EXHIBIT 99.3


                             INTERLOCUTORY AGREEMENT


1.       The interlocutory agreement of certain disputed issues raised to date
         in the litigation, and the conduct of the parties in making and
         effectuating such agreement, shall not prejudice any party's rights in
         the lawsuit on file, and all claims, causes of actions, defenses, and
         arguments are expressly reserved.

2.       A meeting of the directors and other interested persons will be called
         by the President of the corporation for August 4 or 5, 1998. The
         meeting will also serve as a simultaneous meeting of the corporation's
         directors, and minutes shall be kept. The Chairman shall preside at the
         meeting. Those attending will be George Sutherland, Jack Chance, Feroze
         Variava, Steve McLoughlin, Bill Knollenberg, Doris Knollenberg, Brad
         Knollenberg, Walter Cicack, as counsel for the Knollenberg Group,
         Michael Lee, as counsel for NEHI, and Sheryl Jones Alu and/or Jeff
         Koeppel, NEHI's regulatory compliance counsel. Bill Comiskey, of
         Weinstein Spira, also will be permitted to attend, if his schedule
         permits. Daniel Kirshbaum shall not be permitted to attend, nor shall
         anyone else from his firm.

3.       Although any matters related to the business of the corporation may be
         raised for discussion, the only matter subject to decision at the
         meeting shall be the calling of the annual meeting of the corporation's
         shareholders, which meeting shall be scheduled and called by the
         corporation for no sooner than forty-five (45) days nor later than
         seventy-five (75) days following the meeting of the directors and other
         interested persons. Bill Knollenberg, Doris Knollenberg, and Brad
         Knollenberg shall not oppose or contest the scheduling and calling of
         such meeting. Any person named herein may designate an item for
         discussion (but not decision or vote, save for the calling of the
         shareholders meeting) in writing, delivered to the corporation at its
         offices with copies to Michael Lee and Walter Cicack, at least
         forty-eight (48) hours before the meeting.

4.       The meeting may be recorded and/or videotaped and costs shall be
         divided equally and paid by NEHI and Bill Knollenberg.

5.       No other meeting of the board of directors shall be held prior to the
         shareholders meeting unless five (5) days prior written notice thereof
         is provided to Michael Lee and Walter Cicack.

6.       The Knollenberg Group will not oppose the engagement of Weinstein Spira
         & Company and Bill Comiskey as the corporation's auditors. To the
         extent he is reasonably able to do so, Bill Comiskey will issue a
         written report and findings regarding each litigation party's stock
         ownership in the corporation and provide a report on the same to the
         corporation, with copies to Michael Lee and Walter Cicack, at least
         fifteen (15) days prior to the shareholders meeting. Such report,
         however, shall not involve deciding legal disputes regarding the
         ownership of any party's stock.

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7.       Until the shareholders meeting, NEHI agrees not to sell, transfer,
         assign, or pledge any assets other than in the ordinary course of its
         business.

8.       Until the shareholders meeting, Bill Knollenberg, Doris Knollenberg,
         Brad Knollenberg, Gulf Minerals Exploration, Erin Oil Exploration,
         Inc., and Erin Oil (also a shareholder controlled by Bill Knollenberg)
         agree not to sell, transfer, assign, or pledge, directly or indirectly,
         any shares of NEHI stock and not to sell or offer for sal any
         debenture, warrant, or other instrument which by its terms may bind
         NEHI or which may be converted into NEHI stock or take any other action
         which might create any liability on the part of NEHI.

9.       Until the shareholders meeting, Horse Energy LP and Rotary Steerable
         Tools USA, LP, Jack Chance, George Sutherland, Feroze Variava and Steve
         McLoughlin, agree not to sell, transfer, assign, or pledge, directly or
         indirectly, any shares they may own, if any, or NEHI stock.

10.      The terms of this settlement agreement shall read into the court's
         record and submitted for approval by the court. Michael Lee and Walter
         Cicack agree to move for the Court's approval of such terms on behalf
         of their respective clients.

11.      The temporary injunction hearing scheduled for July 23, 1998, shall be
         passed, without prejudice to any party's rights to seek other
         injunctive relief, but all parties agree that no attempt will be made
         to enjoin or prevent the meeting in number 2 hereinabove.

12.      NEHI shall copy and deliver to Walter Cicack the items requested in
         Walter Cicack's letter of June 19, 1998, subject to an objection as to
         what may be inspected under Delaware law. Walter Cicack agrees to pay
         the company's copying and delivery charges.