Document:

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                                                                   EXHIBIT 10.20

                              TERMINATION AGREEMENT

      THIS TERMINATION AGREEMENT, dated as of _______________ is made and
entered into by and between PetroQuest Energy, Inc., a Delaware corporation with
its principal office at 400 E. Kaliste Saloom Road, Suite 3000, Lafayette,
Louisiana 70508 (the "Company"), and _______________ ("Executive").

                                 R E C I T A L S

      A. Company desires to enter into an agreement with Executive whereby
severance benefits will be paid to Executive on a change in control of the
Company and consequent actual or constructive termination of Executive's
employment.

      B. This Agreement sets forth the severance benefits which the Company
agrees that it will pay to the Executive if Executive's employment with the
Company terminates under one of the circumstances described herein following a
Change in Control of the Company.

      NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained herein, the parties hereto agree as follows:

      1. Term of Agreement. This Agreement shall be effective immediately on the
date hereof and shall continue in effect through December 31, [3rd December
after date of execution]; provided, however, that commencing on January 1, [3rd
January after date of execution] and each January 1 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless not
later than September 30 of the preceding year, the Company shall have given
notice that it does not wish to extend this Agreement; provided, further, that
notwithstanding any such notice by the Company not to extend, this Agreement
shall automatically be extended for 24 months beyond the term provided herein if
a Change in Control, as defined in Section 3 of this Agreement, has occurred
during the term of this Agreement.

      2. Effect on Employment Rights. This Agreement is not part of any
employment agreement that the Company and Executive may have entered. Nothing in
this Agreement shall confer upon Executive any right to continue in the employ
of the Company or interfere with or restrict in any way the rights of the
Company, which are hereby expressly reserved, to terminate for any reason, with
or without cause.

      Executive agrees that, subject to the terms and conditions of this
Agreement, in the event of a potential change in control of the Company (as
defined below), Executive will remain in the employ of the
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Company during the pendency of any such potential change in control and for a
period of one year after the occurrence of an actual Change in Control. For this
purpose, a "potential change in control of the Company" shall be deemed to have
occurred if (a) the Company enters into an agreement the consummation of which
would result in the occurrence of a Change in Control, (b) any person (including
the Company) publicly announces an intention to take or consider taking action
which if consummated would constitute a Change in Control or (c) the Board of
Directors of the Company (the "Board") adopts a resolution to the effect that a
potential change in control of the Company has occurred.

      3. Change in Control. For purposes of this Agreement, a "Change in
Control" of the Company shall be deemed to have occurred if any of the events
set forth in any one of the following paragraphs shall occur:

            (a) any "person" (as defined in section 3(a)(9) of the Securities
      Exchange Act of 1934, as amended (the "Exchange Act") and as such term is
      modified in sections 13(d) and 14(d) of the Exchange Act), excluding the
      Company or any of its subsidiaries, a trustee or any fiduciary holding
      securities under an employee benefit plan of the Company of any of its
      subsidiaries, an underwriter temporarily holding securities pursuant to an
      offering of such securities or a corporation owned, directly or
      indirectly, by stockholders of the Company in substantially the same
      proportions as their ownership of the Company, is or becomes the
      "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
      directly or indirectly, of securities of the Company representing 30% or
      more of the combined voting power of the Company's then outstanding
      securities; or

            (b) during any period of not more than two consecutive years,
      individuals who at the beginning of much period constitute the Board and
      any new director (other than a director designated by a Person who has
      entered into an agreement with the Company to effect a transaction
      described in clause (a), (c) or (d) of this paragraph) whose election by
      the Board or nomination for election by the Company's stockholders was
      approved by a vote of at least two-thirds (2/3) of the directors then
      still in office who either were directors at the beginning of the period
      or whose election or nomination for election was previously so approved,
      cease for any reason to constitute a majority thereof; or

            (c) the shareholders of the Company approve a merger or
      consolidation of the Company with any other corporation, other than (i) a
      merger or consolidation which would result in the voting securities of the
      Company outstanding immediately prior thereto continuing to represent
      (either by remaining outstanding or by being converted into voting
      securities of the surviving entity), in combination with the ownership of
      any trustee or other fiduciary holder of securities under an employee
      benefit plan of the Company, at least 50% of the combined voting power of
      the voting securities of the Company or such surviving entity outstanding
      immediately after such merger or consolidation, or (ii) a merger or
      consolidation effected to implement a

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      recapitalization of the Company (or similar transaction) in which no
      person acquires more than 50% of the combined voting power of the
      Company's then outstanding securities; or

            (d) the shareholders of the Company approve a plan of complete
      liquidation of the Company or an agreement for the sale or disposition by
      the Company of all or substantially all of the Company's assets.

      Notwithstanding the foregoing, if any transaction described under
      paragraphs (a), (c) and (d) of this Section 3 results in consideration to
      the Company or the shareholders of the Company, as the case may be, from
      such transaction with a value (as determined in good faith by the
      Compensation Committee of the Board) of less than $1.00 per share (subject
      to adjustment for stock splits and combination and stock dividends after
      the date hereof), no Change in Control will be deemed to occur unless such
      transaction is approved by persons holding not less than two-thirds of the
      combined voting power of the Company's voting securities entitled to vote
      on such transaction. In addition, no Change in Control shall be deemed to
      occur if there is consummated any transaction or series of integrated
      transactions immediately following which, in the judgment of the
      Compensation Committee of the Board, the holders of the Company's Common
      Stock immediately prior to such transaction or series of transactions
      continue to have the same proportionate ownership in an entity which owns
      all or substantially all of the assets of the Company immediately prior to
      such transaction or series of transactions.

      4. Termination of Employment Following a Change in Control. Executive
shall be entitled to the benefits provided in Section 5 hereof upon the
subsequent termination of Executive's employment by the Company within two years
after a Change in Control which occurs during the term of this Agreement,
provided such termination is (a) by the Company other than for cause, as defined
below, or (b) by Executive for Good Reason, as defined below. Executive shall
not be entitled to the benefits of Section 5, any other provision hereof to the
contrary notwithstanding, if Executive's employment terminates: (i) pursuant to
Executive retiring at age 65, (ii) by reason of Executive's total and permanent
disability, or (iii) by reason or Executive's death. As used herein, "total and
permanent disability" means a condition which prevents Executive from performing
to a significant degree the essential duties of his or her position and is
expected to be of long-term duration or result in death. A determination of
total and permanent disability must be based on competent medical evidence.

            (a) Cause.

                  (i) Definition. Termination by the Company of Executive's
            employment for Cause shall mean termination upon Executive's willful
            engaging in misconduct which is demonstrably and materially
            injurious to the Company and its subsidiaries taken as a whole. No
            act, or failure to act, on Executive's part shall be considered
            "willful" unless done, or omitted to be done, by Executive not in
            good faith and without reasonable belief

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            that Executive's action or omission was in the best interest of the
            Company or its subsidiaries. Notwithstanding the foregoing,
            Executive shall not be deemed to have been terminated for Cause
            unless and until there shall have been delivered to Executive a copy
            of a resolution duly adopted by the affirmative vote of not less
            than three quarters of the entire membership of the Board at a
            meeting of the Board called and held for the purpose of making a
            determination of whether Cause for termination exists (after
            reasonable notice to Executive and an opportunity for Executive to
            be heard before the Board), finding that in the good faith opinion
            of the Board Executive was guilty of misconduct as set forth above
            in this subsection 4(a)(i) and specifying the particulars thereof in
            detail.

                  (ii) Remedy by Executive. If the Company gives Executive a
            Notice of Termination which states that the basis for terminating
            Executive's employment is Cause, Executive shall have ten days after
            receipt of such Notice to remedy the facts and circumstances which
            provided Cause. The Board (or any duly authorized Committee thereof)
            shall make a good faith reasonable determination immediately after
            such ten-day period whether such facts and circumstances have been
            remedied and shall communicate such determination in writing to
            Executive. If the Board determines that an adequate remedy has not
            occurred, then the initial Notice of Termination shall remain in
            effect.

            (b) Good Reason. After a Change in Control, Executive may terminate
      employment with the Company at any time during the term of this Agreement
      if Executive has made a good faith reasonable determination that Good
      Reason exists for this termination.

                  (i) Definition. For purposes of this Agreement, "Good Reason"
            shall mean any of the following actions, if taken without the
            express written consent of Executive:

                        A. any material change by the Company in Executive's
                  functions, duties, or responsibilities which change would
                  cause Executive's position with the Company to become of less
                  dignity, responsibility, importance, or scope from the
                  position and attributes that applied to Executive immediately
                  prior to the Change in Control;

                        B. any significant reduction in Executive's base salary,
                  other than a reduction effected as part of an across-the-board
                  reduction affecting all executive employees of the Company;

                        C. any material failure by the Company to comply with
                  any of the provisions of this Agreement (or of any employment
                  agreement between the parties);

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                        D. the Company's requiring Executive to be based at any
                  office or location more than 45 miles from the home at which
                  the Executive resides on the date immediately preceding the
                  Change in Control, except for travel reasonably required in
                  the performance of Executive's responsibilities and
                  commensurate with the amount of travel required of Executive
                  prior to the Change in Control; or

                        E. any failure by the Company to obtain the express
                  assumption of this Agreement by any successor or assign of the
                  Company.

                        Executive's right to terminate employment for Good
                  Reason pursuant to this subsection 4(b)(i) shall not be
                  affected by Executive's incapacity due to physical or mental
                  illness.

                  (ii) Remedy by Company. If Executive gives the Company a
            Notice of Termination which states that the basis for Executive's
            termination of employment is Good Reason, the Company shall have ten
            days after receipt of such Notice to remedy the facts and
            circumstances which provided Good Reason. Executive shall make a
            good faith reasonable determination immediately after such ten-day
            period whether such facts and circumstances have been remedied and
            shall communicate such determination in writing to the Company. If
            Executive determines that adequate remedy has not occurred, then the
            initial Notice of Termination shall remain in effect.

                  (iii) Determination by Executive Presumed Correct. Any
            determination by Executive pursuant to this Section 4(b) that Good
            Reason exists for Executive's termination of employment and that
            adequate remedy has not occurred shall be presumed correct and shall
            govern unless the party contesting the determination shows by a
            clear preponderance of the evidence that it was not a good faith
            reasonable determination.

                  (iv) Severance Payment Made Notwithstanding Dispute.
            Notwithstanding any dispute concerning whether Good Reason exists
            for termination of employment or whether adequate remedy has
            occurred, the Company shall immediately pay to Executive, as
            specified in Section 5, any amounts otherwise due under this
            Agreement. Executive may be required to repay such amounts to the
            Company if any such dispute is finally determined adversely to
            Executive.

            (c) Notice of Termination. Any termination of Executive's employment
      by the Company or by Executive hereunder shall be communicated by a Notice
      of Termination to the other party hereto. For purposes of this Agreement,
      a "Notice of Termination" shall mean a written notice which shall indicate
      the specific termination provisions in this Agreement relied upon any
      which sets forth (i) in reasonable detail the facts and circumstances
      claimed to provide a basis for

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      termination of Executive's employment under the provision so indicated and
      (ii) the date of Executive's termination of employment, which shall be no
      earlier than 10 days after such Notice is received by the other party. Any
      purported termination of the Executive's employment by the Company which
      is not effected pursuant to a Notice of Termination satisfying the
      requirements of this Agreement shall not be effective. In the case of a
      termination for Cause, the Notice of Termination shall also satisfy the
      requirements set forth in Section 4(a)(i).

      5. Severance Payment Upon Termination of Employment. If Executive's
employment with the Company is terminated during the term of this Agreement and
after a Change in Control (a) by the Company other than for Cause, or (b) by
Executive for Good Reason, then Executive shall be entitled to the following:

            (a) Lump-Sum Severance Payment. In lieu of any further salary
      payments to the Executive for periods subsequent to the Date of
      Termination, the Company shall pay to the Executive a lump sum severance
      payment, in cash, equal to two (2) (or, if less, the number of years,
      including fractions, from the date of Termination until the Executive
      would have reached age sixty-five (65)) times the sum of (a) the
      Executive's Annual Base Salary in effect on date of termination and (b)
      the Executive's most recent Annual Bonus. if the most recent Annual Bonus
      was a stock option or a stock grant, the value of the bonus will be deemed
      to be the number of option shares times the closing price of the Company's
      Common Stock for the 20 trading days prior to Termination.

            (b) Continued Benefits. For a twenty-four (24) month period (or, if
      less, the number of months from the Date of Termination until the
      Executive would have reached age sixty-five (65)) after the Date of
      Termination, the Company shall provide the Executive with life insurance,
      health, disability and other welfare benefits ("Welfare Benefits")
      substantially similar in all respects to those which the Executive is
      receiving immediately prior to the Notice of Termination (without giving
      effect to any reduction in such benefits subsequent to the Potential
      Change in Control preceding the Change in Control or the Change in Control
      which reduction constitutes or may constitute God Reason). Benefits
      otherwise receivable by an Executive pursuant to this Section shall be
      reduced to the extent substantially similar benefits are actually received
      by or made available to the Executive by any other employer during the
      same time period for which such benefits would be provided pursuant to
      this Section at a cost to the Executive that is commensurate with the cost
      incurred by the Executive immediately prior to the Executive's Date of
      Termination (without giving effect to any increase in costs paid by the
      Executive after the Potential Change in Control preceding the Change in
      Control or the Change in Control which constitutes or may constitute Good
      Reason); provided, however, that if the Executive becomes employed by a
      new employer which maintains a medical plan that either (i) does not cover
      the Executive or a family member or dependent with respect to a
      preexisting condition which was covered under the applicable Company
      medical plan, or (ii) does not cover the Executive or a family member or
      dependent for a designated waiting

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      period, the Executive's coverage under the applicable Company medical plan
      shall continue (but shall be limited in the event of noncoverage due to a
      preexisting condition, to such preexisting condition) until the earlier of
      the end of the applicable period of noncoverage under the new employer's
      plan or the second anniversary of the Executive's Date of Termination. The
      Executive agrees to report to the Company any coverage and benefits
      actually received by the Executive or made available to the Executive from
      such other employer(s). The Executive shall be entitled to elect to change
      his level of coverage and/or his choice of coverage options (such as
      Executive only or family medical coverage) with respect to the Welfare
      Benefits to be provided by the Company to the Executive to the same extent
      that actively employed senior executives of the Company are permitted to
      make such changes; provided, however, that in the event of any such
      changes the Executive shall pay the amount of any cost increase that would
      actually be paid by an actively employed executive of the Company by
      reason of making the same change in his level of coverage or coverage
      options.

            (c) Gross-Up Payment. In the event that the Executive becomes
      entitled to the Severance Benefits or any other benefits or payments under
      this Agreement (other than pursuant to this Section) by reason of the
      accelerated vesting of stock options thereunder (together, the "Total
      Benefits"), and in the event that any of the Total Benefits will be
      subject to the Excise Tax, the Company shall pay to the Executive an
      additional amount (the "Gross-Up Payment") such that the net amount
      retained by the Executive, after deduction of any Excise Tax on the Total
      Benefits and any federal, state and local income tax, Excise Tax and FICA
      and Medicare withholding taxes upon the payment provided for by this
      Section, shall be equal to the Total Benefits.

            For purposes of determining whether any of the Total Benefits will
      be subject to the Excise Tax and the amount of such Excise Tax, (i) any
      other payments or benefits received or to be received by the Executive in
      connection with a Change in Control or the Executive's termination of
      employment (whether pursuant to the terms of this Agreement or any other
      agreement, plan or arrangement with the Company, any Person whose actions
      result in a Change in Control or any Person affiliated with the Company or
      such Person) shall be treated as "parachute payments" within the meaning
      of Section 280G(b)(2) of the Code, and all "excess parachute payments"
      within the meaning the Section 280G(b)(1) shall be treated as subject to
      the Excise Tax, unless in the opinion of tax counsel ("Tax Counsel")
      selected by the Company's independent auditors and acceptable to the
      Executive, such other payments or benefits (in whole or in part) do not
      constitute parachute payments, or such excess parachute payments (in whole
      or in part) represent reasonable compensation for services actually
      rendered within the meaning of Section 280G(b)(4) of the Code in excess of
      the Base Amount, or are otherwise not subject to the Excise Tax, (ii) the
      amount of the Total Benefits which shall be treated as subject to the
      Excise Tax shall be equal to the lesser of (A) the total amount of the
      Total Benefits reduced by the amount of such Total Benefits that in the
      opinion of Tax Counsel are not parachute payments, or (B) the amount of
      excess parachute payments within the meaning of Section 280G(b)(1) (after
      applying clause (i), above), and (iii) the

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      value of any non-cash benefits or any deferred payment or benefit shall be
      determined by the Company's independent auditors in accordance with the
      principles of Sections 280G(d)(3) and (4) of the Code. For purposes of
      determining the amount of the Gross-Up Payment, the Executive shall be
      deemed to pay federal income taxes at the highest marginal rate of federal
      income taxation in the calendar year in which the Gross-Up Payment is to
      be made and state and local income taxes at the highest marginal rate of
      taxation in the state and locality of the Executive's residence on the
      Date of Termination, net of the reduction in federal income taxes which
      could be obtained from deduction of such state and local taxes (calculated
      by assuming that any reduction under Section 68 of the Code in the amount
      of itemized deductions allowable to the Executive applies first to reduce
      the amount of such state and local income taxes that would otherwise be
      deductible by the Executive).

      In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder at the time of termination of the
Executive's employment, the Executive shall repay to the Company, at the time
that the amount of such reduction in Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such reduction (plus that
portion of the Gross-Up Payment attributable to the Excise Tax, federal, state
and local income taxes and FICA and Medicare withholding taxes imposed on the
portion of the Gross-Up Payment being repaid by the Executive to the extent that
such repayment results in a reduction in Excise Tax, FICA and Medicare
withholding taxes and/or federal, state or local income taxes) plus interest on
the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of
the Code. In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder at the time of the termination of the Executive's
employment (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), the Company shall
make an additional Gross-Up Payment, determined as previously described, to the
Executive in respect to such excess (plus any interest, penalties or additions
payable by the Executive with respect to such excess) at the time that the
amount of such excess is finally determined.

            (d) Timing of Payments. The payments provided for in Sections 5(a)
      and 5(c) shall be made not later than the fifth (5th) day following the
      Date of Termination; provided, however, that if the amounts of such
      payments cannot be finally determined on or before such day, the Company
      shall pay to the Executive on such day an estimate, as determined in good
      faith by the Company, of the minimum amount of such payments and shall pay
      the remainder of such payments (together with interest at the rate
      provided in Section 1274(b)(2)(B) of the Code from the firth (5th) day
      following the Date of Termination to the payment of such remainder) as
      soon as the amount thereof can be determined but in no event later than
      the thirtieth (30th) day after the Date of Termination. In the event that
      the amount of the estimated payments exceeds the amount subsequently
      determined to have been due, such excess shall constitute a loan by the
      Company to the Executive, payable on the fifth (5th) business day after
      demand by the Company (together with interest at the rate provided in
      Section 1274(b)(2)(B) of the Code from the fifth (5th) day following the
      Date of Termination to the repayment of such excess).

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      6. Reimbursement of Legal Costs. The Company shall pay to the Executive
all legal fees and expenses incurred by the Executive as a result of a
termination which entitles the Executive to any payments under this Agreement
including all such fees and expenses, if any, incurred in contesting or
disputing any Notice of Intent to Terminate under Section 4(a) hereof or in
seeking to obtain or enforce any right or benefit provided by this Agreement or
in connection with any tax audit or proceeding to the extent attributable to the
application of Section 4999 of the Code to any payment or benefit provide
hereunder. Such payments shall be made within five (5) business days after
delivery of the Executive's respective written requests for payment accompanied
by such evidence of fees and expenses incurred as the Company reasonably may
require.

      7. Damages. Executive shall not be required to mitigate damages with
respect to the amount of any payment provided under this Agreement by seeking
other employment or otherwise, nor shall the amount of any payment provided
under this Agreement be reduced by retirement benefits, deferred compensation or
any compensation earned by Executive as a result of employment by another
employer.

      8. Successor to Company. The Company shall require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to Executive, expressly, absolutely
and unconditionally to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession or assignment had taken place. A used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor or
assign to its business and/or assets as aforesaid which executes and delivers
the agreement provided for in this Section or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of law.

      9. Heirs of Executive. This Agreement shall inure to the benefit of and be
enforceable by Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive should die while any amounts are still payable to Executive hereunder,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to Executive's devisee, legatee, or other
designee or, if there be so much designee, to Executive's estate.

      10. Arbitration. Any dispute, controversy or claim arising under or in
connection with this Agreement, or the breach thereof, shall be settled
exclusively by arbitration in accordance with the Rules of the American
Arbitration Association then in effect. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court of competent jurisdiction. Any
arbitration held pursuant to this Section in connection with Executive's
termination of employment shall take place in Houston, Texas at the earliest
possible date. If any proceeding is necessary to enforce or interpret the terms
of this Agreement, or to recover damages for breach thereof, the prevailing
party shall be entitled to reasonable attorneys' fees

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and necessary costs and disbursements, not to exceed in the aggregate one
percent (1%) of the net worth of the other party, in addition to any other
relief to which he or it may be entitled.

      11. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered by messenger or in person, or when
mailed by United States registered mail, return receipt requested, postage
prepaid, as follows:

      If to the Company:      400 E. Kaliste  Saloom Road
                              Suite 3000
                              Lafayette, Louisiana 70508
                              Attention: President

      If to the Executive     _______________
                              400 E. Kaliste Saloom Road
                              Suite 3000
                              Lafayette, Louisiana 70508

or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

      12. General Provisions.

            (a) Executive's rights and obligations under this Agreement shall
      not be transferable by assignment or otherwise, nor shall Executive's
      rights be subject to encumbrance or subject to the claims of the Company's
      creditors. Nothing in this Agreement shall prevent the consolidation of
      the Company with, or its merger into, any other corporation, or the sale
      by the Company of all or substantially all of its properties or assets;
      and this Agreement shall inure to the benefit of, be binding upon and be
      enforceable by, any successor surviving or resulting corporation, or other
      entity to which such assets shall be transferred. This Agreement shall not
      be terminated by the voluntary or involuntary dissolution of the Company.

            (b) This Agreement and any Employment Agreement with Executive plus
      terms of any stock option plans or grants constitutes the entire agreement
      between the parties hereto in respect to the rights and obligations of the
      parties following a Change in Control. This Agreement supersedes and
      replaces all prior oral and written agreements, understandings,
      commitments, and practices between the parties (whether or not fully
      performed by Executive prior to the date hereof), which shall be of no
      further force or effect.

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            (c) The provisions of this Agreement shall be regarded as divisible,
      and if any of said provisions or any part thereof are declared invalid or
      unenforceable by a court of competent jurisdiction, the validity and
      enforceability of the remainder of such provisions or parts thereof and
      the applicability thereof shall not be affected thereby.

            (d) This Agreement may not be amended or modified except by a
      written instrument executed by the Company and Executive.

            (e) This Agreement and the rights and obligations hereunder shall be
      governed by and construed in accordance with the laws of the State of
      Texas.

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                        PetroQuest Energy, Inc.,
                                          a Delaware Corporation

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                        ________________________________________
                                                        Executive

                                       11<PAGE>

                                                                   EXHIBIT 10.21

                            INDEMNIFICATION AGREEMENT

      This Indemnification Agreement is entered into this ___ day of __________,
2001 ("Agreement"), by and between PetroQuest Energy, Inc., a Delaware
corporation ("Company"), and _______________ ("Indemnitee"):

      WHEREAS, highly competent persons have become more reluctant to serve
corporations as directors, executive officers or in other capacities unless they
are provided, with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions against them
arising out of their service to, and activities on behalf of, the corporation;

      WHEREAS, the Board of Directors of the Company (the "Board") has
determined that, in order to attract and retain qualified individuals, the
Company will attempt to maintain on an ongoing basis, at its sole expense,
liability insurance to protect persons' serving the Company and its subsidiaries
from certain liabilities. Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Company believes that, given current market
conditions and trends, such insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers and other persons in service to corporations or business enterprises
are being increasingly subjected to expensive and time-consuming litigation
relating to, among other things, matters that traditionally would have been
brought only against the corporation or business enterprise itself;

      WHEREAS, the uncertainties relating to such insurance and to
indemnification have increased the difficulty of attracting and retaining such
persons;

      WHEREAS, the Board has determined that the increased difficulty in
attracting and retaining such persons is detrimental to the best interests of
the Company's stockholders and that the Company should act to assure such
persons that there will be increased certainty of such protection in the future;

      WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified; and

      WHEREAS, Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that he be
so indemnified;

      NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
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      SECTION 1. Services by Indemnitee. Indemnitee agrees to serve as a
[director/executive officer] of the Company and, as mutually agreed by
Indemnitee and the Company, as a director, officer, employee, agent or fiduciary
of other corporations, partnerships, joint ventures, trusts or other enterprises
(including, without limitation, employee benefit plans). Indemnitee may at any
time and for any reason resign from any such position (subject to any other
contractual obligation or any obligation imposed by operation of law), in which
event the Company shall have no obligation under this Agreement to continue
Indemnitee in that position. This Agreement shall not be deemed an employment
contract between the Company (or any of its subsidiaries) and Indemnitee.
Indemnitee specifically acknowledges that Indemnitee's employment with the
Company (or any of its subsidiaries), if any, is at will, and the Indemnitee may
be discharged at any time for any reason, with or without cause, except as may
be otherwise provided in any written employment contract between Indemnitee and
the Company (or any of its subsidiaries), other applicable formal severance
policies duly adopted by the Board or, with respect to service as a director of
the Company, by the Company's Certificate of incorporation, Bylaws and the
General Corporation Law of the State of Delaware. Notwithstanding, the
foregoing, this Agreement shall continue in force after Indemnitee has ceased to
serve as an officer or director of the Company and no longer serves at the
request of the Company as a director, officer, employee or agent of the Company
or any subsidiary of the Company.

      SECTION 2. Indemnification--General. The Company shall indemnify, and
advance Expenses (as hereinafter defined) to, Indemnitee (a) as provided in this
Agreement and (b) to the fullest extent permitted by applicable law in effect on
the date hereof and as amended from time to time. The rights of Indemnitee
provided under the preceding sentence shall include, but shall not be limited
to, the rights set forth in the other Sections of this Agreement.

      SECTION 3. Proceedings Other than Proceedings by or in the Right of the
Company. Indemnitee shall be entitled to the rights of indemnification provided
in Section 2 and this Section 3 if, by reason of his Corporate Status (as
hereinafter defined), he is, or is threatened to be made, a party to or a
participant in any threatened, pending, or completed Proceeding (as hereinafter
defined), other than a Proceeding by or in the right of the Company. Pursuant to
this Section 3, the Company shall indemnify Indemnitee against, and shall hold
Indemnitee harmless from and in respect of, all Expenses, judgments, penalties,
fines (including excise taxes) and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with or in
respect of such Expenses, judgments, fines, penalties or amounts paid in
settlement) actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any claim, issue or matter therein, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and, with respect to any criminal
Proceeding, had no reasonable cause to believe his conduct was unlawful.

      SECTION 4. Proceedings by or in the Right of the Company. Indemnitee shall
be entitled to the rights of indemnification provided in Section 2 and this
Section 4 if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or a participant in any threatened, pending or completed
Proceeding brought by or in the right of the Company to procure a judgment in
its favor.

                                       2
<PAGE>
Pursuant to this Section 4, the Company shall indemnify Indemnitee against, and
shall hold Indemnitee harmless from and in respect of, all Expenses actually and
reasonably incurred by him or on his behalf in connection with, and any amounts
paid in settlement of, such Proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company. Notwithstanding the foregoing, no indemnification against such Expenses
shall be made in respect of any claim, issue or matter in such Proceeding as to
which Indemnitee shall have been adjudged to be liable to the Company if
applicable law prohibits such indemnification; provided, however, if applicable
law so permits, indemnification against such Expenses shall nevertheless be made
by the Company in such event if and only to the extent that the Court of
Chancery of the State of Delaware, or the court in which such Proceeding shall
have been brought or is pending, shall determine.

      SECTION 5. Indemnification for Expenses of a Party Who Is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of any
Proceeding, he shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith. If Indemnitee is not
wholly successful in defense of such Proceeding but is successful, on the merits
or otherwise, as to one or more but less than all claims, issues or matters in
such Proceeding, the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. For purposes of this Section and
without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.

      SECTION 6. Indemnification for Expenses as a Witness. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee is, by reason
of his Corporate Status, a witness in any Proceeding to which Indemnitee is not
a party, he shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith.

      SECTION 7. Advancement of Expenses. The Company shall advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within ten (10) days after the receipt by the Company of a
statement or statements from Indemnitee requesting such advance or advances from
time to time, whether prior to or after final disposition of such Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by an undertaking by
or on behalf of Indemnitee to repay any Expenses advanced if it ultimately shall
be determined, in accordance with this Agreement, that Indemnitee is not
entitled to be indemnified against such Expenses.

      SECTION 8. Procedure for Determination of Entitlement to Indemnification.

      (a) To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee

                                       3
<PAGE>
is entitled to indemnification. The Secretary of the Company shall, promptly
upon receipt of such a request for indemnification, advise the Board in writing
that Indemnitee has requested indemnification.

      (b) On written request by Indemnitee for indemnification pursuant to the
first sentence of Section 8(a), a determination, if required by applicable law,
with respect to Indemnitee's entitlement thereto shall be made in the specific
case: (i) if a Change in Control (as hereinafter defined) shall have occurred
within two (2) years prior to the date of such written request, by Independent
Counsel (as hereinafter defined) in a written opinion to the Board, a copy of
which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not
have occurred within two (2) years prior to the date of such written request,
(A) by a majority vote of the Disinterested Directors (as hereinafter defined),
even though less than a quorum of the Board, or (B) if there are no such
Disinterested Directors, or if such Disinterested Directors so direct, by
Independent Counsel in a written opinion to the Board, a copy of which shall be
delivered to Indemnitee; and, if it is so determined that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made within ten (10) days
after such determination. Indemnitee shall cooperate with the person, persons or
entity making such determination with respect to Indemnitee's entitlement to
indemnification, including providing to such person, persons or entity on
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the determination
as to Indemnitee's entitlement to indemnification) and the Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.

      (c) In the event the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 8(b), the Independent Counsel
shall be selected as provided in this Section 8(c). If a Change of Control shall
not have occurred within two (2) years prior to the date of Indemnitee's written
request for indemnification pursuant to Section 8(a), the Independent Counsel
shall be selected by the Board, and the Company shall give written notice to
Indemnitee advising him of the identity of the Independent Counsel so selected.
If a Change of Control shall have occurred within two (2) years prior to the
date of Indemnitee's written request for indemnification pursuant to Section
8(a), the Independent Counsel shall be selected by Indemnitee (unless Indemnitee
shall request that such selection be made by the Board, in which event the
preceding sentence shall apply), and Indemnitee shall give written notice to the
Company advising it of the identity of the Independent Counsel so selected in
either event, Indemnitee or the Company, as the case may be, may, within ten
(10) days after such written notice of selection shall have been given, deliver
to the Company or to Indemnitee, as the case may be, a written objection to such
selection. Such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of "Independent
Counsel" as defined in Section 17, and the objection shall set forth with
particularity the factual basis of such assertion. If such written objection is
so made and substantiated, the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court has
determined that such objection is without merit. If, within twenty (20) days
after submission by Indemnitee of a written request for indemnification pursuant
to Section 8(a), no Independent Counsel shall have been selected and not

                                       4
<PAGE>
objected to, either the Company or Indemnitee may petition the Court of Chancery
or other court of competent jurisdiction for resolution of any objection which
shall have been made by the Company or Indemnitee to the other's selection of
Independent Counsel and/or for the appointment as Independent Counsel of a
person selected by the petitioned court or by such other person as the
petitioned court shall designate, and the person with respect to whom all
objections are so resolved or the person so appointed shall act as Independent
Counsel under Section 8(b). The Company shall pay any and all reasonable fees
and expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Section 8(b), and the Company shall pay all
reasonable fees and expenses incident to the procedures of this Section 8(c),
regardless of the manner in which such Independent Counsel was selected and
appointed. If (i) Independent Counsel does not make any determination respecting
Indemnitee's entitlement to indemnification hereunder within ninety (90) days
after receipt by the Company of a written request therefor and (ii) any judicial
proceeding or arbitration pursuant to Section 10(a)(iii) hereof is then
commenced, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

      SECTION 9. Presumptions and Effect of Certain Proceedings.

      (a) In making a determination with respect to entitlement to
indemnification hereunder, the Person, Persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 8(a), and the Company shall have the burden of proof to
overcome that presumption in connection with the making by any person, persons
or entity of any determination contrary to that presumption.

      (b) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or on a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly provided
in this Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.

      (c) Any action taken by Indemnitee in connection with any employee benefit
plan shall, if taken in good faith by Indemnitee and in a manner Indemnitee
reasonably believed to be in the interest of the participants in or
beneficiaries of that plan, be deemed to have been taken in a manner "not
opposed to the best interests of the Company" for all purposes of this
Agreement.

      SECTION 10. Remedies of Indemnitee.

      (a) In the event that (i) a determination is made pursuant to Section 8
that Indemnitee is not entitled to indemnification hereunder, (ii) advancement
of Expenses is not timely made pursuant to Section 7, (iii) Independent Counsel
is to determine Indemnitee's entitlement to indemnification hereunder, but does
not make that determination within ninety (90) days after receipt by the Company
of the request for that

                                       5
<PAGE>
indemnification, (iv) payment of indemnification is not made pursuant to Section
5 or 6 within ten (10) days after receipt by the Company of a written request
therefor or (v) payment of indemnification is not made within ten (10) days
after a determination has been made that Indemnitee is entitled to
indemnification, Indemnitee shall be entitled to an adjudication from the Court
of Chancery of his entitlement to such indemnification or advancement of
Expenses. Alternatively, Indemnitee, at his option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the Commercial
Arbitration Rules of the American Arbitration Association. Indemnitee shall
commence such Proceeding seeking an adjudication or an award in arbitration
within one hundred eighty (180) days following the date on which Indemnitee
first has the right to commence such proceeding pursuant to this Section 10(a);
provided, however, that the foregoing clause shall not apply in respect of a
proceeding brought by Indemnitee to enforce his rights under Section 5.

      (b) In the event that a determination shall have been made pursuant to
Section 8(b) that Indemnitee is not entitled to indemnification, any judicial
proceeding or arbitration commenced pursuant to this Section 10 shall be
conducted in all respects as a de novo trial, or arbitration, on the merits and
Indemnitee shall not be prejudiced by reason of that adverse determination. In
any judicial proceeding or arbitration commenced pursuant to this Section 10,
the Company shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.

      (c) If a determination shall have been made pursuant to Section 8(b) that
Indemnitee is entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding or arbitration commenced pursuant to
this Section 10, absent (i) a misstatement by Indemnitee of a material fact, or
an omission by Indemnitee of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law.

      (d) In the event that Indemnitee, pursuant to this Section 10, seeks a
judicial adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
against, any and all expenses (of the types described in the definition of
Expenses in Section 17) actually and reasonably incurred by him in such judicial
adjudication or arbitration, but only if he prevails therein. If it shall be
determined in said judicial adjudication or arbitration that Indemnitee is
entitled to receive part but not all of the indemnification or advancement of
expenses sought, the expenses incurred by Indemnitee in connection with such
judicial adjudication or arbitration shall be appropriately prorated.

      SECTION 11. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

      (a) The rights of indemnification and to receive advancement of Expenses
as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under applicable law, the
Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders
or a resolution of directors, or otherwise. No amendment, alteration or repeal
of this Agreement or of any provision hereof shall limit or restrict any right
of Indemnitee under this Agreement

                                       6
<PAGE>
in respect of any action taken or omitted by such Indemnitee in his Corporate
Status prior to such amendment, alteration or repeal. To the extent that a
change in Delaware law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by
this Agreement the greater benefits so afforded by such change.

      (b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors, officers, employees, or
agents of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which such person serves at the
request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such director, Officer, employee or agent under such policy or
policies.

      (c) In the event of any payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all the rights of recovery of
Indemnitee, who shall execute all papers required and take all action necessary
to secure such rights, including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.

      (d) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.

      (e) The Company's obligation to indemnify or advance Expenses hereunder to
Indemnitee with respect to Indemnitee's service at the request of the Company as
a director, officer, employee or agent of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise shall be reduced
by any amount Indemnitee has actually received as indemnification or advancement
of Expenses from such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise.

      SECTION 12. Duration of Agreement. This Agreement shall continue until and
terminate upon the later of: (a) ten (10) years after the date that Indemnitee
shall have ceased to serve as a director or officer of the Company or of any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise which Indemnitee served on behalf of the Company; or (b) the
final termination of any Proceeding then pending in respect of which Indemnitee
is granted rights of indemnification or advancement of expenses hereunder and of
any Proceeding commenced by Indemnitee pursuant to Section 10 relating thereto.
This Agreement shall be binding upon the Company and its successors and assigns
and shall inure to the benefit of Indemnitee and his spouse (if Indemnitee
resides in Texas or another community property state), heirs, executors and
administrators, and this Agreement does not, and shall not be construed to
confer any rights on any person that is not a party to this Agreement, other
than Indemnitee's spouse, and his heirs, executors and assigns.

      SECTION 13. Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the

                                       7
<PAGE>
remaining provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to
be invalid, illegal or unenforceable which is not itself invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby; (b) such
provision or provisions shall be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (c) to the fullest extent possible, the provisions of this
Agreement (including. without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable which is not itself invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested thereby.

      SECTION 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any other provision hereof, Indemnitee shall not be
entitled to indemnification or advancement of Expenses under this Agreement with
respect to any Proceeding brought by Indemnitee or any claim therein prior to a
Change in Control, unless the bringing of such Proceeding or making of such
claim shall have been approved by the Board of Directors.

      SECTION 15. Identical Counterparts. This Agreement may be executed in one
or more counterparts by means of original or facsimile signatures, each of which
shall for all purposes be deemed to be an original but all of which together
shall constitute one and the same Agreement. Only one such counterpart signed by
the party against whom enforceability is sought needs to be produced to evidence
the existence of this Agreement.

      SECTION 16. Headings. The headings of the Sections hereof are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof.

      SECTION 17. Definitions. For purposes of this Agreement:

            (a) "Acquiring Person" means any Person who or which, together with
      all Affiliates and Associates of such Person, is or are the Beneficial
      Owner of twenty-five percent (25%) or more of the shares of Common Stock
      then outstanding, but does not include any Exempt Person; provided,
      however, that a Person shall not be or become an Acquiring Person if such
      Person, together with its Affiliates and Associates, shall become the
      Beneficial Owner of twenty-five percent (25%) or more of the shares of
      Common Stock then outstanding solely as a result of a reduction in the
      number of shares of Common Stock outstanding due to the repurchase of
      Common Stock by the Company, unless and until such time as such Person or
      any Affiliate or Associate of such Person shall purchase or otherwise
      become the Beneficial Owner of additional shares of Common Stock
      constituting one percent (1%) or more of the then outstanding shares of
      Common Stock or any other Person (or Persons) who is (or collectively are)
      the Beneficial Owner of shares of Common Stock constituting one percent
      (1%) or more of the then outstanding shares of Common Stock shall become
      an Affiliate or Associate of such Person, unless, in either such case,
      such Person, together with all Affiliates and Associates of such Person,

                                       8
<PAGE>
      is not then the Beneficial Owner of twenty-five percent (25%) or more of
      the shares of Common Stock then outstanding.

            (b) "Affiliate" has the meaning ascribed to that term in Exchange
      Act Rule 12b-2.

            (c) "Associate" means, with reference to any Person, (i) any
      corporation, firm, partnership, association, unincorporated organization
      or other entity (other than the Company or a subsidiary of the Company) of
      which that Person is an officer or general partner (or officer or general
      partner of a general partner) or is, directly or indirectly, the
      Beneficial owner of 10% or more of any class of its equity securities,
      (ii) any trust or other estate in which that Person has a substantial
      beneficial interest or for or of which that Person serves as trustee or in
      a similar fiduciary capacity and (iii) any relative or spouse of that
      Person, or any relative of that spouse, who has the same home as that
      Person.

            (d) A specified Person is deemed the "Beneficial Owner" of, and is
      deemed to "beneficially own," any securities:

                  (i) of which that Person or any of that Person's Affiliates or
            Associates, directly or indirectly, is the "beneficial owner" (as
            determined pursuant to Exchange Act Rule 13d-3) or otherwise has the
            right to vote or dispose of, including pursuant to any agreement,
            arrangement or understanding (whether or not in writing); provided,
            however, that a Person shall not be deemed the "Beneficial Owner"
            of, or to "beneficially own," any security under this subparagraph
            as a result of an agreement, arrangement or understanding to vote
            that security if that agreement, arrangement or understanding: (A)
            arises solely from a revocable proxy or consent given in response to
            a public (that is, not including a solicitation exempted by Exchange
            Act Rule 14a-2(b)(2)) proxy or consent solicitation made pursuant
            to, and in accordance with, the applicable provisions of the
            Exchange Act; and (B) is not then reportable by such Person on
            Exchange Act Schedule 13D (or any comparable or successor report);

                  (ii) which that Person or any of that Person's Affiliates or
            Associates, directly or indirectly, has the right or obligation to
            acquire (whether that right or obligation is exercisable or
            effective immediately or only after the passage of time or the
            occurrence of an event) pursuant to any agreement, arrangement or
            understanding (whether or not in writing) or on the exercise of
            conversion rights, exchange rights, other rights, warrants or
            options, or otherwise; provided, however, that a Person shall not be
            deemed the "Beneficial Owner" of, or to "beneficially own,"
            securities tendered pursuant to a tender or exchange offer made by
            that Person or any of that Person's Affiliates or Associates until
            those tendered securities are accepted for purchase or exchange; or

                                       9
<PAGE>
                  (iii) which are beneficially owned, directly or indirectly, by
            (A) any other Person (or any Affiliate or Associate thereof) with
            which the specified Person or any of the specified Person's
            Affiliates or Associates has any agreement, arrangement or
            understanding (whether or not in writing) for the purpose of
            acquiring, holding, voting (except pursuant to a revocable proxy or
            consent as described in the proviso to subparagraph (i) of this
            definition) or disposing of any voting securities of the Company or
            (B) any group (as that term is used in Exchange Act Rule 13d-5(b))
            of which that specified Person is a member;

PROVIDED, HOWEVER, that nothing in this definition shall cause a Person engaged
in business as an underwriter of securities to be the "Beneficial Owner" of, or
to "beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty (40) days after the date of that acquisition. For purposes
of this Agreement, "voting" a security shall include voting, granting a proxy,
acting by consent, making a request or demand relating to corporate action
(including, without limitation, calling a stockholder meeting) or otherwise
giving an authorization (within the meaning of Section 14(a) of the Exchange
Act) in respect of such security.

            (e) "Change of Control" means the occurrence of any of the following
      events that occurs after the effective date of this Agreement: (i) any
      Person becomes an Acquiring Person; (ii) at any time the then Continuing
      Directors cease to constitute a majority of the members of the Board;
      (iii) a merger of the Company with or into, or a sale by the Company of
      its properties and assets substantially as an entirety to, another Person
      occurs and, immediately after that occurrence, any Person, other than an
      Exempt Person, together with all Affiliates and Associates of such Person,
      shall be the Beneficial Owner of twenty-five percent (25%) or more of the
      total voting power of the then outstanding Voting Shares of the Person
      surviving that transaction (in the case or a merger or consolidation) or
      the Person acquiring those properties and assets substantially as an
      entirety.

            (f) "Common Stock" means the common stock, par value $.001 per
      share, of the Company.

            (g) "Continuing Director" means at any time any individual who then
      (i) is a member of the Board and was a member of the Board as of the
      effective date of this Agreement or whose nomination for his first
      election, or that first election, to the Board following that date was
      recommended or approved by a majority of the then Continuing Directors
      (acting separately or as a part of any action taken by the Board or any
      committee thereof) and (ii) is not an Acquiring Person, an Affiliate or
      Associate of an Acquiring Person or a nominee or representative of an
      Acquiring Person or of any such Affiliate or Associate.

                                       10
<PAGE>
            (h) "Corporate Status" describes the status of a Person who is or
      was a director, officer, employee or agent of the Company or of any other
      corporation, partnership, joint venture, trust, employee benefit plan or
      other enterprise which such person is or was serving at the request of the
      Company. For purposes of this Agreement, "serving at the request of the
      Company" includes any service by Indemnitee which imposes duties on, or
      involves services by, Indemnitee with respect to any employee benefit plan
      or its participants or beneficiaries.

            (i) "Court of Chancery" means the Court of Chancery of the State of
      Delaware.

            (j) "Disinterested Director" means a director of the Company who is
      not and was not a party to the Proceeding in respect of which
      indemnification is sought by Indemnitee hereunder.

            (k) "Exchange Act" means the Securities Exchange Act of 1934, as
      amended.

            (l) "Exempt Person" means (i), (A) the Company, any subsidiary of
      the Company, any employee benefit plan of the Company or of any subsidiary
      of the Company and (B) any Person organized, appointed or established by
      the Company for or pursuant to the terms of any such plan or for the
      purpose of funding any such plan or funding other employee benefits for
      employees of the Company or any subsidiary of the Company and (ii)
      Indemnitee, any Affiliate or Associate of Indemnitee or any group (as that
      term is used in Exchange Act Rule 13d-5(b)) of which Indemnitee or any
      Affiliate or Associate of Indemnitee is a member.

            (m) "Expenses" include all attorneys' fees, retainers, court costs,
      transcript costs, fees of experts, witness fees, travel expenses,
      duplicating costs, printing and binding costs, telephone charges, postage,
      delivery service fees, all other disbursements or expenses of the types
      customarily incurred in connection with prosecuting, defending, preparing
      to prosecute or defend, investigating, being or preparing to be a witness
      in, or otherwise participating in, a Proceeding and all interest or
      finance charges attributable to any thereof. Should any payments by the
      Company under this Agreement be determined to be subject to any federal,
      state or local income or excise tax, "Expenses" also shall include such
      amounts as are necessary to place Indemnitee in the same after-tax
      position (after giving effect to all applicable taxes) he would have been
      in had no such tax been determined to apply to such payments.

            (n) "Independent Counsel" means a law firm, or a member of a law
      firm, that is experienced in matters of corporation law and neither
      presently is, nor in the past five (5) years has been, retained to
      represent: (i) the Company, its Affiliates or Indemnitee in any matter
      material to either such party; or (ii) any other Party to the Proceeding
      giving rise to

                                       11
<PAGE>
      a claim for indemnification hereunder. Notwithstanding the foregoing. the
      term "Independent Counsel" shall not include any person who, under the
      applicable standards of professional conduct then prevailing, would have a
      conflict of interest in representing either the Company or Indemnitee in
      an action to determine Indemnitee's rights under this Agreement.

            (o) "Person" means any natural person, sole proprietorship,
      corporation, partnership of any kind having a separate legal status,
      limited liability company, business trust, unincorporated organization or
      association, mutual company, joint stock company, joint venture, estate,
      trust, union or employee organization or governmental authority.

            (p) "Proceeding" includes any action, suit, alternate dispute
      resolution mechanism, hearing or any other proceeding, whether civil,
      criminal, administrative, arbitrative, investigative or mediative, any
      appeal in any such action, suit, alternate dispute resolution mechanism,
      hearing or other proceeding and any inquiry or investigation that could
      lead to any such action, suit, alternate dispute resolution mechanism,
      hearing or other proceeding, except one (i) initiated by an Indemnitee
      pursuant to Section 10 to enforce his rights hereunder or (ii) pending on
      or before the date of this Agreement.

            (q) "Voting Shares" means: (i) in the case of any corporation, stock
      of that corporation of the class or classes having general voting power
      under ordinary circumstances to elect a majority of that corporation's
      board of directors; and (ii) in the case of any other entity, equity
      interests of the class or classes having general voting power under
      ordinary circumstances equivalent to the Voting Shares of a corporation.

      SECTION 18. Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

      SECTION 19. Notice by Indemnitee. Indemnitee agrees promptly to notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder; provided, however, failure to give such notice shall not
deprive Indemnitee of his rights to indemnification and advancement of Expenses
under this Agreement unless the Company is actually and materially prejudiced
thereby.

      SECTION 20. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (a) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed or (b) mailed by
certified or registered mail with postage prepaid, on the third (3rd) business
day after the date on which it is so mailed:

                                       12
<PAGE>
            (a)   If to Indemnitee, to:   _______________
                                          400 E. Kaliste Saloom Rd., Suite 3000
                                          Lafayette, Louisiana 70508

                                       13
<PAGE>
            (b)   If to the Company, to:  PetroQuest Energy, Inc.
                                          400 E. Kaliste Saloom Rd., Suite 3000
                                          Lafayette, Louisiana 70508
                                          Attention: Corporate Secretary

or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case way be.

      SECTION 21. Contribution. To the fullest extent permissible under
applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement and/or for Expenses, in connection with any claim relating to
an indemnifiable event under this Agreement, in such proportion as is deemed
fair and reasonable in light of all the circumstances of such Proceeding in
order to reflect: (a) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving cause to
such Proceeding; and/or (b) the relative fault of the Company (and its
directors, officers, employees and agents) and Indemnitee in connection with
such event(s) and/or transaction(s).

      SECTION 22. Governing Law; Submission to Jurisdiction. This Agreement and
the legal relations among the parties shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws rules. Except with respect to any arbitration commenced
by Indemnitee pursuant to Section 10(a), the Company and Indemnitee hereby
irrevocably and unconditionally (a) agree that any action or proceeding arising
out of or in connection with this Agreement shall be brought only in the Court
of Chancery and not in any other state or federal court in the United States of
America or any court in any other country, (b) consent to submit to the
exclusive jurisdiction of the Court of Chancery for purposes of any action or
proceeding arising out of or in connection with this Agreement, (c) waive any
objection to the laying of venue of any such action or proceeding in the Court
of Chancery, and (d) waive, and agree not to plead or to make, any claim that
any such action or proceeding brought in the Court of Chancery has been brought
in an improper or otherwise inconvenient forum.

      SECTION 23. Miscellaneous. Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun where appropriate. When used in this
Agreement, the words "herein," "hereof" and words of similar import shall refer
to this Agreement as a whole and not to any provision of this Agreement, and the
word "Section" refers to a Section of this Agreement, unless otherwise
specified.

                                       14
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.

                                        PETROQUEST ENERGY, INC.

                                        ________________________________________
                                        [Name], [Title]

                                        INDEMNITEE

                                        ________________________________________
                                        [Name]

                                       15

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