Document:

Exhibit 10.3

                          MORTGAGE, SECURITY AGREEMENT,
                FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION

                                     MADE BY

                  TEXAURUS ENERGY, INC., a Delaware corporation

                                 as "Mortgagor"

                                       and

                            LAURUS MASTER FUND, LTD.
                            a Cayman Islands company

                                 as "Mortgagee"

<PAGE>

                          MORTGAGE, SECURITY AGREEMENT,
                FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION

     BE  IT  KNOWN,  that  on  this  20th  day  of  April,  2006,

     BEFORE  ME,  the  undersigned Notary Public, duly commissioned as set forth
below,  and  in  the  presence  of  the  undersigned  competent  witnesses,

     PERSONALLY  CAME  AND  APPEARED:

     TEXAURUS  ENERGY,  INC.,  a  Delaware  corporation ("Mortgagor"),
                                                          ---------
     represented herein by Max Maxwell, its President, duly authorized
     by  Resolution,  a copy of which is annexed hereto as Schedule 1,
     whose  mailing address is 2411 Fountainview, #120, Houston, Texas
     77057  whose  tax  id  number  is  applied  for,  and  whose
     organizational  number  is  4118617,

     who,  being  duly sworn, declared and said that it does hereby execute this
MORTGAGE,  SECURITY  AGREEMENT, FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION
(this  "Mortgage")  to  LAURUS  MASTER  FUND,  LTD.,  a  Cayman  Islands company
        -------
("Mortgagee").
  ---------

                                   RECITALS.:

     WHEREAS,  in  order  to  secure  the  Secured Indebtedness (defined below),
Mortgagor  has  agreed  to  execute and deliver this Mortgage pursuant to which,
among  other  things,  the  Mortgaged  Property (defined below) is mortgaged and
hypothecated  by  Mortgagor  to  Mortgagee.

     NOW,  THEREFORE,  Mortgagor  hereby  agrees  as  follows:

                                    ARTICLE I
                                   DEFINITIONS

     1.1  Certain  Defined  Terms. For all purposes of this Mortgage, unless the
          -----------------------
context  otherwise  requires:

     "Accounts  and Contract Rights" shall mean all accounts (including accounts
      -----------------------------
in  the  form of joint interest billings under applicable operating agreements),
contract  rights and general intangibles of Mortgagor now or hereafter existing,
or  hereafter acquired by, or on behalf of, Mortgagor, or Mortgagor's successors
in  interest,  relating  to  or  arising  from  the  ownership,  operation  and
development  of  the  Mortgaged  Property  and  to  the  production, processing,
treating,  sale,  purchase,  exchange or transportation of Hydrocarbons (defined

<PAGE>

below) produced or to be produced from or attributable to the Mortgaged Property
or any units or pooled interest units in which all or a portion of the Mortgaged
Property  forms  a  part,  together  with  all accounts and proceeds accruing to
Mortgagor  attributable  to the sale of Hydrocarbons produced from the Mortgaged
Property  or any units or pooled interest units in which all or a portion of the
Mortgaged  Property  forms  a  part.

     "Article"  shall  mean  and  refer  to  an Article of this Mortgage, unless
      -------
specifically  indicated  otherwise.

     "Code"  shall  mean  the  Uniform  Commercial Code in effect in each of the
      ----
jurisdictions  where  the  Mortgaged  Property or a portion thereof is situated.

     "Credit  Agreements"  shall  mean,  collectively,  the  Securities Purchase
      ------------------
Agreement  and  the  other  Related  Agreements  as defined therein, and "Credit
Agreement"  shall  mean  any  one  of  the  foregoing.

     "Effective  Date"  shall  mean  April  21,  2006.
      ---------------

     "Event  of Default" shall mean the occurrence of any breach by Mortgagor of
      -----------------
any term or provision of this Mortgage or the occurrence of any Event of Default
under  and  as  defined  in  the  applicable  Credit  Agreement.

     "Exhibit  A" shall mean, unless specifically indicated otherwise, Exhibit A
      ----------
attached  hereto  and  incorporated  herein  by  reference  for  all  purposes.

     "Gas  Balancing  Agreement" shall mean any agreement or arrangement whereby
      -------------------------
Mortgagor,  or  any  other  party  having  an interest in any Hydrocarbons to be
produced from Mineral Interests in which Mortgagor owns an interest, has a right
or an obligation to take more or less than its proportionate share of production
therefrom.

     "Hydrocarbons"  shall  mean  oil, gas, coalbed methane gas, casinghead gas,
      ------------
drip  gasolines,  natural  gasoline,  condensate,  distillate,  as-extracted
collateral  and  all  other  liquid  or  gaseous  hydrocarbons produced or to be
produced  in  conjunction  therewith, and all products, byproducts and all other
substances  derived  therefrom or the processing thereof, and all other minerals
and  substances, including, but not limited to, sulphur, lignite, coal, uranium,
thorium,  iron,  geothermal steam, water, carbon dioxide, helium and any and all
other  minerals,  ores,  or  substances  of  value and the products and proceeds
therefrom,  including,  without  limitation,  all gas resulting from the in-situ
combustion  of  coal  or  lignite.

     "Lands"  shall  mean the lands described in Exhibit A and shall include any
      -----
lands,  the  description  of  which is contained in Exhibit A or incorporated in
Exhibit  A  by  reference  to another instrument or document, including, without
limitation,  all  lands  described in the Oil and Gas Leases listed on Exhibit A
hereto,  and  shall  also  include  any lands now or hereafter unitized, pooled,
spaced  or otherwise combined, whether by statute, order, agreement, declaration
or  otherwise,  with lands the description of which is contained in Exhibit A or
is  incorporated  in  Exhibit  A  by  reference.

     "Lien" shall mean any mortgage, deed of trust, collateral assignment, lien,
      ----
pledge,  charge,  security  interest  or  other  encumbrance.

<PAGE>

     "Loans"  shall  mean collectively, all amounts now or hereafter advanced by
      -----
the  Mortgagee  to  Mortgagor  under  the  Notes  and  the  Credit  Agreements.

     "Material  Adverse  Effect" shall mean a material adverse effect on (a) the
      -------------------------
assets,  liabilities, financial condition, results of operations or prospects of
Mortgagor, (b) the right or ability of Mortgagor to fully, completely and timely
perform  its  obligations  under  the  Credit Agreements, or (c) the validity or
enforceability  of  any  Credit  Agreement  against  Mortgagor, or the rights or
remedies  of  Mortgagee  thereunder.

     "Mortgaged  Property"  shall  have the meaning stated in Article II of this
      -------------------
Mortgage.

     "Net  Revenue  Interest"  shall  mean Mortgagor's share of all Hydrocarbons
      ----------------------
produced  from  the Lands, after deducting the appropriate proportionate part of
all  lessors'  royalties,  overriding  royalties,  production payments and other
payments  out of or measured by production which burden Mortgagor's share of all
such  production, subject to non-consent provisions contained in joint operating
agreements.

     "Notes"  shall  have  the  meaning  set  forth  in  the  Credit Agreements.
      -----

     "Obligations"  shall  mean all present and future indebtedness, obligations
      -----------
and  liabilities  and  all renewals, refinancings and extensions thereof, or any
part  thereof,  of Mortgagor, to Mortgagee arising pursuant to any of the Credit
Agreements,  or  arising  pursuant  to any commodity, interest rate, currency or
other swap, option, collar, futures contract or other contract pursuant to which
a  Person  hedges  risks  related  to commodity prices, interest rates, currency
exchange  rates,  securities prices or financial market conditions and any other
commodity  price  hedging  agreements by and between Mortgagor and Mortgagee and
all  interest  accrued  on any of the foregoing, and reasonable costs, expenses,
and  attorneys'  fees  incurred  in  the  enforcement  or  collection  thereof,
regardless of whether such indebtedness, obligations and liabilities are direct,
indirect,  fixed,  contingent, liquidated, unliquidated, joint, several or joint
and  several.

     "Oil  and  Gas  Leases" shall mean oil, gas and mineral leases, oil and gas
      ---------------------
leases, oil leases, gas leases, other mineral leases, subleases, top leases, any
rights  resulting  in  an  ownership  interest in Hydrocarbons and all operating
rights  relating  to  any  of  the foregoing (whether operated by virtue of such
leases,  or  assignments  or  applicable  operating  agreements),  and all other
interests pertaining to any of the foregoing, including, without limitation, all
royalty  and  overriding  royalty  interests, production payments and net profit
interests,  production payments and net profit interests, mineral fee interests,
and  all  reversionary,  remainder, carried and contingent interests relating to
any  of the foregoing and all other rights therein which are described and/or to
which  reference  may  be  made  on  Exhibit  A.
                                     ----------

     "Operating Equipment" shall mean all Personal Property and fixtures affixed
      -------------------
or  situated  upon all or any part of the Mortgaged Property, including, without
limitation,  all surface or subsurface machinery, equipment, facilities or other
property  of  whatsoever  kind  or nature now or hereafter located on any of the
Lands  which are useful for the production, treatment, storage or transportation
of  oil  or  gas,  including,  but  not by way of limitation, all oil wells, gas

<PAGE>

wells,  water  wells,  injection  wells, casing, tubing, rods, pumping units and
engines,  Christmas trees, derricks, separators, gun barrels, flow lines, tanks,
gas  systems  (for  gathering,  treating  and  compression),  water systems (for
treating,  disposal  and  injection),  power plants, poles, lines, transformers,
starters  and  controllers,  machine  shops,  tools, storage yards and equipment
stored  therein,  buildings  and  camps,  telegraph,  telephone  and  other
communication  systems,  roads,  loading  racks  and  shipping  facilities.

     "Permitted Encumbrances" shall mean with respect to the Mortgaged Property:
      -----------------------

          (a)  Liens securing  the  Obligations;

          (b)  minor  defects  in title which do not secure the payment of money
     and  otherwise have no material adverse effect on the value or operation of
     the  subject  property,  including,  without  limitation,  easements,
     rights-of-way,  servitudes,  permits,  surface  leases,  and  other similar
     rights  in  respect  of  surface  operations,  and easements for pipelines,
     streets, alleys, highways, telephone lines, power lines, railways and other
     easements  and  rights-of-way,  on,  over  or  in  respect  of  any  of the
     properties  of  Mortgagor  that  are customarily granted in the oil and gas
     industry;

          (c)  inchoate  statutory  or operators' Liens securing obligations for
     labor,  services,  materials  and  supplies furnished to Mineral Interests,
     which  are  not  more  than  60  days  delinquent;

          (d)  mechanic's,  materialman's,  warehouseman's,  journeyman's  and
     carrier's Liens, and other similar Liens arising by operation of law in the
     ordinary  course  of business, securing obligations which are not more than
     60  days  delinquent;

          (e)  Liens for taxes or assessments not yet due or not yet delinquent,
     or,  if  delinquent,  that  are being contested in good faith in the normal
     course  of  business  by  appropriate  action;

          (f)  lease  burdens payable to third parties which are deducted in the
     calculation  of discounted present value in any reserve report delivered by
     Mortgagor  pursuant to the Credit Agreements including, without limitation,
     any  royalty, overriding royalty, net profits interest, production payment,
     carried  interest  or  reversionary  working  interest;

          (g)  Liens,  charges  and  encumbrances upon Mortgagor's assets, other
     than  Proved  Mineral Interests, which in the aggregate do not have a value
     in  excess  of  $100,000;  and

          (h)  Liens  described in Section 4(e) of the Master Security Agreement
     dated as of March 28, 2006, made by Mortgagor in favor of Mortgagee (as the
     same  may  be  amended,  modified  and  supplemented  from  time  to time).

     "Person"  shall  mean  any  individual,  corporation,  partnership, limited
      ------
liability  company,  association,  trust,  other  entity or organization, or any
court  or  governmental  department,  commission,  board,  bureau,  agency,  or
instrumentality  of  any nation or of any province, state, commonwealth, nation,
territory, possession, county, parish, or municipality, whether now or hereafter
constituted  or  existing.

<PAGE>

     "Personal  Property" shall mean that portion of the Mortgaged Property that
      -----------------
is  personal  property.

     "Proved  Mineral  Interests"  shall  mean,  collectively,  Proved Producing
      --------------------------
Mineral Interests, Proved Nonproducing Mineral Interests, and Proved Undeveloped
Mineral  Interests.

     "Proved  Nonproducing  Mineral  Interests" shall mean all Subject Interests
      ----------------------------------------
which  constitute  proved  developed  nonproducing  reserves.

     "Proved Producing Mineral Interests" shall mean all Subject Interests which
      ----------------------------------
constitute  proved  developed  producing  reserves.

     "Proved  Undeveloped  Mineral  Interests"  shall mean all Subject Interests
      ---------------------------------------
which  constitute  proved  undeveloped  reserves.

     "Section"  shall  mean  and  refer  to  a  section of this Mortgage, unless
      -------
specifically  indicated  otherwise.

     "Secured Indebtedness" shall have the meaning stated in Article III of this
      --------------------
Mortgage.

     "Securities  Purchase  Agreements"  means the Securities Purchase Agreement
      --------------------------------
dated  as  of March 28, 2006 between Mortgagor and Mortgagee, as may be amended,
modified  and  supplemented  from  time  to  time.

     "Subject  Interests"  shall  have  the meaning stated in Article II of this
      ------------------
Mortgage.

     "Subsidiary" shall mean, for any Person, any corporation or other entity of
      ----------
which  securities  or  other ownership interests having ordinary voting power to
elect  a  majority of the board of directors or other persons performing similar
functions  (including  that  of  a  general partner) are at the time directly or
indirectly  owned,  collectively,  by  such  Person and any Subsidiaries of such
Person.  "Subsidiary"  shall  include  Subsidiaries of Subsidiaries (and so on).

     "Well  Data"  shall  mean  all  logs,  drilling  reports,  division orders,
      ----------
transfer  orders,  operating  agreements,  contracts  and  other  agreements,
abstracts,  title  opinions,  files,  records, seismic data, memoranda and other
information  in the possession or control of Mortgagor or to which Mortgagor has
access  relating  to  the  Lands  and/or  any  wells  located  thereon.

     1.2  Other  Terms.  Unless otherwise defined or indicated herein, all terms
          ------------
with their initial letter capitalized shall have the meaning given such terms in
the  Revolving  Credit  Agreement.

                                   ARTICLE II
                       GRANTING CLAUSE: MORTGAGED PROPERTY
                       -----------------------------------
In  order to secure the Secured Indebtedness, up to a maximum amount outstanding
at  any  time  or  from  time to time of FIFTY MILLION DOLLARS ($50,000,000.00),
Mortgagor  does  hereby  mortgage,  pledge,  assign,  hypothecate,  and  grant a
security  interest  unto  Mortgagee  and  Mortgagee's  successors  in  title and
assigns,  as  herein  provided, for the uses and purposes herein set forth, with
warranties  and covenants of title only to the extent provided herein and in the

<PAGE>

Credit  Agreements,  all  of  Mortgagor's right, title and interest, whether now
owned  or  hereafter  acquired, including whether the same is acquired before or
after the Effective Date, in all of the hereinafter described properties, rights
and  interests  to the full extent that such property is susceptible of mortgage
under the Louisiana Civil Code, Louisiana Revised Statutes, and other provisions
of  Louisiana law; and, insofar as such properties, rights and interests consist
of  equipment, general intangibles, accounts, contract rights, inventory, goods,
chattel  paper, instruments, documents, money, fixtures, asextracted collateral,
proceeds  and products of collateral or any other Personal Property of a kind or
character  defined in or subject to the applicable provisions of the Code or any
provision  of  Louisiana  law, Mortgagor hereby grants to Mortgagee a continuing
security  interest  therein  and  does further affect, hypothecate, collaterally
assign,  and  pledge  unto  and  in  favor  of  Mortgagee and its successors and
assigns,  as  collateral  assignee, all the present and future rents, as well as
all other property and rights described below that are susceptible of collateral
assignment  under  La.  R.S. Sec. 9:4401, Sec. 9:5386, or any other provision of
Louisiana  law,  whether  now owned or hereafter acquired, including whether the
same  are  acquired  on  or  after  the  Effective  Date,  namely:

          (a)  all  of  those certain Oil and Gas Leases and Lands (all such Oil
     and  Gas  Leases  and Lands being herein called the "Subject Interests," as
                                                          -----------------
     hereinafter  further  defined)  which  are described in Exhibit A and/or to
                                                             ---------
     which reference may be made in Exhibit A and/or which are covered by any of
                                    ---------
     the  leases  described on Exhibit A, which Exhibit A is made a part of this
                               ---------
     Mortgage for all purposes, and is incorporated herein by reference as fully
     as  if  copied  at  length  in  the  body  of  this Mortgage at this point;

          (b)  all  rights, titles, interests and estates now owned or hereafter
     acquired by Mortgagor in and to (i) any and all properties now or hereafter
     pooled  or  unitized  with  any  of  the  Subject  Interests,  and (ii) all
     presently  existing  or  future  operating  agreements  and  unitization,
     communitization  and  pooling  agreements and the units operated thereby to
     the  extent  the  same  relate to all or any part of the Subject Interests,
     including,  without  limitation,  all units formed under or pursuant to any
     applicable  laws  (the  rights,  titles, interests and estates described in
     this  clause (b) also being included within the term "Subject Interests" as
     used  herein);

          (c)  all presently existing and future agreements entered into between
     Mortgagor and any third party that provide for the acquisition by Mortgagor
     of  any  interest  in  any  of  the  properties  or  interests specifically
     described  in  Exhibit  A  or  which  relate  to  any of the properties and
                    ----------
     interests  specifically  described  in  Exhibit  A;
                                             ----------

          (d)  the Hydrocarbons (including inventory) which are in, under, upon,
     produced or to be produced from or attributable to the Lands from and after
     the  Effective  Date;

          (e)  the  Accounts  and  Contract  Rights;

          (f)  the  Operating  Equipment;

          (g)  the  Well  Data;

<PAGE>

          (h)  the  rights and security interests of Mortgagor held by Mortgagor
     to  secure  the obligation of the first purchaser to pay the purchase price
     of  the  Hydrocarbons;

          (i)  all  surface  leases,  rights-of-way,  franchises,  easements,
     servitudes,  licenses,  .privileges,  tenements,  hereditaments  and
     appurtenances now existing or in the future obtained in connection with any
     of  the  aforesaid, and all other items of value and incident thereto which
     Mortgagor  may,  at  any  time,  have  or  be  entitled;  and

          (j)  all  and  any  different  and additional rights of any nature, of
     value  or  convenience  in  the  enjoyment,  development,  operation  or
     production,  in any way, of any property or interest included in any of the
     foregoing  clauses, and in all revenues, income, rents, issues, profits and
     other  benefits  arising therefrom or from any contract now in existence or
     hereafter  entered  into  pertaining  thereto, and in all rights and claims
     accrued  or  to  accrue  for the removal by anyone of Hydrocarbons from, or
     other  act  causing  damage  to,  any  of  such  properties  or  interests.

     All  the  aforesaid properties, rights and interests, together with any and
all substitutions, replacements, corrections or amendments thereto, or renewals,
extensions  or ratifications thereof, or of any instrument relating thereto, and
together  with  any additions thereto which may be subjected to the Lien of this
Mortgage by means of supplements hereto, being hereinafter called the "Mortgaged
                                                                       ---------
Property".
--------

     Subject,  however,  to  (i)  Permitted Encumbrances, and (ii) the condition
that  Mortgagee  shall  not  be liable in any respect for the performance of any
covenant  or  obligation  of  Mortgagor  with respect to the Mortgaged Property.

     Mortgagor  covenants  and  agrees with Mortgagee that it will not mortgage,
pledge,  or  assign  the  Mortgaged  Property to the detriment of this Mortgage.

     This  Mortgage  has  been executed by Mortgagor pursuant to Article 3298 of
the  Louisiana  Civil  Code and other applicable law for the purpose of securing
the  Secured  Indebtedness that may now be existing and/or that may arise in the
future  as  provided  herein, with the preferences and priorities provided under
applicable  Louisiana  law.  However,  nothing  under  this  Mortgage  shall  be
construed  as  limiting the duration of this Mortgage or the purpose or purposes
for  which  the  Secured  Indebtedness  may  be  requested  or  extended.

                                   ARTICLE III
                              SECURED INDEBTEDNESS

     This Mortgage is given to secure the Loans and all of the Obligations under
and  as  described  in  the  Credit  Agreements,  including, without limitation:

          (a)  interest on all credit outstanding under the Credit Agreements at
     the  rates  provided  in  the  Credit  Agreements;

          (b)  the  Obligations, including, without limitation, the indebtedness
     evidenced  by  the  Notes;

          (c)  payment  and  performance  of  any  and  all  present  and future
     obligations  of  Mortgagor  according to the terms of any present or future
     hedge  transaction,  including,  without  limitation, any present or future

<PAGE>

     swap  agreements,  cap,  floor,  collar,  exchange  transaction,  forward
     agreement  or  other exchange or protection agreements relating to any such
     transaction  now  existing  or hereafter entered into between Mortgagor, on
     the  one  hand  and  Mortgagee  on  the  other  hand;

          (d)  any  sums advanced as expenses or costs incurred by, or on behalf
     of,  Mortgagee  which  are  made  or incurred pursuant to the terms of this
     Mortgage  or  any  Credit  Agreement, plus interest thereon at the rate set
     forth  in the applicable Note from the date of advance or expenditure until
     reimbursed;  and

          (e)  all  other  and  additional debts, obligations and liabilities of
     every  kind and character of Mortgagor now existing or hereafter arising in
     connection  with  any  of  the  Credit  Agreements or otherwise (all of the
     obligations  and  indebtedness  referred  to  in  this Article III, and all
                                                            -----------
     renewals,  refinancings,  extensions  and  modifications  thereof,  and all
     substitutions  therefor, in whole or in part, are herein sometimes referred
     to  as  the  "Secured  Indebtedness").
                   ---------------------

                                   ARTICLE IV
       COVENANTS, REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF MORTGAGORS

     Mortgagor  hereby  covenants,  represents,  warrants  and  agrees  that:

     4.1  Payment  of  Indebtedness.  Mortgagor  will duly and punctually pay or
cause  to  be  paid  when  due  all  of  the  Secured  Indebtedness.

     4.2  Warranties. (a) Mortgagor, to the extent of the interests specified in
          ----------
Exhibit  A, has, or on the Effective Date, will have, good and defensible title,
----------
subject  to  Permitted  Encumbrances,  to  each  property  right  or  interest
constituting  the  Mortgaged  Property,  and  has, or on the Effective Date will
have,  a  good  and  legal  right  to make the grant and conveyance made in this
Mortgage; (b) Mortgagor's present Net Revenue Interest in the Mortgaged Property
is  not  less (or on the Effective Date will not be less) than that specified in
Exhibit  A  and  if no interest is specified, includes all its interests however
----------
specified in and to the Oil and Gas Leases and Lands described on Exhibit A; and
                                                                  ---------
(c)  the  Mortgaged  Property  is  free  from  all  Liens  other  than Permitted
Encumbrances.  Mortgagor  will  warrant  and  forever  defend  (subject to those
Permitted  Encumbrances  described  in  clauses (b) and (f) of the definition of
"Permitted  Encumbrances" set forth above) the Mortgaged Property unto Mortgagee
and Mortgagee's successors, legal representatives and assigns, and Mortgagee and
Mortgagee's  successors, legal representatives and assigns, against every Person
whomsoever  lawfully  claiming  the same or any part thereof, and Mortgagor will
maintain  and  preserve  the  Lien  hereby created so long as any of the Secured
Indebtedness  remains unpaid, except where such failure to comply would not have
a  Material  Adverse  Effect.

4.3     Further  Assurances.  Mortgagor  will execute and deliver such other and
        -------------------
further instruments and will do such other and further acts as in the reasonable
discretion  of  Mortgagee  may  be  necessary  or  desirable  to  carry out more
effectively  the  purposes  of  this  Mortgage,  including, without limiting the
generality  of the foregoing, (a) prompt correction of any material defect which
may  hereafter  be  discovered  in the title to the Mortgaged Property or in the

<PAGE>

execution  and acknowledgment of this Mortgage, any Notes, or any other document
used  in connection herewith or at any time delivered to Mortgagee in connection
with  any  Obligations,  and  (b)  if  required  by  Section  8.1 hereof, prompt
execution and delivery of all division or transfer orders that in the reasonable
discretion of Mortgagee are needed to transfer effectively the assigned proceeds
of  production  from  the  Mortgaged  Property  to  Mortgagee.

     4.4  Taxes.  To  the  extent  and  in  the  manner  required  by the Credit
          -----
Agreements,  and  to the extent not prohibited by applicable law, Mortgagor will
promptly  pay, or cause to be paid, all taxes legally imposed upon this Mortgage
or  upon  the  Mortgaged  Property or upon the interest of Mortgagee therein, or
upon  the  income,  profits,  proceeds  and  other  revenues  thereof.

     4.5  Operation  of  the  Mortgaged  Property.  So  long  as  the  Secured
          ---------------------------------------
Indebtedness  or  any  part  thereof  remains  unpaid:

          (a)  To  the  extent  that  Mortgagor  is  the Operator of the Subject
     Interests,  Mortgagor shall maintain and operate the Subject Interests in a
     good  and  workmanlike  manner  and will observe and comply with all of the
     terms  and  provisions,  express  or  implied,  of  all  Oil and Gas Leases
     relating  to  the  Subject Interests so long as such Oil and Gas Leases are
     capable  of  producing Hydrocarbons in paying quantities, except where such
     failure  to  comply  would  not  have  a  Material  Adverse  Effect;

          (b)  To  the  extent  that  Mortgagor  is  the Operator of the Subject
     Interests,  Mortgagor  shall  comply  with  all  contracts  and  agreements
     applicable  to  or relating to the Mortgaged Property or the production and
     sale of Hydrocarbons therefrom, except to the extent a failure to so comply
     would  not  have  a  Material  Adverse  Effect;

          (c)  To  the  extent  that  Mortgagor  is  the Operator of the Subject
     Interests,  Mortgagor  shall, at all times, maintain, preserve and keep all
     Operating  Equipment  used with respect to the Mortgaged Property in proper
     repair,  working order and condition, and make all necessary or appropriate
     repairs, renewals, replacements, additions and improvements thereto so that
     the  efficiency  of such Operating Equipment shall at all times be properly
     preserved  and  maintained,  except  where such failure to comply would not
     have  a  Material  Adverse  Effect;  provided  that  no  item  of Operating
     Equipment  need be so repaired, renewed, replaced, added to or improved, if
     Mortgagor  shall  in good faith determine that such action is not necessary
     or  desirable  for  the continued efficient and profitable operation of the
     Subject  Interests;

          (d)  Mortgagor  shall cause the Mortgaged Property to be kept free and
     clear  of  all  Liens  other  than  Permitted  Encumbrances;

          (e)  Mortgagor  shall  comply  with the terms of the Credit Agreements
     with  respect  to  maintenance  of  insurance.  All loss payable clauses or
     provisions  in  said  policy  or policies shall be endorsed in favor of and
     made payable to Mortgagee, as its interest may appear. Mortgagee shall have
     the  right  to  collect, and Mortgagor hereby assigns to Mortgagee, any and
     all  monies that may become payable under any such policies of insurance by
     reason of damage, loss or destruction of any of the Mortgaged Property, and
     Mortgagee may, at its election, either apply all or any part of the sums so
     collected  toward  payment of the Secured Indebtedness, whether or not such
     Secured  Indebtedness,  or any portion thereof, is then due and payable, in
     such  manner  as  Mortgagee  may  elect, or release same to Mortgagors; and

<PAGE>

          (f)  Mortgagor  shall  not sell, lease, transfer, abandon or otherwise
     dispose  of  any  portion  of  the Mortgaged Property or any of Mortgagor's
     rights,  titles  or  interests  therein  or thereto, except as specifically
     permitted  in  the  Credit  Agreements.

     4.6  Recording.  Mortgagor  will  promptly and at Mortgagors' sole cost and
          ---------
expense,  record,  register,  deposit  and  file  this  Mortgage and every other
instrument  in addition or supplemental hereto in such offices and places and at
such  times  and as often as may be necessary to preserve, protect and renew the
Lien  hereof  as  a perfected Lien on real or personal property, as the case may
be,  subject  only  to  Permitted  Encumbrances,  and the rights and remedies of
Mortgagee,  and otherwise will do and perform all matters or things necessary or
expedient to be done or observed by reason of any law or regulation of any state
or  of the United States or of any other competent authority, for the purpose of
effectively  operating,  maintaining  and  preserving  the  Lien  hereof  on the
Mortgaged  Property.

     4.7  Records.  Statements  and Reports. Mortgagor will keep proper books of
          -------
record  and  account  in  which  complete  and  correct  entries will be made of
Mortgagor's  transactions  in  accordance  with  sound  accounting  principles
consistently  applied and will, to the extent required by the Credit Agreements,
furnish or cause to be furnished to Mortgagee (a) all reports required under the
Credit  Agreements,  and  (b) such other information concerning the business and
affairs and financial condition of Mortgagor as Mortgagee may, from time to time
reasonably  request.

     4.8 No Government Approvals. Mortgagor warrants that no approval or consent
         -----------------------
of  any  Person  is  necessary  to  authorize the execution and delivery of this
Mortgage,  or  any  of the other Credit Agreements or the Notes, or to authorize
the  observance  or  performance by Mortgagor of the covenants herein or therein
contained.

     4.9  Right  of  Entry.  Mortgagor  will  permit Mortgagee, or the agents or
          ----------------
designated  representatives  of Mortgagee, to enter upon the Mortgaged Property,
and  all parts thereof at reasonable times during normal business hours and with
advance  notice  to Mortgagor's President, for the purposes of investigating and
inspecting  the  condition  and  operation thereof, provided that no such notice
shall  be  required  to  be given in the event Mortgagee believes such access is
necessary  to  preserve  or  protect  the  Mortgaged  Property  or following the
occurrence  and  during  the  continuance  of  an  Event  of  Default.

     The  representations  and warranties set forth in the Credit Agreements are
incorporated  herein  by  reference  as  if  set  forth  herein,  and  each such
representation  and  warranty  is  true  and  correct.

                                    ARTICLE V
                         ADDITIONS TO MORTGAGED PROPERTY

It  is  understood and agreed that Mortgagor may periodically subject additional
properties to the Lien of this Mortgage. In the event that additional properties
are  to  be  subjected to the Lien hereof, the parties hereto agree to execute a
supplemental mortgage, satisfactory in form and substance to Mortgagee, together
with  any  security  agreement, financing statement or other security instrument
required  by  Mortgagee, all in form and substance satisfactory to Mortgagee and

<PAGE>

in  a  sufficient  number  of  executed  (and,  where  necessary or appropriate,
acknowledged)  counterparts  for  recording  purposes.  Upon  execution  of such
supplemental  mortgage,  all additional properties thereby subjected to the Lien
of  this  mortgage shall become part of the Mortgaged Property for all purposes.

                                   ARTICLE VI
                           ENFORCEMENT OF THE SECURITY

     6.1  General Remedies. Upon the occurrence and during the continuance of an
          ----------------
Event  of Default, Mortgagee may do any one or more of the following, subject to
and in accordance with any applicable provision of the Credit Agreements, and to
any  mandatory  requirements  or  limitations  of  applicable law then in force:

          (a)  exercise  all  of  the rights, remedies, powers and privileges of
     Mortgagor  with respect to the Mortgaged Property or any part thereof, give
     or  withhold  all  consents  required  therein  which,  with respect to the
     Mortgaged  Property  or  any  part  thereof,  Mortgagor  would otherwise be
     entitled  to  give  or  withhold,  and  perform  or  attempt to perform any
     covenants  in  this  Mortgage  which  Mortgagor  is  obligated  to perform;
     provided  that,  no  payment or performance by Mortgagee shall constitute a
     waiver  of  any  Event of Default, and Mortgagee shall be subrogated to all
     rights and Liens securing the payment of any debt, claim, tax or assessment
     for  the payment of which Mortgagee may make an advance, or which Mortgagee
     may  pay.

          (b) execute and deliver to such Person or Persons as may be designated
     by  Mortgagee  appropriate  powers  of attorney to act for and on behalf of
     Mortgagor  in all transactions with any federal, state or local agency with
     respect  to  any  of  the  Mortgaged  Property.

          (c) exercise any and all other rights or remedies granted to Mortgagee
     pursuant  to  the provisions of any of the Credit Agreements and applicable
     law.

          (d) if Mortgagor has failed to keep or perform any covenant whatsoever
     contained  in  any Credit Agreement or this Mortgage, Mortgagee may, at its
     option,  perform  or  attempt to perform such covenant. Any payment made or
     expense  incurred  in  the performance or attempted performance of any such
     covenant  shall  be  a  part  of  the  Secured  Indebtedness, and Mortgagor
     promises,  upon  demand,  to pay to Mortgagee, at the place where the Notes
     are  payable,  or  at  such  other place as Mortgagee may direct by written
     notice,  all  sums  so  advanced or paid by Mortgagee, with interest at the
     default rates set forth in the Notes from the date when paid or incurred by
     Mortgagee.  No  such  payment by Mortgagee shall constitute a waiver of any
     Event  of  Default.

          (e) Mortgagee may, at its option, without notice, demand, presentment,
     notice  of  intent  to accelerate or of acceleration, or notice of protest,
     all  of  which are hereby expressly waived by Mortgagor, declare the entire
     unpaid  balance  of  the  Secured  Indebtedness,  or  any  part  thereof,
     immediately  due  and  payable,  and  upon  such  declaration,  it shall be
     immediately  due and payable, and the Liens hereof shall then be subject to
     foreclosure  in  accordance  with  applicable  law.

<PAGE>

          (f)  Upon  the occurrence of an Event of Default, this Mortgage may be
     foreclosed  as  to  the  Mortgaged  Properties, or any part thereof, in any
     manner  permitted  by applicable law, by ordinary or executory process. For
     purposes of Louisiana executory process only, Mortgagor hereby acknowledges
     the  Secured  Indebtedness  and  confesses  judgment  up to the full amount
     thereof  if the same is not paid at maturity. Mortgagor further agrees that
     the  Mortgagee  may cause all or any part of the Mortgaged Properties to be
     seized  and sold after due process of law, Mortgagor waiving the benefit of
     all  laws  or  parts of law relative to the appraisement or property seized
     and  sold  under  executory  process or other legal process, and consenting
     that  all  or  any  part  of  the  Mortgaged Properties may be sold without
     appraisement,  either  in  its  entirety  or  in  lots  or  parcels, as the
     Mortgagee  may  determine, to the highest bidder for cash. Mortgagor hereby
     waives (i) the benefit of appraisement provided for in Articles 2332, 2336,
     2723,  and 2724 of the Louisiana Code of Civil Procedure and all other laws
     conferring the same; (ii) the demand and three (3) days notice of demand as
     provided  in  Article  2721 of the Louisiana Code of Civil Procedure; (iii)
     the  notice  of  seizure  provided  for  in  Articles  2293 and 2721 of the
     Louisiana  Code  of Civil Procedure; (iv) the three (3) days delay provided
     for in Articles 2331 and 2722 of the Louisiana Code of Civil Procedure; and
     (v)  all  other  laws  providing rights of notice, demand, appraisement, or
     delay.  Pursuant  to  Louisiana  Revised  Statutes  9:5131-5135  and
     9:5136-5140.2, in the event the Mortgaged Properties or any part thereof is
     seized  as  an  incident to an action for the recognition or enforcement of
     this  Mortgage  by executory process, ordinary process, sequestration, writ
     of  fieri facias, or otherwise, Mortgagor agrees that the court issuing any
     such  order,  shall,  if  petitioned for by Mortgagee direct the applicable
     sheriff  to  appoint  as a keeper of the Mortgaged Properties the holder or
     any  agent or other Person designated by holder at the time such seizure is
     effected.  Mortgagor  agrees  that such keeper shall be entitled to receive
     its  compensation,  in excess of its reasonable costs and expenses incurred
     in  the  administration  or  preservation  of  the Mortgaged Properties, an
     amount  equal  to  one  (1%) percent of the gross revenues of the Mortgaged
     Properties  and  other amounts received by the keeper, payable on a monthly
     basis.  The  designation  of  a  keeper  made herein shall not be deemed to
     require  the  holder  to  provoke  the  appointment  of  such  a  keeper.

          (g)  Mortgagee  may  proceed by suit or suits, at law or in equity, to
     enforce  the  payment  and  performance  of  the  Secured  Indebtedness  in
     accordance  with  the terms hereof, and of the Credit Agreements evidencing
     it,  to  foreclose the Liens of this Mortgage as against all or any part of
     the  Mortgaged  Property,  and  to  have  all  or any part of the Mortgaged
     Property  sold  under  the  judgment  or  decree  of  a  court of competent
     jurisdiction.

          (h)  To  the  extent  permitted  by  law, upon the acceleration of the
     Secured Indebtedness, Mortgagee, as a matter of right and without regard to
     the  sufficiency  of  the  Mortgaged  Property,  and without any showing of
     insolvency,  fraud  or  mismanagement on the part of Mortgagor, and without
     the  necessity  of  filing  any judicial or other proceeding other than the
     proceeding  for  appointment  of  a  receiver,  shall  be  entitled  to the
     appointment  of  a  receiver or receivers of the Mortgaged Property, or any
     part  thereof,  and of the income, royalties, revenues, bonuses, production
     payments,  delay  rentals,  benefits,  rents,  issues  and profits thereof.
     Mortgagor  hereby consents to the appointment of such receiver or receivers
     and  agrees  not  to  oppose  any  application  therefor  by  Mortgagee.

          (i)  Upon  the acceleration of the Secured Indebtedness, Mortgagee may
     (without  notification,  if  permitted  by  applicable  law) enter upon the
     Mortgaged  Property,  take possession of the Mortgaged Property, and remove

<PAGE>

     the  Personal  Property,  or  any  part  thereof,  with or without judicial
     process,  and,  in  connection  therewith,  without  any  responsibility or
     liability on the part of Mortgagee, take possession of any property located
     on  or  in  the  Mortgaged  Property  which  is not a part of the Mortgaged
     Property  and  hold  or  store  such  property  at  Mortgagors' expense. If
     necessary  to  obtain  the possession provided for in this Section 6.1 (i),
                                                                --------------
     Mortgagee  may  undertake  any  and  all  remedies to dispossess Mortgagor,
     including,  specifically,  one  or  more  actions  for  forcible  entry and
     detainer,  trespass  to  try  title  and  restitution.

          (j)  Mortgagee may require Mortgagor to assemble any Personal Property
     and  any  other  items  of the Mortgaged Property, or any part thereof, and
     make  it  available  to  Mortgagee at a place to be designated by Mortgagee
     which  is  reasonably  convenient  to  such  Mortgagor  and  Mortgagee.

          (k) Mortgagee may surrender the insurance policies maintained pursuant
     to  the  Credit  Agreements, or any part thereof, and receive and apply the
     unearned  premiums  as  a  credit  on  the  Secured  Indebtedness,  and, in
     connection  therewith, Mortgagor hereby appoints Mortgagee as the agent and
     attorney-in-fact  for  such Mortgagor (with full powers of substitution) to
     collect  such  premiums,  which  power  of attorney shall be deemed to be a
     power  coupled with an interest and therefore irrevocable until the release
     of  the  Liens  evidenced  by  this  Mortgage.

          (l)  Mortgagee may retain the Personal Property and any other items of
     the  Mortgaged  Property,  or  any part thereof, in satisfaction or partial
     satisfaction  of  the  Secured  Indebtedness whenever the circumstances are
     such  that  Mortgagee  is  entitled  to  do  so  under  the  Code.

          (m) Mortgagee shall have the right to become the purchaser at any sale
     of  the  Mortgaged  Property held by Mortgagee or by any court, receiver or
     public  officer,  and  Mortgagee  shall  have  the right to credit upon the
     amount of the bid made therefor, the amount payable out of the net proceeds
     of such sale to Mortgagee. Recitals contained in any conveyance made to any
     purchaser at any sale made hereunder shall conclusively establish the truth
     and accuracy of the matters therein stated, including, without limiting the
     generality  of  the  foregoing,  nonpayment of the unpaid principal sum of,
     interest  accrued  on,  and  fees  payable  in  respect  of,  the  Secured
     Indebtedness  after the same have become due and payable, and advertisement
     and  conduct  of  such  sale  in  the  manner  provided  herein.

          (n) Mortgagee may buy any Personal Property and any other items of the
     Mortgaged  Property, or any part thereof, at any private disposition if the
     Mortgaged  Property  or  the  part  thereof  being  disposed  of, is a type
     customarily  sold  in a recognized market or a type which is the subject of
     widely  distributed  standard  price  quotations.

          (o)  Mortgagee  shall  have  and may exercise any and all other rights
     which  Mortgagee  may  have  under  the  Code,  by  virtue  of  the  Credit
     Agreements,  this  Mortgage,  at  law,  in  equity  or  otherwise.

          (p)  In  the  event  that the Mortgagee elects to commence appropriate
     Louisiana  foreclosure proceedings under this Mortgage, Mortgagee may cause

<PAGE>

     the  Mortgaged  Property,  or  any part or parts thereof, to be immediately
     seized and sold, whether in term of court or in vacation, under ordinary or
     executory  process,  in  accordance  with  applicable Louisiana law, to the
     highest  bidder  for  cash,  with  or without appraisement, and without the
     necessity  of  making  additional  demand  upon  or  notifying Mortgagor or
     placing  Mortgagor  in  default,  all  of  which  are  expressly  waived.

          (q)  Should  any  or  all  of  the  Mortgaged Property be seized as an
     incident  to an action for the recognition or enforcement of this Mortgage,
     by  executory  process,  sequestration, attachment, writ of fieri facias or
     otherwise,  Mortgagor  hereby  agrees that the court issuing any such order
     shall,  if  requested  by  Mortgagee,  appoint  Mortgagee,  or  any  agent
     designated  by Mortgagee, or any person or entity named by Mortgagee at the
     time  such  seizure  is requested, or any time thereafter, as Keeper of the
     Mortgaged  Property as provided under La. R.S. 9:5136 et seq. Such a Keeper
                                                           ------
     shall  be  entitled to reasonable compensation. Mortgagor agrees to pay the
     reasonable  fees  of  such Keeper, which are hereby fixed at the greater of
     market rate or $50.00 per hour, which compensation to the Keeper shall also
     be  secured  by  this  Mortgage.

          (r)  Should  it become necessary for Mortgagee to foreclose under this
     Mortgage,  all  declarations of fact, which are made under an authentic act
     before  a  Notary  Public  in  the  presence  of two witnesses, by a person
     declaring  such  facts to lie within his or her knowledge, shall constitute
     authentic  evidence for purposes of executory process and also for purposes
     of  La.  R.S.  9:3509.1, La. R.S. 9:3504(D)(6) and La. R.S. 10:9-508, where
     applicable.

          (s)  Mortgagee  may, in addition to the foregoing remedies, or in lieu
     thereof,  in  Mortgagee's sole discretion, pursuant to Louisiana Civil Code
     Article  1986,  commence  an  appropriate  action against Mortgagor seeking
     specific  performance  of  any  covenant contained herein, or in aid of the
     execution  or  enforcement  of  any  power  herein  granted.

     Mortgagee  shall  have  no  obligation  to  do,  or refrain from doing, any
     of  the acts, or to make or refrain from making any payment, referred to in
     this  Section  6.1.

     6.2 Foreclosure by Judicial Proceedings. Upon the occurrence of an Event of
         -----------------------------------
Default,  Mortgagee  may  proceed, where permitted by law, by a suit or suits in
equity  or  at  law, whether for a foreclosure hereunder, or for the sale of the
Mortgaged Property, or for the specific performance of any covenant or agreement
herein  contained or in aid of the execution of any power herein granted, or for
the  appointment  of a receiver pending any foreclosure hereunder or the sale of
the Mortgaged Property, or for the enforcement of any other appropriate legal or
equitable  remedy.

     6.3  Receipt to Purchaser. Upon any sale by virtue of judicial proceedings,
          --------------------
the  receipt of the officer making such sale under judicial proceedings shall be
sufficient discharge to the purchaser or purchasers at any sale for his or their
purchase  money,  and  such  purchaser or purchasers, or his or their assigns or
personal  representatives,  shall  not,  after  paying  such  purchase money and
receiving  such  receipt  of  such  officer therefor, be obligated to see to the
application  of  such  purchase money, or be in any way answerable for any loss,
misapplication  or  non-application  thereof.

<PAGE>

     6.4 Effect of Sale. Any sale or sales of the Mortgaged Property or portions
         --------------
thereof  where  permitted  by  law  shall  operate  to  divest all right, title,
interest,  claim  and demand whatsoever either at law or in equity, of Mortgagor
of,  in and to the premises and the property sold, and shall be a perpetual bar,
both  at law and in equity, against Mortgagor, and Mortgagor's successors, legal
representatives  or  assigns,  and  against  any and all Persons claiming or who
shall  thereafter  claim  all  or  any of the property sold by, through or under
Mortgagor,  or  Mortgagor's  successors,  legal  representatives  and  assigns.
Nevertheless,  Mortgagor,  if requested by Mortgagee to do so, shall join in the
execution  and  delivery of all proper conveyances, assignments and transfers of
the  properties  so  sold.

     6.5  Application  of  Proceeds.  The  proceeds  of  any  sale  of  or other
          -------------------------
realization  on the Mortgaged Property, or any part thereof, shall be applied by
Mortgagee  to  the  Secured Indebtedness in such order as Mortgagee shall elect.

6.6     Mortgagors'  Waiver of Appraisement, Marshaling, etc.; Rights. Mortgagor
agrees,  to the full extent that such Mortgagor may lawfully so agree, that such
Mortgagor  will  not  at  any  time,  insist  upon  or  plead  or, in any manner
whatsoever,  claim  the  benefit of any stay, extension or redemption law now or
hereafter in force, in order to prevent or hinder the enforcement or foreclosure
of  this  Mortgage or the absolute sale of the Mortgaged Property or any portion
thereof  or the possession thereof by any purchaser at any sale made pursuant to
any  provision  hereof,  or  pursuant  to  the  decree of any court of competent
jurisdiction;  but  Mortgagor,  and  all  who  may  claim  through or under such
Mortgagor,  so  far  as  such  Mortgagor or those claiming through or under such
Mortgagor  now  or hereafter lawfully may, hereby waives the benefit of all such
laws.  Mortgagor  and all who may claim through or under such Mortgagor, waives,
to  the  extent  that  such  Mortgagor  or  those claiming through or under such
Mortgagor may lawfully do so, any and all rights of appraisement and any and all
right  to have the Mortgaged Property marshaled upon any foreclosure of the Lien
hereof, or sold in inverse order of alienation, and agrees that any court having
jurisdiction  to  foreclose  such  Lien  may  sell  the Mortgaged Property as an
entirety.  If any law in this Section 6.6 referred to and now in force, of which
                              -----------
Mortgagor  or  Mortgagor's  successor or successors might take advantage despite
the provisions hereof, shall hereafter be repealed or cease to be in force, such
law shall not thereafter be deemed to constitute any part of the contract herein
contained  or to preclude the operation or application of the provisions of this
Section  6.6.
------------

     6.7  Mineral  Leasing  Act.  Notwithstanding  any  other provisions of this
          ---------------------
Mortgage  , any Oil and Gas Leases covered by this Mortgage which are subject to
the  Mineral  Leasing  Act  of 1920, as amended, and the regulations promulgated
thereunder,  shall  not be sold or otherwise disposed of to any party other than
citizens  of  the  United  States, or to associations of such citizens or to any
corporation  organized  under  the  laws  of  the United States, or any state or
territory thereof that are qualified to own or control interests in such Oil and
Gas  Leases under the provisions of such Mineral Leasing Act and regulations, or
to  Persons  who  may  acquire  ownership or interest in such Oil and Gas Leases
under  the  provisions  of 30 U.S.C. Sec. 184(g), if applicable, as such Mineral
Leasing  Act  or  regulations  are  now  or  may be from time to time in effect.

     6.8  Costs  and  Expenses.  All  reasonable  costs,  expenses  (including
          --------------------
attorneys'  fees)  and  payments incurred or made by Mortgagee in protecting and
enforcing  its  rights  hereunder, shall constitute a demand obligation owing by

<PAGE>

Mortgagor to the party incurring such or making such costs, expenses or payments
and shall bear interest at a rate per annum equal to the default rates set forth
in  the  Notes,  all  of  which  shall  constitute  a  portion  of  the  Secured
Indebtedness.

     6.9  Operation  of the Mortgaged Property by Mortgagee. Upon the occurrence
          -------------------------------------------------
of  an  Event  of Default that is continuing and the acceleration of the Secured
Indebtedness  under  any  Credit  Agreement, and in addition to all other rights
herein conferred on Mortgagee, Mortgagee (or any Person designated by Mortgagee)
shall,  to the extent permitted by applicable law, have the right and power, but
not  the  obligation,  to enter upon and take possession of any of the Mortgaged
Property,  and  to exclude Mortgagor, and Mortgagor's agents or servants, wholly
therefrom,  and  to  hold,  use,  administer, manage and operate the same to the
extent that Mortgagor shall be at the time entitled to do any of such things and
in  such  Mortgagor's  place  and  stead. Mortgagee (or any Person designated by
Mortgagee)  may  operate  the same without any liability or duty to Mortgagor in
connection with such operations, except to use ordinary care in the operation of
such  Mortgaged  Property,  and  Mortgagee or any Person designated by Mortgagee
shall  have  the right to collect and receive all Hydrocarbons produced and sold
from  the  Mortgaged  Property,  the  proceeds  of which shall be applied to the
Secured  Indebtedness  in  such order as Mortgagee shall elect, to make repairs,
purchase  machinery and equipment, conduct workover operations, drill additional
wells and to exercise every power, right and privilege of Mortgagor with respect
to  the  Mortgaged  Property.  When  and  if such expenses of such operation and
development  (including  costs of unsuccessful workover operations or additional
wells)  have  been paid and the Secured Indebtedness paid and performed in full,
such Mortgaged Property shall, if there has been no sale or foreclosure thereof,
be  returned  to  Mortgagors.

     6.10  Additional  Waivers.  In  order  to enforce this Mortgage , Mortgagee
           -------------------
shall  not  be  obligated  (a)  to foreclose any other mortgage or deed of trust
covering  Mortgaged  Property  located in another State, seek a deficiency after
any  such  foreclosure,  or  otherwise  enforce Mortgagee's rights in any of the
other  Mortgaged  Property;  or  (b)  to  seek  an  injunction  (prohibitive  or
mandatory),  the  appointment  of a receiver, an order modifying any stay in any
federal  or  state  bankruptcy,  reorganization  or other insolvency proceedings
relating  to  any of the Mortgaged Property or any portion thereof, or any other
extraordinary  relief. Mortgagor waives, to the fullest extent permitted by law,
any  defense  such  Mortgagor  may  have  to  any  liability  hereunder based on
Mortgagee's  failure  or refusal to prosecute, or any lack of diligence or delay
in  prosecuting,  any action or proceeding to enforce any other mortgage or deed
of  trust.  If  Mortgagee  elects  to  enforce this Mortgage before, or without,
enforcing its rights with respect to any Mortgaged Property covered by any other
Mortgage  ,  Mortgagor waives, to the fullest extent permitted by law, any right
such Mortgagor may have, whether statutory or otherwise, to set off the value of
any  other  Mortgaged  Property,  or  any  portion  thereof, against the Secured
Indebtedness.  If  Mortgagee  elects  to enforce its mortgages or deeds of trust
covering  all  or any portion of the Mortgaged Property located in other States,
or in conjunction with the enforcement of this Mortgage, Mortgagee is authorized
to  purchase  all  or  any  part  of  such other Mortgaged Property at public or
private  sale  or  as  otherwise  provided  by applicable law, and to credit the
purchase  price  against  the  Secured  Indebtedness  in such order or manner as
Mortgagee  determines  in its sole discretion and to preserve Mortgagee's rights
and  Liens  under this Mortgage for any portion of the Secured Indebtedness that
remains  unpaid.  Mortgagor waives to the fullest extent permitted by applicable
law  any  right  to claim or seek any credit against the Secured Indebtedness in
excess  of the actual amount bid or received by Mortgagee in connection with the
foreclosure  of  Mortgagee's  Liens  on any of the Mortgaged Property located in
such other States. Mortgagor further agrees that Mortgagee shall not be required
(a)  to  seek  or  obtain  a deficiency judgment in or pursuant to any action or

<PAGE>

proceeding  to  foreclose  this  Mortgage  as a condition of later enforcing any
mortgage  or deed of trust covering Mortgaged Property located in another State,
or  (b)  to seek or obtain a deficiency judgment in or pursuant to any action or
proceeding  to foreclose any such other mortgage or deed of trust as a condition
of later enforcing this Mortgage. Notwithstanding the foregoing, if Mortgagee in
good  faith  believes  that  it  may  be  required either to obtain a deficiency
judgment  to  enforce  this  Mortgage after enforcement of a mortgage or deed of
trust  covering  Mortgaged  Property  located  in  another  State, or to enforce
another  mortgage  or  deed  of  trust  after enforcement of this Mortgage, then
Mortgagor  agrees  that  Mortgagee  shall  be entitled to seek and obtain such a
deficiency  judgment  notwithstanding  any  contrary  or  inconsistent provision
contained  in  any  Credit  Agreement.

                                   ARTICLE VII
                                  MISCELLANEOUS

     7.1  Advances  by Mortgagee. Each and every covenant herein contained shall
          ----------------------
be  performed  and kept by Mortgagor solely at Mortgagors' expense. If Mortgagor
shall  fail to perform or keep any of the covenants of whatsoever kind or nature
contained  in this Mortgage, Mortgagee or any receiver appointed hereunder, may,
but  shall not be obligated to, make advances to perform the same on Mortgagor's
behalf, and Mortgagor hereby agrees to repay such sums upon demand plus interest
at  a  rate  per  annum  equal  to the default rate of interest set forth in the
applicable  Note.  No such advance shall be deemed to relieve Mortgagor from any
Event  of  Default  hereunder.

     7.2  Defense  of  Claims.  Mortgagors  will  notify  Mortgagee, in writing,
          -------------------
promptly  of  the  commencement  of any legal proceedings of which Mortgagor has
notice  affecting  or which could adversely effect the Lien hereof or the status
of  or  title  to the Mortgaged Property, or any material part thereof, and will
take  such  action,  employing  attorneys  agreeable  to  Mortgagee,  as  may be
necessary  to  preserve  Mortgagor's or Mortgagee's rights affected thereby; and
should Mortgagor fail or refuse to take any such action, Mortgagee may take such
action  on  behalf and in the name of Mortgagor and at Mortgagors' sole cost and
expense.  Moreover,  Mortgagee  may  take  such independent action in connection
therewith  as  it may, in its sole discretion, deem proper without any liability
or duty to Mortgagor except to use ordinary care, Mortgagor hereby agreeing that
all  sums  advanced  or all expenses incurred in such actions plus interest at a
rate per annum equal to the default rate of interest set forth in the applicable
Note,  will,  on  demand,  be  reimbursed to Mortgagee or any receiver appointed
hereunder.

     7.3  Release.  If  the Secured Indebtedness shall be paid and discharged in
          -------
full,  then,  and  in  that  case  only,  this  Mortgage shall terminate and the
interests  of  Mortgagor  in the Mortgaged Property shall become wholly clear of
the  Lien  created  hereby, and such Lien shall be released in due course at the
cost  of  Mortgagor.  Mortgagee  will,  at Mortgagors' sole expense, execute and
deliver  to Mortgagor all releases and other instruments reasonably requested of
the  Lien  created hereunder. Otherwise, this Mortgage shall remain and continue
in  full  force  and  effect.

<PAGE>

     7.4  Renewals,  Amendments  and  Other Security. Renewals, refinancings and
          ------------------------------------------
extensions  of  the Secured Indebtedness may be given at any time and amendments
may  be  made  to  this Mortgage, the Credit Agreements and any other agreements
relating  to any part of the Secured Indebtedness, and Mortgagee may take or may
hold other security for the Secured Indebtedness. Any amendment of this Mortgage
shall  be  by  written instrument and need be executed only by the party against
whom  enforcement  of  such amendment is asserted. Mortgagee may resort first to
such other security or any part thereof or first to the security herein given or
any part thereof, or from time to time to either or both, even to the partial or
complete  abandonment  of either security, and such action shall not be a waiver
of  any  rights conferred by this Mortgage, which shall continue as a first Lien
upon  the  Mortgaged  Property  not  expressly  released  until  all  Secured
Indebtedness  secured  hereby  is  fully  paid  and  discharged.

     7.5 Instrument and Assignment, etc. This Mortgage shall be deemed to be and
         ------------------------------
may be, enforced from time to time as an assignment, chattel mortgage, contract,
financing  statement,  real  estate  mortgage, pledge or security agreement, and
from  time  to  time  as  anyone  or  more  thereof;  and to the extent that any
particular  jurisdiction wherein a portion of the Mortgaged Property is situated
does  not  recognize  or  permit  Mortgagor  to  grant,  bargain, sell, warrant,
mortgage, assign, transfer or convey Mortgagor's rights, titles and interests to
Mortgagee  in  the  manner  herein  adopted, then, with respect to the Mortgaged
Property  located  in  such  jurisdiction, Mortgagor does hereby grant, bargain,
sell,  warrant,  mortgage,  assign,  transfer  and  convey  unto  Mortgagee, the
Mortgaged  Property  to  secure  the  Secured  Indebtedness and the Obligations.

     7.6  Limitation  on Interest. Regardless of any provision contained in this
          -----------------------
Mortgage  or  any of the Credit Agreements, Mortgagee shall never be entitled to
receive,  collect,  or  apply, as interest on the Loans, any amount in excess of
the  Maximum  Lawful Rate, and in the event Mortgagee ever receives, collects or
applies as interest any such excess, such amount which would be deemed excessive
interest shall be deemed a partial prepayment of principal and treated hereunder
as  such; and if the Loans are paid in full, any remaining excess shall promptly
be  paid  to  Mortgagors.  In  determining  whether  or not the interest paid or
payable  under  any  specific  contingency  exceeds  the  Maximum  Lawful  Rate,
Mortgagor  shall, to the extent permitted under applicable law, (a) characterize
any non-principal payment as an expense, fee or premium rather than as interest,
(b)  exclude  voluntary  prepayments  and  the effect thereof, and (c) amortize,
prorate,  allocate  and spread, in equal parts, the total amount of the interest
throughout  the  entire contemplated term of the Note, so that the interest rate
is  the  Maximum  Lawful  Rate throughout the entire term of the Note; provided,
however,  that  if the unpaid principal balance thereof is paid and performed in
full prior to the end of the full contemplated term thereof, and if the interest
received  for  the actual period of existence thereof exceeds the Maximum Lawful
Rate,  Mortgagee  shall  refund  to Mortgagors the amount of such excess and, in
such event, Mortgagee shall not be subject to any penalties provided by any laws
for contracting for, charging, taking, reserving or receiving interest in excess
of  the  Maximum  Lawful  Rate.

     7.7  Unenforceable  or  Inapplicable  Provisions.  If any provision of this
          -------------------------------------------
Mortgage  or  in any of the Credit Agreements is invalid or unenforceable in any
jurisdiction,  the  other  provisions  hereof or of any of the Credit Agreements
shall  remain  in  full force and effect in such jurisdiction, and the remaining
provisions hereof shall be liberally construed in favor of Mortgagee in order to
effectuate  the provisions hereof, and the invalidity of any provision hereof in

<PAGE>

any  jurisdiction  shall  not  affect the validity or enforceability of any such
provision  in any other jurisdiction. Any reference herein contained to statutes
or  laws of a state in which no part of the Mortgaged Property is situated shall
be  deemed  inapplicable  to,  and  not  used  in,  the  interpretation  hereof.

     7.8  Rights Cumulative. Each and every right, power and remedy herein given
          -----------------
to  Mortgagee  shall  be cumulative and not exclusive; and each and every right,
power  and remedy whether specifically herein given or otherwise existing may be
exercised  from  time  to  time  and so often and in such order as may be deemed
expedient  by  Mortgagee  and the exercise, or the beginning of the exercise, of
any  such  right,  power  or remedy shall not be deemed a waiver of the right to
exercise,  at the same time and thereafter, any other right, power or remedy. No
delay  or  omission  by  Mortgagee in the exercise of any right, power or remedy
shall  impair  any such right, power or remedy or operate as a waiver thereof or
of  any  other  right,  power  or  remedy  then  or  thereafter  existing.

     7.9  Waiver  by Mortgagee. Any and all covenants in this Mortgage may, from
          --------------------
time  to  time,  by  instrument in writing signed by Mortgagee be waived to such
extent and in such manner as Mortgagee may desire, but no such waiver shall ever
affect  or  impair Mortgagee's rights and remedies or Liens hereunder, except to
the  extent  specifically  stated  in  such  written  instrument.

     7.10  Successors  and Assigns. This Mortgage is binding upon Mortgagor, and
           -----------------------
Mortgagor's  heirs, devisees, successors, personal and legal representatives and
assigns,  and  shall inure to the benefit of Mortgagee and its successors, legal
representatives  and  assigns,  and  the  provisions  hereof  shall  likewise be
covenants  running  with  the  Lands.

     7.11 Article and Section Headings. The article and section headings in this
          ----------------------------
Mortgage are inserted for convenience and shall not be considered a part of this
Mortgage  or  used  in  its  interpretation.

     7.12  Counterparts.  This  Mortgage  may  be  executed  in  any  number  of
           ------------
counterparts,  each of which shall for all purposes be deemed to be an original,
and  all  of  which  are identical except that, to facilitate recordation in any
particular  county  or  parish, counterpart portions of Exhibit A which describe
                                                        ---------
properties  situated  in counties or parishes other than the county or parish in
which  such  counterpart  is  to  be  recorded  may  be  omitted.

     7.13  Special  Filing as Financing Statements. This Mortgage shall likewise
           ---------------------------------------
be  a  security  agreement  and a financing statement by virtue of Mortgagor, as
debtor,  granting  to  Mortgagee,  its  successors,  legal  representatives  and
assigns,  as  secured  party,  a  security  interest  in  all personal property,
as-extracted  collateral,  fixtures,  accounts,  contract  rights,  general
intangibles,  inventory,  goods, chattel paper, instruments, documents and money
described  or  referred  to  in  granting  clauses (a) through (j) of Article II
                                                                      ----------
hereof  and  all proceeds and products from the sale, lease or other disposition
of  the  Mortgaged  Property or any part thereof. The addresses shown in Section
                                                                         -------
7.14  hereof   are  the addresses of  Mortgagors  and  Mortgagee and information
----
concerning  the security interest may be obtained from Mortgagee at its address.
Without in any manner limiting the generality of any of the foregoing provisions
hereof:  (a)  some  portion of the goods described or to which reference is made
herein  are  or  are  to  become  fixtures  on  the  Lands described or to which
reference  is made herein; (b) the minerals and the like (including oil and gas)
included  in  the  Mortgaged  Property  and the accounts resulting from the sale
thereof  will  be  financed  at the wellhead(s) or minehead(s) of the well(s) or

<PAGE>

mine(s) located on the Lands described or to which reference is made herein; and
(c)  this  Mortgage  is  to  be filed of record, among other places, in the real
estate records of each county or parish in which the Lands, or any part thereof,
are  situated,  as  a  financing  statement,  but  the failure to do so will not
otherwise  affect  the  validity  or  enforceability of this Mortgage. Mortgagor
authorizes  Mortgagee  to  file  such  amendments  to  this  Mortgage, financing
statements  and  amendments  thereto,  and continuation statements, as Mortgagee
deems  reasonable  or  necessary  to  perfect and maintain the perfection of the
Liens  granted herein, including such Liens with respect to any additions to the
Mortgaged  Property  as  provided  in  Article  V.

     7.14  Notices.  Whenever  this  Mortgage  requires  or permits any consent,
           -------
approval,  notice,  request  or  demand from one party to another, such consent,
approval,  notice  or  demand  shall, unless otherwise required under applicable
law,  be  given  in  accordance  with  the  provisions of the Credit Agreements,
addressed to the party to be notified at the address stated below (or such other
address  as  may  have  been designated in accordance with the provisions of the
Credit  Agreements):

MORTGAGOR-DEBTOR                 MORTGAGEE-SECURED PARTY

                                 Laurus Master Fund, Ltd.
                                 c/o M&C Corporate Services Limited
                                 PO Box 309 G.T.
                                 Ugland House, South Church Street, George Town
                                 Grand Cayman, Cayman Islands
                                 Facsimile:  345-949-8080

                                 with copies to:

                                 John E. Tucker, Esq.
                                 825 Third Avenue, 14th Floor
                                 New York, New York 10022
                                 Facsimile:  212-541-4434

                                 Loeb & Loeb, LLP
                                 345 Park Avenue
                                 New York, New York 10154
                                 Attention:  Scott J. Giordano, Esq.
                                 Facsimile  212-407-4990

     7.15 GOVERNING LAW. THIS MORTGAGE, THE NOTE AND THE CREDIT AGREEMENTS SHALL
          -------------
BE  CONSTRUED  IN  ACCORDANCE  WITH  AND  GOVERNED  BY  THE LAWS OF THE STATE OF
LOUISIANA  AND  THE  LAWS  OF THE UNITED STATES OF AMERICA, EXCEPT TO THE EXTENT
THAT  THE  LAWS  OF  ANY  STATE  IN  WHICH  THE  MORTGAGED  PROPERTY  IS LOCATED

<PAGE>

NECESSARILY  GOVERNS  THE  VALIDITY, PERFECTION, PRIORITY AND ENFORCEABILITY OF,
AND  THE  EXERCISE  OF  ANY  REMEDIES  WITH  RESPECT TO, ANY LIEN INTENDED TO BE
CREATED  HEREBY  ON  THE  MORTGAGED  PROPERTY  LOCATED  IN  SUCH  STATE.

     7.16  Future  Advances.  This  Mortgage covers not only the proceeds of the
           ----------------
Loan,  but all advances hereafter made by any Mortgagee to or for the benefit of
Mortgagor  (the  "Future  Advances"), including, without limitation, any amounts
advanced  by  Mortgagee in satisfying, on Mortgagor's behalf, any of Mortgagor's
Obligations,  and  any  advances  made  in  accordance  herewith by Mortgagee to
protect  its  security,  and any other advances by Mortgagee. The maximum amount
secured  hereby  may  be advanced and repaid, and again advanced and repaid from
time  to  time,  in  Mortgagee'  sole and absolute discretion, and this Mortgage
shall  become  enforceable upon recording and shall have priority over all other
parties whose rights arose after the recording hereof, with respect to all funds
advanced  by  Mortgagee  to  Mortgagor,  regardless  of  whether such funds were
advanced  before  or  after  the  arising  of  such  other  party's  rights.

     7.17  Recording.  Executed original counterparts of this Mortgage are to be
           ---------
filed  for  record  in  the  records  of the jurisdictions wherein the Mortgaged
Property  is  situated,  and  shall  have annexed thereto as Exhibit A, only the
portions or divisions containing specific descriptions of the Mortgaged Property
relating  to  the  Lands  located  in  such  jurisdictions.  Whenever a recorded
counterpart  of this Mortgage contains specific descriptions which are less than
all of the descriptions contained in any full counterpart lodged with Mortgagee,
the  omitted  descriptions  are  hereby  included  by reference in such recorded
counterpart  as  if  each recorded counterpart conformed to any full counterpart
lodged  with  Mortgagee.

     7.18  No  Paraphed Notes. Mortgagor acknowledges that no promissory note or
           ------------------
other  instrument  has  been presented to the undersigned notary public(s) to be
paraphed  for  identification  herewith.

     7.19  Acceptance.  The  acceptance  of  this  Mortgage by Mortgagee and the
           ----------
consent  by  Mortgagee  to the terms and conditions of this Mortgage is presumed
and,  under  the  provisions of Louisiana Civil Code article 3289, Mortgagee has
not  been  required  to  sign  this  Mortgage  .

     7.20  Certificates.  The  production  of  mortgage,  conveyance,  and  tax
           ------------
certificates  is  waived  by  Mortgagor and Mortgagee and the undersigned notary
public  is  released  from  all  liability  in  connection  therewith.

     7.21  Louisiana  Defined Terms. The term "real estate" will mean "immovable
           ------------------------
property"  as  that term is used in the Louisiana Civil Code. The term "personal
property"  will  mean  "movable  property" as that term is used in the Louisiana
Civil  Code.  The  term "easement" will mean "servitude" as that term is used in
the  Louisiana Civil Code. The term "intangible" will mean "incorporeal" as that
term is used in Louisiana law. The term "receiver" will include "keeper" as that
term is used in Louisiana law. The term "joint and several" will mean "solidary"
as  that  term  is  used  in  Louisiana  law.

                                  ARTICLE VIII
                            ASSIGNMENT OF PRODUCTION

     8.1  Assignment.  For  the  purpose  of  further  securing  the  Secured
          ----------
Indebtedness  and  the performance of Mortgagor's covenants hereunder, Mortgagor
does  hereby  TRANSFER,  ASSIGN,  AND  CONVEY  unto Mortgagee any and all of the

<PAGE>

interests  of Mortgagor in and to the Hydrocarbons that may be produced from, or
attributable  to,  the  Mortgaged  Property  on  and  after  the Effective Date,
together  with  the  proceeds of the sale thereof and attributable thereto. This
assignment  is  made  upon  the  following  terms  and  conditions: (a) pipeline
companies  and  others  purchasing  the  oil, gas, minerals and other substances
listed  above  produced  and  to  be  produced  from  said  property  are hereby
authorized  and directed to pay directly to Mortgagee the interests of Mortgagor
in  and  to  the  proceeds  of  the  sale  of  the  oil, gas, minerals and other
substances  listed  above  produced,  to  be  produced  and attributable to said
property,  and  to  continue such payments until they have been furnished with a
release  hereof  executed  in writing by Mortgagee, and the receipt of Mortgagee
for  monies  so  paid  to it shall be a full and complete release, discharge and
acquittance  to  any  such pipeline company or other purchaser, to the extent of
all  amounts  so paid, (b) Mortgagee is hereby authorized to receive and collect
the  proceeds  of the sale of the oil, gas, minerals and other substances listed
above  assigned to it hereunder, and to apply the funds so received first toward
the payment of the expenses, if any, incurred in the collection thereof, then in
such  order  as  Mortgagee  shall  determine  toward  the payment of the Secured
Indebtedness,  any  balance  remaining  after  the full and final payment of the
Secured  Indebtedness  to  be  held  subject  to  the  order  of Mortgagors, (c)
Mortgagee  shall  have the right, at its sole option, at any time, and from time
to  time, to release to, or on the order of, Mortgagor all or any portion of the
funds  assigned  to  Mortgagee  hereunder,  and no such releases shall affect or
impair  the  Lien  of this Mortgage or the validity and effect of the assignment
contained  in  this  Article  VIII,  (d)  Mortgagee  shall  never  be  under any
obligation  to enforce the collection of the funds assigned to it hereunder, nor
shall  it  ever be liable for failure to exercise diligence in the collection of
such funds, but it shall only be accountable for the sums that it shall actually
receive,  (e)  Mortgagor  covenants  to  cause  all  pipeline companies or other
purchasers  of the oil, gas, minerals and other substances listed above produced
from  and  attributable  to  said property, to pay promptly to Mortgagee, at the
office  of  Mortgagee at the address of Mortgagee stated above, the interests of
Mortgagor  in and to the proceeds of the sale thereof, and (f) upon the full and
final  payment  of  the  Secured  Indebtedness,  Mortgagee,  at  the  request of
Mortgagors,  and at Mortgagors' sole cost and expense, shall execute and deliver
to  Mortgagors  a  reassignment  hereof,  without  recourse,  representations or
warranties.

     8.2  Power  of  Attorney.  In  consideration  of the Loans evidenced by the
          -------------------
Notes,  Mortgagor  hereby  designates and appoints Mortgagee as Mortgagor's true
and  lawful  agent and attorney-in-fact (with full power of substitution, either
generally or for such limited periods or purposes as Mortgagee may, from time to
time,  prescribe),  with  full power and authority, for and on behalf and in the
name  of  Mortgagor,  upon  the  occurrence  of  an  Event  of  Default  that is
continuing,  to  execute,  acknowledge  and  deliver  all  such division orders,
transfer orders, certificates and any and all other documents of every nature as
may,  from  time  to  time,  be necessary or proper to effectuate the intent and
purpose  of  the  assignment contained in Section 8.1 hereof. Mortgagor shall be
                                          -----------
bound  thereby as fully and effectively as if Mortgagor had personally executed,
acknowledged  and delivered any such division order, transfer order, certificate
or other documents. The powers and authorities herein conferred on Mortgagee may
be  exercised  by  any authorized officer or director of Mortgagee. The power of
attorney  conferred  by this Section 8.2 is granted for a valuable consideration
and hence is coupled with an interest and is irrevocable so long as the Secured.
Indebtedness, or any part thereof, shall remain unpaid. All Persons dealing with
Mortgagee,  any  officer  or director thereof above designated or any substitute
thereof,  shall  be  fully  protected  in treating the powers and authorizations
conferred  by  this  Section  8.2  as  continuing in full force and effect until
                     ------------
advised  by  Mortgagee that all of the Secured Indebtedness is fully and finally
paid.

                           [Signature Page to Follow]

<PAGE>

     THUS DONE AND PASSED, on the date first above mentioned, in my presence and
in  the presence of the undersigned competent witnesses, who hereunto sign their
names  with  Mortgagor  and  me,  Notary,  after  reading  of  the  whole.

The  address  of  Mortgagor  is:
2411  Fountainview  Dr.  Suite  120
Houston,  Texas  77057

WITNESSES:                                   TEXAURUS  ENERGY,  INC.

/s/ Anna Knull
----------------------------                 By: /s/ Max Maxwell
Print  Name: Anna Knull                         --------------------------
                                                Max  Maxwell
                                             Its:  President
/s/ Marilyn C. Maloney
---------------------------
Print  Name: Marilyn C. Maloney

                            /s/ Dolores I. Fisher
                     -----------------------------------------
                                  Notary Public
                                  Printed Name: Dolores I Fisher
                         State of Texas, County of Harris
                                 ------           -------
                             My commission expires: 7-22-2009
                             Notary #/Bar# 00105121-1
                                          ---------

<PAGE>

                                   EXHIBIT A

Being an undivided Eight (8%) Percent of 8/8ths working interest in the "Leases"
listed  and  described  on  Exhibit  "A"  and an undivided Eight (8%) Percent of
8/8ths  working interest in and to:  (a)  the wellbores of the Key Operating and
Production Company, Inc. - S.L. 16995 No. 1 Well, bearing Office of Conservation
Serial  No.  228882,  and  the Key Operating and Production Company, Inc. - S.L.
16995  No.  1-D  Well,  bearing  Office  of  Conservation  Serial  No.  229486
(collectively  ("S.L.  16995  Well"),  and  the  Key  Operating  and  Production
Company,  Inc.  -  S.L.  16995 No.2  Well, bearing Office of Conservation Serial
No.230531, and the Key Operating and Production Company, Inc. - S.L. 16995 No. 3
Well,  bearing  Office  of  Conservation  Serial  No.  3-231777  and  3D-232537
(collectively  "Wells"),  (b)  all  physical facilities situated at the wellsite
location  of  the  Wells,  including,  but  not  limited  to,  any  tanks,  tank
batteries,  gas  plants,  disposal  facilities,  buildings,  structures,  field
separators  and  liquid  extractors,  compressors, pumps, pumping units, valves,
fittings,  machinery and parts, engines, boilers, meters, apparatus, implements,
tools,  appliances,  cables,  wires,  towers, casing, tubing and rods, gathering
lines,  and  any  and  all  other  fixtures  and  equipment  of  every  type and
description (collectively, "Equipment"); and (c) the right of ingress and egress
to  and  from  the  Wells on, over and across the leased premises covered by the
Leases.

<PAGE>Exhibit 10.4

                              COLLATERAL ASSIGNMENT
                              ---------------------

     COLLATERAL  ASSIGNMENT  made  as of this     day of April, 2006 by Texaurus
                                             -----
Energy,  Inc.  ("Assignor")  to  Laurus  Master  Fund,  Ltd.  ("Assignee").

     FOR VALUE RECEIVED, and as collateral security for all debts, liabilities
and obligations of Assignor to Assignee, now existing or hereafter arising under
that certain Securities Purchase Agreement dated as of March 28, 2006 between
Assignor and Assignee (the "SPA") and the Related Agreements (as defined in the
SPA) (each as amended, modified, restated or supplemented from time to time),
Assignor hereby assigns, transfers and sets over unto Assignee, its successors
and assigns, all of its rights, but not its obligations, under that certain Sale
and Purchase Agreement dated as of March 15, 2006, as amended as of April 20,
2006 between Structured Capital Corp. ("Seller") and Assignor and all of the
agreements and documents by which assets or rights of Seller are transferred to
Assignor (as each may be amended, modified, restated or supplemented from time
to time, collectively, the "Agreements"), including, without limitation, all
indemnity rights and all moneys and claims for moneys due and/or to become due
to Assignor under the Agreements.

     Assignor hereby (i) specifically authorizes and directs Seller upon notice
to Seller by Assignee to make all payments due to Assignor under or arising
under the Agreements directly to Assignee and (ii) irrevocably authorizes and
empowers Assignee (a) to ask, demand, receive, receipt and give acquittance for
any and all amounts which may be or become due or payable, or remain unpaid at
any time and times to Assignor by Seller under and pursuant to the Agreements,
(b) to endorse any checks, drafts or other orders for the payment of money
payable to Assignor in payment thereof, and (c) in Assignee's discretion to file
any claims or take any action or institute any proceeding, either in its own
name or in the name of Assignor or otherwise, which Assignee may deem necessary
or advisable to effectuate the foregoing. It is expressly understood and agreed,
however, that Assignee shall not be required or obligated in any manner to make
any demand or to make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim or take any other action to
collect or enforce the payment of any amounts which may have been assigned to
Assignee or to which Assignee may be entitled hereunder at any time or times.

     Seller is hereby authorized to recognize Assignee's claims to rights
hereunder without investigating any reason for any action taken by Assignee or
the validity or the amount of the obligations or existence of any default, or
the application to be made by Assignee of any of the amounts to be paid to
Assignee. Checks for all or any part of the sums payable under this Assignment
shall be drawn to the sole and exclusive order of Assignee. Upon payment by
Seller to Assignee of any amounts due to Assignor under or arising under the
Agreements, the obligations of Seller to Assignor with respect to such amounts
shall be deemed paid in full.

     Without first obtaining the written consent of Assignee, Assignor and
Seller shall not amend or modify the Agreements.

     In the event Assignor declines to exercise any rights under the Agreements,
Assignee shall have the right to enforce any and all such rights of Assignor
directly against Seller.

<PAGE>

     IN WITNESS WHEREOF, Assignor has duly executed this Assignment the day and
year first above written.

                                    TEXAURUS  ENERGY,  INC.

                                    By: /s/ Max Maxwell
                                       -----------------------------
                                       Name: Max Maxwell
                                       Title: President

<PAGE>

Seller  hereby  consents  and  agrees
to  the  provisions  of  this  Collateral  Assignment
as  of  this   21    day  of  April,  2006.
            --------

STRUCTURED  CAPITAL  CORP.

By: /s/ Jostein Hauge
   -----------------------
Name: Jostein Hauge
Title: President

<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}]]