of its guaranty of
       Borrower's Obligations.

            (g)  Copies of any agreements, documents or
       instruments delivered by any Related Person in connection
       with any Subordinated Debt.

            (h)  Copies of the Subordinated Parent Indenture,
       Subordinated Parent Guarantee and any agreements,
       documents or instruments delivered by any Related Person
       in connection therewith.

            (i)  A Notice of Final Agreement in the form of the
       attached Exhibit G.

       Section 3.2.  Additional Conditions Precedent.  No Lender
  has any obligation to make any Advance (including its first)
  and Agent has no obligation to issue any Letter of Credit
  (whether or not otherwise agreed to by Agent) unless the
  following conditions precedent have been satisfied:

            (a)  All representations and warranties made by any
       Related Person in any Loan Document shall be true on and
       as of the date of such Advance or the date of issuance of
       such Letter of Credit (except to the extent that the
       facts upon which such representations are based have been
       changed by the transactions herein contemplated) as if such
       representations and warranties had been made as of the date
       of such Advance or the date of issuance of such Letter of Credit.

            (b)  No Default shall exist at the date of such
       Advance or the date of issuance of such Letter of Credit.

            (c)  Each Related Person shall have performed and
       complied with all agreements and conditions required in
       the Loan Documents to be performed or complied with by it
       on or prior to the date of such Advance or the date of
       issuance of such Letter of Credit.

            (d)  The making of such Advance or the issuance of
       such Letter of Credit shall not be prohibited by any law
       or any regulation or order of any court or governmental
       agency or authority and shall not subject Agent or any
       Lender to any penalty or other onerous condition under or
       pursuant to any such law, regulation or order.

            (e)  Agent shall have received all documents and
       instruments which Agent has then reasonably requested, in
       addition to those described in Section 3.1 (including
       opinions of legal counsel for the Related Persons and
       Agent; corporate documents and records; documents
       evidencing governmental authorizations, consents,
       approvals, licenses and exemptions; and certificates of
       public officials and of officers and representatives of
       the Related Persons and other Persons), as to (i) the
       accuracy and validity of or compliance with all
       representations, warranties and covenants made by any of
       the Related Persons in this Agreement and the other Loan
       Documents, (ii) the satisfaction of all conditions
       contained herein or therein, and (iii) all other matters
       pertaining hereto and thereto.  All such additional
       documents and instruments shall be satisfactory to Agent
       in form, substance and date.

            (f)  All legal matters relating to the Loan
       Documents and the consummation of the transactions
       contemplated thereby shall be satisfactory to Thompson &
       Knight, a Professional Corporation, counsel to Agent.

            ARTICLE IV -- Representations and Warranties

       Section 4.1.  Borrower's, Parent's and DEOC's
  Representations and Warranties.  To induce Agent and Lenders
  to enter into this Agreement and to make the Loans, each of
  Borrower, Parent and DEOC represents and warrants to Agent and
  each Lender that:

            (a)  No Default.  Neither Borrower, Parent nor DEOC
       is in default in the performance of any of the covenants
       and agreements contained herein.  No event has occurred
       and is continuing which constitutes a Default.

            (b)  Organization and Good Standing.  Each
       Restricted Person which is a corporation, partnership or
       business trust is duly organized, validly existing and in
       good standing under the laws of its state of organization
       or formation, having all corporate, partnership or business
       trust powers required to carry on its business and enter into
       and carry out the transactions contemplated hereby.  Each
       such Person is duly qualified, in good standing, and authorized
       to do business in all other jurisdictions within the United
       States wherein the character of the properties owned or
       held by it or the nature of the business transacted by it
       makes such qualification necessary.  Each such Person has
       taken all actions and procedures customarily taken in
       order to enter, for the purpose of conducting business or
       owning property, each jurisdiction outside the United
       States wherein the character of the properties owned or
       held by it or the nature of the business transacted by it
       makes such actions and procedures desirable.

            (c)  Authorization.  Each Restricted Person which is
       a corporation or partnership has duly taken all corporate
       or partnership action necessary to authorize the
       execution and delivery by it of the Loan Documents to
       which it is a party and to authorize the consummation of
       the transactions contemplated thereby and the performance
       of its obligations thereunder.  Borrower is duly
       authorized to borrow funds hereunder.

            (d)  No Conflicts or Consents.  The execution and
       delivery by the various Related Persons of the Loan
       Documents to which each is a party, the performance by
       each of its obligations under such Loan Documents, and
       the consummation of the transactions contemplated by the
       various Loan Documents, do not and will not (i) conflict
       with any provision of (A) any domestic or foreign law,
       statute, rule or regulation, (B) the articles or
       certificate of incorporation, bylaws, charter, or
       partnership agreement or certificate of any Related
       Person, or (C) any agreement, judgment, license, order or
       permit applicable to or binding upon any Related Person,
       (ii) result in the acceleration of any Debt owed by any
       Related Person, or (iii) result in or require the
       creation of any Lien upon any assets or properties of any
       Related Person except as expressly contemplated in the
       Loan Documents.  Except as expressly contemplated in the
       Loan Documents no consent, approval, authorization or
       order of, and no notice to or filing with, any court or
       governmental authority or third party is required in
       connection with the execution, delivery or performance by
       any Related Person of any Loan Document or to consummate
       any transactions contemplated by the Loan Documents.

            (e)  Enforceable Obligations.  This Agreement is,
       and the other Loan Documents when duly executed and
       delivered will be, legal and binding obligations of each
       Related Person which is a party hereto or thereto,
       enforceable in accordance with their respective terms
       except as limited by bankruptcy, insolvency, moratorium,
       fraudulent conveyance, or similar laws of general
       application relating to the enforcement of creditors'
       rights and as limited by general equitable principles.

            (f)  Initial Financial Statements.  The Initial
       Financial Statements fairly present the Consolidated
       financial position at the respective dates thereof and
       the Consolidated results of operations and the changes in
       Consolidated financial position for the respective
       periods thereof for each entity for which Initial
       Financial Statements have been provided.  Since the date
       of such audited annual Initial Financial Statements no
       material adverse change has occurred in the financial
       condition or businesses or in Consolidated financial
       condition or businesses of such entity, except as
       reflected in the quarterly Initial Financial Statements
       or in the Disclosure Schedule.  All Initial Financial
       Statements were prepared in accordance with GAAP.

            (g)  Other Obligations.  No Related Person has any
       outstanding Debt of any kind (including contingent
       obligations, tax assessments, and unusual forward or
       long-term commitments) which is, in the aggregate,
       material with respect to Borrower's, Parent's or DEOC's
       Consolidated financial condition and not shown in the
       Initial Financial Statements or disclosed in the
       Disclosure Schedule.

            (h)  Full Disclosure.  No certificate, statement or
       other information delivered herewith or heretofore by any
       Related Person to Agent or any Lender in connection with
       the negotiation of this Agreement or in connection with
       any transaction contemplated hereby contains any untrue
       statement of a material fact or omits to state any
       material fact known to any Related Person (other than
       industry risks normally associated with the types of
       businesses conducted by the Related Persons) necessary to
       make the statements contained herein or therein not
       misleading as of the date made or deemed made.  There is
       no fact known to any Related Person (other than industry
       risks normally associated with the types of businesses
       conducted by the Related Persons) that has not been
       disclosed to Agent and each Lender in writing which could
       materially and adversely affect Borrower's, Parent's or
       DEOC's Consolidated properties, business, prospects or
       condition (financial or otherwise).  There are no
       statements or conclusions in any Engineering Report which
       are based upon or include misleading information or fail
       to take into account material information regarding the
       matters reported therein, it being understood that each
       Engineering Report is necessarily based upon professional
       opinions, estimates and projections and that neither
       Borrower, Parent nor DEOC warrant that such opinions,
       estimates and projections will ultimately prove to have
       been accurate.  Borrower has heretofore delivered to
       Agent and each Lender true, correct and complete copies
       of any letters and documents listed in the Disclosure
       Schedule.

            (i)  Litigation.  Except as disclosed in the Initial
       Financial Statements or in the Disclosure Schedule:  (i)
       there are no actions, suits or legal, equitable,
       arbitrative or administrative proceedings pending, or to
       the knowledge of any Related Person threatened, against
       any Related Person before any federal, state, municipal
       or other court, department, commission, body, board,
       bureau, agency, or instrumentality, domestic or foreign,
       and there are no outstanding judgments, injunctions,
       writs, rulings or orders by any such governmental entity
       against any Related Person or any Related Person's
       stockholders, partners, directors or officers, which do
       or may materially and adversely affect Borrower
       individually or, on a Consolidated basis, Borrower,
       Parent or DEOC and their respective Consolidated
       Subsidiaries, their ownership or use of any of their
       assets or properties, their businesses or financial
       condition or prospects, or the right or
       ability of any Related Person to enter into the Loan
       Documents to which it is a party or to consummate the
       transactions contemplated thereby or to perform its
       obligations thereunder.

            (j)  ERISA Liability.  Except as disclosed in the
       Initial Financial Statements or in the Disclosure
       Schedule, no Termination Event has occurred with respect
       to any ERISA Plan and the Related Persons are in
       compliance with ERISA in all material respects.  No
       Related Person is required to contribute to, or has any
       other absolute or contingent liability in respect of, any
       "multiemployer plan" as defined in Section 4001 of ERISA.

            (k)  Names and Places of Business.  Neither
       Borrower, Parent nor DEOC has, during the preceding five
       years, been known by or used any other corporate,
       partnership or fictitious name, except as disclosed in
       the Disclosure Schedule.  Except as otherwise indicated
       in the Disclosure Schedule, the chief executive office
       and principal place of business of Borrower, Parent and
       DEOC are located at the address of Borrower set out in
       Section 9.3 hereof.

            (l)  Subsidiaries.  Neither Borrower, Parent nor
       DEOC (i) has any Subsidiary which has assets of
       $1,000,000 or more, or (ii) owns any stock in any other
       corporation or association which is not a Subsidiary,
       except as listed in the Disclosure Schedule.  No Related
       Person is a member of any general or limited partnership,
       joint venture or association of any type whatsoever
       except those listed in the Disclosure Schedule and
       associations, joint ventures or other relationships (a)
       which are established pursuant to a standard form
       operating agreement or similar agreement or which are
       partnerships for purposes of federal income taxation
       only, (b) which are not corporations or partnerships (or
       subject to the Uniform Partnership Act) under applicable
       state law, and (c) whose businesses are limited to the
       exploration, development and operation of oil, gas or
       mineral properties and interests owned directly by the
       parties in such associations, joint ventures or
       relationships.  As of the date hereof each of Parent,
       Borrower and DEOC owns, directly or indirectly, the
       equity interest in each of its Subsidiaries which is
       indicated in the Disclosure Schedule.

            (m)  Title to Properties.  Each Restricted Person
       has defensible title to all of its properties and assets,
       free and clear of all Prohibited Liens and of all
       impediments to the use of such properties and assets in
       such Restricted Person's business, except that no
       representation or warranty is made with respect to any
       oil, gas or mineral property or interest to which no
       proved oil or gas reserves are properly attributed.

       Section 4.2.  Representation by Lenders.  Each Lender
  hereby represents that it will acquire its Note for its own
  account in the ordinary course of its commercial lending
  business; however, the disposition of such Lender's property
  shall at all times be and remain within its control and, in
  particular and without limitation, such Lender may sell or
  otherwise transfer its Note, any participation interest or
  other interest in its Note, or any of its other rights and
  obligations under the Loan Documents.

        ARTICLE V -- Covenants of Borrower, Parent and DEOC

       Section 5.1.  Affirmative Covenants.  Each of Borrower,
  Parent and DEOC warrants, covenants and agrees that until the
  full and final payment of the Obligations and the termination
  of this Agreement, unless Majority Lenders have previously
  agreed otherwise in writing:

            (a)  Payment and Performance.  Each of Borrower,
       Parent and DEOC will pay all amounts owed by it under the
       Loan Documents in accordance with the terms thereof and
       will observe, perform and comply with every covenant,
       term and condition expressed or implied in the Loan
       Documents.  Each of Borrower, Parent and DEOC will cause
       the other Related Persons to observe, perform and comply
       with every such term, covenant and condition.

            (b)  Books, Financial Statements and Reports.   Each
       Related Person will at all times maintain full and
       accurate books of account and records.  Borrower, Parent
       and DEOC will maintain and will cause their respective
       Subsidiaries to maintain a standard system of accounting
       and will furnish the following statements and reports to
       Agent and each Lender at Borrower's, Parent's or DEOC's
       expense:

                 (i)  As soon as available, and in any event
            within 105 days after the end of each Fiscal Year,
            complete Consolidated financial statements of
            Parent, together with all notes thereto, prepared in
            reasonable detail in accordance with GAAP, together
            with an opinion, based on an audit using generally
            accepted auditing standards, by KPMG Peat Marwick,
            or other independent certified public accountants
            selected by Parent and acceptable to Agent, stating
            that such Consolidated financial statements have
            been so prepared.  These Consolidated financial
            statements shall contain a Consolidated balance
            sheet as of the end of such Fiscal Year and
            Consolidated statements of earnings, of cash flows,
            and of changes in stockholders' equity for such
            Fiscal Year, each setting forth in comparative form
            the corresponding figures for the preceding Fiscal
            Year.  In addition, within 105 days after the end of
            each Fiscal Year Parent will furnish to Agent and
            each Lender a certificate in the form of Exhibit D
            signed by the President, Executive Vice President or
            Vice President-Finance of Borrower, of Parent and of
            DEOC, stating that such financial statements are
            accurate and complete, stating that he has reviewed
            the Loan Documents, containing all calculations
            required to be made to show compliance or
            non-compliance with the provisions of Sections
            5.2(a)(iv), (j) and (k), and further stating that
            there is no condition or event at the end of such
            Fiscal Year or at the time of such certificate which
            constitutes a Default or specifying the nature and
            period of existence of any such condition or event.

                 (ii) As soon as available, and in any event
            within 45 days after the end of each Fiscal
            Quarter:

                      (A) a Consolidated and consolidating
                 balance sheet and income statement of Parent,
                 as at the end of such Fiscal Quarter and for
                 the period from the beginning of the then
                 current Fiscal Year to the end of such Fiscal
                 Quarter, all in reasonable detail and prepared
                 in accordance with GAAP, subject to changes
                 resulting from normal year-end adjustments;

                      (B) a Consolidated statement of cash flows
                 of Parent for the period from the beginning of
                 the then current Fiscal year to the end of such
                 Fiscal Quarter, in reasonable detail and
                 prepared in accordance with GAAP, subject to
                 changes resulting from normal year-end
                 adjustments; and

                      (C) a certificate in the form of Exhibit D
                 signed by the President, Executive Vice
                 President or Vice President-Finance of
                 Borrower, of Parent and of DEOC, stating that
                 such financial statements are accurate and
                 complete, stating that he has reviewed the Loan
                 Documents, containing all calculations required
                 to be made by Borrower or Parent to show
                 compliance or non-compliance with the
                 provisions of Sections 5.2(a)(iv), (j) and (k),
                 and further stating that there is no condition
                 or event at the end of such Fiscal Quarter or
                 at the time of such certificate which
                 constitutes a Default or specifying the nature
                 and period of existence of any such condition
                 or event.

                 (iii)     Promptly upon their becoming
            available, copies of all financial statements,
            reports, notices and proxy statements sent by any
            Restricted Person to its stockholders or partners
            and all registration statements, periodic reports
            and other statements and schedules filed by any
            Restricted Person with any securities exchange, the
            Securities and Exchange Commission or any similar
            governmental authority, including any information or
            estimates with respect to Parent's oil and gas
            business (including its exploration, development and
            production activities) which are required to be
            furnished in Parent's annual report pursuant to
            Sections 13 or 15(d) of the Securities Exchange Act
            of 1934, as amended (such required information and
            estimates being called the "SEC Estimates" in the
            immediately following subsection (iv)).

                 (iv) By February 1 of each year, a preliminary
            version, and by March 14 of each year a final
            version, of an engineering report prepared as of the
            preceding December 31 by LaRoche & Associates, or
            other independent petroleum engineers chosen by
            Parent and acceptable to Majority Lenders,
            concerning oil and gas properties and interests
            owned by Borrower, Parent or DEOC constituting
            approximately eighty percent (80%) of the total oil
            and gas reserve value of all oil and gas properties
            and interests owned by Borrower, Parent and the
            other Guarantors which have attributable to them
            proved oil or gas reserves, together with an
            engineering report prepared by Borrower's, Parent's
            and the other Guarantors' in-house engineering staff
            concerning all other oil and gas properties and
            interests owned by Borrower, Parent and the other
            Guarantors not evaluated by such engineers which
            have attributable to them proved oil or gas
            reserves.  Each such Engineering Report shall
            distinguish among proved developed producing
            reserves, proved developed non-producing reserves,
            and proved undeveloped reserves, shall contain
            sufficient information to enable Parent to meet the
            reporting requirements concerning oil and gas
            reserves contained in Regulations S-K and S-X
            promulgated by the Securities and Exchange
            Commission, shall be in form and substance
            satisfactory to Agent, shall contain information and
            analysis comparable in scope to that contained in
            the Initial Engineering Report, and shall contain a
            detailed analysis (herein called the "SEC Case")
            from which can be derived the SEC Estimates referred
            to in the immediately preceding subsection (iii).

                 (v)  By August 15 of each year, a supplemental
            engineering report prepared by Borrower's, Parent's
            and DEOC's in-house engineering staff as of the
            preceding July 1, using assumptions incorporated in
            the most recent SEC Case furnished under the
            immediately preceding subsection (iv), as to the
            five oil and gas properties or interests (units,
            fields and/or leases) owned by Borrower, Parent or
            DEOC with the greatest oil and gas reserve value,
            containing information and analysis comparable in
            scope to that contained in the most-recent
            Engineering Report delivered pursuant to the
            immediately preceding subsection (iv).

                 (vi) As soon as available, and in any event
            within 45 days after the end of each Fiscal Quarter,
            a report describing the gross volume of production
            and sales attributable to production during such
            Fiscal Quarter from all properties described in the
            final Engineering Report most recently furnished
            under subsection (b)(iv) above or in any more recent
            supplemental Engineering Report furnished under
            subsection (b)(v) above, and describing the related
            severance taxes, other taxes, and leasehold
            operating expenses and capital costs attributable
            thereto and incurred during such Fiscal Quarter.  By
            August 15 of each year Borrower, Parent and DEOC
            shall provide a detailed report of all such items of
            information, on a lease or unit basis for the oil
            and gas properties or interests contained in the
            most-recent supplemental Engineering Report
            delivered pursuant to the immediately preceding
            subsection (v), for the six month period ending on
            the preceding June 30.

                 (vii)     As soon as available, and in any
            event within 45 days after the end of each Fiscal
            Quarter, a report showing for the then current
            Fiscal Year all transfers of Proved Properties.

            (c)  Other Information and Inspections.  Each of
       Borrower, Parent and DEOC will, and will cause each
       Restricted Person to, furnish to Agent any
       information which Agent may from time to time request
       concerning any covenant, provision or condition of the
       Loan Documents or any matter in connection with the
       Restricted Persons' businesses and operations.  Each
       Restricted Person will permit representatives appointed
       by Agent, including independent accountants, agents,
       attorneys, appraisers and any other persons, to visit and
       inspect any of such Restricted Person's property during
       normal office hours, including its books of account,
       other books and records, and any facilities or other
       business assets, and to make extra copies therefrom and
       photocopies and photographs thereof, and to write down
       and record any information such representatives obtain,
       and each Restricted Person shall permit Agent or its
       representatives to investigate and verify the accuracy of
       the information furnished to Agent in connection with the
       Loan Documents and to discuss all such matters with its
       officers, employees and representatives.  Each of Agent
       and Lenders agrees that it will take all reasonable steps
       to keep confidential any information given to it by any
       Restricted Person, provided, however, that this
       restriction shall not apply to information which (i) has
       at the time in question entered the public domain, (ii)
       is required to be disclosed by law or by any order, rule
       or regulation (whether valid or invalid) of any court or
       governmental agency or authority, (iii) is disclosed to
       Agent or any Lender or any of their respective examiners,
       Affiliates, auditors, attorneys or agents (which
       Affiliates, auditors, attorneys, and agents shall be
       deemed bound by the restrictions of this sentence), (iv)
       is furnished to prospective successor Agents or to
       purchasers or prospective purchasers of participations or
       interests in the Loans or the Notes (provided that any
       such Persons who are not Affiliates of a Lender have
       agreed to be bound by the restrictions of this sentence),
       or (v) is disclosed in connection with enforcement of the
       Loan Documents during the continuance of a Default.

            (d)  Notice of Material Events and Change of
       Address.  Each of Borrower, Parent and DEOC will promptly
       notify Agent and each Lender (i) of any material adverse
       change in Borrower's or DEOC's individual financial
       condition or in Parent's Consolidated financial
       condition, (ii) of the occurrence of any Default, (iii)
       of the acceleration of the maturity of any Debt owed by
       any Related Person or of any default by any Related
       Person under any indenture, mortgage, agreement, contract
       or other instrument to which any of them is a party or by
       which any of them or any of their properties is bound, if
       such acceleration or default might have a material
       adverse effect upon Borrower's or DEOC's individual
       financial condition or upon Parent's Consolidated
       financial condition, (iv) of any material adverse claim
       (or any claim of $1,000,000 or more) asserted against any
       Related Person or with respect to any Related Person's
       properties, (v) of the occurrence of any Termination
       Event, and (vi) of the filing of any suit or proceeding
       against any Related Person in which an adverse decision
       could have a material adverse effect upon Borrower's or
       DEOC's individual financial condition, business, or
       operations or upon Parent's Consolidated financial
       condition, business or operations.  Upon the occurrence
       of any of the foregoing the Restricted Persons will take
       all necessary or appropriate steps to remedy promptly any
       such material adverse change, Default or default, to
       protect against any such adverse claim, to defend any
       such suit or proceeding, and to resolve all
       controversies on account of any of the foregoing. 
       Borrower, Parent and DEOC will also notify Agent in
       writing at least twenty Business Days prior to the date
       that any Related Person which is a party to any Loan
       Document changes its name or the location of its chief
       executive office.

            (e)  Maintenance of Properties.  Each Restricted
       Person will maintain, preserve, protect, and keep all
       property used or useful in the conduct of its business in
       good condition and in compliance with all applicable
       laws, rules and regulations, and will from time to time
       make all repairs, renewals and replacements needed to
       enable the business and operations carried on in
       connection therewith to be promptly and advantageously
       conducted at all times.

            (f)  Maintenance of Existence and Qualifications. 
       Each Restricted Person which is a corporation,
       partnership or business trust will maintain and preserve
       its corporate, partnership or business trust existence
       and its rights and franchises in full force and effect
       and will qualify to do business as a foreign corporation,
       partnership or business trust in all states or
       jurisdictions where required by applicable law.

            (g)  Payment of Trade Debt, Taxes, etc.  Each
       Restricted Person will (i) timely file all required tax
       returns; (ii) timely pay all taxes, assessments, and
       other governmental charges or levies imposed upon it or
       upon its income, profits or property; (iii) within thirty
       days after the same becomes due pay all Debt owed by it
       on ordinary trade terms to vendors, suppliers and other
       Persons providing goods and services used by it in the
       ordinary course of its business; (iv) pay and discharge
       when due all other Debt now or hereafter owed by it; and
       (v) maintain appropriate accruals and reserves for all of
       the foregoing Debt in accordance with GAAP.  Each
       Restricted Person may, however, delay paying or
       discharging any such Debt so long as it is in good faith
       contesting the validity thereof by appropriate
       proceedings and it has set aside on its books adequate
       reserves therefor to the extent required by GAAP.

            (h)  Insurance.  Each Restricted Person will keep or
       cause to be kept adequately insured by financially sound
       and reputable insurers, its surface equipment and other
       property of a character usually insured by similar
       Persons engaged in the same or similar businesses.  Each
       Restricted Person shall at all times maintain (1)
       adequate insurance against fire, casualty and any other
       hazards normally insured against, and (2) adequate
       insurance against its liability for injury to persons or
       property, which insurance shall be by financially sound
       and reputable insurers.

            (i)  Payment of Expenses.  Whether or not the
       transactions contemplated by this Agreement are
       consummated, Borrower will pay all reasonable costs and
       expenses (including attorneys' fees but excluding normal
       overhead) (i) of Agent in connection with the
       preparation, execution and delivery of the Loan
       Documents, and any and all consents, waivers or other
       documents or instruments relating thereto, (ii) of any
       Person in connection with the filing,
       recording, refiling and re-recording of any Loan
       Documents and any other documents or instruments or
       further assurances required to be filed or recorded or
       refiled or re-recorded by the terms of any Loan Document,
       (iii) of Agent in connection with the borrowings
       hereunder and other action reasonably required in the
       course of administration hereof, and (iv) of Agent or any
       Lender in connection with the defense at any time of the
       Loan Documents and the Obligations, or, after the
       occurrence of a Default, in connection with the
       enforcement of the Loan Documents and the Obligations or
       the defense of Agent's or such Lender's exercise of its
       rights in respect thereof.

            (j)  Performance on Restricted Person's Behalf.  If
       any Restricted Person fails to pay any taxes, insurance
       premiums, expenses, fees, or other amounts it is required
       to pay under any Loan Document, Agent may pay the same,
       and shall use its best efforts to notify Borrower prior
       to making any such payment; provided, however, that any
       failure by Agent to so notify Borrower shall not limit or
       otherwise impair Agent's ability to make any such
       payment.  Borrower shall immediately reimburse Agent for
       any such payments and each amount paid by Agent shall
       constitute an Obligation owed hereunder and shall bear
       interest at the Late Payment Rate from the date such
       amount is paid by Agent until the date such amount is
       repaid to Agent.

            (k)  Compliance with Agreements and Law.  Each
       Restricted Person will perform all material obligations
       it is required to perform under the terms of each
       indenture, mortgage, deed of trust, security agreement,
       lease, franchise, agreement, contract or other instrument
       or obligation to which it is a party or by which it or
       any of its properties is bound.  Each Restricted Person
       will conduct its business and affairs in compliance with
       all laws, regulations, and orders applicable thereto
       (including those relating to pollution and other
       environmental matters).

            (l)  Evidence of Compliance.  Each Restricted Person
       will furnish to Agent and each Lender at such Restricted
       Person's or Borrower's expense all evidence which Agent
       or Majority Lenders from time to time reasonably request,
       including the forms of evidence and assurance described
       in Section 3.2(e), as to the accuracy and validity of or
       compliance with all representations, warranties and
       covenants made by any Related Person in the Loan
       Documents, the satisfaction of all conditions contained
       therein, and all other matters pertaining thereto.

       Section 5.2.  Negative Covenants.  Each of Borrower,
  Parent and DEOC warrants, covenants and agrees that until the
  full and final payment of the Obligations and the termination
  of this Agreement, unless Majority Lenders have previously
  agreed otherwise in writing:

            (a)  Limitation on Debt.  No Restricted Person will
       in any manner owe or be liable for Restricted Debt
       except:

                 (i)  the Obligations;

                 (ii) operating lease or capital lease
            obligations (excluding oil, gas or mineral leases)
            entered into in the ordinary course of the
            Restricted Persons' businesses in arm's length
            transactions at competitive market rates under
            competitive terms and conditions in all respects,
            provided that the obligations required to be paid in
            any Fiscal Year under any such operating and capital
            leases do not in the aggregate exceed $4,000,000 for
            all Restricted Persons;

                 (iii)     Approved Additional Debt, provided,
            however, that the sum of (A) the Loan Balance, plus
            (B) the aggregate outstanding principal balance of
            the Approved Additional Debt shall at no time exceed
            the sum of (C) the Available Borrowing Base then in
            effect, plus (D) $10,000,000;

                 (iv) obligations:

                      (1)  under "take-or-pay" contracts to
                 deliver gas from specified properties in
                 consideration of advance payments therefor,
                 provided that, if the aggregate amount of such
                 obligations of the Restricted Persons is
                 $500,000 or more at the end of any Fiscal
                 Quarter, the amount of each such obligation
                 which is $100,000 or more, and the aggregate
                 amount of all such obligations which are less
                 than $100,000 (together with a list of the
                 properties which give rise to such
                 obligations), must be disclosed on each
                 quarterly officers' certificate delivered under
                 Section 5.1(b)(ii)(C); and

                      (2)  resulting from an "over-produced"
                 status under gas balancing arrangements,
                 provided that, if the aggregate amount of the
                 Restricted Persons' net over-production (i.e.,
                 over-production less under-production) is
                 500,000 mcf or more at the end of any Fiscal
                 Quarter, the amount of each item of
                 over-production which is 100,000 mcf or more,
                 the aggregate amount of all such items which
                 are less than 100,000 mcf, and the aggregate
                 amount of all offsetting under-production
                 rights (together with a list of the properties
                 which give rise to such obligations and rights)
                 must be disclosed on each quarterly officers
                 certificate under Section 5.1(b)(ii)(C);

                 (v)  Debt owed among Borrower, Parent and
            Guarantors that is subordinated to the Obligations
            pursuant to the Subordination Agreement (herein
            called "Subordinated Debt");

                 (vi) guaranties by one Restricted Person of
            Debt owed by another Restricted Person, if such Debt
            either (1) is not Restricted Debt, or (2) is allowed
            under subsections (i), (ii), (iv) or (v) of this
            subsection 5.2(a);

                 (vii)     Debt of the Restricted Persons for
            plugging and abandonment bonds or for letters of
            credit issued by any Lender in place thereof which
            are required by regulatory authorities in the area
            of operations, and Debt of the Restricted Persons for
            other bonds or letters of credit issued by any
            Lender which are required by such regulatory
            authorities with respect to other normal oil and gas
            operations;

                 (viii)    obligations under the Subordinated
            Parent Indenture, the Subordinated Parent Debentures
            and the Subordinated Parent Guarantee;

                 (ix) non-recourse Restricted Debt as to which
            neither Borrower nor Parent nor any Guarantor (A)
            provides any guaranty or credit support of any kind
            (including any undertaking, guarantee, indemnity,
            agreement or instrument that would constitute
            Restricted Debt) or (B) is directly or indirectly
            liable (as a guarantor or otherwise); provided, that
            after giving effect to such Restricted Debt
            outstanding from time to time, Borrower is not in
            violation of Sections 5.2(j) and (k);

                 (x)  Debt arising under forward, future, swap
            or hedging contracts permitted pursuant to Section
            5.2(n);

                 (xi) miscellaneous items of Restricted Debt not
            described in subsections (i) through (x) of this
            subsection (a) which do not in the aggregate (taking
            into account all such Restricted Debt of all
            Restricted Persons) exceed $2,000,000 at any one
            time outstanding; provided, that after giving effect
            to such Restricted Debt outstanding from time to
            time, Borrower is not in violation of Sections
            5.2(j) and (k).

            (b)  Limitation on Liens.  No Restricted Person will
       create, assume or permit to exist any Lien upon any of
       the properties or assets which it now owns or hereafter
       acquires, except:

                 (i)  operators' liens under customary operating
            agreements, statutory Liens for taxes, statutory
            mechanics' and materialmen's Liens, and other
            similar statutory Liens, provided such Liens secure
            only Debt which is not delinquent or which is being
            contested as provided in Section 5.1(g);

                 (ii) Liens on any oil and gas properties which
            neither have developed reserves (producing or
            non-producing) properly attributable thereto nor are
            otherwise held under lease by production of other
            reserves;

                 (iii)     Liens on the Restricted Persons'
            office facilities;

                 (iv) Liens to secure the Obligations;

                 (v)  Liens securing Subordinated Debt permitted
            under Section 5.2(a)(v);

                 (vi) Liens on property securing Debt permitted
            under Section 5.2(a)(ix) incurred to finance the
            purchase price of such property
            and not secured by other property (except for such
            property and receivables, contract rights and
            similar intangibles related thereto and the proceeds
            thereof); and

                 (vii)     Liens described in Section
            5.2(n)(i)(B) to secure Debt arising under forward,
            future, swap or hedging contracts permitted pursuant
            to Section 5.2(n)(i).

       No Restricted Person will allow the filing or continued
       existence of any financing statement describing as
       collateral any assets or property of such Restricted
       Person, other than financing statements which describe
       only collateral subject to a Lien permitted under this
       section and which name as secured party or lessor only
       the holder of such Lien.

            (c)  Limitation On Intercompany Transfers.  No
       Restricted Person will engage in any transaction with any
       other Restricted Person or Unrestricted Person which
       involves the transfer of assets by a Restricted Person in
       any manner (whether by loan, purchase, dividend, capital
       contribution, or otherwise) except (to the extent not
       otherwise prohibited hereunder or under the other Loan
       Documents) as follows:

                 (i)  Borrower, Parent and the other Guarantors
            may make loans among one another, Borrower and each
            Guarantor other than Parent may pay dividends to
            Borrower, Parent or any other Guarantor, and Parent,
            Borrower and the other Guarantors may make capital
            contributions to or purchase additional shares of
            capital stock in Borrower and Guarantors, all
            without limit, provided that no Default exists
            immediately before or immediately after such
            transaction;

                 (ii) Borrower, Parent and the other Guarantors
            may make loans or capital contributions to, purchase
            shares of common stock from, or otherwise provide
            funds to Restricted Persons (other than Borrower,
            Guarantors and Devon Trust) and Unrestricted
            Persons, provided that (A) the aggregate amount of
            all such loans (excluding any such loans which have
            at the time in question been repaid) may at no time
            in the aggregate exceed $1,000,000 with respect to
            all such Restricted Persons and Unrestricted
            Persons, (B) the aggregate amount of all such
            capital contributions, purchases of shares, and
            other provisions of funds (excluding loans and
            excluding capital contributions consisting of newly
            issued or treasury stock of Parent) shall be
            included within and must not exceed the $1,000,000
            annual limit on investments set out in Section
            5.2(f)(ii), and (C) any Restricted Person or
            Unrestricted Person who receives $1,000,000 or more
            in any one or more such transactions (whether as a
            loan, capital contribution, purchase, or otherwise)
            from either or both of Borrower and Parent must
            become a Guarantor to the extent provided in Section
            6.2;Section 5.2(c)(iii)

                 (iii)     Any Restricted Person other than
            Parent may pay dividends to its shareholders so long
            as the full amount of such dividends is received
            (either directly or through a series of concurrent
            transactions) by any or all of Borrower, Parent, or
            the other Guarantors;

                 (iv) The Restricted Persons may sell (and pay
            for) goods and services to each other, at fair
            prices obtainable in arm's-length transactions with
            third parties, in transactions which do not involve
            the payment of cash or cash equivalents by Borrower
            or Parent to any Person other than each other; and

                 (v)  Parent may pay quarterly interest payments
            on the Subordinated Parent Debentures to Devon
            Trust, pursuant to the express terms thereof, and
            Devon Trust may pay quarterly cash dividends to the
            holders of the Devon Trust Securities pursuant to
            the express terms thereof, provided that both
            immediately before and immediately after any such
            proposed interest payment and dividend payment,
            Parent is in compliance with Section 5.2(k) and no
            Default under Section 7.1(a), 7.1(f) or 7.1(h) is
            continuing.

       In addition to the foregoing, Borrower, Parent and the
       other Guarantors may, without regard to the $1,000,000
       limit referred to in subsection (ii)(B) of this section,
       acquire interests from unaffiliated third parties in
       corporations or limited partnerships who thereby become
       (or already are) Subsidiaries of Parent, provided that
       (1) no such corporation or limited partnership may be
       designated as an Unrestricted Person, (2) Borrower or a
       Guarantor must acquire directly more than 50% (by vote)
       of the voting stock of any corporation so acquired, and
       (3) Borrower or a Guarantor must acquire directly 100% of
       the general partner interests in any limited partnership
       so acquired.

            (d)  Limitation on Distributions and Repurchases;
       Dividends and Redemptions.  Except as permitted in
       Section 5.2(c) or in the last sentence of this
       subsection, no Restricted Person will otherwise declare
       or pay any dividends on, or make any distribution or
       other payment in respect of, any class of its capital
       stock or any partnership or other interests in it, nor
       will any Restricted Person directly or indirectly make,
       cause or permit any capital contribution to or purchase,
       redeem, acquire or retire any shares of the capital stock
       of or partnership interests or other interests in any
       Related Person (whether such interests are now or
       hereafter issued, outstanding or created), or cause or
       permit any reduction or retirement of the capital stock
       of any Related Person, or agree to do any of the
       foregoing.  Each Restricted Person may declare and pay to
       any Persons dividends payable only in its common or
       preferred stock, so long as Parent's direct or indirect
       interest in any of its Subsidiaries is not thereby
       reduced.  In addition to the foregoing, Parent may
       declare and pay to any Persons quarterly cash dividends
       on the common stock of Parent, provided that, immediately
       prior to and immediately after the payment of such cash
       dividends (i) Parent is in compliance with Section 5.2(k)
       and (ii) no Borrowing Base Deficiency exists.  In
       addition to the foregoing, Parent may spend up to
       $25,000,000 in the aggregate to purchase,
       redeem, acquire or otherwise retire shares of the capital
       stock of Parent, provided that both immediately before
       and immediately after any such proposed repurchase (i) no
       Default is continuing and (ii) no Borrowing Base
       Deficiency exists.

            (e)  Limitation on Mergers, Issuances of Securities. 
       No Restricted Person will merge or consolidate with or
       into any other Person, except that (i) any Related Person
       which is a Subsidiary of Parent (other than Borrower) may
       be consolidated with Borrower, Parent or any other
       Guarantor so long as Borrower, Parent or a Guarantor is
       the surviving entity and (ii) any Subsidiaries of Parent
       (other than Borrower) may merge or consolidate with or
       into each other so long as the surviving entity is a
       Guarantor.  No Restricted Person (other than Parent and
       Devon Trust) will issue any additional shares of its
       capital stock, additional partnership interests or other
       securities or any options, warrants or other rights to
       acquire such additional shares, partnership interests or
       other securities except to a Restricted Person of which
       such issuer is already directly or indirectly a
       Subsidiary and only to the extent not otherwise forbidden
       under the terms hereof.  Devon Trust will not issue any
       securities except common securities to Parent and the
       Devon Trust Securities.  Borrower and each Guarantor
       other than Parent will at all times remain wholly-owned
       direct or indirect Subsidiaries of Parent, Parent will at
       all times own all of the outstanding common securities of
       Devon Trust, and no Restricted Person will allow any
       diminution of Borrower's or any Guarantor's interest
       (direct or indirect) therein.  Parent will not issue or
       have outstanding any securities other than its common or
       preferred stock and the Subordinated Parent Debentures.

            (f)  Limitation on Investments and New Businesses. 
       Other than as permitted in Section 5.2(c), no Restricted
       Person will (i) make any expenditure or commitment or
       incur any obligation or enter into or engage in any
       transaction except in the ordinary course of its present
       oil and gas businesses and operations, or (ii) make any
       acquisitions of or capital contributions to or other
       investments in any Persons in excess of $1,000,000 in the
       aggregate in any Fiscal Year.  Notwithstanding the
       foregoing, so long as no Borrowing Base Deficiency
       exists, the Restricted Persons may make:

                 (A) investments in direct obligations of, or
            obligations guaranteed by the full faith and credit
            of, the United States of America, maturing in twelve
            months or less from the date of acquisition thereof
            by such Restricted Person,

                 (B) demand deposits, and time deposits
            (including certificates of deposit) maturing within
            one year from the date of deposit thereof, with a
            domestic office (1) of Agent or any Lender or the
            Bank of Oklahoma, N.A., or (2) of any bank or trust
            company organized under the laws of the United
            States of America or any State therein, provided
            that (a) the full amount of each such deposit in
            such bank or trust company is insured by the Federal
            Deposit Insurance Corporation or (b) such bank or
            trust company has capital, surplus and undivided profits
            aggregating at least $50,000,000,

                 (C) investments in (1) publicly traded debt
            securities with an original term of 270 days or less
            or (2) interest bearing securities issued to the
            public by banks, associated entities or similar
            institutions, which can be put to the issuer at the
            investor's unconditional option within one month
            after acquisition, so long as in each case such
            securities have a credit rating of at least A-1 from
            Standard & Poor's Corporation or P-1 from Moody's
            Investors Service, Inc.

            (g)  Limitation on Credit Extensions.  Except as
       allowed under clauses (A), (B) or (C) of the immediately
       preceding subsection (f), no Restricted Person will
       extend credit, make advances or make loans other than (i)
       normal and prudent extensions of credit by any Related
       Person to its own customers buying goods and services in
       the ordinary course of business, which extensions shall
       not be for longer periods than those extended by similar
       businesses operated in a normal and prudent manner, (ii)
       loans permitted under Section 5.2(c), and (iii) other
       loans by Borrower or Guarantors to any Persons who are
       not Related Persons, provided that aggregate principal
       balance of all such loans does not exceed $250,000 at any
       time outstanding.

            (h)  Limitation on Sales of Property.  No Restricted
       Person will sell, transfer, lease, exchange, alienate or
       dispose of (in this section, "transfer") any of its
       assets or properties or any interest therein except that
       the following may be transferred in arms'-length
       transactions:

                 (i)  properties and assets which are not used
            or useful in the exploration, production,
            processing, transportation or refining of oil or
            gas;

                 (ii) inventory (including oil and gas
            production or seismic data) which is sold in the
            ordinary course of business;

                 (iii)     equipment which is not used or useful
            in the operation or maintenance of Proved
            Properties;

                 (iv) oil and gas properties (or portions
            thereof) which are not Proved Properties, and Proved
            Properties to which no proved developed producing
            reserves or proved developed non-producing reserves
            are attributed, provided that such Proved Properties
            are farmed out to Persons other than Affiliates of
            Borrower and not otherwise transferred; and

                 (v)  Proved Properties, provided that (A) no
            Default is continuing at the time of such proposed
            transfer, (B) no Borrowing Base Deficiency exists,
            and (C) the aggregate prices received from all
            transfers of Proved Properties (including such
            proposed transfer but excluding farmouts
            under subsection (iv) immediately above) by all Restricted
            Persons during any Fiscal Year does not exceed
            $25,000,000.

       Borrower will furnish to Agent and each Lender the report
       regarding transfers made pursuant to the above subsection
       5.2(h)(v) as set forth in subsection 5.1(b)(vii).  No
       Restricted Person will sell, transfer or otherwise
       dispose of capital stock of any of Parent's Subsidiaries
       except that any Subsidiary of Parent (other than
       Borrower) may sell or issue its own capital stock to the
       extent not otherwise prohibited hereunder.  No Restricted
       Person will discount, sell, pledge or assign any notes
       payable to it, accounts receivable or future income
       except to the extent expressly permitted under the Loan
       Documents.

            (i)  Fiscal Year.  No Related Person will change its
       fiscal year.

            (j)  Working Capital and Current Ratio.  The ratio
       of Parent's Consolidated current assets to Parent's
       Consolidated current liabilities (excluding deferred
       taxes) will never be less than 1.00 to 1.00.  For
       purposes of this subsection: (a) up to $15,000,000 of an
       aggregate amount of the unused portion of (I) the
       Available Borrowing Base which is available for borrowing
       at the time in question and (II) any long-term credit
       facility at Bank of Oklahoma, N.A. which is available for
       borrowing at the time in question without violation of
       Section 5.2(a), will be considered a current asset, and
       (b) Borrower's Consolidated current liabilities will be
       calculated without including any payments of principal on
       the Notes which are required to be repaid within one year
       from the time of calculation.  For purposes of the
       foregoing, all accrued interest payments on the
       Subordinated Parent Debentures and all dividend payments
       on the Devon Trust Securities shall (without duplication)
       be deemed to be and shall be included in Parent's
       Consolidated current liabilities as defined by GAAP.

            (k)  Tangible Net Worth.  Parent's Consolidated
       Tangible Net Worth will never be less than:

                 (i)  $310,000,000, plus

                 (ii) seventy-five percent (75%) of Parent's
            Cumulative Consolidated Net Income (beginning May 1,
            1996 as set forth in the definition thereof), to the
            extent Parent's Cumulative Consolidated Net Income
            is greater than zero, plus

                 (iii)     one hundred percent (100%) of the
            proceeds (net only of costs of sale) from any
            issuance after April 30, 1996 of any shares of
            Parent's common or preferred stock or any other
            securities, other than the Subordinated Parent
            Debentures (including any options, warrants or other
            rights to acquire such stock) which Parent issues
            after such date, provided that Parent shall comply
            with the provisions of Section 5.2(e) hereof in
            connection with any such issuance.

       As used in this subsection:

            "Parent's Consolidated Debt" means all Consolidated
       liabilities and similar balance sheet items of Parent,
       together with all other contingent and indirect
       liabilities (including without limitation any guaranties)
       of Parent or any of Parent's Subsidiaries which are of a
       character required to be included in Parent's audited
       Consolidated annual financial statements described in
       Section 5.1(b)(i), other than deferred taxes. 
       Notwithstanding the foregoing, for the purposes of
       determining "Parent's Consolidated Debt", the outstanding
       principal amount of the Subordinated Parent Debentures
       shall not be included.

            "Parent's Consolidated Tangible Net Worth" means (A)
       all Consolidated assets of Parent, other than intangible
       assets (including without limitation as intangible assets
       such assets as patents, copyrights, licenses, franchises,
       goodwill, trade names, trade secrets and leases other
       than oil, gas or mineral leases or leases required to be
       capitalized under GAAP), plus (B) the amount spent by
       Parent, if any, to purchase, redeem, acquire or otherwise
       retire shares of the capital stock of Parent as provided
       in Section 5.2(d), minus (C) Parent's Consolidated Debt
       and deferred taxes.  For the purposes of determining
       "Parent's Consolidated Tangible Net Worth", no
       adjustments shall be made to the book value of Parent's
       Consolidated oil and gas assets which would otherwise be
       required after March 31, 1992 pursuant to the limitation
       on capitalized costs contained in Regulation Section
       210.4-10(i)(4) of the Securities and Exchange Commission.

            (l)  Amendment of Contracts; ERISA Plans.  No
       Related Person will amend or permit any amendment of any
       agreement, document or instrument delivered in connection
       with the Subordinated Debt, the Subordinated Parent
       Debentures or the Devon Trust Securities without the
       written consent of Majority Lenders.  No Related Person
       will amend or permit any amendment to any contract which
       releases, qualifies, limits, makes contingent or
       otherwise detrimentally affects the rights and benefits
       of Agent or any Lender under or acquired pursuant to any
       Loan Documents.  No Related Person will incur any
       obligation to contribute to any "multiemployer plan" as
       defined in Section 4001 of ERISA.

            (m)  Devon Trust; Devon Trust Securities.  Devon
       Trust shall exist for the exclusive purposes of (A)
       issuing the Devon Trust Securities, (B) investing the
       gross proceeds of the Devon Trust Securities in the
       Subordinated Parent Debentures and (C) engaging in only
       those other activities necessary or incidental thereto. 
       Parent shall exercise its option to defer interest
       payments on the Subordinated Parent Debentures rather
       than default on such interest payments.  Devon Trust
       shall not be dissolved without prior written notice by
       Parent to Majority Lenders.  Devon Trust shall not redeem
       the Devon Trust Securities prior to their stated
       maturity, and Parent shall not prepay or redeem the
       Subordinated Parent Debentures prior to their stated
       maturity, unless both immediately before and immediately
       after any such proposed prepayment or redemption, Parent
       is in compliance with Section 5.2(k) and no Default under
       Section 7.1(a), 7.1(f) or 7.1(h) is continuing.

            (n)  Hedging Contracts.  No Restricted Person will
       be a party to or in any manner be liable on any forward,
       future, swap or hedging contract, unless such contracts
       qualify under GAAP as a hedge of oil and gas production,
       floating rate Debt or foreign currency needs (and not as
       a speculative investment), such contracts are entered
       into in the ordinary course of the Restricted Persons'
       businesses, and

                 (i)  if such contracts are entered into with
            the purpose and effect of fixing prices on oil or
            gas expected to be produced by the Restricted
            Persons:

                 (A)  such contracts for any single month
                 (determined, in the case of contracts that are
                 not settled on a monthly basis, by a monthly
                 proration acceptable to Agent) do not, in the
                 aggregate, cover amounts greater than seventy-
                 five percent (75%) of the Related Persons'
                 aggregate Projected Oil and Gas Production
                 anticipated to be sold in the ordinary course
                 of the Restricted Persons' businesses for such
                 month;

                 (B)  such contracts do not require any Related
                 Person to provide any Lien to secure Borrower's
                 obligations thereunder, other than Liens on
                 cash or cash equivalents in an aggregate amount
                 not more than $10,000,000; and

                 (C)  each such contract is with a counterparty
                 or has a guarantor of the obligation of the
                 counterparty who (unless such counterparty is
                 Agent, any Lender or any of their Affiliates)
                 at the time the contract is made has long-term
                 obligations rated AA or better by Standard &
                 Poor's Corporation or Aa2 or better by Moody's
                 Investors Service, Inc. or is an investment
                 grade-rated industry participant.

                 As used in this subsection (iii), the term
                 "Projected Oil and Gas Production" means the
                 projected production of oil or gas (measured by
                 volume unit or BTU equivalent, not sales price)
                 for the term of the contracts or a particular
                 month, as applicable, from properties and
                 interests owned by any Restricted Person which
                 have attributable to them proved oil or gas
                 reserves, as such production is projected in
                 the most recent Engineering Report delivered
                 pursuant to Section 5.1(b)(iv), after deducting
                 projected production from any properties or
                 interests sold or under contract for sale that
                 had been included in such Engineering Report
                 and after adding projected production from any
                 properties or interests that had not been
                 reflected in such Engineering Report but that
                 are reflected in a separate or supplemental
                 Engineering Report meeting the
                 requirements of such Section 5.1(b)(iv) above
                 and otherwise are satisfactory to Agent.

                 (ii)  if such contracts are entered into with
            the purpose and effect of fixing interest rates on a
            principal amount of indebtedness of such Restricted
            Person that is accruing interest at a variable rate,
            the aggregate notional amount of such contracts
            never exceeds the anticipated outstanding principal
            balance of the indebtedness to be hedged by such
            contracts or an average of such principal balances
            calculated using a generally accepted method of
            matching interest swap contracts to declining
            principal balances, and the floating rate index of
            each such contract generally matches the index used
            to determine the floating rates of interest on the
            corresponding indebtedness to be hedged by such
            contract.

     Section 5.3.  Investing Subsidiary.  Each of Borrower,
  Parent and DEOC warrants, covenants and agrees that until the
  full and final payment of the Obligations and the termination
  of this Agreement, unless Majority Lenders have previously
  agreed otherwise in writing:

          (a)  So long as it exists, Investing Subsidiary shall
     be and at all times will remain a wholly-owned Subsidiary of
     Borrower;

          (b)  Borrower shall make no equity investments in,
     loans to, or other transfers of assets to Investing
     Subsidiary, except that Borrower may make stock purchases or
     capital contributions from time to time which are in cash
     and which do not in the aggregate (including Borrower's
     original investment in Investing Subsidiary and all
     investments thereafter, but excluding previous investments
     of capital which are returned to Borrower) exceed (i)
     $15,000,000 or (ii) with the prior consent of Majority
     Lenders, $25,000,000;

          (c)  Notwithstanding Section 5.2(a), Investing
     Subsidiary shall not in any manner owe or be liable for
     Restricted Debt of any type, whether to Related Persons or
     otherwise, except for any guaranty of the Obligations which
     may hereafter be requested by Agent;

          (d)  The sole business of Investing Subsidiary, if any,
     shall be the purchase, holding, and sale of debt or equity
     securities of one or more Portfolio Companies (provided that
     Investing Subsidiary may temporarily invest cash not
     required to be returned to Borrower under subsection (f)
     below in investments permitted under the second sentence of
     Section 5.2(f));

          (e)  No assets of Investing Subsidiary shall be counted
     as current assets in any calculations under Section 5.2(j);

          (f)  Whenever Investing Subsidiary has assets with a
     book value in excess of $5,000,000 (excluding unrealized
     appreciation), and such assets consist in whole or in part
     of cash received from anyone other than Borrower, such cash
     (to the extent it does not exceed such excess) may not be reinvested
     by Investing Subsidiary but must be promptly dividended or
     otherwise distributed to Borrower;

          (g)  Investing Subsidiary shall be a Restricted Person
     for all purposes under this Agreement, including without
     limitation Sections 5.2(b) and 6.2, and Borrower will cause
     Investing Subsidiary to give a guaranty of such part of the
     Obligations as Agent may in its discretion at any time
     request as contemplated in Section 6.2; and

     Lenders hereby agree that, notwithstanding Sections 5.1(b),
  5.1(c), 5.2(c), 5.2(f), 6.2 or any other provisions of this
  Agreement:  (1) Investing Subsidiary need not give a guaranty
  as contemplated in Section 6.2 until requested to do so by
  Agent, and (2) no Related Person shall be required to identify
  Investing Subsidiary or any Portfolio Company to Lenders
  except to the limited extent provided in the following
  sentence.  Borrower will identify Investing Subsidiary (but
  not any Portfolio Company) in connection with any guaranty
  hereafter given by Investing Subsidiary or any security
  interest hereafter given by Borrower in Borrower's stock in
  Investing Subsidiary, but Agent and Lenders shall take all
  reasonable efforts to keep the knowledge of such identity to
  the minimum number of Persons needed to effectuate such
  guaranty or security interest.  The investments permitted
  under this section shall not count against the $1,000,000
  limit on equity investments contained in Section 5.2(f)(ii),
  nor may investments be made in Investing Subsidiary or in
  Portfolio Companies under Sections 5.2(c) or 5.2(f) in
  addition to those provided for in this section.  As indicated
  in Section 5.3(d) above, Investing Subsidiary may buy and sell
  debt and equity securities of Portfolio Companies in its
  discretion.  Borrower and Lenders acknowledge and agree that
  Lenders, in good faith, have not relied upon the debt or
  equity securities of Portfolio Companies as collateral in
  extending or maintaining this particular credit.

                ARTICLE VI -- Guaranties and Offset

     Section 6.1.  Bank Accounts; Offset.  To secure the
  repayment of the Obligations, each of Borrower, Parent and the
  other Guarantors hereby grants to Agent and each Lender a
  security interest, a lien, and a right of offset, each of
  which shall be upon and against all right, title, and interest
  of any Restricted Person in (a) any and all moneys, securities
  or other property (and the proceeds therefrom) of Borrower,
  Parent and the other Guarantors now or hereafter held or
  received by or in transit to Agent or such Lender from or for
  the account of Borrower, Parent or any other Guarantor,
  whether for safekeeping, custody, pledge, transmission,
  collection or otherwise, (b) any and all deposits (general or
  special, time or demand, provisional or final) of Borrower,
  Parent or any other Guarantor with Agent or such Lender, and
  (c) any other credits and claims of Borrower, Parent or any
  Guarantor at any time existing against Agent or such Lender,
  including claims under certificates of deposit.  Upon the
  occurrence of any Default, each of Agent and Lenders is hereby
  authorized to foreclose upon, offset, appropriate, and apply,
  at any time and from time to time, without notice to Borrower,
  Parent or any other Guarantor, any and all items hereinabove
  referred to against the Obligations (whether or not such
  Obligations are then due and payable).  To the extent that
  Borrower, Parent or any other Guarantor have accounts
  designated as royalty or joint
  interest owner accounts, the foregoing security interest, lien
  and right of offset shall not extend to funds in such accounts
  which belong to, or otherwise arise from payments to Borrower,
  Parent or any other Guarantor for the account of, third party
  royalty or joint interest owners.

     Section 6.2.  Guaranties of Subsidiaries.  Each Related
  Person (other than Borrower, Parent, the other Guarantors, or
  Devon Trust) which is now existing or is created, acquired or
  comes into existence after the date hereof and which after the
  date hereof receives loans or capital contributions from or
  has other debt or equity investments made in it by one or more
  Restricted Persons in an aggregate amount of $1,000,000 or
  more, shall, upon request by and at the discretion of Agent,
  promptly execute and deliver to Agent for the benefit of Agent
  and Lenders an absolute and unconditional guaranty of the
  timely repayment of the Obligations and the due and punctual
  performance of the obligations of Borrower hereunder, which
  guaranty shall be satisfactory to Agent in form and substance. 
  Borrower, Parent and each other Guarantor will cause each such
  Related Person to deliver to Agent, simultaneously with its
  delivery of such a guaranty, written evidence satisfactory to
  Agent and its counsel that such Related Person has taken all
  corporate or partnership action necessary to duly approve and
  authorize its execution, delivery and performance of such
  guaranty and any other documents which it is required to
  execute.  Notwithstanding the foregoing, if any Related Person
  not wholly owned (directly or indirectly) by Parent would
  violate a duty to its minority interest owners by becoming a
  Guarantor, such Related Person need not become a Guarantor and
  Parent will instead, if requested by Agent, give (or cause to
  be given) a first security interest (under documents in form
  and substance acceptable to Agent) in its entire ownership
  interest in such Related Person to Agent for the benefit of
  Lenders.

     Section 6.3.  Guarantors' Right of Setoff.  Insofar as any
  Guarantor (other than Parent), Parent and Borrower are
  concerned, any payment by any such Guarantor under its
  guaranty of the Obligations shall be deemed to be a repayment
  of, and shall be set off against (i) first, any intercompany
  loans made by Parent to such Guarantor, and (ii) second, any
  intercompany loans made by Borrower to such Guarantor.

           ARTICLE VII -- Events of Default and Remedies

     Section 7.1.  Events of Default.  Each of the following
  events constitutes an Event of Default under this Agreement:

          (a)  Any Related Person fails to pay any Obligation
     when due and payable, whether at a date for the payment of a
     fixed installment or contingent or other payment to Agent or
     a Lender or as a result of acceleration or otherwise;

          (b)  Any "default", "event of default", "Default" or
     "Event of Default" occurs under any Loan Document (other
     than this Agreement) which defines any such term, and the
     same is not remedied within the applicable period of grace
     (if any) provided in such Loan Document;Section 7.1(c)

          (c)  Any Related Person fails (other than as referred
     to in subsections (a) and (b) above) to duly observe,
     perform or comply with any covenant, agreement, condition or
     provision of any Loan Document, and such failure is not
     remedied within the applicable Grace Period;

          (d)  Any representation or warranty previously,
     presently or hereafter made in or in writing by or on behalf
     of any Related Person in connection with any Loan Document
     shall prove to have been false or incorrect in any material
     respect on any date on or as of which made, and the
     represented or warranted facts do not become true and
     correct within the applicable Grace Period;

          (e)  Any Restricted Person fails to duly observe,
     perform or comply with any agreement with any Person or any
     term or condition of any instrument, if such agreement or
     instrument is materially significant (i) to Borrower, (ii)
     to Parent, DEOC or any other Guarantor, or (iii) to Borrower
     and its subsidiaries on a Consolidated basis, to Parent and
     its subsidiaries on a Consolidated basis, or to DEOC and its
     subsidiaries on a Consolidated basis, and such failure is
     not remedied within the applicable period of grace (if any)
     provided in such agreement or instrument;

          (f)  Any Related Person (i) fails to duly pay any Debt
     constituting principal or interest owed by it with respect
     to borrowed money or money otherwise owed under any note,
     bond, or similar instrument, including without limitation
     the Subordinated Parent Debentures, the Subordinated Parent
     Indenture, the Subordinated Parent Guarantee and the Devon
     Trust Securities, or (ii) fails to pay when the same becomes
     due and payable any other Debt in excess of $100,000 (other
     than trade payables outstanding in compliance with
     Section 5.1(g)(iii)), or (iii) breaches or defaults in the
     performance of any agreement or instrument by which any Debt
     described in the preceding clauses (i) or (ii) is issued,
     evidenced, governed, or secured, and any such failure,
     breach or default continues beyond any applicable period of
     grace provided therefor;

          (g)  Either (i) any "accumulated funding deficiency"
     (as defined in Section 412(a) of the Internal Revenue Code
     of 1986, as amended) in excess of $100,000 exists with
     respect to any ERISA Plan, whether or not waived by the
     Secretary of the Treasury or his delegate, provided,
     pursuant to Section 412(c)(10) of the Internal Revenue Code
     of 1986, as amended, any contribution for an ERISA Plan year
     made during the period set forth in Section 412(c)(10) shall
     be deemed to have been made on the last day of such ERISA
     Plan year, or (ii) any Termination Event occurs with respect
     to any ERISA Plan and the then current value of such ERISA
     Plan's benefit liabilities exceeds the then current value of
     such ERISA Plan's assets available for the payment of such
     benefit liabilities by more than $100,000 (or in the case of
     a Termination Event involving the withdrawal of a
     substantial employer, the withdrawing employer's
     proportionate share of such excess exceeds such
     amount);

          (h)  Any Related Person:

               (i)  suffers the entry against it of a judgment,
          decree or order for relief by a court of competent
          jurisdiction in an involuntary case commenced under any
          applicable bankruptcy, insolvency or other similar law
          of any jurisdiction now or hereafter in effect,
          including the federal Bankruptcy Code, as from time to
          time amended, or has any such case commenced against it
          which remains undismissed for a period of thirty days;
          or

               (ii) commences a voluntary case under any
          applicable bankruptcy, insolvency or similar law now or
          hereafter in effect, including the federal Bankruptcy
          Code, as from time to time amended; or applies for or
          consents to the entry of an order for relief in an
          involuntary case under any such law; or makes a general
          assignment for the benefit of creditors; or fails
          generally to pay its debts as such debts become due; or
          takes corporate or other action to authorize any of the
          foregoing; or

               (iii)     suffers the appointment of or taking
          possession by a receiver, liquidator, assignee,
          custodian, trustee, sequestrator or similar official of
          all or any substantial part of its property in a
          proceeding brought against or initiated by it, and such
          appointment or taking possession is neither made
          ineffective nor discharged within thirty days after the
          making thereof, or such appointment or taking
          possession is consented to, requested by, or acquiesced
          to by it; or

               (iv) suffers the entry against it of a final
          judgment for the payment of money in excess of
          $1,000,000, unless the same is discharged within thirty
          days after the date of entry thereof or an appeal or
          appropriate proceeding for review thereof is taken
          within said period and a stay of execution pending such
          appeal is obtained; or

               (v)  suffers a writ or warrant of attachment or
          any similar process to be issued by any court against
          all or any substantial part of its property, and such
          writ or warrant of attachment or any similar process is
          not stayed or released within thirty days after the
          entry or levy thereof or after any stay is vacated or
          set aside;

          (i)  Any material adverse change occurs in Borrower's
     Consolidated financial condition or businesses or
     operations, in Parent's Consolidated financial condition or
     businesses or operations, or in DEOC's Consolidated
     financial condition or businesses or operations, and such
     adverse change is not remedied within the applicable Grace
     Period;

          (j)  any Person (or syndicate or group of Persons which
     is deemed a "person" for the purposes of Section 13(d)(3) of
     the Securities Exchange Act of 1934, as amended) acquires
     more than thirty percent (30%) of the outstanding
     stock of Parent having ordinary voting power (disregarding
     changes in voting power based on the occurrence of
     contingencies) for the election of directors, or during any
     period of twelve successive months a majority of the Persons
     who were directors of Parent at the beginning of such period
     cease to be directors of Parent; and

  Upon the occurrence of an Event of Default described in
  subsection (h)(i), (h)(ii) or (h)(iii) of this section with
  respect to Borrower, Parent or DEOC, all of the Obligations
  shall thereupon become immediately due and payable, without
  presentment, demand, protest, notice of protest, declaration
  or notice of acceleration or intention to accelerate, or other
  notice or declaration of any kind, all of which are hereby
  expressly waived by Borrower, Parent and DEOC and each
  Restricted Person who at any time guaranties, ratifies or
  approves this Agreement.  During the continuance of any other
  Event of Default, and with the consent of Majority Lenders,
  Agent may at any time and from time to time (unless all
  Defaults have theretofore been remedied) without notice to
  Borrower or any Guarantor declare any or all of the
  Obligations immediately due and payable, and all such
  Obligations shall thereupon be immediately due and payable,
  without presentment, demand, protest, notice of protest,
  declaration or notice of acceleration or intention to
  accelerate, or other notice or declaration of any kind, all of
  which are hereby expressly waived by Borrower, Parent and DEOC
  and each Restricted Person who at any time guaranties,
  ratifies or approves this Agreement.  After any such
  acceleration neither Agent nor any Lender shall have any
  obligation to make any further Advances or Loans of any kind
  under any agreement with any Restricted Person.  The term
  "Grace Period" as used herein with respect to an Event of
  Default for which a Grace Period is specifically provided
  shall mean the period beginning on the date of the related
  Default and ending thirty days after written notice of such
  Default is given by Agent to Borrower, provided that such
  period shall be reduced to two days if Borrower has not
  previously given written notice of such Default to Agent and
  Lenders as required in Section 5.1(d).

     Section 7.2.  Remedies.  If any Default shall occur and be
  continuing, Agent and Lenders may protect and enforce their
  rights under the Loan Documents by any appropriate
  proceedings, including proceedings for specific performance of
  any covenant or agreement contained in any Loan Document, and
  Agent and Lenders may enforce the payment of any Obligations
  due or enforce any other legal or equitable right.  All
  rights, remedies and powers conferred upon Agent or Lenders
  under any Loan Document shall be deemed cumulative and not
  exclusive of any other rights, remedies or powers available
  under the other Loan Documents or at law or in equity.

                       ARTICLE VIII -- Agent

     Section 8.1.  Appointment and Authority.  Each Lender hereby
  irrevocably authorizes Agent, and Agent hereby undertakes, to
  receive payments of principal, interest and other amounts due
  hereunder as specified herein and to take all other actions
  and to exercise such powers under the Loan Documents as are
  specifically delegated to Agent by the terms hereof or
  thereof, together with all other powers reasonably incidental
  thereto.  The relationship of Agent to Lenders is only that of
  one commercial bank acting as administrative agent for others,
  and nothing in the Loan Documents shall be
  construed to constitute Agent a trustee or other fiduciary for
  any holder of any of the Notes or of any participation therein
  nor to impose on Agent duties and obligations other than those
  expressly provided for in the Loan Documents.  With respect to
  any matters not expressly provided for in the Loan Documents
  and any matters which the Loan Documents place within the
  discretion of Agent, Agent shall not be required to exercise
  any discretion or take any action, and it may request
  instructions from Lenders with respect to any such matter, in
  which case it shall be required to act or to refrain from
  acting (and shall be fully protected and free from liability
  to all Lenders in so acting or refraining from acting) upon
  the instructions of Majority Lenders (including itself),
  provided, however, that Agent shall not be required to take
  any action which exposes it to a risk of personal liability
  that it considers unreasonable or which is contrary to the
  Loan Documents or to applicable law.  Upon receipt by Agent
  from Borrower, Parent or DEOC of any communication calling for
  action on the part of Lenders or upon notice from any Lender
  to Agent of any Default or Event of Default, Agent shall
  promptly notify each Lender thereof.

     Section 8.2.  Agent's Reliance, Etc.  Neither Agent nor any
  of its directors, officers, agents, attorneys, or employees
  shall be liable for any action taken or omitted to be taken by
  any of them under or in connection with the Loan Documents,
  including their negligence of any kind, except that each shall
  be liable for its own gross negligence or willful misconduct. 
  Without limiting the generality of the foregoing, Agent (a)
  may treat the payee of any Note as the holder thereof until
  Agent receives written notice of the assignment or transfer
  thereof in accordance with this Agreement, signed by such
  payee and in form satisfactory to Agent; (b) may consult with
  legal counsel (including counsel for Borrower, Parent or
  DEOC), independent public accountants and other experts
  selected by it and shall not be liable for any action taken or
  omitted to be taken in good faith by it in accordance with the
  advice of such counsel, accountants or experts; (c) makes no
  warranty or representation to any Lender and shall not be
  responsible to any Lender for any statements, warranties or
  representations made in or in connection with the Loan
  Documents; (d) shall not have any duty to ascertain or to
  inquire as to the performance or observance of any of the
  terms, covenants or conditions of the Loan Documents on the
  part of any Related Person or to inspect the property
  (including the books and records) of any Related Person; (e)
  shall not be responsible to any Lender for the due execution,
  legality, validity, enforceability, genuineness, sufficiency
  or value of any Loan Document or any instrument or document
  furnished in connection therewith; (f) may rely upon the
  representations and warranties of the Related Persons and the
  Lenders in exercising its powers hereunder; and (g) shall
  incur no liability under or in respect of the Loan Documents
  by acting upon any notice, consent, certificate or other
  instrument or writing (including any telecopy, telegram, cable
  or telex) believed by it to be genuine and signed or sent by
  the proper Person or Persons.

     Section 8.3.  Lenders' Credit Decisions.  Each Lender
  acknowledges that it has, independently and without reliance
  upon Agent or any other Lender, made its own analysis of
  Borrower, Parent and DEOC and the transactions contemplated
  hereby and its own independent decision to enter into this
  Agreement and the other Loan Documents.  Each Lender also
  acknowledges that it will, independently and without reliance
  upon Agent or any other Lender and based on such documents and
  information as it shall deem appropriate at the time, continue to make its
  own credit decisions in taking or not taking action under the
  Loan Documents.

     Section 8.4.  Indemnification.  Each Lender agrees to
  indemnify Agent (to the extent not reimbursed by Borrower
  within ten (10) days after demand) from and against such
  Lender's Percentage Share of any and all liabilities,
  obligations, claims, losses, damages, penalties, actions,
  judgments, suits, costs, expenses or disbursements (including
  reasonable fees of attorneys, accountants, experts, and
  advisors) of any kind or nature whatsoever (in this section
  collectively called "liabilities and costs") which to any
  extent (in whole or in part) may be imposed on, incurred by,
  or asserted against Agent growing out of, resulting from or in
  any other way associated with any of the Loan Documents and
  the transactions and events (including the enforcement
  thereof) at any time associated therewith or contemplated
  therein.  The foregoing indemnification shall apply whether or
  not such liabilities and costs are in any way or to any extent
  caused, in whole or in part, by any negligent act or omission
  of any kind by Agent or any of its officers, agents,
  attorneys, employees or representatives, provided only that no
  Lender shall be obligated under this section to indemnify
  Agent for that portion, if any, of any liabilities and costs
  which is proximately caused by (and attributed under any
  applicable principles of comparative fault to) Agent's own
  individual gross negligence or willful misconduct, as
  determined in a final judgment.  Without limitation of the
  foregoing, each Lender agrees to reimburse Agent promptly upon
  demand for such Lender's Percentage Share of any out-of-pocket
  expenses (including without limitation fees of attorneys,
  accountants, and other experts and advisors) incurred by Agent
  in connection with the preparation, execution, administration,
  or enforcement of, or advice in respect of rights and
  responsibilities under, the Loan Documents, all as reasonably
  allocated by Agent, to the extent that Agent is not reimbursed
  for such expenses by Borrower as provided in such section.  As
  used in this section the term "Agent" shall refer not only to
  the Person designated as such in Section 1.1 but also to each
  director, officer, agent, attorney, employee, representative
  and Affiliate of such Person.

     Section 8.5.  Rights as Lender.  In its capacity as a
  Lender, Agent shall have the same rights and obligations as
  any Lender and may exercise such rights as though it were not
  Agent.  Agent may accept deposits from, lend money to, act as
  Trustee under indentures of, and generally engage in any kind
  of business with any of the Related Persons or their
  Affiliates, all as if it were not Agent hereunder and without
  any duty to account therefor to any other Lender.

     Section 8.6.  Sharing of Set-Offs and Other Payments.  Each
  of Agent and Lender agrees that if it shall, whether through
  the exercise of rights of banker's lien, set off, or
  counterclaim against Borrower, Parent or DEOC or otherwise,
  obtain payment of a portion of the aggregate Obligations owed
  to it which, taking into account all distributions made by
  Agent under Section 2.11, causes Agent or such Lender to have
  received more than it would have received had such payment
  been received by Agent and distributed pursuant to Section
  2.11, then (i) it shall be deemed to have simultaneously
  purchased and shall be obligated to purchase interests in the
  Obligations as necessary to cause Agent and all Lenders to
  share all payments as provided for in Section 2.11, and (ii)
  such other adjustments shall be made from time to time as
  shall be equitable to ensure that Agent and all Lenders share all
  payments of Obligations as provided in Section 2.11; provided,
  however, that nothing herein contained shall in any way affect
  the right of Agent or any Lender to obtain payment (whether by
  exercise of rights of banker's lien, set-off or counterclaim
  or otherwise) of indebtedness other than the Obligations. 
  Each of Borrower, Parent and DEOC expressly consent to the
  foregoing arrangements and agrees that any holder of any such
  interest or other participation in the Obligations, whether or
  not acquired pursuant to the foregoing arrangements, may to
  the fullest extent permitted by law exercise any and all
  rights or banker's lien, set-off, or counterclaim as fully as
  if such holder were a holder of the Obligations in the amount
  of such interest or other participation.  If all or any part
  of any funds transferred pursuant to this section is
  thereafter recovered from the seller under this section which
  received the same, the purchase provided for in this section
  shall be deemed to have been rescinded to the extent of such
  recovery together with interest, if any, if interest is
  required pursuant to court order to be paid on account of the
  possession of such funds prior to such recovery. 

  Notwithstanding anything herein to the contrary, no Lender
  shall be obligated to take any action described in this
  section which would cause such Lender to purchase a
  participation in any Offered Rate Portion of a second Lender's
  Loan or which would otherwise obligate such first Lender to
  share in any loss or delay caused by an Offered Rate Portion
  of a second Lender's Loan not being paid when due.

     Section 8.7.  Investments.  Whenever Agent in good faith
  determines that it is uncertain about how to distribute to
  Lenders any funds which it has received, or whenever Agent in
  good faith determines that there is any dispute among Lenders
  about how such funds should be distributed, Agent may choose
  to defer distribution of the funds which are the subject of
  such uncertainty or dispute.  If Agent in good faith believes
  that the uncertainty or dispute will not be promptly resolved,
  or if Agent is otherwise required to invest funds pending
  distribution to Lenders, Agent shall invest such funds pending
  distribution; all interest on any such investment shall be
  distributed upon the distribution of such investment and in
  the same proportion and to the same Persons as such
  investment.  All moneys received by Agent for distribution to
  Lenders (other than to the Person who is Agent in its separate
  capacity as a Lender) shall be held by Agent pending such
  distribution solely as Agent for such Lenders, and Agent shall
  have no equitable title to any portion thereof.

     Section 8.8.  Benefit of Article VIII.  The provisions of
  Sections 8.1 through 8.7 are intended solely for the benefit
  of Agent and Lenders, and no Related Person shall be entitled
  to rely on any such provision or assert any such provision in
  a claim or defense against Agent or any Lender.  Agent and
  Lenders may amend such provisions as they desire without the
  consent of Borrower, Parent or DEOC.

     Section 8.9.  Resignation.  Agent may resign at any time by
  giving written notice thereof to Lenders, Borrower, Parent and
  DEOC.  Each such notice shall set forth the date of such
  resignation.  Upon any such resignation Borrower may, with the
  written concurrence of Lenders whose aggregate Percentage
  Shares equal or exceed fifty percent (50%), designate a
  successor Agent.  If within fifteen days after the date of
  such resignation Borrower makes no such designation or such
  written concurrence is not given, Majority Lenders shall have
  the right to appoint a successor Agent.  A successor must
  be appointed for any retiring Agent, and such Agent's resignation
  shall become effective when such successor accepts such
  appointment.  If, within thirty days after the date of the
  retiring Agent's resignation, no successor Agent has been
  appointed and has accepted such appointment, then the retiring
  Agent may appoint a successor Agent, which shall be a
  commercial bank organized or licensed to conduct a banking or
  trust business under the laws of the United States of America
  or of any state thereof.  Upon the acceptance of any
  appointment as Agent hereunder by a successor Agent, the
  retiring Agent shall be discharged from its duties and
  obligations under this Agreement and the other Loan Documents. 
  After any retiring Agent's resignation hereunder the
  provisions of this Article VIII shall continue to inure to its
  benefit as to any actions taken or omitted to be taken by it
  while it was Agent under the Loan Documents.

                    ARTICLE IX -- Miscellaneous

     Section 9.1.  Waivers and Amendments; Acknowledgements.

          (a)  Waivers and Amendments.  No failure or delay by
     Agent or any Lender in exercising any right, power or remedy
     which Agent or such Lender may have under any of the Loan
     Documents shall operate as a waiver thereof or of any other
     right, power or remedy, nor shall any single or partial
     exercise by Agent or such Lender of any such right, power or
     remedy preclude any other or further exercise thereof or of
     any other right, power or remedy.  No waiver of any
     provision of any Loan Document and no consent to any
     departure therefrom shall ever be effective unless it is in
     writing and signed as provided below in this section, and
     then such waiver or consent shall be effective only in the
     specific instances and for the purposes for which given and
     to the extent specified in such writing.  No notice to or
     demand on any Related Person shall in any case of itself
     entitle any Related Person to any other or further notice or
     demand in similar or other circumstances.  This Agreement
     and the other Loan Documents set forth the entire
     understanding between the parties hereto with respect to the
     transactions contemplated herein and therein and supersede
     all prior discussions and understandings with respect to the
     subject matter hereof and thereof, and no waiver, consent,
     release, modification or amendment of or supplement to this
     Agreement or the other Loan Documents shall be valid or
     effective against any party hereto unless the same is in
     writing and signed: (i) if such party is Borrower, Parent or
     DEOC, by such party, (ii) if such party is Agent, by Agent,
     and (iii) if such party is a Lender, by such Lender or by
     Agent on behalf of Lenders with the written consent of
     Majority Lenders (or without further consent than that
     already provided herein in the circumstances provided in
     Section 9.7).  Notwithstanding the foregoing or anything to
     the contrary herein, Agent shall not, without the prior
     consent of all Lenders, execute and deliver on behalf of
     Lenders any waiver or amendment which would:  (i) waive any
     of the conditions specified in Article III (provided that
     Agent may in its discretion withdraw any request it has made
     under Section 3.2(e)), (ii) increase the Maximum Loan Amount
     of any Lender or subject any Lender to any additional
     obligations, (iii) reduce any fees hereunder, or the
     principal of, or interest on, the Notes, (iv) postpone any
     date fixed for any payment of any fees hereunder, or
     principal of, or interest on, the Notes, (v)
     amend the definitions herein of "Majority Lenders" or
     "Evaluating Lenders" or otherwise change the aggregate
     amount of Percentage Shares which is required for Agent,
     Lenders or any of them to take any particular action under
     the Loan Documents, or (vi) release Borrower from its
     obligation to pay the Notes or Parent or DEOC from its
     guaranty of such payment.

          (b)  Acknowledgements and Admissions.  Each of
     Borrower, Parent and DEOC hereby represents, warrants,
     acknowledges and admits that (i) it has been advised by
     counsel in the negotiation, execution and delivery of the
     Loan Documents to which it is a party, (ii) it has made an
     independent decision to enter into this Agreement and the
     other Loan Documents to which it is a party, without
     reliance on any representation, warranty, covenant or
     undertaking by Agent or any Lender, whether written, oral or
     implicit, other than as expressly set out in this Agreement,
     (iii) neither Agent nor any Lender has made any such
     representation, covenant or undertaking to Borrower, Parent
     or DEOC pursuant to any such Loan Document, (iv) there are
     no representations, warranties, covenants, undertakings or
     agreements by Agent or any Lender as to the Loan Documents
     except as expressly set out herein or therein, (v) neither
     Agent nor any Lender has any fiduciary obligation toward
     Borrower with respect to any Loan Document or the
     transactions contemplated thereby, (vi) the relationship
     pursuant to the Loan Documents between Borrower, Parent and
     DEOC, on one hand, and Agent and each Lender, on the other
     hand, is and shall be solely that of debtor and creditor,
     respectively, (vii) no partnership or joint venture exists
     with respect to the Loan Documents between any of Borrower,
     Parent, DEOC, Agent and Lenders, (viii) Agent is not
     Borrower's, Parent's or DEOC's Agent, but Agent for Lenders,
     (ix) should an Event of Default or Default occur or exist
     Agent and each Lender will determine in its sole discretion
     and for its own reasons what remedies and actions it will or
     will not exercise or take at that time, (x) without limiting
     any of the foregoing, Borrower, Parent and DEOC are not
     relying upon any representation by Agent or any Lender, or
     any representative thereof, and no such representation has
     been made, that Agent or any Lender will, at the time of an
     Event of Default or Default, or at any other time, waive,
     negotiate, discuss, or take or refrain from taking any
     action with respect to any such Event of Default or Default
     or any other term of the Loan Documents, and (xi) Agent and
     all Lenders have relied upon the truthfulness of the
     foregoing acknowledgements in deciding to execute and
     deliver this Agreement and to accept the Notes.

     Section 9.2.  Survival of Agreements; Cumulative Nature. 
  All of the Related Persons' various representations,
  warranties, covenants and agreements in the Loan Documents
  shall survive the execution and delivery of this Agreement and
  the other Loan Documents and the performance hereof and
  thereof, including the making or granting of the Loans and the
  delivery of the Notes and the other Loan Documents, and shall
  further survive until all of the Obligations are paid in full
  to Lenders and all of Lenders' obligations to Borrower are
  terminated.  All statements and agreements contained in any
  certificate or other instrument delivered by any Related
  Person to Agent or Lenders under any Loan Document shall be
  deemed representations and warranties by Borrower or
  agreements and covenants of Borrower, Parent and DEOC
  under this Agreement.  The representations, warranties,
  indemnities, and covenants made by the Related Persons in the
  Loan Documents, and the rights, powers, and privileges granted
  to Agent and Lenders in the Loan Documents, are cumulative,
  and, except for express waivers and consents, no Loan Document
  shall be construed in the context of another to diminish,
  nullify, or otherwise reduce the benefit to Agent or any
  Lender of any such representation, warranty, indemnity,
  covenant, right, power or privilege.  In particular and
  without limitation, no exception set out in this Agreement to
  any representation, warranty, indemnity, or covenant herein
  contained shall apply to any similar representation, warranty,
  indemnity, or covenant contained in any other Loan Document,
  and each such similar representation, warranty, indemnity, or
  covenant shall be subject only to those exceptions which are
  expressly made applicable to it by the terms of the various
  Loan Documents.

     Section 9.3.  Notices.  All notices, requests, consents,
  demands and other communications required or permitted under
  any Loan Document shall be in writing, unless otherwise
  specifically provided in such Loan Document (provided that
  Agent may give telephonic notices to Lenders), and shall be
  deemed sufficiently given or furnished if delivered by
  personal delivery, by telecopy or telex, by expedited delivery
  service with proof of delivery, or by registered or certified
  mail, postage prepaid, to Borrower and the Related Persons at
  the address of Borrower specified on the signature pages
  hereto and to Agent and the other Lenders at their addresses
  specified on the signature pages hereto (unless changed by
  similar notice in writing given by the particular Person whose
  address is to be changed).  Any such notice or communication
  shall be deemed to have been given (a) in the case of
  expedited personal delivery or delivery service, as of the
  date of first attempted delivery at the address provided
  herein, (b) in the case of telecopy or telex, upon receipt, or
  (c) in the case of registered or certified mail, three days
  after deposit in the mail; provided, however, that no Request
  for Advances or Rate Election shall become effective until
  actually received by Agent.

     Section 9.4.  Joint and Several Liability; Parties in
  Interest; Purchases of Notes.  All Obligations which are
  incurred by two or more Related Persons shall be their joint
  and several obligations and liabilities.  All grants,
  covenants and agreements contained in the Loan Documents shall
  bind and inure to the benefit of the parties thereto and their
  respective successors and assigns; provided, however, that no
  Related Person may assign or transfer any of its rights or
  delegate any of its duties or obligations under any Loan
  Document without the prior written consent of Majority
  Lenders.  Neither Borrower nor any Affiliates of Borrower
  shall directly or indirectly purchase or otherwise retire any
  Obligations owed to any Lender, nor will any Lender accept any
  offer to do so, unless each Lender shall have received
  substantially the same offer with respect to the same
  Percentage Share of the Obligations owed to it.  If Borrower
  or any Affiliate of Borrower at any time purchases some but
  less than all of the Obligations owed to Agent and all
  Lenders, such purchaser shall not be entitled to any rights of
  Agent or a Lender under the Loan Documents unless and until
  Borrower or its Affiliates have purchased all of the
  Obligations.

     SECTION 9.5.  GOVERNING LAW; WAIVER OF JURY TRIAL; ETC.  THE
  LOAN DOCUMENTS SHALL BE DEEMED CONTRACTS AND
  INSTRUMENTSSection 9.5

  MADE UNDER THE LAWS OF THE STATE OF TEXAS AND SHALL BE
  CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE
  LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO CONFLICTS OF LAW
  RULES) AND THE LAWS OF THE UNITED STATES OF AMERICA, EXCEPT TO
  THE EXTENT THAT THE LAW OF ANOTHER JURISDICTION IS EXPRESSLY
  ELECTED IN A LOAN DOCUMENT.  CHAPTER 15 OF TEXAS REVISED CIVIL
  STATUTES ANNOTATED ARTICLE 5069 (WHICH REGULATES CERTAIN
  REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRI-PARTY
  ACCOUNTS) SHALL NOT APPLY TO THIS AGREEMENT OR TO THE NOTES. 
  EACH OF BORROWER, PARENT AND DEOC HEREBY IRREVOCABLY SUBMITS
  ITSELF AND EACH OTHER RESTRICTED PERSON TO THE NON-EXCLUSIVE
  JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF
  TEXAS AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE
  MADE UPON IT OR ANY OF THE RESTRICTED PERSONS IN ANY LEGAL
  PROCEEDING RELATING TO THE LOAN DOCUMENTS OR THE OBLIGATIONS
  IN ACCORDANCE WITH ANY APPLICABLE PROVISIONS OF TEXAS LAW
  GOVERNING SERVICE OF PROCESS.  EACH OF BORROWER, PARENT, DEOC,
  AGENT AND LENDERS HEREBY (A) IRREVOCABLY WAIVES, TO THE
  MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO
  A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
  INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION
  WITH THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED
  THEREBY OR ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY; (B)
  IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY
  LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
  LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
  DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
  DAMAGES, PROVIDED, HOWEVER, THAT THE FOREGOING SHALL NOT APPLY
  TO ANY TRANSACTION SUBJECT TO THE TEXAS DECEPTIVE TRADE
  PRACTICE ACT OR GOVERNED BY CHAPTER 6, 6A OR 7 OF THE TEXAS
  CONSUMER CREDIT CODE; (C) CERTIFIES THAT NEITHER AGENT NOR ANY
  LENDER NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY OF
  THEM HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT
  AGENT AND LENDERS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
  TO ENFORCE THE FOREGOING WAIVERS, AND (D) ACKNOWLEDGES THAT IT
  HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN
  DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY
  BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
  CONTAINED IN THIS SECTION.

     Section 9.6.  Limitation on Interest.  Agent, Lenders, the
  Related Persons and the other parties to the Loan Documents
  intend to contract in strict compliance with applicable usury
  law from time to time in effect.  In furtherance thereof such

   68800 05582 CORP 127213 <PAGE>
 


  Persons stipulate and agree that none of the terms and
  provisions contained in the Loan Documents shall ever be
  construed to create a contract to pay, for the use,
  forbearance or detention of money, interest in excess of the
  maximum amount of interest permitted to be charged by
  applicable law from time to time in effect.  Neither any
  Related Person nor any present or future guarantors, endorsers, or other
  Persons hereafter becoming liable for payment of any
  Obligation shall ever be liable for unearned interest thereon
  or shall ever be required to pay interest thereon in excess of
  the maximum amount that may be lawfully charged under
  applicable law from time to time in effect, and the provisions
  of this section shall control over all other provisions of the
  Loan Documents which may be in conflict or apparent conflict
  herewith.  Agent and Lenders expressly disavow any intention
  to charge or collect excessive unearned interest or finance
  charges in the event the maturity of any Obligation is
  accelerated.  If (a) the maturity of any Obligation is
  accelerated for any reason, (b) any Obligation is prepaid and
  as a result any amounts held to constitute interest are
  determined to be in excess of the legal maximum, or (c) Agent
  or any Lender or any other holder of any or all of the
  Obligations shall otherwise collect moneys which are
  determined to constitute interest which would otherwise
  increase the interest on any or all of the Obligations to an
  amount in excess of that permitted to be charged by applicable
  law then in effect, then all such sums determined to
  constitute interest in excess of such legal limit shall,
  without penalty, be promptly applied to reduce the then
  outstanding principal of the related Obligations or, at
  Agent's or such Lender's or holder's option, promptly returned
  to Borrower or the other payor thereof upon such
  determination.  In determining whether or not the interest
  paid or payable, under any specific circumstance, exceeds the
  maximum amount permitted under applicable law, Agent, Lenders
  and the Related Persons (and any other payors thereof) shall
  to the greatest extent permitted under applicable law,
  (i) characterize any non-principal payment as an expense, fee
  or premium rather than as interest, (ii) exclude voluntary
  prepayments and the effects thereof, and (iii) amortize,
  prorate, allocate, and spread the total amount of interest
  throughout the entire contemplated term of the instruments
  evidencing the Obligations in accordance with the amounts
  outstanding from time to time thereunder and the maximum legal
  rate of interest from time to time in effect under applicable
  law in order to lawfully charge the maximum amount of interest
  permitted under applicable law.  In the event applicable law
  provides for an interest ceiling under Texas Revised Civil
  Statutes Annotated article 5069-1.04, that ceiling shall be
  the indicated rate ceiling.  As used in this section the term
  "applicable law" means the laws of the State of Texas or the
  laws of the United States of America, whichever laws allow the
  greater interest, as such laws now exist or may be changed or
  amended or come into effect in the future.

     Section 9.7.  Optional Termination.  In its sole and
  absolute discretion Borrower may -- at any time that no
  Obligations are owing hereunder -- elect in a written notice
  delivered to Agent to terminate this Agreement.  Upon receipt
  by Agent of such a notice, if such requirements are then
  satisfied, this Agreement and all other Loan Documents shall
  thereupon be terminated and the parties thereto released from
  all prospective obligations thereunder, provided that any
  waivers made in the Loan Documents, any Obligations under
  Sections 2.15 through 2.18 and any obligations which any
  Person may have to indemnify or compensate Agent or any Lender
  shall survive such termination.  At the request and expense of
  Borrower, Agent and Lenders shall prepare and execute all
  necessary instruments to reflect and effect such termination
  of the Loan Documents.  Agent is hereby authorized to execute
  all such instruments on behalf of all Lenders, without the
  joinder of or further action by any Lender.

     Section 9.8.  Severability.  If any term or provision of any
  Loan Document shall be determined to be illegal or
  unenforceable all other terms and provisions of the Loan
  Documents shall nevertheless remain effective and shall be
  enforced to the fullest extent permitted by applicable law.

     Section 9.9.  Counterparts.  This Agreement may be
  separately executed in any number of counterparts and by
  different parties hereto in separate counterparts, each of
  which when so executed shall be deemed to constitute one and
  the same Agreement.    IN WITNESS WHEREOF, this Agreement is
  executed as of the date first written above.

                             DEVON ENERGY CORPORATION (NEVADA)


                             By:                                 
                               H.R. Sanders, Jr., Executive Vice President

                             Address:

                             20 North Broadway, Suite 1500
                             Oklahoma City, Oklahoma 73102
                             Attention:  Vice President-Finance

                             Telephone:  (405) 235-3611
                             Telecopy:   (405) 236-4258
                             Telex:  910-831-3277


                             DEVON ENERGY CORPORATION


                             By:                                 
                               H.R. Sanders, Jr., Executive Vice President


                             DEVON ENERGY OPERATING CORPORATION


                             By:                                 
                               H.R. Sanders, Jr., Executive Vice President


  Maximum                    NATIONSBANK OF TEXAS, N.A.,
  Loan Amount                Agent and Lender


  $120,000,000               By:                                 
                               Dale T. Wilson, Vice President

                             Address:

                             303 West Wall Street
                             Midland, Texas  79702
                             Attention:  Energy Finance Division

                             Telephone: (915) 685-2193
                             Telecopy:  (915) 685-2009

                             With a copy to:

                             NationsBank Plaza
                             901 Main St., 64th Floor
                             Dallas, Texas  75202
                             Attention:  Energy Finance Division

                             Telephone: (214) 508-1254
                             Telecopy:  (214) 508-1285
                             Telex:   163542


  Maximum                    BANK ONE, TEXAS, N.A., Lender
  Loan Amount


  $72,000,000                By:                                 
                               Michael W. Mitchell, Senior Vice President

                             Address:

                             400 Bank One Center
                             1717 Main Street
                             Dallas, Texas 75201
                             Attention: Energy Group

                             Telephone: (214) 290-2609
                             Telecopy:  (214) 290-2627
                             Telex:  163102

  Maximum                    BANK OF MONTREAL, Lender
  Loan Amount


  $72,000,000                By:                                 
                               Michael P. Stuckey, Director

                             Address:

                             700 Louisiana, Suite 4400
                             Houston, Texas  77002

                             Telephone: (713) 546-9771
                             Telecopy:  (713) 223-4007

  Maximum                    FIRST UNION NATIONAL BANK
  Loan Amount                OF NORTH CAROLINA, Lender



  $36,000,000                By:                                 
                               Michael J. Kolosowsky, Vice President

                             Address:

                             1001 Fannin, Suite 2255
                             Houston, Texas  77002

                             Telephone: (713) 650-8764
                             Telecopy:  (713) 650-6354