Document:

<PAGE>

                                                               Exhibit 10(c)

                             GAS SALES AGREEMENT
                             -------------------

         THIS GAS SALES AGREEMENT made and entered into to be effective the
1st day of May, 2000, by and between the DELTA NATURAL GAS COMPANY, INC., a
Kentucky corporation, hereinafter referred to as "Buyer", and WOODWARD
MARKETING, L.L.C., a Delaware corporation, hereinafter referred to as
"Seller".

                              WITNESSETH THAT:
                              ----------------

         WHEREAS, Buyer and Seller have entered into a Gas Sales Agreement
("Agreement"), to be effective May 1, 2000, providing for the purchase by
the Buyer and sale by Seller on a firm basis of 100% of the natural gas
requirements of Buyer's residential and small commercial customers and
providing for certain other services of Seller to Buyer, and

         WHEREAS, for the purpose of setting forth the terms of said
agreements, the parties have agreed to this Agreement.

         NOW, THEREFORE, for and in consideration of the covenants and
agreements set forth herein, the parties agree as follows:

                                  ARTICLE I
                                 DEFINITIONS
                                 -----------

         Unless expressly stated otherwise, the following terms as used in
this Agreement shall mean:

         1.1 The term "Btu" shall mean British Thermal Unit(s) which shall
mean that amount of heat energy required to raise the temperature of one
avoirdupois pound of water from fifty-nine-degrees Fahrenheit (59 F) to
sixty-degrees Fahrenheit (60 F) at standard atmospheric pressure, as
determined on a dry basis. All prices and charges paid hereunder shall be
computed on a "dry" Btu basis.

         1.2 The term "day" shall mean the period of time beginning at 9:00
a.m., Central Time Zone, on a calendar day and ending at 9:00 a.m., Central
Time Zone, on the following calendar day, or such other definition of day,
as may change from time to time, set forth in the tariff of Tennessee Gas
Pipeline Company ("Tennessee") on file with the Federal Energy Regulatory
Commission, or any successor agency.

         1.3 The term "Delivery Point(s)" is defined in Article IV.

<PAGE>
<PAGE>

         1.4 The term "gas" shall include casinghead gas, natural gas from
gas wells, and residue gas resulting from processing casinghead gas and gas
well gas.

         1.5 The term "Liquefiable Hydrocarbons" means all hydrocarbons
(except those hydrocarbons separated from the gas stream by conventional
single-stage mechanical field separation methods) or any mixture thereof
that may be extracted from the gas sold hereunder other than methane (except
for the nominal quantities lost during such processing operations)
including, but not limited to, natural gasolines, butane's, propane and
ethane.

         1.6 The term "Liquid Hydrocarbons" means any hydrocarbons which, in
their natural state, are liquids and which shall include any Liquefiable
Hydrocarbons that condense out of the gas stream during production or
transportation.

         1.7 The term "Mcf" shall mean one thousand (1,000) cubic feet at a
pressure of fourteen and seventy-three-hundredths (14.73) pounds per square
inch absolute and at a temperature of sixty degrees (60 F) Fahrenheit, with
correction from Boyle's Law.

         1.8 The Term "MEAC" means Municipal Energy Acquisition Corporation,
an energy acquisition corporation as defined in Title 7, Chapter 39 of the
Tennessee Code annotated, as amended.

         1.9 The term "MMBtu" shall mean one million (1,000,000) Btu's.

         1.10 The term "month" shall mean the period of time beginning on
the first calendar day of each calendar month and ending on the first day of
the following calendar month.

         1.11 The term "year" shall mean a period of twelve (12) consecutive
months, commencing on the first day of the month following the Effective
Date, as defined in Article VI, and each subsequent twelve (12) month
period; provided that the first year will include the period from the
Effective Date until the first day of the following month if the Effective
Date is not on the first day of a month.

                                 ARTICLE II
                          QUANTITY AND NOMINATIONS
                          ------------------------

         2.1 Purchase Quantity - Subject to the terms and conditions of this
             -----------------
Agreement, Buyer shall purchase and receive and Seller shall sell and
deliver on a firm basis a quantity of gas equal to 100% of Buyer's Tennessee
Gas Pipeline Company (Tennessee) residential and small commercial supply

                                     2

<PAGE>
<PAGE>

requirements subject to section 2.2. Seller expressly acknowledges that a
large percentage of the industrial/large commercial end users on Buyer's
systems do not purchase gas from Buyer and arrange for their own gas
supplies. Volumes flowing at the Delivery Point(s) for these end users shall
be the first gas through Tennessee's meters, and Buyer's acceptance of these
volumes on behalf of the end user(s) shall not constitute a violation of
Seller's exclusive supplier provisions under this Agreement.

         2.2 Maximum Quantity - Notwithstanding anything to the contrary
             ----------------
herein, the maximum quantity of gas that Seller is obligated to sell and
deliver at the Delivery Point(s) under this Agreement (herein referred to as
the "MDQ") shall be equal to the lesser of (a) the monthly FT-G and FT A MDQ
as indicated in Exhibit B (b) the maximum amount of gas that can be
transported on Tennessee Gas Pipeline Company (Tennessee) and redelivered at
the Delivery Point(s) under the firm transportation and storage contracts
with Tennessee that are released or assigned to Seller in accordance with
Article V below (herein referred to as the "Firm Transportation Contracts"
and the "Firm Storage Contracts"). Upon the mutual agreement of the Parties,
Seller may sell and Buyer may purchase quantities in excess of the MDQ. The
price and terms of such excess sales will be mutually agreed upon by the
Parties prior to the delivery of such excess gas.

         2.3 Remedies for Failure to Deliver and Receive
             -------------------------------------------

                  2.3.1 Seller's Failure to Deliver
                        ---------------------------

                           (a) If Seller fails to deliver to Buyer its
natural gas requirements up to the MDQ on any day, for reasons other than
(i) imbalances or variations under transportation agreements or operational
balancing agreements, which are governed by Article V or (ii) an event of
force majeure or an event described in Section 5.5, then Seller shall
reimburse or credit to Buyer for the following:

                  (1)      Seller will reimburse Buyer for the sum of (a)
                           the difference, if positive, between (i) the
                           price Buyer pays for a substitute supply of gas
                           or other alterative fuel such as propane and (ii)
                           the prices set forth in Section 3.1.1 of this
                           Agreement (calculated based upon Buyer's actual
                           load factor under this Agreement) multiplied by
                           the quantity Seller failed to deliver in
                           accordance with this subsection, (b) any
                           reasonable incremental costs and expenses
                           incurred in transporting the substitute supplies
                           and (c) any reasonable incidental expenses
                           incurred in purchasing the substitute supplies.
                           Buyer agrees to act in good faith in purchasing
                           such

                                     3

<PAGE>
<PAGE>

                           substitute supplies so as to minimize Seller's
                           obligations to Buyer hereunder; or
                  (2)      If Buyer, through reasonable efforts, is unable
                           to obtain substitute supplies, then Seller shall
                           provide Buyer the difference between the highest
                           commodity price that was paid by Buyer for the
                           purchase of gas or an alterative fuel, such as
                           propane, during the last two years (not to exceed
                           $10 per MMBtu) and the prices set forth in
                           Section 3.1.1 of this Agreement (calculated based
                           upon Buyer's actual load factor under this
                           Agreement) multiplied by the quantity of gas
                           Seller failed to deliver in accordance with the
                           above.

                           2.3.2 Curtailment - In addition to the remedies
                                 -----------
set forth in Section 2.3.1, if for any reason, including an event of force
majeure, Seller is unable to meet all of its firm sales obligations with
Seller's available supplies on Tennessee, then Seller will curtail its
deliveries to all of its sales customers on a pro-rata basis based upon the
actual nominations of Seller's other firm sales customers made during the
period of curtailment and the actual nomination of Buyer not to exceed the
MDQ to the extent that the curtailment of Seller's other customers would be
useful in maintaining deliveries to Buyer. Upon Buyer's request, Seller will
provide Buyer information to verify that deliveries to Buyer were curtailed
in accordance with this subsection.

                           2.3.3 Failure to Take - If Buyer fails to receive
                                 ---------------
and purchase its full requirements in accordance with Section 2.1 above,
then Buyer will pay Seller $0.035 per MMBtu plus the difference in the price
stated in 3.1.1 and Gas Daily TGP 500 leg average index times the difference
between (a) its full requirements and (b) the quantities actually taken by
Buyer during the applicable seasonal period.

                           2.3.4 Exclusive Remedy - The Parties agree that
                                 ----------------
the actual losses incurred by Buyer as a result of Seller's failure to
deliver quantities and incurred by Seller as a result of Buyer's failure to
take quantities would be uncertain and impossible to determine with
precision. As a result, the payments by Seller and Buyer in accordance with
Subsections 2.3.1 and 2.3.3, respectively, and the deliveries by Seller in
accordance with Subsection 2.3.2 above shall be the sole and exclusive
remedy, for Seller's failure to deliver or Buyer's failure to take the
quantities set forth in this Article. The payments by Seller and Buyer
pursuant to this Section 2.3 are reasonable compensation for such failures.

         2.4 Uniform Takes - Unless permitted otherwise by Tennessee, Buyer
             -------------
will receive gas at the Delivery Point(s), as defined in Section 4.1, at
rates that are in compliance with the terms of the Firm Transportation
Contract with Tennessee that is released or assigned to Seller in accordance
with Article V.

                                     4

<PAGE>
<PAGE>

         2.5 MEAC Volumes - Buyer shall have the option to contract with
             ------------
MEAC for a portion of their volumes. Buyer hereby appoints Seller as agent,
for the term of this Agreement, to administer the MEAC Gas Supply Agreement.
Buyer will be required to advise Seller of the MEAC Volumes to be nominated
and purchased under the MEAC Gas Supply Agreement and transported on a
transportation Contract with Tennessee, either on a daily basis or pursuant
to general guidelines provided by Buyer and agreed to by Seller. Except for
negligence or willful misconduct of Seller, Seller will not be responsible
for the loss or damage associated with the nomination of the MEAC Volumes by
Seller hereunder and Buyer will defend, indemnify and hold harmless Seller
against any such loss or damage, including without limitation any loss or
damage arising out of Buyer's contracts to purchase the MEAC Volumes.

                                 ARTICLE III
                                    PRICE
                                    -----

         3.1 Commodity Price for All Other Quantities Within MDQ
             ---------------------------------------------------

                  3.1.1 City-gate Service - The price for each MMBtu of gas
                        -----------------
sold and delivered hereunder at the Delivery Point(s), except for the MEAC
volumes under 2.5, up to the MDQ shall be priced at the TGP Zone 1 index as
published in the first of the month Inside F.E.R.C's Gas Market report minus
$0.06 / MMBtu. The pricing under this contract shall be redetermined in the
event that Buyer's storage contracts are altered.

                  3.1.2 Fixed Price Alternative - In substitution for the
                        -----------------------
Commodity Price, the Parties may mutually agree, through the utilization of
the NYMEX natural gas futures or otherwise, to lock in a fixed price for all
or part of the MDQ for one or more months. If the Parties agree to such a
fixed price, then Buyer will be required to purchase the designated monthly
quantities for which the Parties have agreed to a fixed price,
notwithstanding any other provision to the contrary in this Agreement.

         3.2 Commodity Price for Excess Gas - The price for each MMBtu of
             ------------------------------
gas sold and delivered hereunder in excess of the MDQ shall be determined in
accordance with Section 2.2 of this Agreement.

         3.3 Transportation and Storage Costs - In addition to payments made
             --------------------------------
above, Buyer shall reimburse Seller for (1) all demand or reservation
charges or surcharges paid by Seller under the Firm Transportation Contracts
and Firm Storage Contracts released and delegated to Seller in accordance
with Article V below, including without limitation any demand transition
cost surcharges, (2) all commodity or volumetric charges or surcharges under
the Firm Transportation Contracts and Firm Storage Contracts that are
associated with

                                     5

<PAGE>
<PAGE>

the gas sold by Seller hereunder, including without limitation any
volumetric transition costs, GRI charges, or ACA charges that are incurred
under such contracts or any injection or withdrawal charges that are
incurred under the Firm Storage Contracts that are required to build
inventory levels for Buyer or to serve Buyer's daily requirements, (3) any
transportation costs paid by Seller to Tennessee to transport the gas
delivered to and from storage under the Firm Storage Contract, to the
interconnection of Tennessee's facilities (herein referred to as the "IT
Transportation Contract"), (4) any fuel and loss costs incurred under the
Firm Transportation Contracts, the IT Transportation Contract and the Firm
Storage Contracts, such costs to be equal to the amount of fuel and loss
quantities that Seller provided to Tennessee pursuant to such contracts
during the applicable month times the Commodity Price and (5) any other
costs, expenses or charges incurred by Seller under such contracts (as such
contracts and the associated tariff provisions and charges may change from
time to time) that would have been incurred by Buyer if Buyer had
administered such contracts. To the extent that Seller is reimbursed by
Buyer in accordance with this section, Seller will indemnify and hold Buyer
harmless from any claims made by Tennessee for the failure to make payments
under the Firm Transportation Contracts or the Firm Storage Contracts.
Seller shall be responsible for any charges incurred in connection with its
utilization of Buyer's Firm Transportation or Firm Storage Contracts for
purposes other than providing gas supply to Buyer. Seller shall credit Buyer
90% of revenue derived from third-party release of Buyer's Firm capacity as
posted on Transporteras Electronic Bulletin Board.

                                 ARTICLE IV
                               DELIVERY POINTS
                               ---------------

         4.1 Delivery Points - The Delivery Points for all gas sold and
             ---------------
delivered hereunder shall be at the points specified in Exhibit A hereto.

         4.2 Adjustments to Delivery Points - It is recognized by both
             ------------------------------
Parties that Seller's ability to deliver gas at the Delivery Point(s) set
forth in Section 4.1 above is dependent upon Seller's ability to utilize the
Firm Transportation Contracts and the Firm Storage Contracts released by
Buyer to Seller in accordance with Article V below. These provisions are
based on Tennessee's tariff provisions in effect on the date of execution of
this Agreement and Seller's ability to utilize such released, assigned or
delegated contracts to deliver the gas sold hereunder at the Delivery
Point(s) set forth in Section 4.1 above. The terms of this section shall be
revised to reflect any substantial change in Tennessee's tariff with regard
to the utilization of such contracts and delivery point flexibility, so as
to place both Parties in a relative position under this Agreement not
substantially different from the position the Parties had prior to the
change in such tariffs.

                                     6

<PAGE>
<PAGE>

                                  ARTICLE V
                   TRANSPORTATION AND STORAGE ARRANGEMENTS
                   ---------------------------------------

         5.1 Transportation and Storage Arrangements
             ---------------------------------------

                  5.1.1 Transfer of Arrangements - Buyer has firm
                        ------------------------
transportation and storage rights on Tennessee as specified in Exhibit B
hereto. In order to provide a delivered storage service to Buyer at the
Delivery Point(s), on the Effective Date of this Agreement, Buyer will
execute a Blanket Authorization Agreement between Seller and Tennessee.
Seller shall have full and complete control over the utilization of such
contracts, including without limitation the manner and timing of any
transportation, injections, and withdrawals of gas under such contracts;
provided that Seller may not, without Buyer's prior written consent, amend
the primary delivery points under the Firm Transportation Contracts or
change the rate schedule or the level of maximum entitlement's under which
such services are offered. Seller agrees not to amend or modify Buyer's
agreements with the transporting pipeline listed in such Blanket
Authorization Agreement in a manner which diminishes Buyer's rights and/or
level of service therein, without Buyer's prior written consent. Buyer will
also appoint Seller as its agent for purposes of administering the Firm
Transportation Contracts and the Firm Storage Contracts for the
transportation and storage of (a) any substitute gas supplies that Buyer
purchases in accordance with Section 2.3.1 or (b) to the extent the release
or assignments provided for above are not permitted by Tennessee's tariff.
Such release/assignment and agency arrangements shall be in accordance with
Tennessee's tariffs and shall terminate upon the expiration of this
Agreement. If, prior to the release or delegation of such rights, elections
for receipt points, delivery points, supply leg capacity, monthly maximum
daily quantity elections or any of her similar elections must be given to
Tennessee then Buyer will cooperate with Seller to make such necessary
elections as designated by Seller. Similarly, Buyer will cooperate with
Seller to make any amendments to the contracts requested by Seller to become
effective on the Effective Date of this Agreement to the extent said
amendments do not adversely affect, in Buyer's sole opinion, Buyer's costs
or Buyer's level or quality of service. In the event of any supplementation
or contradiction between the Blanket Authorization Agreement and this
Agreement, the terms of this Agreement shall control and govern the rights,
obligations, and liabilities of Seller and Buyer.

                                     7

<PAGE>
<PAGE>

         5.2 Responsibility for Firm Transportation and Storage Contracts
             ------------------------------------------------------------

                  5.2.1 Responsibility for Administration - Subject to
                        ---------------------------------
Buyer's obligation to pay Seller in accordance with Section 3.3 above, upon
the transfer of the Firm Transportation Contracts and the Firm Storage
Contracts, Seller shall assume all obligations and rights under such
contracts, including without limitation, the obligation to submit
nominations to Tennessee, to pay any applicable demand or commodity charges,
scheduling or imbalance charges, or providing fuel and loss quantities.

                  5.2.2 Operational Balancing Agreements - Seller will be
                        --------------------------------
responsible for correcting any imbalances or variations under the Firm
Transportation and Firm Storage Contracts. It is understood that Seller
shall correct such imbalances or variations, pursuant to Rate Schedule FT-G,
through automatic injections and withdrawals under the Firm Storage
Contracts. In addition, Buyer agrees to appoint Seller as its agent to enter
into and maintain an Operational Balancing Agreement (OBA) with Tennessee in
accordance with Tennessee's tariff. If Seller is unable to correct such
imbalances or variations through automatic injections and withdrawals under
the Firm Storage Contracts as set forth above due to inventory levels in
storage for Buyer's account or otherwise, then any variance between actual
deliveries and confirmed nominations at the Delivery Point(s) will be
allocated to the OBA. Seller shall be responsible for correcting any such
variation or imbalance under the OBA and any resulting month-end cashout.

                  5.2.3 Penalty Responsibility - Buyer will be required to
                        ----------------------
reimburse Seller for (1) unauthorized overrun penalties associated with
takes in excess of the maximum daily quantities under the Firm
Transportation and Storage Contracts, (2) any penalties or charges that are
imposed by Tennessee due to Buyer's failure to comply with a directive of
the pipeline limiting quantities to less than Buyers contracted maximum
daily quantities.

         5.3 Telemetry - Seller will have the right, but not the obligation
             ---------
to install, at its expense, telemetry or other data linkage equipment that
will monitor Buyer's natural gas requirements on its distribution system,
Buyer will provide the necessary space to install such equipment and will
provide access to maintain, repair and remove such equipment, all at no cost
to Seller. Buyer shall authorize Seller to access Tennessee telemetry
readings on Buyer's behalf, so long as Buyer is not required to give up its
current access to Tennessee's telemetry readings.

                  5.3.1 Projected Requirements - Buyer will provide Seller
                        ----------------------
information concerning any known or expected events pertaining to the
non-residential and commercial customers of the Buyer that will cause
material changes in Buyer's daily natural gas requirements. Buyer will
cooperate with Seller to ensure that nominations (including any necessary
adjustments

                                     8

<PAGE>
<PAGE>

thereto) are made timely to Tennessee and that such nominations reflect the
actual expected deliveries and receipts.

                  5.3.2 Forecasts and Nominations - Based on Buyer's
                        -------------------------
projections set forth in Section 5.3.1, historical data and weather
forecasting by Seller, Seller will forecast Buyer's daily natural gas
requirements. Based on such forecast, Seller will submit the necessary
nominations to Tennessee in accordance with Section 5.2.1.

         5.4 Adjustments to Imbalance Provisions - The purpose of Sections
             -----------------------------------
5.1 through 5.3 is to establish the Parties' responsibilities for
administering the firm contracts and the OBA released/assigned and delegated
above, and for correcting any imbalances between receipts and deliveries or
variations between confirmed nominations and actual deliveries at the
Delivery Point(s). These provisions are based on (a) tariff provisions
approved in Tennessee's FERC Tariff on the date this Agreement was executed,
including the right to balance any variation between projected and actual
daily loads through injections and withdrawals from storage under the Firm
Storage Contracts, and (b) the existing load profile of Buyer. The terms of
this section shall be revised to reflect any substantial change in either
(a) Tennessee's tariff with regard to the correction of such imbalances or
variations and any associated penalties or (b) Buyer's load profile, so as
to place both Parties in a relative position under this Agreement not
substantially different from the position the Parties had prior to the
change in Tennessee's tariff or Buyer's load profile. If the Parties are
unable to agree on the appropriate revisions, the matter shall be submitted
to arbitration in accordance with Article XIV, such decision to be effective
on the first day of the month following the issuance of the arbitrator's
decision.

         5.5 Transportation Limitation - If Tennessee or an upstream
             -------------------------
transporter interrupts, curtails or otherwise fails to receive, transport or
deliver the gas sold and/or delivered hereunder and such interruption or
curtailment is not due to Seller's failure to pay such transporters (unless
to the extent Seller's failure to pay is the result of buyer's failure to
reimburse Seller in accordance with Section 3.3 above), then Seller's
obligation to deliver gas under this Agreement shall be suspended for that
portion of the quantities interrupted or curtailed by such transporters for
so long as such interruption or curtailment of deliveries continues. This
Article 5.5 shall apply only when Seller is transporting gas on Tennessee
under Buyer's FT-G and/or FT-A contracts.

                                 ARTICLE VI
                              TERM OF AGREEMENT
                              -----------------

         6.1 Primary Term - This Agreement shall become effective on May 1,
             ------------
2000 (herein referred to as the "Effective Date") and shall continue in full
force and effect for a primary term of three years through April 30, 2003.
At the

                                     9

<PAGE>
<PAGE>

expiration of the primary term, this Agreement will be extended for an
additional year, unless on or before 60 days prior to the expiration of the
primary term, either Party gives written notice to the other Party that it
does not desire to extend the primary term.

         6.2 Transfer of Gas in Storage - Any gas remaining in storage under
             --------------------------
the Firm Storage Contracts at the termination of this Agreement that was
injected on or before March 31 of the year in which the Agreement terminates
shall be transferred and sold by Seller to Buyer at the arithmetic average
of the Commodity Prices that were applicable during the months of November,
December, January, February and March that immediately preceded the
termination date of this Agreement. Any gas remaining in storage at the
termination of this Agreement that was injected under the Firm Storage
Contracts after March 31 of the year in which the Agreement terminates shall
be transferred and sold by Seller to Buyer at a price mutually agreed to by
the Parties; provided that Seller will not inject gas into storage for
Buyer's account after March 31 of such year, unless Buyer consents to such
injections. For purposes of determining the quantities injected between
March 31 and the termination of this Agreement, the quantities injected into
storage on or before March 31 shall be deemed withdrawn first, prior to the
quantities injected after March 31 of such year.

                                 ARTICLE VII
                               TITLE AND TAXES
                               ---------------

         7.1 Transfer of Title, Possession and Control - Title to the gas
             -----------------------------------------
sold hereunder shall pass from Seller to Buyer upon delivery of said gas to
Buyer at the applicable Delivery Point(s). As between the Parties hereto,
Seller shall be deemed to be in control and possession of all gas delivered
hereunder and shall indemnify and hold Buyer harmless from any damage,
injury or losses which occur prior to delivery to Buyer at the Delivery
Point(s); otherwise, Buyer shall be deemed to be in exclusive control and
possession thereof and shall indemnify and hold Seller harmless from any
other injury, damage or losses.

         7.2 Warranty of Title - Except as set forth below, Seller warrants
             -----------------
title to all gas delivered hereunder by Seller or that Seller has the right
to sell the same, and that such gas is free from liens and adverse claims of
every kind. Seller will indemnify and save Buyer harmless against all loss,
damage and expense of every character on account of adverse claims which are
applicable to the gas before the title to the gas passes to Buyer. Buyer
will indemnify and save Seller harmless against all loss, damage and expense
of every character on account of adverse claims which are applicable to the
gas after title passes to Buyer.

                                     10

<PAGE>
<PAGE>

         7.3 Taxes - Buyer shall reimburse Seller for any taxes, fees or
             -----
charges, other than an income tax, which are levied by a governmental or
regulatory body on the gas sold under this Agreement, and gas held in
Buyer's storage accounts.

                                ARTICLE VIII
                            QUALITY AND PRESSURE
                            --------------------

         8.1 Quality and Pressure Requirements - Seller will deliver the gas
             ---------------------------------
sold under this Agreement at the receipt points under the Firm
Transportation Contracts with Tennessee under conditions that meet the
quality and pressure specifications set forth in Tennessee's tariff. Neither
Seller nor Buyer shall be obligated to install or operate compression
facilities.

         8.2 Remedy for Noncompliance - If (a) the gas sold under this
             ------------------------
Agreement fails to meet the standards concerning quality or pressure set
forth in Section 8.1, (b) Tennessee fails to receive and transport the gas
and (c) Tennessee does not deliver the requirements of Buyer, then Seller
shall be deemed to have failed to deliver the quantities nominated by Buyer,
and shall be subject to the remedies set forth in Section 2.3 above.

                                 ARTICLE IX
                            MEASUREMENT AND TESTS
                            ---------------------

         9.1 Measurement Point - The natural gas sold hereunder shall be
             -----------------
measured at or near the Delivery Point(s) on Tennessee's system at pressures
in existence from time to time and shall be corrected to the unit of
measurement, which shall be one MMBtu.

         9.2 Standards for Measurement and Tests - Unless specified herein
             -----------------------------------
to the contrary, the standards for measurement and tests shall be governed
by those standards set forth in Tennessee's tariff.

         9.3 Operation of Measurement - Seller, as the replacement shipper
             ------------------------
under the Firm Transportation and Storage Contracts, shall cause Tennessee
to operate the measurement facilities involved in metering and receiving gas
at the Delivery Point(s). This operation shall include the changing of all
charts, calculation of volumes and the calibration, maintenance, adjustments
and the repair of such meter facilities in accordance with Tennessee's
tariff. To the extent either Party has access rights to the Delivery
Point(s), including the measurement facilities, that Party will provide
similar access to the other Party, to the extent permitted, to fulfill any
rights or obligations under this Agreement.

                                     11

<PAGE>
<PAGE>

                                  ARTICLE X
                                 PROCESSING
                                 ----------

         Seller may process the gas to remove any Liquid Hydrocarbons or
Liquefiable Hydrocarbons prior to the delivery of the gas to Buyer at the
Delivery Point(s). In the event Seller elects to process the gas, any
hydrocarbons so removed shall be Seller's sole responsibility and all costs
(including associated transportation cost(s) shall be paid by Seller and
Seller shall indemnify, defend and hold Buyer harmless therefrom.

                                 ARTICLE XI
                             BILLING AND PAYMENT
                             -------------------

         11.1 Billing and Payment - Seller shall render to Buyer, at the
              -------------------
address indicated in Section 15.5 hereof, on or before the fifteenth (15th)
day of each calendar month by certified, registered or overnight mail an
invoice for all gas purchased during the preceding month according to the
measurements, computations, and prices provided herein. Buyer agrees to make
payment hereunder to Seller for its account in available funds by wire
transfer or by mail at such location as Seller may from time to time
designate in writing. Payment shall be made by Buyer within the later of (a)
the twenty-fifth (25th) of the month or (b) ten (10) days of the date of
receipt of Seller's invoice; provided that if Tennessee's billing schedule
changes in either of their tariffs, then Buyer will pay Seller on an earlier
date to coincide with the earlier of when payments are due to Tennessee
under the Firm Transportation Contracts. If the invoiced amount is not paid
when due, then interest on any unpaid amount shall accrue at the then
current prime rate of interest as published under "Money Rates" by the Wall
Street Journal, not to exceed any applicable maximum lawful rate together
with any court costs, attorney's fees and all other costs of collection
which Seller may incur in enforcing the terms of this Agreement. If such
default continues for thirty (30) days after written notice from Seller to
Buyer, Seller may suspend gas deliveries hereunder without liability and
without prejudice to other remedies. Notwithstanding the above, if a good
faith dispute arises between the Parties over the amounts due under the
invoice for any matters, other than any reimbursement for the demand or
reservation charges under the Firm Transportation and Storage Contracts,
then Buyer will pay that portion of the statement not in dispute on or
before the due date and both Parties will continue to perform their
obligations under this Agreement during such dispute; provided that Buyer
will be required to provide, within 30 days of a written request by Seller,
a good and sufficient surety bond guaranteeing payment to Seller of the
amount ultimately found due.

                                     12

<PAGE>
<PAGE>

         11.2 Credit Standards - All sales hereunder during the term of this
              ----------------
Agreement shall be subject to appropriate review and approval by Seller's
Credit Department. Buyer agrees to provide information as reasonably
required to Seller's Credit Department to effect a proper evaluation.
Without limiting the above, Seller may suspend deliveries under this
Agreement if Buyer (a) admits that it is unable to pay its debts as they
become due, (b) applies for or agrees to the appointment of a receiver or
trustee in liquidation of it or its properties, (c) makes a general
assignment for the benefit of creditors, (d) files a voluntary petition in
bankruptcy or a petition seeking reorganization or an arrangement with
creditors under any bankruptcy law, (e) is a Party against whom a petition
under any bankruptcy law is filed and such Party admits the material
allegations in such petition filed against it, (f) is adjudicated as
bankrupt under a bankruptcy law or (g) fails to meet the credit standards
set forth in Tennessee's tariff.

         11.3 Adjustments to Payments - If any overcharge or undercharge in
              -----------------------
any form whatsoever shall at any time be found and the bill therefor has
been paid, Seller shall refund the amount of any overcharge received by
Seller and Buyer shall pay the amount of any undercharge, within thirty (30)
days after final determination thereof; provided, there shall be no
retroactive adjustment of any overcharge or undercharge if the matter is not
brought to the attention of the other Party in writing within the lesser of
(a) twelve (12) months following the date deliveries under this Agreement
were made or (b) the period in which the statements and payments to
Tennessee become final.

         11.4 Review of Books and Records - Buyer and Seller shall have the
              ---------------------------
right to inspect and examine, at reasonable hours, the books, records and
charts of the other (pertaining to the sale of gas hereunder or any other
charge or fee arising hereunder), the confidentiality of which they agree to
maintain, to the extent necessary to verify the accuracy of any invoice,
charge or computation made pursuant to this Agreement.

                                 ARTICLE XII
                              REGULATORY BODIES
                              -----------------

         12.1 Laws and Regulations - This Agreement shall be subject to all
              --------------------
valid applicable governmental laws and orders, regulatory authorizations,
directives, rules and regulations of any governmental body or official
having jurisdiction over the Parties, their facilities, the gas or this
Agreement or any provision thereof; but nothing contained herein shall be
construed as a waiver of any right to question or contest any such law,
order, rule or regulation in any forum having jurisdiction.

                                     13

<PAGE>
<PAGE>

         12.2 Reliance on Law - The Parties are entitled to act in
              ---------------
accordance with a law until such law is amended, reversed or otherwise
disposed in a final nonappealable order.

         12.3 Cooperation - The Parties shall cooperate to ensure compliance
              -----------
with all governmental regulation, including obtaining and maintaining all
necessary regulatory authorizations or any reasonable exchange or provision
of information needed for filing or reporting requirements.

         12.4 Changes in Law or Regulation - If any federal or state statute
              ----------------------------
or regulation or order by a court of law or regulatory authority directly or
indirectly (a) prohibits performance under this Agreement, (b) makes such
performance illegal or impossible or (c) effects a change in a substantive
provision of this Agreement which has a significant material adverse impact
upon the ability of either Party to perform its obligations under this
Agreement, then the Parties will use all reasonable efforts to revise the
Agreement so that (a) performance under the Agreement is no longer
prohibited, illegal, impossible or is no longer impacted in a material
adverse fashion, and (b) the Agreement is revised in a manner that
preserves, to the maximum extent possible, the respective positions of the
Parties. Each Party will provide reasonable and prompt notice to the other
Party as to any proposed law, regulations or any regulatory proceedings or
actions that could affect the rights and obligations of the Parties. If the
Parties are unable to revise the Agreement in accordance with the above,
then the Party whose performance is rendered prohibited, illegal, impossible
or is impacted in a material adverse manner shall have the right, at its
sole discretion, to suspend or terminate this Agreement upon written notice
to the other Party.

                                ARTICLE XIII
                                FORCE MAJEURE
                                -------------

         13.1 Force Majeure - If Buyer or Seller is rendered unable, wholly
              -------------
or in part, by force majeure to perform obligations under this Agreement,
other than the obligation to make payments due under this Agreement, it is
agreed that the performance of the respective obligations of Seller and
Buyer to deliver or purchase and receive gas, so far as they are affected by
force majeure, shall be excused and suspended from the inception of any such
inability until it is corrected, but for no longer period. Buyer or Seller,
whichever is claiming such inability, shall give notice thereof to the other
as soon as practicable after the occurrence of the force majeure. Such
notice may be given orally or in writing, but, if given orally, it shall be
promptly confirmed in writing, giving reasonably full particulars. Such
inability shall be promptly corrected to the extent it may be corrected
through the exercise of reasonable diligence by the other Party claiming
inability by reason of force majeure.

                                     14

<PAGE>
<PAGE>

         13.2 Liability During Force Majeure - Neither Buyer nor Seller
              ------------------------------
shall be liable to the other for any losses or damages, regardless of the
nature thereof and however occurring, whether such losses or damages be
direct or indirect, immediate or remote, by reason of, caused by, arising
out of or in any way attributable to suspension of the performance of any
obligation of either Party to the extent that such suspension occurs because
a Party is rendered unable wholly or in part, by force majeure to perform
its obligations, unless the force majeure event is caused by the negligence
or willful misconduct of the Party claiming the force majeure.

         13.3 Definition of Force Majeure - The term "force majeure" as used
              ---------------------------
herein shall mean an event that (a) restricts or prevents performance under
this Agreement, (b) is not reasonably within the control of the Party
claiming suspension and (c) by the exercise of due diligence, such Party is
unable to prevent, overcome or remedy. Events that may give rise to a claim
of force majeure include acts of God, epidemics, landslides, hurricanes,
floods, washouts, lightning, earthquakes, storm warnings, perils of the sea,
acts of any court or governmental or regulatory authorities acts of civil
disorder, acts of industrial disorder, accidents to Seller's, Buyer's or any
transporters facilities or storage or pipeline system, freezing of Seller's
or its suppliers' wells, lines of pipe, storage facilities or other
equipment, necessities for making repairs or alterations to machinery,
wells, platforms, lines of pipe, storage facilities, pumps, compressors,
valves, gauges or any other similar equipment, cratering, blowout or failure
of any well or wells to produce, or any similar event or cause; provided,
however, the settlement of any labor dispute to prevent or end any act of
industrial disorder shall be within the sole discretion of the Party to this
Agreement involved in such labor dispute, and the above requirement that an
inability shall be corrected with reasonable diligence shall not apply to
labor disputes. Notwithstanding the above, it is expressly agreed that the
failure of, or inability to make delivery from, any single source of supply
shall not constitute an event of force majeure beyond the greater of (a) the
period necessary for Seller to locate another supply of gas, not to exceed
one day or (b) the period necessary to adjust the nominations on the
applicable pipelines) to transport gas from another supply of gas.

         13.4 Termination - If a force majeure event continues for a period
              -----------
of thirty (30) days, then the Party which did not claim such force majeure
may at any time thereafter terminate this Agreement upon ten (10) nays prior
written notice to the extent the force majeure event has not been corrected
prior to the expiration of such notice period.

                                     15

<PAGE>
<PAGE>

                                 ARTICLE XIV
                                 ARBITRATION
                                 -----------

         14.1 Submission of Dispute for Arbitration - Any controversy
              -------------------------------------
pertaining to matters expressly made subject to arbitration under this
Agreement shall be determined by a board of arbitration, consisting of three
members, upon notice of submission given by either Party, which notice shall
also name one (1) arbitrator. The Party receiving such notice, shall, by
notice to the other Party within ten (10) days thereafter, name the second
arbitrator, or failing to do so, the Party giving notice of submission shall
name the second arbitrator. The two (2) arbitrators so appointed shall name
a third arbitrator, or, failing to do so within ten (10) days, the third
arbitrator shall be appointed by the person who is the senior (in terms of
service) actively-sitting judge of the United States District Court for the
District where Buyer's principal place of business is located.

         14.2 Qualification of Arbitrators - The arbitrators shall be
              ----------------------------
qualified by education, experience and training in the natural gas industry
to decide upon the particular question in dispute.

         14.3 Arbitration Proceedings - The arbitrators so appointed, after
              -----------------------
giving the Parties due notice of the date of a hearing and reasonable
opportunity to be heard, shall promptly hear the controversy in the location
where Buyer's principal place of business is located and shall thereafter
render their decision determining said controversy no later than ninety (90)
days after such board has been appointed. Any decision requires the support
of a majority of the arbitrators. If the board of arbitration is unable to
reach such decision, new arbitrators will be named and shall act hereunder,
at the request of either Party, in a like manner as if none has been
previously named. After the presentation of evidence has been concluded,
each Party shall submit to the arbitrators a final offer of its proposed
resolution of the dispute. The arbitrators shall approve the final offer of
one Party, without modification and reject that of the other. In considering
the evidence and deciding which final offer to approve, the arbitrators
shall be guided by the criteria described in the applicable section of this
Agreement.

         14.4 Arbitrator's Decision - The decision of the arbitrators shall
              ---------------------
be rendered in writing and supported by written reasons. The decision of the
arbitrators shall be final and binding upon the Parties. The decision of the
arbitrator(s) shall be kept confidential in accordance with Section 15.1 of
this Agreement. Each Party shall bear the expenses of its chosen arbitrator,
and the expenses of the third arbitrator shall be home equally by the
Parties. Each Party shall bear the compensation and expenses of its legal
counsel, witnesses and employees.

                                     16

<PAGE>
<PAGE>

                                 ARTICLE XV
                                MISCELLANEOUS
                                -------------

         15.1 Confidentiality - Except as necessary to obtain the
              ---------------
transportation of the gas under this Agreement, or as otherwise provided
herein, Seller and Buyer agree to maintain the confidentiality of this
Agreement and each of the terms and conditions hereof, and Seller and Buyer
agree not to divulge same to any third party except to the extent, and only
to the extent, required by law, court order or the order or regulation of an
administrative agency having jurisdiction over Buyer or Seller or the
subject matter of this Agreement. If required to be disclosed, then the
Party subject to the disclosure requirement shall (a) notify the other Party
immediately and (b) cooperate to the fullest extent in seeking whatever
confidential status may be available to protect any material so disclosed.

         15.2 No Incidental. Consequential or Punitive Damages - Except as
              -------------
expressly provided in this Agreement, the Parties hereto waive any and all
rights, claims, or causes of action arising under this Agreement for
incidental, consequential or punitive damages. Any damages resulting from a
breach of this Agreement by either Party shall be limited to actual damages
incurred by the Party claiming damages.

         15.3 Third Party Beneficiaries - Neither Buyer nor Seller intend
              -------------------------
for the provisions of this Agreement to benefit any third party. No third
party shall have any right to enforce the terms of this Agreement against
Buyer or Seller.

         15.4 Waiver of Default - No waiver by Buyer or Seller of any
              -----------------
default of the other under this Agreement shall operate as a waiver of any
future default, whether of a like or different character.

         15.5 Notices - Except as otherwise expressly provided in this
              -------
Agreement, every notice, request, statement and invoice provided in this
Agreement shall be in writing directed to the Party to whom given, made or
delivered at such Party's address as follows:

Buyer:
Delta Natural Gas Company, Inc.
3617 Lexington Road
Winchester, KY 40391
Attention: Mr. Brian Ramsey
Phone: 606-744-6171 Ext. 158
Fax: 606-744-3623
Email: bramsey@deltagas.com

Seller:                             Nominations:
Woodward Marketing, L.L.C.          Woodward Marketing, L. L. C.
377 Riverside Drive, Suite 109      11251 Northwest Freeway, Suite 400
Franklin, TN 37064                  Houston, TX 77092
Attention: Mr. Rob Ellis            Attention: Mr. Rick Sullivan
Phone: 615-595-2878                 Phone: 713-688-7771
Fax: 615-794-0947                   Fax: 713-688-5124

                                     17

<PAGE>
<PAGE>

         Either Buyer or Seller may choose one or more of its addresses for
receiving invoices, statements, notices and payments by notifying the other
in the manner as provided above. All written notices, requests, statements
and invoices shall be considered transmitted at the time of delivery, if
hand delivered, or, if delivered by mail, on the next working day after
mailing; if transmitted by telephone or other oral means or by telecopy or
other form of electronic or telegraphic communication, all such notices
shall be considered transmitted at the time of oral communication or at the
time the telecopy or other form of electronic or telegraphic communication
was sent.

         15.6 Choice of Law - The Parties agree that the laws of the
              -------------
Commonwealth of Kentucky shall control construction, interpretation,
validity and/or enforcement of this Agreement.

         15.7 Assignment - All provisions of this Agreement shall extend to
              ----------
and be binding on the successors and assigns of the Parties hereto insofar
as applicable to the rights and obligations succeeded to or assigned, but no
succession or assignment shall relieve the assigning or succeeded to Party
of its obligations without written consent of the other Party, which consent
shall not be unreasonably withheld; provided that either Party may assign
this Agreement to an affiliate without the prior written consent of the
other Party. Nothing in this section prevents either Party from pledging or
mortgaging all or any part of such Party's property as security. Buyer shall
require any purchaser or lessee of Buyer's distribution system to assume the
obligations under this Agreement to the extent so elected by Seller.

         15.8 Interpretation - In interpretation and construction of this
              --------------
Agreement, no presumption shall be made against any Party on grounds such
Party drafted the Agreement or any provision thereof.

         15.9 Headings - The headings of any article, section or subsection
              --------
of this Agreement are for purposes of convenience only and shall not be
interpreted as having meaning or effect.

         15.10 Entire Agreement - The terms and conditions contained herein
               ----------------
constitute the full and complete agreement between the Parties and any
change to be made must be submitted in writing and agreed to by both
Parties.

         15.11 Severability - Except as otherwise stated herein, any article
               ------------
or section declared or rendered unlawful by a court of law or regulatory
authority with jurisdiction over the Parties or deemed unlawful because of a
statutory

                                     18

<PAGE>
<PAGE>

change will not otherwise affect the lawful obligations that arise under
this Agreement.

         15.12 Enforceability - Each Party represents that it has all
               --------------
necessary power and authority to enter into and perform its obligations
under this Agreement and that this Agreement constitutes a legal, valid and
binding obligation of that Party enforceable against it in accordance with
its terms, except as such enforceability may be affected by any bankruptcy
law or the application of principles of equity.

         IN WITNESS WHEREOF, this Agreement is executed in multiple
counterparts, each of which is an original as of April 24, 2000.

DELTA NATURAL GAS COMPANY, INC.        WOODWARD MARKETING, L.L.C.

By:    /s/ ALAN L. HEATH               By:    /s/ ROB ELLIS
   ------------------------------         -----------------------------

Name:    Alan L. Heath                 Name:   Rob Ellis
      ---------------------------            --------------------------

Title:    V.P. OPPS. & ENG.            Title:      Sr. Vice President
       --------------------------               -----------------------

                                     19

<PAGE>
<PAGE>

                                  EXHIBIT A
                                  ---------

BUYER:   Delta Natural Gas Company, Inc.

         Pursuant to the Gas Sales Agreement between Seller and Buyer, the
Tennessee Gas Pipeline Company delivery points) for the natural gas service
are as follows:

         Delivery Points                             Meter Number
         ---------------                             ------------

         Nicholasville                               020248
         Berea                                       020208
         Jeffersonville                              020430
         Salt Lick                                   020212
         Farmers                                     020462
         Kinder Hilda                                020733
         Westbend                                    020813
         Richmond                                    020895

                                     20

<PAGE>
<PAGE>

                                  EXHIBIT B
                                  ---------

BUYER:   Delta Natural Gas Company, Inc.

         Pursuant to the Gas Sales Agreement between Seller and Buyer, the
Tennessee Gas Pipeline Company Pipeline and Storage contracts are as
follows:

TGP Pipeline Capacity:

                          FT-G        FT-A         Total
                          ----        ----         -----

         January         16,211       1,400        17,611
         February        16,211       1,400        17,611
         March           11,050       1,400        12,450
         April            8,075       1,400         9,475
         May              6,150       1,400         7,550
         June             4,276       1,400         5,676
         July             4,248       1,400         5,648
         August           4,248       1,400         5,648
         September        4,246       1,400         5,826
         October          7,144       1,400         8,544
         November        10,275       1,400        11,675
         December        16,211       1,400        17,611

TGP Storage Capacity:

                             MSQ       MDWQ      MDIQ
         Production Area:  186,757     1,524     1,245
         Market Area:      387,622     8,636     2,585

                                     21<PAGE>

                                                               Exhibit 10(d)

                             GAS SALES AGREEMENT
                             -------------------

         This Agreement is made and entered into as of the 1st day of
November, 1993 by and between Delta Natural Gas Company, Inc. ("Buyer"), and
Natural Gas Clearinghouse ("Seller"), both Buyer and Seller sometimes
referred to collectively as "Parties" or singularly as "Party".

                               I. Definitions
                                  -----------

         1.1 "Agreement" means the provisions of this document and those
contained in Exhibits "A" "B" and "C" attached hereto, as such may be
amended from time to time.

         1.2 "Btu" (British Thermal Unit) means the amount of heat energy
required to raise the temperature of one pound of Water from fifty-nine-
degrees Fahrenheit (59 degrees F) to sixty degrees (60 degrees F), as
determined on a dry basis.

         1.3 "Columbia Gas" shall mean Columbia Gas Transmission Corporation.

         1.4 "Columbia Gulf" shall mean Columbia Gulf Transmission Company.

         1.5 "Day" shall mean that period of 24 consecutive hours beginning
and ending at 8:00 a.m. Eastern Time.

         1.6 "FERC" means the Federal Energy Regulatory Commission or any
successor government authority.

         1.7 "Gas" or "Natural Gas" means the effluent vapor stream
(including Liquid Hydrocarbons) in its natural state produced from wells,
including all hydrocarbon and nonhydrocarbon constituents and including
casinghead gas produced with crude oil, and residue gas resulting from the
processing of gas well gas or casinghead gas.

         1.8 "Index Price" shall mean the arithmetic average of: (i) the
price denoted in the column labeled "Index for Columbia Gulf Transmission
Co., Louisiana", as it is published in the first issue of the Delivery Month
in Inside FERC's Gas Market Report, in the table titled "Prices of Spot Gas
   -------------------------------
Delivered to Pipelines", plus transportation from onshore points to Rayne as
follows: the effective Base Rate stated at Sheet No. 019 of Columbia Gulf's
FERC Gas Tariff for Rate Schedule ITS-2, plus the ACA charge, plus .348%
fuel and any applicable FERC-approved surcharges; (ii) the price denoted in
the column labeled "Contract Index" for South Louisiana, Columbia-Rayne, in
the table titled "Spot Gas Prices", "Delivered to Pipelines-30-Day Supply
Transactions" in the first edition of each applicable month of Natural Gas
Intelligence; and (iii) the price denoted for Columbia Gulf Transmission
Co., Rayne, La. "Bid Week"

<PAGE>
<PAGE>

for applicable months as it is published in the first issue of the Delivery
Month in Natural Gas Week in the table titled "Spot Prices on Interstate
         ----------------
Pipeline Systems" "Delivered-to-Pipeline" ($/MMBTU").

         1.9 "Mcf" shall mean one thousand (1,000) cubic feet of Gas as
determined on the measurement basis set forth in this Agreement.

         1.10 "MMBtu" means one million (1,000,000) Btu. One MMBtu is
equivalent to one Dth.

         1.11 "Month" shall mean the period commencing at 8:00 a.m. Eastern
Time on the first Day of a calendar month and ending at 8:00 a.m. Eastern
Time on the first Day of the immediately following calendar month.

         1.12 "Transporter" means Columbia Gulf and, where appropriate,
Columbia Gas.

                                II. Quantity
                                    --------

         2.1 Subject to the other provisions of this Agreement, Seller shall
sell and deliver and Buyer shall purchase and receive, on a firm basis, a
maximum daily quantity of gas up to 12,070 MMBtu ("MDQ"). Buyer shall
purchase, and Seller shall supply, one hundred percent of Buyer's gas
requirements for system supply on Columbia Gas from Seller pursuant to this
Agreement. Buyer shall be permitted to receive, and to transport through its
facilities, Gas from other suppliers, solely to the extent that such Gas is
received and transported by Buyer for industrial and commercial end-users
behind Buyer's citygate.

         Notwithstanding the foregoing, Buyer shall not utilize Gas
purchased from Seller under this Agreement to supply new industrial load
added after November 1, 1993. In the event Buyer adds a new industrial
customer(s) after November 1, 1993, Buyer and Seller shall negotiate in
good faith with respect to the price and terms at which Seller would provide
Gas to supply such load. Buyer may also negotiate with other suppliers to
supply such new load. If Buyer and Seller do not agree on the terms and
price for supply to serve the new load, Buyer may make whatever arrangements
it deems appropriate to provide supply to such new load.

         2.2(a) No later than forty-eight hours prior to the earlier of the
first-of-the-month nomination deadline for Transporter or such other
pipeline designated by the parties, Buyer shall notify Seller of the
quantity of Gas that Buyer desires to purchase from Seller on each Day of
the coming Month (the "Daily Nominated Quantity").

                                     2

<PAGE>
<PAGE>

         2.2(b) On or before 4:00 pm Eastern Time on the day prior to
Transporter's nomination deadline for the next day, Buyer may adjust its
Daily Nominated Quantity prospectively for any day during the remainder of
that month.

         2.2(c) Buyer may nominate quantities in excess of the MDQ, and
Seller shall exercise its best efforts to deliver the excess quantities,
provided that the Parties agree, prior to delivery, on the price of the
excess quantity and the terms and conditions of its delivery.

         2.2(d) At the time of nomination pursuant to sections 2.2(a) and
2.2(b) of this Agreement, Buyer may direct Seller to cause Gas sold
hereunder to be delivered under Columbia Gas' Rate Schedule ITS, in lieu of
causing such Gas to be delivered under Columbia Gas' Rate Schedule GTS.
Notwithstanding the foregoing, Seller shall have the authority to determine
whether sufficient ITS capacity exists to permit delivery of Daily Nominated
Quantities. In the event Seller reasonably determines that sufficient ITS
capacity is not available to permit delivery of Nominated Quantities, Seller
is authorized to cause Buyer's Gas to be delivered under Columbia Gas' Rate
Schedule GTS.

         2.2(e) Nominations required hereunder may be provided in writing
(including by facsimile transmission) or orally. Oral nominations shall be
confirmed in writing as soon as practicable.

         2.3 The rules, guidelines, and policies of the Transporter(s)
actually transporting Gas under this Agreement, as may be changed from time
to time by agreement of the parties, shall define and set forth the manner
in which the Gas purchased and sold is transported. Buyer and Seller
recognize that the receipt and delivery on Transporter's pipeline facilities
of gas purchased and sold under this Agreement shall be subject to the
operational procedures of Transporter, as set forth in Transporter's then
effective Federal Energy Regulatory Commission Gas Tariff. Buyer and Seller
shall be obligated to use their best efforts to avoid imposition by
Transporter of penalties, scheduling fees, cash-out costs or similar charges
for imbalances or as a result of violations of Operational Flow Orders, as
permitted by Transporter's tariff ("Imbalance Charges"). If during any month
Buyer or Seller receives an invoice from Transporter that includes an
Imbalance Charge, both parties shall be obligated to use their best efforts
to determine the validity as well as the cause of such Imbalance Charge. If
the parties determine that the Imbalance Charge was imposed as a result of
Buyer's actions (which shall include, but shall not be limited to, Buyer's
failure to accept a daily quantity of Gas equal to Buyer's nomination of its
daily volume requirements), then Buyer shall pay for such Imbalance Charge.
If the parties determine that the Imbalance Charge was imposed as a result
of Seller's actions (which shall include, but not be limited to, Seller's
failure to deliver a daily quantity of gas equal to Buyer's nomination

                                     3

<PAGE>
<PAGE>

of its daily quantity requirements), then Seller shall pay such Imbalance
Charge.

         2.4(a) If Seller fails to sell and deliver the quantity of Gas
nominated by Buyer pursuant to this Agreement, and such failure is not
otherwise excused under this Agreement, then Buyer's sole remedy shall be to
obtain alternate supplies of Gas to cover the quantity of Gas not delivered
by Seller (such alternate supplies obtained by Buyer are referred to as
"Deficiency Gas") and collect from Seller an amount equal to any additional
costs Buyer incurs to obtain Deficiency Gas, including, without limitation,
(i) the difference, if positive, between the price Buyer pays for a
substitute supply and the commodity charge applicable under section 3.2
hereof; (ii) any reasonable incremental expenses incurred in purchasing such
substitute supplies; and (iii) penalties charged by any pipeline that would
have transported the Gas Seller fails to deliver. Buyer shall use its best
efforts to obtain Deficiency Gas at the lowest reasonable cost available.
All other remedies Buyer may have at law and equity arising from Seller's
unexcused failure to deliver Gas nominated by Buyer are waived.

         2.4(b) Buyer's obtaining of Deficiency Gas and recovery of Buyer's
costs from Seller, as specified in Paragraph 2.4(a), shall be limited to
those quantities underdelivered and to the period of underdelivery. Buyer's
recovery from Seller may be, at Buyer's choice, either a credit against
future purchases or a cash payment in accordance with Article IV.

         2.5 The delivery of Gas from Seller to Buyer shall be made at the
Delivery Point(s) into Columbia Gulf designated in Exhibit A, as
supplemented by mutual written agreement of the Parties from time to time.
Title to Gas delivered under this Agreement shall pass to Buyer at the
Delivery Point(s).

         2.6 Contemporaneously with the execution of this Agreement, Buyer
will delegate to Seller full responsibility for the administration,
management and operation of Buyer's firm transportation service agreement
with Columbia Gulf and Buyer's Rate Schedule GTS service agreement with
Columbia Gas pursuant to an Agency and Delegation Agreement acceptable to
Buyer, Seller, Columbia Gulf, and Columbia Gas. Seller shall assume full
responsibility for the nomination, scheduling and balancing of Gas
transported and stored under Buyer's transportation and GTS agreements with
Columbia Gulf and Columbia Gas. Seller's responsibility under the Agency and
Delegation Agreement shall commence upon delivery of Gas to the Delivery
Point(s) on Columbia Gulf, apply to the injection and withdrawal of Gas
from Columbia Gas' storage facilities, and continue until Gas is delivered
to Buyer's citygate delivery points designated in Exhibit A. Seller will
indemnify and hold Buyer harmless from all costs, expenses and liability,
including any liability under the Minimum Fixed Cost Contribution set forth
in Columbia Gas' Rate Schedule GTS, arising from: (i) Seller's failure to
follow Buyer's instructions under the Agency and

                                     4

<PAGE>
<PAGE>

Delegation Agreement; or (ii) Seller's unauthorized violation of any term or
condition contained in Buyer's transportation or Rate Schedule GTS
agreements with Columbia Gulf or Columbia Gas. Notwithstanding the foregoing
sentence, Buyer will indemnify and hold Seller harmless from any costs,
expenses and liability, including, without limitation, Imbalance Charges as
defined in Section 2.3, and Minimum Fixed Cost Contribution under Columbia
Gas' Rate Schedule GTS, resulting from any act or omission of Seller
undertaken in accordance with Buyer's nominations, other instruction(s) or
any other information supplied to Seller under this Agreement or the Agency
and Delegation Agreement.

         2.7 Subject to Seller's acceptance of Buyer's creditworthiness,
which will not be unreasonably withheld, Seller shall finance the Storage
Inventory Transfer from Columbia Gas to Buyer pursuant to Section 43 of the
General Terms and Conditions of Columbia Gas' FERC Gas Tariff in accordance
with the terms set forth in Exhibit C to this Agreement.

                                 III. Price
                                      -----

         3.1 Buyer shall pay Seller each Month a commodity charge for each
MMBtu nominated by Buyer and caused to be delivered by Seller at Buyer's
citygate, calculated as follows:

         3.2(a) For the period commencing November 1, 1993 and ending
October 31, 1994, the monthly commodity charge for each MMBtu of Gas
nominated by Buyer and delivered by Seller under this Agreement shall equal
the sum of (A) the Index Price, as defined in section 1.8 hereof, and (B)
$0.05 per MMBtu.

         3.2(b) For the period November 1, 1994 through April 30, 1996, and
for any extension of the Initial Term as defined in Article VII of this
Agreement, the monthly commodity charge for each MMBTU of Gas nominated by
Buyer and delivered by Seller under this Agreement shall equal the sum of
(A) the Index Price, as defined in section 1.8 hereof, and (B) $0.01 per
MMBtu.

         3.3 Subject to Seller's obligation to indemnify and hold Buyer
harmless under Section 2.6 of this Agreement, Buyer shall be responsible for
and shall pay all charges, costs and expenses incurred in transportation and
storage of the Gas from the Delivery Point(s) to Buyer's citygate receipt
points, including any Minimum Fixed Cost Contribution liability under
Columbia Gas' Rate Schedule GTS. Buyer shall receive bills directly from
Columbia Gas and Columbia Gulf and shall pay such bills directly. Seller
shall be responsible for any charges incurred in connection with its
utilization of Buyer's Rate Schedule GTS rights on Columbia Gas for purposes
other than providing Gas supply to Buyer, and for any commodity charges
incurred in connection with

                                     5

<PAGE>
<PAGE>

its use of Buyer's Rate Schedule FTS rights on Columbia Gulf for purposes
other than providing Gas supply to Buyer. In the event Buyer identifies such
charges from Columbia Gas and Columbia Gulf that do not relate to Seller
providing Gas supply to Buyer, Buyer shall submit a statement to Seller for
reimbursement, in accordance with the provisions of section 4.5 of this
Agreement.

         3.4 If any publication used to calculate the Index Price is no
longer available, or is not available for a given month, or if the Parties
shall agree that the published Index Price no longer reflects the spot
market for Gas at the delivery location, the Parties will agree on a
substitute publication or index. The substitute publication or index shall
be recognized in the industry as a measure of prices paid each month for
short term sales of Gas in the market region containing the Delivery
Point(s). Until a substitute publication or index can be agreed on, the
Index Price shall be computed on the remaining publication(s) or index.

         3.5 In the event that Buyer is not permitted by the applicable
state or local regulatory body having jurisdiction to recover from its
customers any portion of the purchase price paid to Seller under this
Agreement, Buyer shall promptly notify Seller of such disallowance. Within
15 days of such notice, the Parties shall meet and attempt, in good faith,
to agree on a mutually acceptable course of action. If no resolution is
reached within 30 days of Buyer's notice, Buyer shall have the right, in its
sole discretion, to terminate the contract by notifying Seller in writing.
Such termination shall take effect on the first day of the Month following
Buyer's written notice of termination.

                                 IV. Payment
                                     -------

         4.1 On or before the tenth (10th) Day of each Month, Seller shall
render to Buyer a statement setting forth the charges for the total MMBtu of
Gas nominated and delivered to Buyer at the Delivery Point(s) during the
immediately preceding Month. Invoices shall be sent to Buyer at:

         Attn.:   Steve Billings
                  Delta Natural Gas Company, Inc.
                  3617 Lexington Road
                  Winchester, KY 40391
         Phone:   (606) 744-6171 ext. 158
         Fax:     (606) 744-3623

Buyer shall pay the amounts invoiced on or before the twentieth (20th) day
of the Month. If presentation of a statement by Seller is delayed after the
tenth (10th) day of the Month, then the time for payment shall be extended a
corresponding period of time, unless Buyer is responsible for such delay.

                                     6

<PAGE>
<PAGE>

Payments shall be made to Seller by check or by wire transfer. Payment by
check shall reach Seller by the 20th day of the Month. Payment by wire
transfer shall be made direct to:

         NationsBank-Dallas, Texas
         ABA #111000025
         Account #2261523836
         Account Title: Natural Gas Clearinghouse

Payment by check shall be made to:

         NationsBank
         Credit Natural Gas Clearinghouse
         P.O. Box 840795
         Dallas, TX 75284-0795

         4.2 If Buyer presents to Seller reasonable evidence supporting
Buyer's good faith belief that the amount of the invoice is incorrect, Buyer
shall pay the undisputed amount. If Seller can to Buyer's reasonable
satisfaction, that Buyer's is incorrect, Buyer shall immediately pay any
remaining amount owed. Late payments and all amounts withheld by Buyer and
subsequently acknowledged or determined to be owing shall bear interest
running from the original due date until paid at the lower of the Prime Rate
of interest established by the Chase Manhattan Bank plus two percent (2%) or
the maximum applicable non-usurious rate.

         4.3 If either Party discovers an error in the amount billed any
statement or payment rendered under this Agreement, such error shall be
adjusted within thirty (30) days of the discovery of the error, together
with interest at the rate provided for in Section 4.2. No adjustments
claimed within twenty-four (24) months of the date of the original
statement. A Party's rights under termination of this Agreement.

         4.4 The Parties shall each preserve all test data, meter records,
charts and other similar records within their custody or control pertaining
to Gas sold and delivered under this Agreement for a period of at least
three (3) years following their creation. Upon at least twenty-four (24)
hours advance notice, each Party shall have the right during normal business
hours to examine the books and records of the other Party to the extent
necessary to verify the accuracy of any statement, charge, computation, or
demand made under or pursuant to this Agreement. A Party's rights under this
paragraph shall survive termination of this Agreement.

                                     7

<PAGE>
<PAGE>

         4.5. In the event Buyer elects to be reimbursed by cash payment for
obtaining Deficiency Gas pursuant to section 2.4 of this Agreement, or seeks
reimbursement in accordance with section 3.3 of this Agreement, Buyer shall
render Seller a statement by the 10th day of the Month following the Month
in which Buyer obtained the Deficiency Gas. Seller shall pay the amount
invoiced by the 20th day of the Month. Payment shall be by wire transfer or
check at Buyer's option. If presentation of a statement by Buyer is delayed
beyond the 10th day of the Month, then the time for payment shall be
extended a corresponding period of time, unless Seller is responsible for
such delay. Any disputes regarding the amounts invoiced by Buyer shall be
resolved pursuant to the procedures set forth in section 4.2 hereof. Billing
errors shall be governed by section 4.3 hereof.

                        V. Creditworthiness of Buyer
                           -------------------------

         5.1 Prior to commencement of deliveries, or during the term of this
Agreement if Buyer has failed to make timely payment of undisputed amounts
on more than one occasion, Seller may require Buyer to supply Seller with
credit information including, but not limited to, bank references, financial
statements and names of persons with whom Seller may make reasonable inquiry
into Buyer's creditworthiness and obtain adequate assurance of Buyer's
solvency and ability to perform.

                             VI. Responsibility
                                 --------------

         6.1 Except as provided in the Agency and Delegation Agreement
described in Section 2.6 of this Agreement, all charges, expenses, fees,
taxes, damages, injuries, and other costs incurred in or attributable to the
handling or transportation of the Gas delivered in accordance with this
Agreement prior to delivery to Buyer at the Delivery Point(s) shall be the
responsibility of Seller, as between the Parties, and Seller shall
indemnify, defend, and hold Buyer harmless from all such costs.

         6.2 Except as provided in the Agency and Delegation Agreement
described in Section 2.6 of this Agreement, all charges, expenses, fees,
taxes (including sales, or transfer taxes and any other taxes levied on or
in connection with the transactions under this Agreement by the state, or
other government subdivision, in which the Gas is consumed or otherwise
used), damages, injuries, and other costs incurred in or attributable to the
purchase and transfer, transportation, and handling of the Gas from and
after delivery to the Delivery Point(s) shall be the responsibility of
Buyer, as between the Parties, and Buyer shall indemnify, defend, and hold
harmless Seller from all such costs. In the event Seller is required by law
to collect any such taxes, and Buyer claims an exemption from the taxes,
Buyer shall, upon Seller's request, furnish Seller with a copy of Buyer's
exemption certificate.

                                     8

<PAGE>
<PAGE>

         6.3 Except as provided in Article XIII herein, Buyer warrants that
it has all necessary regulatory approvals and authorizations for the
purchase of Gas by Buyer hereunder.

                                  VII. Term
                                       ----

         7.1 This Agreement shall become effective upon the date of
execution by both Parties ("Effective Date") and shall continue for a term
extending through April 30, 1996 ("Initial Term"). Following the Initial
Term, this Agreement shall continue in effect on a year-to-year basis unless
either Party gives written notice to the other of its intention not to
extend the Agreement, provided, however, such written notice must be given
at least six (6) months prior to the expiration of the Initial Term or any
subsequent one year extension.

         7.2 If, upon termination of this Agreement, either pursuant to this
Article VII or to the election of Buyer under Section 3.5 hereof, there
remains in Buyer's storage account under Rate Schedule GTS, Gas which Seller
has caused to be injected but which has not been delivered to Buyer's
citygate, Buyer shall pay Seller for such Gas a price per MMBtu equal to the
greater of: (i) Seller's actual cost for the volumes of Gas that have not
been delivered, plus 15 cents; or (ii) the Index Price for the Month in
which the contract termination takes effect.

                        VIII. Quality and Measurement
                              -----------------------

         8.1 Buyer agrees to purchase nominated quantities of Gas delivered
by Seller to the Delivery Point(s) meeting the quality and pressure
specifications set forth in Transporter's Gas Tariff on file with the FERC.
If Gas delivered by Seller to the Delivery Point(s) is rejected by
Transporter for failure to meet its quality specifications, Buyer shall be
relieved of the obligation to receive and pay for such Gas, including any
applicable reservation charges. To the extent that Transporter accepts Gas
tendered by Seller for Buyer's account at the Delivery Point(s), Seller
shall be deemed to have complied with the quality specifications set forth
herein.

         8.2 Buyer and Seller agree that the volume and heating value of Gas
sold and delivered hereunder will be measured at or near the Delivery
Point(s) by Transporter, using equipment owned or controlled by, and
measuring procedures employed by Transporter. The measurements made by
Transporter shall be accepted by Buyer and Seller, provided, however, the
measuring

                                     9

<PAGE>
<PAGE>

equipment and procedures used conform to Transporter's filed tariffs and to
generally recognized industry standards.

         8.3 All Gas sold and delivered hereunder shall be measured as
provided for in the General Terms and Conditions of Transporter's FERC Gas
Tariff on file with the FERC.

                               IX. Processing
                                   ----------

         9.1 Subject to the quality specifications of Article VIII, Seller
may process the Gas to remove any Liquid Hydrocarbons or Liquefiable
Hydrocarbons prior to and after the delivery of the Gas to Buyer at the
Delivery Point(s). In the event Seller elects to process the Gas, any
hydrocarbons so removed shall be Seller's sole responsibility and all costs
(including additional transportation costs attributable to such processing)
shall be paid by the Seller. The volumes delivered to Buyer shall be net of
any "plant volume reduction" as that phrase, or its equivalent, is defined
in pertinent gas processing agreements.

                              X. Force Majeure
                                 -------------

         10.1 If either Party is rendered unable, wholly or in part, by
force majeure to perform its obligations under this other than the
-------------
obligation to make payments then or thereafter due, it is mutually agreed
that performance of the respective obligations of the Parties, so far as
they are affected by such force majeure, shall be suspended without
                          -------------
liability from the inception of any such inability until it is corrected but
for no longer period. In order to suspend by reason of force majeure, the
                                                       -------------
Party claiming such inability shall promptly notify the other party of the
claimed inability to perform, the circumstances giving rise to the claim,
and the expected duration of the inability to perform. The Party claiming
force majeure shall promptly correct the inability to perform to the extent
-------------
it may be corrected through the exercise of reasonable diligence. No Party
shall, however, be required against its will to adjust or settle any labor
disputes.

         10.2 The term "force majeure" means an event that (i) was not
within the control of the party claiming its occurrence; and (ii) could not
have been prevented or avoided by such Party through the exercise of due
diligence. Events of force majeure include, without limitation by
                     -------------
enumeration, acts of God, earthquakes, epidemics, fires, floods, hurricanes,
landslides, lightning, storms, washouts, freezing of wells or lines of pipe
used to supply the Gas under this Agreement and other similar severe natural
calamities, acts of public enemy, wars, blockades, insurrections, riots,
civil disturbances and

                                     10

<PAGE>
<PAGE>

arrests, strikes, lockouts or other industrial disturbances, explosions,
breakage, accidents to equipment, facilities or lines of pipe used to enable
Seller to deliver or Buyer to receive Gas under this Agreement, the refusal
or inability of Transporter to transport Gas under an existing
transportation agreement, imposition by a regulatory agency, court or other
governmental authority having jurisdiction of binding laws, conditions,
limitations, orders, rules or regulations that prevent or prohibit either
Party from performing, provided such governmental action has been resisted
in good faith by all reasonable legal means, or any other cause of a similar
type.

         The following are not events of force majeure: (i) the inability of
                                         -------------
Seller to obtain term Gas (i.e. Gas obtained on a basis other than
interruptible arrangements of 30 days or less) and resell such Gas to Buyer
at a profit; and (ii) the ability of Seller to sell its Gas supply to
another market at a more advantageous price; or (iii) depletion of Seller's
reserves.

                                 XI. Notice
                                     ------

         11.1 Any notice, request, demand or statement which either Party
may desire to give to the other, shall be in writing and may be mailed by
registered or certified mail, return receipt requested, to the post office
address of the Parties shown below, or by facsimile transmission followed by
written confirmation by regular mail, unless otherwise provided in this
Agreement:

         SELLER:           Notices
                           -------
                           Natural Gas Clearinghouse
                           Attn: Vincent T. McConnell
                           13430 Northwest Freeway, #1200
                           Houston, Texas 77040
                           Phone (713) 744-1715
                           Telecopy (713) 744-6180

                           Billing Inquiries
                           -----------------
                           Natural Gas Clearinghouse
                           Attn: Vincent T. McConnell
                           13430 Northwest Freeway, #1200
                           Houston, Texas 77040
                           Phone (713) 744-1715
                           Telecopy (713) 744-6180

         BUYER:            Notices and Billing Inquiries
         Attn.:            -----------------------------
                           Brian Ramsey
                           Steve Billings
                           Delta Natural Gas Company, Inc.
                           3617 Lexington Road
                           Winchester, KY 40391

         Phone:            (606) 744-6171 ext. 158
         Fax:              (606) 744-3623

                                     11

<PAGE>
<PAGE>

Notice shall be deemed received five business days following mailing if by
registered or certified mail or upon sender's receipt of transmission
confirmation if by facsimile transmission.

         11.2 Either of the Parties may from time to time designate a
different address. Routine communications may be delivered by registered,
certified or ordinary mail, or by telephone or telecopy if the Parties
agree.

             XII. Seller's Warranties and Gas Supply Obligations
                  ----------------------------------------------

         12.1 Seller warrants title to all Gas sold by it to Buyer and that
such Gas is free from all liens and adverse claims. Seller agrees to
indemnify Buyer from, and with respect to, all suits, actions, debts,
accounts, damages, costs, losses and expenses (including only reasonable
attorneys' fees) arising from or out of any adverse claims of any and all
persons related to such Gas or taxes or charges thereon prior to the time
the Gas is delivered at the Delivery Point(s). Buyer agrees to indemnify
Seller from and with respect to, all suits, actions, debts, accounts,
damages, costs, losses and expenses (including only reasonable attorneys'
fees) arising from or out of any adverse claims of any and all persons
related to such Gas or taxes or charges thereon at the time the Gas is
delivered at the Delivery Point(s) or thereafter.

                      XIII. Governmental Authorizations
                            ---------------------------

         13.1 This Agreement shall be subject to all valid and applicable
laws of the United States and to the applicable valid rules, regulations or
orders of any regulatory agency or governmental authority having
jurisdiction, and the Parties shall be entitled to regard all applicable
laws, rules and regulations (federal, state or local) as valid and may act
in accordance therewith until such time as the same may be declared invalid
by final judgment of a court of competent jurisdiction and such judgment is
not subject to appeal.

         13.2 Upon execution of this Agreement, each of the Parties agrees
to seek such government certificates, permits, licenses and authorizations
which, in its sole discretion, it deems necessary to perform its obligations
under this Agreement.

         13.3 Upon execution of this Agreement, and from time to time
through out its term, each of the Parties shall make all filings required by
any regulatory bodies having jurisdiction over the activities covered by
this Agreement and upon request of the other Party shall promptly provide
copies of such to the other Party.

                                     12

<PAGE>
<PAGE>

         13.4 Neither Party will knowingly enter into agreements or
undertake any activities or filings that would interfere with or frustrate
the other Party's efforts to obtain the necessary regulatory approvals to
fulfill its obligations under this Agreement.

                              XIV. Assignments
                                   -----------

         14.1 Either Party may, without relieving itself of any obligations
under this Agreement, assign any of its rights under this Agreement to any
corporation, partnership, joint venture, or other entity with which it is
affiliated. Either Party, may also assign or pledge this Agreement under the
provisions of any mortgage, deed of trust, indenture or similar instrument.
But neither Party shall otherwise assign this Agreement or any of its
rights, duties or obligations unless it shall have first obtained the
consent in writing of the other Party, which consent shall not be
unreasonably withheld. This Agreement shall be binding upon, and inure to
the benefit of, the respective successors and assigns of the Parties.

                             XV. Confidentiality
                                 ---------------

         15.1 The terms of this Agreement, including but not limited to, the
price paid for Gas, the quantities of Gas purchased, and all other material
terms of this Agreement shall be kept confidential by the Parties except to
the extent that any information must be disclosed for the purpose of
effectuating transportation of the Gas, obtaining regulatory approval(s),
complying with a directive of any applicable regulatory body having
jurisdiction, or as required by law.

                             XVI. Miscellaneous
                                  -------------

         16.1 No waiver by either Party of any one or more defaults by the
other in the performance of any provisions of this Agreement shall operate
or be constructed as a waiver of any other default or defaults, whether of a
like or of a different character.

         16.2 THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS.

         16.3 This Agreement constitutes the entire agreement between the
Parties pertaining to the subject matter hereof, supersedes all prior
agreements

                                     13

<PAGE>
<PAGE>

and understandings, whether oral or written, which the Parties may have had
in connection herewith and may not be modified except by written agreement
executed by authorized representatives of the Parties.

         16.4 Except as otherwise stated herein, any article or provision
declared or rendered unlawful by a court of law or regulatory agency with
jurisdiction over the Parties or deemed unlawful because of a statutory
change shall not otherwise affect the lawful obligations that arise under
this Agreement.

         16.5 Neither Party shall be liable to the other for any
consequential, incidental, punitive, or exemplary damages as a result of any
act or omission under this Agreement or relating in any fashion to this
Agreement.

         17.1 All disputes arising under this Agreement shall be resolved
through arbitration. All such arbitration shall be conducted pursuant to the
procedures set forth in Exhibit B hereto.

         IN WITNESS WHEREOF, the Parties have duly executed this Agreement
as of the day and year written below.
SELLER:                                     BUYER:

ACCEPTED and AGREED to this                 ACCEPTED and AGREED to this
28th day of October, 1993                   21st day of October, 1993

NATURAL GAS CLEARINGHOUSE                   DELTA NATURAL GAS COMPANY,
                                            INC.

By:   /s/ [illegible signature]             By:    /s/ ALAN L. HEATH
   ---------------------------------           ----------------------------
                                                   Alan L. Heath

Title:   SR. VICE PRESIDENT                 Title: Vice President
      ------------------------------              -------------------------
                                                   Operations & Engineering

                                     14

<PAGE>
<PAGE>

                                  EXHIBIT B
                            ARBITRATION PROCEDURE

         1. Arbitration under the Agreement shall be governed by the Federal
Arbitration Act, 9 U.S.C. Section 1, et seq., and will not be governed by
the arbitration acts, statutes or rules of any other jurisdiction.

         2. Either party may request arbitration by submitting a written
notice to the other. The notice shall name the noticing party's arbitrator
and shall contain a statement of the issue presented for arbitration. Within
fifteen (15) days of receipt of a notice of arbitration, the other party
shall name its arbitrator by written notice and may designate any additional
issues for arbitration. The two named arbitrators shall select the third
arbitrator within fifteen (15) days after the date on which the second
arbitrator was named. Should the two arbitrators fail to agree on the
selection of the third arbitrator, either party shall be entitled to request
the Senior Judge of the United States District Court of the District of
Houston to select the third arbitrator. All arbitrators shall be qualified
by education or experience within the natural gas industry to decide the
issues presented for arbitration and shall be licensed attorneys. No
arbitrator shall be: a current or former director, officer or employee of
either party, or its affiliates; an attorney (or member of a law firm) who
has rendered legal services to either party, or its affiliates, within the
preceding three years; or an owner of any of the common stock of either
party, its affiliates or direct competitors.

3. The three arbitrators shall commence the arbitration hearing within
twenty-five (25) days following the appointment of the third arbitrator. The
proceeding shall be held at a mutually acceptable site. If the parties are
unable to agree on a site, the arbitrators shall select a site other than
the State of Texas or the State of [Kentucky/Ohio]. Each party shall have an
opportunity to present its evidence at the hearing. The arbitrators may call
for the submission of pre-hearing statements of position and legal
authority, but no post-hearing briefs shall be submitted. After the
presentation of the evidence has concluded, each party shall submit to the
arbitration panel a final offer of its proposed resolution of the dispute. A
majority of the arbitrators shall approve the final offer of one party
without modification, and reject the offer of the other party. The
arbitration panel shall not have the authority to award punitive or
exemplary damages. The arbitrators' decision must be rendered within thirty
(30) days following the conclusion of the hearing or submission of evidence,
but no later than 90 days after appointment of the third arbitrator.

4. The decision of the arbitrators or a majority of them, shall be in
writing and shall be final and binding upon the parties as to the issue
submitted. Each

<PAGE>
<PAGE>

party shall bear the expense and cost of its arbitrator and one-half of the
expense and cost of the third arbitrator.

5. The arbitrators shall have the authority to establish rules and
procedures governing the arbitration hearing, except that there shall be no
pre-hearing discovery unless the parties mutually agree that discovery will
be permitted. Either party shall be entitled to insist that no discovery
shall be had, or that discovery be limited to one or more of the devices
authorized by the Federal Rules of Civil Procedure.

<PAGE>
<PAGE>

                                  EXHIBIT C
                    STORAGE INVENTORY TRANSFER FINANCING

1. Seller shall pay Columbia Gas the amount billed to Buyer by Columbia Gas
pursuant to Section 43 of the General Terms and Conditions of Columbia Gas'
FERC Gas Tariff for the "Conversion Transfer" of storage inventory, as
defined in that section.

2. Buyer shall reimburse Seller for the amount paid under paragraph 1, plus
carrying charges calculated at 5% annual interest, over a 12 month period,
commencing the first month after Seller makes the payment under paragraph 1.

3. Seller shall bill Buyer for amounts due under this Exhibit C in 12 equal
monthly payments, beginning in the first month after the payment in
paragraph 1 is made. Such amounts shall be separately stated on Seller's
invoice. The provisions of Article IV of the Agreement shall govern billing
and payment under this Exhibit C.

<PAGE>
<PAGE>

                   FIRST AMENDMENT TO GAS SALES AGREEMENT

         This Amendment is executed as of this 14th day of March, 1997, but
made effective May 1, 1997 except as indicated in Item 4 of this amendment,
by and between Delta Natural Gas Company, Inc. ("Buyer") and Natural Gas
Clearinghouse ("Seller").

WHEREAS, Seller and Buyer entered into a Gas Sales Agreement effective as of
November 1, 1993, Natural Gas Clearinghouse Contract No. 93-11-532 (herein
"Agreement");

WHEREAS, Seller and Buyer wish to amend the Agreement in certain particulars;

NOW THEREFORE, in consideration of the mutual covenants contained herein,
Seller and Buyer agree as follows:

1. Article 1.5 of the Agreement is deleted in its entirety and replaced with
the following:

                  "1.5 `Day' shall mean a period of 24 consecutive hours,
         coextensive with a `day' as defined by the Transporter in a
         particular transaction."

2. Article 1.11 of the Agreement is deleted in its entirety and replaced
with the following:

                  "1.11 `Month' shall mean the period beginning on the first
         Day of the calendar month and ending immediately prior to the
         commencement of the first Day of the next calendar month."

3. Article 1.8 of the Agreement shall be deleted in its entirety and
replaced with the following:

                  1.8 "Index Price" shall mean the price as published in the
         first issue each month of Inside FERC's Gas Market Report in the
         table titled "Prices of Spot Gas Delivered to Pipelines" under the
         heading "Columbia Gulf/onshore", plus the applicable transportation
         from onshore to Rayne, Louisiana, plus $0.01 per MMBtu. In the
         event Seller arranges transportation on Columbia Gas to facilitate
         deliveries to Buyer, applicable transportation charges on Columbia
         Gas will be added to the price in addition to any charges incurred
         on Columbia Gulf as stated above.

<PAGE>
<PAGE>

4. The first sentence of Article 2.1 shall be deleted and replaced with the
following: "Subject to the other provisions of this Agreement, Seller shall
sell and deliver and Buyer shall purchase and receive, on a firm basis, a
maximum daily quantity of gas up to 12,380 MMBtu ("MDQ")."

5. Article 2.2(d) of the Agreement shall be deleted and replaced with the
following:

                  2.2(d) Buyer and Seller agree that Seller shall cause Gas
         to be sold and delivered to Buyer under Columbia Gas' Rate Schedule
         GTS up to the respective Minimum Fixed Cost Contribution (MFCC)
         threshold level(s) under Buyer's GTS agreements with Columbia Gas.
         After satisfying Buyer's MFCC requirements under Columbia Gs' Rate
         Schedule GTS, Seller shall endeavor to acquire released firm or
         interruptible transportation capacity or other transportation
         service less costly than GTS on the Columbia Gas system on Buyer's
         behalf and as Buyer's agent in accordance with the terms and
         conditions of the Limited Agency Agreement dated November 1, 1993.

6. Article 3.3 of the Agreement shall be deleted and replaced with the
following:

                  3.3 Subject to Seller's obligation to indemnify and hold
         Buyer harmless under Section 2.6 of this Agreement, Buyer shall be
         responsible for and shall pay all charges, costs and expenses
         incurred in transportation and storage of the Gas from the Delivery
         Point(s) to Buyer's citygate receipt points, including any Minimum
         Fixed Cost Contribution liability under Columbia Gas' Rate Schedule
         GTS. Buyer shall receive bills directly from the Transporter(s) and
         shall pay such bills directly. Seller shall be responsible for any
         charges incurred in connection with its utilization of Buyer's Rate
         Schedule GTS rights on Columbia Gas for purposes other than
         providing Gas Supply to Buyer. In the event Buyer identifies such
         charges from Columbia Gas and Columbia Gulf that do not relate to
         Seller providing Gas supply to Buyer, Buyer shall submit a
         statement to Seller for reimbursement, in accordance with the
         provisions of section 4.5 of this Agreement. Effective June 1,
         1996, if Seller utilizes Buyer's Rate Schedule FTS rights on
         Columbia Gulf for purposes other than providing Gas supply to
         Buyer, Seller shall pay to Buyer (1) an amount equal to the posted
         transportation rate or (2) in lieu of paying the posted rate, Buyer
         and Seller may agree on a monthly basis prior to the beginning of
         the month to share (eighty percent (80%) to Buyer and twenty
         percent (20%) to Seller) in any savings obtained by Seller
         reselling any released capacity and associated gas. This savings
         will be calculated by taking the market price of the repackaged gas
         as compared to the delivered price to Buyer

                                     2

<PAGE>
<PAGE>

         of the gas Seller would have otherwise delivered pursuant to the
         terms and conditions of this Agreement less transportation
         commodity charges and related costs.

7. In Article 4.1 of the Agreement, Seller's payment addresses shall be
deleted and replaced with the following:

         Payment by wire transfer:                   Payment by check:
         ------------------------                    ----------------
         First National Bank of Chicago              Natural Gas Clearinghouse
         Chicago, IL                                 P.O. Box 730508
         Account Title: Natural Gas Clearinghouse    Dallas, TX 75373-0508
         Account Number: 55-53911
         ABA Number: 071000013

8. Article 7.1 of the Agreement shall be deleted and replaced with the
following:

                  7.1 This Agreement shall become effective as of November
         1, 1993 ("Effective Date") and shall continue in full force and
         effect, unless terminated earlier under the provisions hereof,
         until April 30, 2000 ("Initial Term"). Following the Initial Term,
         this Agreement shall continue in effect on an annual basis unless
         either party provides written notice to the other of its intention
         not to extend the Agreement, provided, however, such written notice
         must be given at least six (6) months prior to the expiration of
         the Initial Term or any subsequent one year extension.

9. Article 11.1 of the Agreement shall be revised by substituting the
following Notice address for Seller:

                           Notices
                           -------
                           Natural Gas Clearinghouse
                           Attn: Contract Administration
                           13430 Northwest Freeway Suite 1200
                           Houston, TX 77040
                           Phone: (713) 507-3860
                           Facsimile: (713) 767-5931

                           Operational Matters
                           -------------------
                           Attn: Manager Customer Services
                           Phone: 800-NGC-1777

10. Exhibit A to the Agreement shall be amended by adding the following:

         GTS Service Agreement No. 37948
         Columbia Gulf Service Agreement No. 44375
         Quantity: 310 Dth/Day

                                     3

<PAGE>
<PAGE>

11. All other provisions of the Agreement shall remain in full force and
effect.

IN WITNESS WHEREOF, Seller and Buyer execute this agreement effective on the
date first written above.

"SELLER"                                    "BUYER"

NATURAL GAS CLEARINGHOUSE,                  DELTA NATURAL GAS COMPANY, INC.
a Colorado general partnership

BY:  /s/ [illegible signature]              BY:  /s/  GEORGE S. BILLINGS
   ---------------------------------             -----------------------
TITLE:  Vice President                      TITLE:  MGR. - GAS SUPPLY
       -----------------------------                -----------------

                                     4

<PAGE>
<PAGE>

              SECOND AMENDMENT TO GAS SALES AGREEMENT AND FIRST
                    AMENDMENT TO LIMITED AGENCY AGREEMENT

         This Amendment is made and entered into as of the 1st day June,
2002 by and between DYNEGY MARKETING AND TRADE ("Seller") and DELTA NATURAL
GAS COMPANY ("Buyer").

         WHEREAS, Seller, as successor to Natural Gas Clearinghouse, and
Buyer are parties to a Gas Sales Agreement dated November 1, 1993, as
amended (Seller's Contract No. 6) ("Sales Agreement") and a related Limited
Agency Agreement dated November 1, 1993 ("Limited Agency Agreement"); and

         WHEREAS, Seller and Buyer desire to amend the Sales Agreement and
the Limited Agency Agreement to provide for the addition of gas delivered at
the Mt. Olivet Delivery Point.

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

                                     I.

         The first sentence of Article 2.1 of the Sales Agreement is deleted
and replaced with the following: "Subject to the other provisions of this
Agreement, Seller shall sell and deliver and Buyer shall purchase and
receive, on a firm basis, a maximum daily quantity of gas up to 12,880 MMBtu
("MDQ").

                                     II.

         Exhibit A to the Sales Agreement is deleted and the Exhibit A
attached hereto is substituted therefor.

         The third "WHEREAS" clause of the Limited Agency Agreement is
changed and amended to read in its entirety as follows:

         "WHEREAS, Buyer has arranged for firm transportation of the supply
of Gas it will purchase from Seller under the Gas Contract on Columbia Gulf
Transmission Company pursuant to the terms of Service Agreements 43827,
43828, 43829, 44375, and 43332 ("Assignment Agreements") and transportation
and storage of such Gas pursuant to the terms of Rate Schedule GTS Service
Agreements ("GTS Agreements") Nos. 37813, 37814, 37815, 37948, 37954, and
with Columbia Gas Transmission Corporation (the Columbia companies being
referred (to herein collectively as "Columbia"); and"

                                     1

<PAGE>
<PAGE>

                                     IV.

         This Amendment shall be effective as of June 1, 2002.

IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of the
date first hereinabove written.

DYNEGY MARKETNG AND TRADE           DELTA NATURAL GAS COMPANY

By:     /s/ LANCE C. JORDAN         By:   /s/ GEORGE S. BILLINGS
   ---------------------------         -----------------------------

Name:   Lance C. Jordan             Name:   George S. Billings
        -------------------                 ------------------

Title:  Vice President              Title:  MGR - GAS SUPPLY
        -------------------                 ----------------
        Energy Trading
        --------------

                                     2

<PAGE>
<PAGE>

                                  EXHIBIT A

Attached to and made a part of Gas Sales Agreement dated November 1, 1993
between Dynegy Marketing and Trade, as Seller, and Delta Natural Gas
Company, as Buyer.

<TABLE>
<CAPTION>
                          Columbia Gas Transmission                   Columbia Gulf Transmission           MDQ
Delivery Point          Co. GTS Service Agreement No.                 Co. Service Agreement No.           MMBtu
--------------          -----------------------------                 --------------------------          -----
<S>                                 <C>                                      <C>                          <C>
Cumberland                          37813                                       43828                      5,400

Stanton                             37814                                       43827                      2,530

Winchester                          37815                                       43829                      4,140

N. Middletown                       37948                                       44375                        310

Mt. Olivet                          37954                                       43322                        500
                                                                                                          ------

                                                                             Total MDQ:                   12,880
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}]]