Document:

Exhibit 10.7

                  MORTGAGE, DEED OF TRUST, SECURITY AGREEMENT,
                FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION

     THIS  MORTGAGE,  DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT AND
ASSIGNMENT  OF  PRODUCTION (this "Mortgage") is from New Century Energy Corp., a
Colorado  corporation,  and  Century  Resources,  Inc.,  a Delaware corporation,
together  as  Mortgagors  (individually  and  together, "Mortgagors"), to Eugene
Grin, 825 Third Avenue, New York, New York 10022, as Trustee ("Trustee") for the
benefit  of  LAURUS  MASTER  FUND, LTD., a Cayman Islands company ("Mortgagee"),
dated  as  of  September  19,  2005  between  Mortgagors  and  Mortgagee.

                                    RECITALS

     WHEREAS,  pursuant  to  the  terms of a Securities Purchase Agreement dated
September  19,  2005  between Mortgagors and Mortgagee as amended, modified, and
supplemented  from  time  to  time (the "Securities Purchase Agreement") and the
Related  Agreements  defined  therein,  Mortgagors  are  required to execute and
deliver  this  Mortgage  pursuant  to  which,  among other things, the Mortgaged
Property  (defined  below) is granted and assigned by Mortgagors to Mortgagee to
further  secure  the  Secured  Indebtedness  (defined  below).
NOW,  THEREFORE,  in  consideration  of  the  sum  of  $10.00 and other good and
valuable  consideration,  in hand paid by Mortgagee, the receipt and adequacy of
which  are  hereby  acknowledged  and confessed by Mortgagors, Mortgagors hereby
agree  as  follows:
                                    ARTICLE I
                                   DEFINITIONS

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

     "Accounts  and Contract Rights" shall mean all accounts (including accounts
in  the  form of joint interest billings under applicable operating agreements),
contract rights and general intangibles of Mortgagors now or hereafter existing,
or hereafter acquired by, or on behalf of, Mortgagors, or Mortgagors' successors
in  interest,  relating  to  or  arising  from  the  ownership,  operation  and
development  of  the  Mortgaged  Property  and  to  the  production, processing,
treating,  sale,  purchase,  exchange or transportation of Hydrocarbons (defined
below) produced or to be produced from or attributable to the Mortgaged Property
or any units or pooled interest units in which all or a portion of the Mortgaged
Property  forms  a  part,  together  with  all accounts and proceeds accruing to
Mortgagors  attributable to the sale of Hydrocarbons produced from the Mortgaged
Property  or any units or pooled interest units in which all or a portion of the
Mortgaged  Property  forms  a  part.

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

<PAGE>

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

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

     "Effective Date" shall mean September 19, 2005.

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

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

     "Gas  Balancing  Agreement"  means  any  agreement  or  arrangement whereby
Mortgagors,  or  any  other  party  having an interest in any Hydrocarbons to be
produced  from  mineral  interests  in  which Mortgagors own an interest, have a
right  or  an  obligation  to  take more or less than its proportionate share of
production therefrom.

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

     "June  2005  Credit  Agreements"  shall  mean, collectively, the Securities
Purchase  Agreement  dated  as of June 30, 2005 between Mortgagors and Mortgagee
(as  amended,  modified  and  supplemented  from  time  to time) and the Related
Agreements  as  defined therein, and "June 2005 Credit Agreement" shall mean any
one or more of the foregoing.

     "June  2005  Note"  means  the Secured Convertible Term Note dated June 30,
2005  made  by  Mortgagors  in  favor  of  Mortgagee,  as  amended, modified and
supplemented from time to time.

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

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

<PAGE>

     "Loans"  shall  mean collectively, all amounts advanced by the Mortgagee to
Mortgagors under the Note and the Credit Agreements.

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

     "Mortgaged  Property"  shall  have  the meaning stated in Article 2 of this
Mortgage.

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

     "Note" shall have the meaning set forth in the Credit Agreements.

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

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

     "Operation Equipment" shall mean all Personal Property and fixtures affixed
or  situated  upon all or any part of the Mortgaged Property, including, without
limitation,  all surface or subsurface machinery, equipment, facilities or other
property  of  whatsoever  kind  or nature now or hereafter located on any of the
Lands  which are useful for the production, treatment, storage or transportation
of  oil  or  gas,  including,  but  not by way of limitation, all oil wells, gas
wells,  water  wells,  injection  wells, casing, tubing, rods, pumping units and
engines,  Christmas trees, derricks, separators, gun barrels, flow lines, tanks,
gas  systems  (for  gathering,  treating  and  compression),  water systems (for
treating,  disposal  and  injection),  power plants, poles, lines, transformers,
starters  and  controllers,  machine  shops,  tools, storage yards and equipment
stored  therein,  buildings  and  camps,  telegraph,  telephone  and  other
communication systems, roads, loading racks and shipping facilities.

<PAGE>

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

          (a) Liens securing the obligations;

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

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

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

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

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

          (g)  Liens,  charges  and  encumbrances upon Mortgagors' assets, other
     than  Proved  Mineral Interests, which in the aggregate do not have a value
     in excess of $50,000.

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

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

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

<PAGE>

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

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

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

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

     "Secured  Indebtedness"  shall have the meaning stated in Article 3 of this
Mortgage.

     "Subject  Interests"  shall  have  the  meaning stated in Article 2 of this
Mortgage.

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

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

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

                                   ARTICLE II
                       GRANTING CLAUSE: MORTGAGED PROPERTY

     Mortgagors,  for  and  in consideration of the sum of $10.00 and other good
and  valuable consideration, in hand paid by Mortgagee, the receipt and adequacy
of  which  are  hereby  acknowledged and confessed by Mortgagors, and for and in
consideration of the debt and purposes hereinafter set forth, to secure the full
and  complete  payment and performance of the Secured Indebtedness and to secure
the  performance  of  the covenants, obligations, agreements and undertakings of
Mortgagors hereinafter described, have GRANTED, BARGAINED, WARRANTED, MORTGAGED,
ASSIGNED,  TRANSFERRED  and  CONVEYED,  and by these presents do GRANT, BARGAIN,
WARRANT,  MORTGAGE,  ASSIGN,  TRANSFER  and  CONVEY  unto  Trustee and Trustee's
substitutes  or successors, and his and their assigns, for the uses and purposes
herein  set  forth,  with  warranties  and covenants of title only to the extent
provided  herein  and  in the Credit Agreements, all of Mortgagors' right, title
and interest, whether now owned or hereafter acquired, in all of the hereinafter
described  properties,  rights  and  interests; and, insofar as such properties,
rights  and  interests  consist  of  equipment,  general  intangibles, accounts,

<PAGE>

contract rights, inventory, goods, chattel paper, instruments, documents, money,
fixtures,  as  extracted  collateral, proceeds and products of collateral or any
other  Personal  Property  of  a  kind or character defined in or subject to the
applicable  provisions  of  the  Code,  Mortgagors  hereby  grant to Mortgagee a
security interest therein, whether now owned or hereafter acquired, namely:

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

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

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

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

          (e) the Accounts and Contract Rights;

          (f) the Operating Equipment;

          (g) the Well Data;

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

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

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

<PAGE>

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

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

     TO  HAVE  AND  TO  HOLD  the  Mortgaged  Property  unto  Mortgagee  and its
successors,  legal  representatives and assigns, forever, subject to Section 7.3
hereof,  to  secure,  in  each such instance, the payment and performance of the
Secured Indebtedness and the Obligations.

                                   ARTICLE III
                              SECURED INDEBTEDNESS

     This Mortgage is given to secure the Loans and all of the Obligations under
and  as  described in the Credit Agreements and the June 2005 Credit Agreements,
including,  without  limitation:

          (a) interest on all credit outstanding under the Credit Agreements and
     the  June  2005  Credit Agreements, as applicable, at the rates provided in
     the Credit Agreements;

          (b)  the  Obligations, including, without limitation, the indebtedness
     evidenced by the Note and the June 2005 Note;

          (c)  payment  and  performance  of  any  and  all  present  and future
     obligations  of  Mortgagors according to the terms of any present or future
     hedge  transaction,  including,  without  limitation, any present or future
     swap  agreements,  cap,  floor,  collar,  exchange  transaction,  forward
     agreement  or  other exchange or protection agreements relating to any such
     transaction  now  existing or hereafter entered into between Mortgagors and
     Mortgagee;

          (d)  any  sums advanced as expenses or costs incurred by, or on behalf
     of,  Mortgagee  which  are  made  or incurred pursuant to the terms of this
     Mortgage  or  any  Credit Agreement pr any June 2005 Credit Agreement, plus
     interest  thereon  at  the rate set forth in Section 1.1(a) of the Note and
     Section  1.1(a)  of  the  June  2005  Note, as applicable, from the date of
     advance or expenditure until reimbursed; and

          (e)  all  other  and  additional debts, obligations and liabilities of
     every kind and character of Mortgagors now existing or hereafter arising in
     connection  with  any  of  the  Credit  Agreements and the June 2005 Credit
     Agreements  (all  of  the  obligations and indebtedness referred to in this
     Article  3,  and  all  renewals, refinancings, extensions and modifications
     thereof,  and  all  substitutions therefor, in whole or in part, are herein
     sometimes referred to as the "Secured Indebtedness").

<PAGE>

     NOTWITHSTANDING  ANY  OTHER  PROVISION  CONTAINED  HEREIN  OR  IN ANY OTHER
AGREEMENT  BETWEEN  MORTGAGORS  AND  MORTGAGEE, the lien granted hereunder shall
only  serve  to  encumber the properties described in Exhibit A until payment in
full  by  Mortgagors  to Mortgagee of the Secured Indebtedness arising under the
Credit  Agreements.

                                   ARTICLE IV
       COVENANTS, REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF MORTGAGOR

     Mortgagors  hereby  covenant,  represent,  warrant  and  agree  that:

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

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

     4.3  Further Assurances. Mortgagors will execute and deliver such other and
          ------------------
further instruments and will do such other and further acts as in the reasonable
discretion  of  Mortgagee  may  be  necessary  or  desirable  to  carry out more
effectively  the  purposes  of  this  Mortgage,  including, without limiting the
generality  of the foregoing, (a) prompt correction of any material defect which
may  hereafter  be  discovered  in the title to the Mortgaged Property or in the
execution  and acknowledgment of this Mortgage, any Notes, or any other document
used  in connection herewith or at any time delivered to Mortgagee in connection
with  any  Obligations,  and  (b)  if  required  by  Section  8.1 hereof, prompt
execution and delivery of all division or transfer orders that in the reasonable
discretion of Mortgagee are needed to transfer effectively the assigned proceeds
of production from the Mortgaged Property to Mortgagee.

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

<PAGE>

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

          (a)  Mortgagors  shall  observe  and  comply with all of the terms and
     provisions,  express  or implied, of all Oil and Gas Leases relating to the
     Subject  Interests  so  long  as  such  Oil  and  Gas Leases are capable of
     producing  Hydrocarbons  in paying quantities, except where such failure to
     comply would not have a Material Adverse Effect;

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

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

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

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

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

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

<PAGE>

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

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

     4.9  Right  of  Entry.  Mortgagors  will permit Mortgagee, or the agents or
          ----------------
designated  representatives  of Mortgagee, to enter upon the Mortgaged Property,
and  all  parts  thereof,  for  the purposes of investigating and inspecting the
condition and operation thereof.

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

                                    ARTICLE V
                         ADDITIONS TO MORTGAGED PROPERTY

     It  is  understood  and  agreed  that  Mortgagors  may periodically subject
additional properties to the Lien of this Mortgage. In the event that additional
properties  are  to be subjected to the Lien hereof, the parties hereto agree to
execute  a  supplemental  mortgage,  satisfactory  in  form  and  substance  to
Mortgagee,  together  with  any security agreement, financing statement or other
security  instrument  required  by  Mortgagee,  all  in  form  and  substance
satisfactory  to  Mortgagee  and  in a sufficient number of executed (and, where
necessary  or  appropriate,  acknowledged)  counterparts for recording purposes.
Upon  execution of such supplemental mortgage, all additional properties thereby
subjected  to  the  Lien  of  this  Mortgage  shall become part of the Mortgaged
Property for all purposes.

                                   ARTICLE VI
                           ENFORCEMENT OF THE SECURITY

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

          (a)  exercise  all  of  the rights, remedies, powers and privileges of
     Mortgagors with respect to the Mortgaged Property or any part thereof, give
     or  withhold  all  consents  required  therein  which,  with respect to the
     Mortgaged  Property  or  any  part  thereof,  Mortgagors would otherwise be
     entitled  to  give  or  withhold  and  perform  or  attempt  to perform any
     covenants  in  this  Mortgage  which  Mortgagors  are obligated to perform;

<PAGE>

     provided  that  no  payment  or performance by Mortgagee shall constitute a
     waiver  of  any  Event  of Default and Mortgagee shall be subrogated to all
     rights and Liens securing the payment of any debt, claim, tax or assessment
     for  the  payment of which Mortgagee may make an advance or which Mortgagee
     may pay.

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

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

          (d)  if  Mortgagors  have  failed  to  keep  or  perform  any covenant
     whatsoever  contained  in  any Credit Agreement or this Mortgage, Mortgagee
     may,  at  its  option,  perform  or  attempt  to perform such covenant. Any
     payment  made  or  expense  incurred  in  the  performance  or  attempted
     performance  of  any  such  covenant  shall  be  a  part  of  the  Secured
     Indebtedness,  and Mortgagors promise, upon demand, to pay to Mortgagee, at
     the  place  where  the Note is payable, or at such other place as Mortgagee
     may  direct  by  written notice, all sums so advanced or paid by Mortgagee,
     with  interest  at  the rate set forth in Section 4.11 of the Note from the
     date when paid or incurred by Mortgagee. No such payment by Mortgagee shall
     constitute a waiver of any Event of Default.

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

          (f)  Upon  the occurrence of an Event of Default, this Mortgage may be
     foreclosed  as  to  the  Mortgaged  Properties, or any part thereof, in any
     manner permitted by applicable law.

     Mortgagee  may  request  Trustee  to,  and  in such event Trustee is hereby
authorized  and  empowered  and  it  shall  be his or her special duty upon such
request of Mortgagee and to the extent permitted by applicable law, proceed with
foreclosure  and  sell  all or any part of the Mortgaged Property at one or more
sales,  as  an  entirety or in parcels, at such place or places and otherwise in
such manner and upon such notice as may be required by applicable law or, in the
absence  of  any such requirement, as Trustee or Mortgagee may deem appropriate,
and  to  make  conveyance  to the purchaser or purchasers thereof. Any such sale
shall  be made to the highest bidder or bidders for cash, at the courthouse door
of  the county wherein the Mortgaged Property is situated; provided that, if the
Mortgaged  Property  is  situated  in  more  than  one  county, such sale of the
Mortgaged  Property, or part thereof, may be made in any county wherein any part
of the Mortgaged Property is situated. Such sale shall be made at public outcry,

<PAGE>

on the day of any month, during the hours of such day, and after written notices
thereof  have  been publicly posted in such places and for such time periods and
all  Persons  entitled  to  notice  thereof  have  been sent such notice, all as
required  by  applicable law. If the applicable law in force as of the Effective
Date  hereof  should  hereafter be amended to require a different notice of sale
applicable  to  sales  of property of the nature of the Mortgaged Property under
powers  of sale conferred by mortgages or deeds of trust, Trustee may, in his or
her  sole discretion, to the extent permitted by applicable law, give either the
notice of sale required by applicable law in effect on the Effective Date or the
notice of sale prescribed by the amended law; and nothing herein shall be deemed
to  require  Mortgagee  or Trustee to do, and Mortgagee and Trustee shall not be
required  to  do,  any act other than as required by applicable law in effect at
the  time of any such sale. After such sale, Trustee shall make to the purchaser
or purchasers thereunder good and sufficient deeds, assignments or bills of sale
in  the name of Mortgagors, conveying or transferring the Mortgaged Property, or
any  part  thereof,  so  sold  to  the  purchaser  or purchasers containing such
warranties  of title as are customarily given, which warranties shall be binding
upon Mortgagors.

     Sale  of  a  part  of the Mortgaged Property shall not exhaust the power of
sale  granted  hereby, but sales may be made from time to time until the Secured
Indebtedness  is  paid  and performed in full. It shall not be necessary to have
present or to exhibit at any such sale any of the Personal Property. In addition
to the rights and other powers of sale granted under the preceding provisions of
this Section 6.1(f), if default is made in the payment of any installment of the
Obligations,  Mortgagee  may,  at  its option, at once or at any time thereafter
while  any  matured  installment  remains  unpaid,  without declaring the entire
Secured  Indebtedness  to  be  due and payable, orally or in writing, enforce or
direct  Trustee  to enforce (as provided by applicable law) the Liens created by
this  Mortgage  and  sell  the  Mortgaged  Property  subject  to  such  matured
indebtedness and the Liens securing its payment, in the same manner, on the same
terms,  at  the  same  place  and time and after having given notice in the same
manner,  all  as  provided  in  the preceding provisions of this Section 6.1(f).
After such sale, Mortgagee or Trustee (as provided by applicable law) shall make
due  conveyance  to the purchaser or purchasers. Sales made without maturing the
Secured  Indebtedness  may  be made hereunder whenever there is a default in the
payment  of  any  installment of the Secured Indebtedness without exhausting the
power  of sale granted hereby and without affecting in any way the power of sale
granted  under  this  Section  6.1(f),  the  unmatured  balance  of  the Secured
Indebtedness (except as to any proceeds of any sale which Mortgagee may apply as
prepayment  of  the  Secured Indebtedness), or the Liens securing payment of the
Secured  Indebtedness. The sale or sales of less than the whole of the Mortgaged
Property  shall  not  exhaust the power of sale herein granted, and Mortgagee or
Trustee  (as  provided  by  applicable  law)  is  specifically empowered to make
successive  sale  or  sales  under  such  power until the whole of the Mortgaged
Property  shall  be  sold. It is intended by each of the foregoing provisions of
this  Section  6.1(f)  that  Trustee  may,  after  any  request  or direction by
Mortgagee,  sell  not  only  the  Subject  Interests  but  also  all other items
constituting  a part of the Mortgaged Property along with the Subject Interests,
or  any  part thereof, all as a unit and as a part of a single sale, or may sell
any  part  of  the  Mortgaged  Property  separately  from  the  remainder of the
Mortgaged Property. If the proceeds of such sale or sales of less than the whole
of  such  Mortgaged  Property  shall  be  less than the aggregate of the Secured
Indebtedness  and  the  expense of enforcing the trust created by this Mortgage,
the  Liens  of  this  Mortgage  shall  remain in full force and effect as to the
unsold  portion of the Mortgaged Property just as though no sale or sale of less
than  the whole of the Mortgaged Property had occurred, but Mortgagee shall have
the  right, at its sole election, to request Trustee to sell less than the whole
of the Mortgaged Property. In the event any questions should be raised as to the
regularity  or validity of any sale hereunder, Mortgagee or Trustee (as provided
by  applicable law) shall have the right and is hereby authorized to make resale

<PAGE>

of  said property so as to remove any questions or doubt as to the regularity or
validity  of  the  previous  sale,  and  as  many  resales may be made as may be
appropriate.  It  is  agreed  that,  in  any deed or deeds given by Mortgagee or
Trustee (as provided by applicable law), any and all statements of fact or other
recitals  therein  made as to the identity of Mortgagee, or as to the occurrence
or  existence  of  any Event of Default, or as to the request to sell, notice of
sale,  time,  place,  terms,  and manner of sale, and receipt, distribution, and
application  of  the  money  realized  therefrom,  or  as  to the due and proper
appointment  of  a  substitute  trustee,  and,  without  being  limited  by  the
foregoing, as to any other act or thing having been duly done by Mortgagee or by
Trustee  shall  be  taken  by any Governmental Authority as prima facie evidence
that  the  said  statements  or  recitals  are  true and correct and are without
further  question to be so accepted, and Mortgagors do hereby ratify and confirm
any  and  all  acts that Trustee or Mortgagee may lawfully do in the premises by
virtue  hereof.  In  the event of the resignation or death of Trustee, or his or
her  failure, refusal, or inability, for any reason, to make any such sale or to
perform  any  of  the  trusts  herein  declared, or, at the option of Mortgagee,
without  cause,  Mortgagee  may  appoint  at  its sole discretion, in writing, a
substitute  trustee,  who  shall  thereupon  succeed to all the estates, titles,
rights, powers, and trusts herein granted to and vested in Trustee. If Mortgagee
is a national banking association or a corporation, such appointment may be made
on  behalf  of  such  Mortgagee  by any Person who is then the president, or any
vice-president,  or the cashier or secretary, or any other authorized officer or
agent  of  Mortgagee.  In  the  event  of  the  resignation or death of any such
substitute  trustee,  or  his or her failure, refusal, or inability to make such
sale  or  perform  such  trusts,  or, at the option of Mortgagee, without cause,
Mortgagee  may  appoint  successive substitute trustees from time to time in the
same manner. Wherever herein the word "Trustee" is used, the same shall mean the
Person  who is the duly appointed Trustee or substitute trustee hereunder at the
time in question.

          (g)  Mortgagee  may, or Trustee may upon written request of Mortgagee,
     in  lieu  of or in addition to exercising the power of sale provided for in
     Section  6.1(f)  hereof,  proceed by suit or suits, at law or in equity, to
     enforce  the  payment  and  performance  of  the  Secured  Indebtedness  in
     accordance  with  the  terms hereof and of the Credit Agreements evidencing
     it,  to  foreclose the Liens of this Mortgage as against all or any part of
     the  Mortgaged  Property,  and  to  have  all  or any part of the Mortgaged
     Property  sold  under  the  judgment  or  decree  of  a  court of competent
     jurisdiction.

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

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

<PAGE>

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

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

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

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

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

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

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

     6.2 Foreclosure by Judicial Proceedings. Upon the occurrence of an Event of
         ----------------------------------
Default,  Mortgagee  may  proceed, where permitted by law, by a suit or suits in
equity  or  at  law, whether for a foreclosure hereunder, or for the sale of the

<PAGE>

Mortgaged Property, or for the specific performance of any covenant or agreement
herein  contained or in aid of the execution of any power herein granted, or for
the  appointment  of a receiver pending any foreclosure hereunder or the sale of
the Mortgaged Property, or for the enforcement of any other appropriate legal or
equitable remedy.

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

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

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

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

<PAGE>

     6.7  Costs  and  Expenses.  All  reasonable  costs,  expenses  (including
          --------------------
attorneys'  fees)  and  payments incurred or made by Mortgagee in protecting and
enforcing  its  rights  hereunder  shall constitute a demand obligation owing by
Mortgagors  to  the  party  incurring  such  or  making  such costs, expenses or
payments and shall bear interest at a rate per annum equal to the rate set forth
in  Section  4.11  of  the  Note, all of which shall constitute a portion of the
Secured Indebtedness.

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

     6.9  Additional  Waivers.  In  order to enforce this Mortgage, Mortgagee or
          -------------------
Trustee  shall  not  be obligated (a) to foreclose any other mortgage or deed of
trust  covering  Mortgaged  Property located in another State, seek a deficiency
after any such foreclosure or otherwise enforce Mortgagee's rights in any of the
other  Mortgaged  Property;  or  (b)  to  seek  an  injunction  (prohibitive  or
mandatory),  the  appointment  of a receiver, an order modifying any stay in any
federal  or  state  bankruptcy,  reorganization  or other insolvency proceedings
relating  to  any of the Mortgaged Property or any portion thereof, or any other
extraordinary  relief. Mortgagors waive, to the fullest extent permitted by law,
any  defense Mortgagors may have to any liability hereunder based on Mortgagee's
failure  or  refusal  to  prosecute,  or  any  lack  of  diligence  or  delay in
prosecuting,  any  action or proceeding to enforce any other mortgage or deed of
trust.  If  Mortgagee  elects  to  enforce  this  Mortgage  before,  or without,
enforcing its rights with respect to any Mortgaged Property covered by any other
Mortgage,  Mortgagors  waive,  to the fullest extent permitted by law, any right
Mortgagors may have, whether statutory or otherwise, to set off the value of any
other  Mortgaged  Property,  or  any  portion  thereof,  against  the  Secured
Indebtedness.  If  Mortgagee  elects  to enforce its mortgages or deeds of trust
covering  all  or any portion of the Mortgaged Property located in other States,

<PAGE>

or in conjunction with the enforcement of this Mortgage, Mortgagee is authorized
to  purchase  all  or  any  part  of  such other Mortgaged Property at public or
private  sale  or  as  otherwise  provided  by applicable law, and to credit the
purchase  price  against  the  Secured  Indebtedness  in such order or manner as
Mortgagee  determines  in its sole discretion and to preserve Mortgagee's rights
and  Liens  under this Mortgage for any portion of the Secured Indebtedness that
remains  unpaid.  Mortgagors waive to the fullest extent permitted by applicable
law  any  right  to claim or seek any credit against the Secured Indebtedness in
excess  of the actual amount bid or received by Mortgagee in connection with the
foreclosure  of  Mortgagee's  Liens  on any of the Mortgaged Property located in
such other States. Mortgagors further agree that Mortgagee shall not be required
(a)  to  seek  or  obtain  a deficiency judgment in or pursuant to any action or
proceeding  to  foreclose  this  Mortgage  as a condition of later enforcing any
mortgage  or deed of trust covering Mortgaged Property located in another State,
or  (b)  to seek or obtain a deficiency judgment in or pursuant to any action or
proceeding  to foreclose any such other mortgage or deed of trust as a condition
of later enforcing this Mortgage. Notwithstanding the foregoing, if Mortgagee in
good  faith  believes  that  it  may  be  required either to obtain a deficiency
judgment  to  enforce  this  Mortgage after enforcement of a mortgage or deed of
trust covering Mortgaged Property located in another State or to enforce another
mortgage  or  deed  of  trust after enforcement of this Mortgage then Mortgagors
agree  that  Mortgagee  shall  be  entitled to seek and obtain such a deficiency
judgment notwithstanding any contrary or inconsistent provision contained in any
Credit Agreement.

                                   ARTICLE VII
                                  MISCELLANEOUS

     7.1  Advances  by Mortgagee. Each and every covenant herein contained shall
          ----------------------
be performed and kept by Mortgagors solely at Mortgagors' expense. If Mortgagors
shall  fail to perform or keep any of the covenants of whatsoever kind or nature
contained  in  this Mortgage, Mortgagee or any receiver appointed hereunder may,
but  shall not be obligated to, make advances to perform the same on Mortgagors'
behalf, and Mortgagors hereby agree to repay such sums upon demand plus interest
at  a  rate per annum equal to the rate of interest set forth in Section 4.11 of
the  Note.  No such advance shall be deemed to relieve Mortgagors from any Event
of Default hereunder.

     7.2  Defense  of  Claims.  Mortgagors  will  notify  Mortgagee, in writing,
          -------------------
promptly  of  the commencement of any legal proceedings of which Mortgagors have
notice  affecting  or which could adversely effect the Lien hereof or the status
of or title to the Mortgaged Property or any material part thereof and will take
such  action, employing attorneys agreeable to Mortgagee, as may be necessary to
preserve  Mortgagors'  or  Mortgagee's  rights  affected  thereby;  and  should
Mortgagor fail or refuse to take any such action, Mortgagee may take such action
on  behalf  and  in  the  name  of  Mortgagors  and at Mortgagors' sole cost and
expense.  Moreover,  Mortgagee  may  take  such independent action in connection
therewith  as  it may, in its sole discretion, deem proper without any liability
or  duty  to  Mortgagors except to use ordinary care, Mortgagors hereby agreeing
that all sums advanced or all expenses incurred in such actions plus interest at
a  rate per annum equal to the rate of interest set forth in Section 4.11 of the
Note  will,  on  demand,  be  reimbursed  to Mortgagee or any receiver appointed
hereunder.

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

<PAGE>

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

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

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

     7.7  Unenforceable  or  Inapplicable  Provisions.  If any provision of this
          -------------------------------------------
Mortgage  or  in any of the Credit Agreements is invalid or unenforceable in any
jurisdiction,  the  other  provisions  hereof or of any of the Credit Agreements

<PAGE>

shall  remain  in  full force and effect in such jurisdiction, and the remaining
provisions hereof shall be liberally construed in favor of Mortgagee in order to
effectuate  the provisions hereof, and the invalidity of any provision hereof in
any  jurisdiction  shall  not  affect the validity or enforceability of any such
provision  in any other jurisdiction. Any reference herein contained to statutes
or  laws of a state in which no part of the Mortgaged Property is situated shall
be deemed inapplicable to, and not used in, the interpretation hereof.

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

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

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

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

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

     7.13  Special  Filing as Financing Statements. This Mortgage shall likewise
           ---------------------------------------
be  a  security  agreement and a financing statement by virtue of Mortgagors, as
debtors,  granting  to  Mortgagee,  its  successors,  legal  representatives and
assigns,  as  secured  party,  a  security  interest  in  all personal property,
as-extracted  collateral,  fixtures,  accounts,  contract  rights,  general
intangibles,  inventory,  goods, chattel paper, instruments, documents and money
described or referred to in granting clauses (a) through (j) of Article 2 hereof
and  all  proceeds and products from the sale, lease or other disposition of the
Mortgaged  Property  or  any  part  thereof. The addresses shown in Section 7.14
hereof  are the addresses of Mortgagors and Mortgagee and information concerning
the  security interest may be obtained from Mortgagee at its address. Without in
any  manner  limiting  the generality of any of the foregoing provisions hereof:

<PAGE>

(a) some portion of the goods described or to which reference is made herein are
or  are  to become fixtures on the Lands described or to which reference is made
herein;  (b)  the  minerals and the like (including oil and gas) included in the
Mortgaged  Property  and  the  accounts  resulting from the sale thereof will be
financed  at the wellhead(s) or minehead(s) of the well(s) or mine(s) located on
the  Lands described or to which reference is made herein; and (c) this Mortgage
is to be filed of record, among other places, in the real estate records of each
county  or  parish  in  which the Lands, or any part thereof, are situated, as a
financing  statement,  but  the  failure  to do so will not otherwise affect the
validity  or  enforceability of this Mortgage. Mortgagors authorize Mortgagee to
file  such  amendments  to  this  Mortgage,  financing statements and amendments
thereto,  and continuation statements as Mortgagee deems reasonable or necessary
to  perfect  and  maintain the perfection of the Liens granted herein, including
such  Liens  with respect to any additions to the Mortgaged Property as provided
in Article 5.

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

MORTGAGORS-DEBTORS                            MORTGAGEE-SECURED  PARTY

New  Century  Energy  Corp.                   Laurus Master Fund, Ltd.
Attn:  Edward  R.  DeStefano                  c/o M&C Corporate Services Limited
5851  San  Felipe,  Suite  775                PO Box 309 G.T.
Houston,  Texas  77057                        Ugland House, South Church Street,
                                              George Town
Fax:  713-266-4358                            Grand Cayman, Cayman Islands

Century  Resources,  Inc.                     Facsimile:  345-949-8080
Attn:  Edward  R.  DeStefano
5851  San  Felipe,  Suite  775
Houston,  Texas  77057

Fax:  713-266-4358

with  copies  to:                             with  copies  to:

J.  Kevin  Raley                              Scott  J.  Giordano,  Esq.
Cotham, Harwell & Evans                       Loeb  &  Loeb,  LLP
1616 S. Voss, Suite 200                       345  Park  Avenue
Houston, Texas 77057                          New York, New  York 10154

Facsimile:  713-647-7512                      Facsimile  212-407-4990

     7.15 GOVERNING LAW. THIS MORTGAGE, THE NOTE AND THE CREDIT AGREEMENTS SHALL
          ------------
BE  CONSTRUED  IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS
AND THE LAWS OF THE UNITED STATES OF AMERICA.

     7.16 Future Advances: Maximum Secured Amount. This Mortgage covers not only
          --------------------------------------
the proceeds of the Loan, but all advances hereafter made by Mortgagee to or for
the  benefit  of  Mortgagors  (the  "Future  Advances"),  including,  without
limitation,  any  amounts  advanced  by  Mortgagee in satisfying, on Mortgagors'
behalf,  any  of  Mortgagors'  Obligations,  and any advances made in accordance
herewith  by  Mortgagee  to  protect  its  security,  and  any other advances by
Mortgagee.  The  maximum  amount  secured hereby may be advanced and repaid, and
again  advanced  and  repaid  from time to time, in Mortgagee' sole and absolute
discretion,  and this Mortgage shall become enforceable upon recording and shall
have  priority  over  all  other  parties whose rights arose after the recording
hereof,  with  respect  to  all  funds  advanced  by  Mortgagee  to  Mortgagors,
regardless  of  whether  such funds were advanced before or after the arising of
such  other  party's  rights.  Nothing  herein shall be interpreted as requiring
Mortgagee  to  make  any Future Advances hereunder. The maximum principal amount
secured by this Mortgage at any one time shall be $50,000,000.

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

                                  ARTICLE VIII
                            ASSIGNMENT OF PRODUCTION

     8.1  Assignment.  For  the  purpose  of  further  securing  the  Secured
          ---------
Indebtedness  and the performance of Mortgagors' covenants hereunder, Mortgagors
do  hereby  TRANSFER,  ASSIGN,  AND  CONVEY  unto  Mortgagee  any and all of the
interests of Mortgagors in and to the Hydrocarbons that may be produced from, or
attributable  to,  the  Mortgaged  Property  on  and  after  the Effective Date,
together  with  the  proceeds of the sale thereof and attributable thereto. This
assignment  is  made  upon  the  following  terms  and  conditions: (a) pipeline

<PAGE>

companies  and  others  purchasing  the  oil, gas, minerals and other substances
listed  above  produced  and  to  be  produced  from  said  property  are hereby
authorized and directed to pay directly to Mortgagee the interests of Mortgagors
in  and  to  the  proceeds  of  the  sale  of  the  oil, gas, minerals and other
substances  listed  above  produced,  to  be  produced  and attributable to said
property  and  to  continue  such payments until they have been furnished with a
release  hereof  executed  in writing by Mortgagee, and the receipt of Mortgagee
for  monies  so  paid  to it shall be a full and complete release, discharge and
acquittance  to  any  such pipeline company or other purchaser, to the extent of
all  amounts  so paid; (b) Mortgagee is hereby authorized to receive and collect
the  proceeds  of the sale of the oil, gas, minerals and other substances listed
above  assigned  to it hereunder and to apply the funds so received first toward
the  payment  of  the  expenses, if any, incurred in the collection thereof then
toward  the payment of the Secured Indebtedness, any balance remaining after the
full  and  final  payment  of the Secured Indebtedness to be held subject to the
order  of Mortgagors; (c) Mortgagee shall have the right, at its sole option, at
any  time,  and from time to time, to release to, or on the order of, Mortgagors
all  or  any  portion  of the funds assigned to Mortgagee hereunder, and no such
releases  shall  affect  or impair the Lien of this Mortgage or the validity and
effect  of the assignment contained in this Article 8; (d) Mortgagee shall never
be  under  any  obligation to enforce the collection of the funds assigned to it
hereunder,  nor shall it ever be liable for failure to exercise diligence in the
collection  of such funds, but it shall only be accountable for the sums that it
shall  actually receive; (e) Mortgagors covenant to cause all pipeline companies
or  other purchasers of the oil, gas, minerals and other substances listed above
produced from and attributable to said property to pay promptly to Mortgagee, at
the  office of Mortgagee at the address of Mortgagee stated above, the interests
of  Mortgagors in and to the proceeds of the sale thereof; and (f) upon the full
and  final  payment  of  the  Secured Indebtedness, Mortgagee, at the request of
Mortgagors,  at  Mortgagors' sole cost and expense, shall execute and deliver to
Mortgagors  a  reassignment  hereof,  without  recourse,  representations  or
warranties.  Notwithstanding  the  foregoing  provisions of this Section 8.1, so
long as no Event of Default has occurred and shall be continuing, Mortgagors may
continue  to receive from the purchasers of production all such Hydrocarbons and
proceeds  of the sale thereof, subject, however, to the Liens created under this
Mortgage.  If  an Event of Default has occurred and is continuing, Mortgagee may
exercise  all  rights  and  remedies  granted  hereunder,  including,  without
limitation,  the  right to obtain possession of all Hydrocarbons and proceeds of
the  sale  thereof  then  held  by  Mortgagors  or  to receive directly from the
purchasers all other Hydrocarbons and proceeds of the sale thereof.

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

                           [Signature Page to Follow]

<PAGE>

     IN WITNESS WHEREOF, Mortgagors, acting by and through their duly authorized
officers  have  executed  this  Mortgage  on the date of its acknowledgment.

                                              NEW CENTURY ENERGY CORP.

                                              /s/ Edward R. DeStefano
                                              ----------------------------------
                                              Edward  R.  DeStefano
                                              President  &  CEO

                                              CENTURY  RESOURCES,  INC.

                                              /s/ Edward R. DeStefano
                                              ----------------------------------
                                              Edward  R.  DeStefano
                                              President  &  CEO

The  address  of  Mortgagors  are:

New  Century  Energy  Corp.
5851  San  Felipe,  Suite  775
Houston,  Texas  77057

Century  Resources,  Inc.
5851  San  Felipe,  Suite  775
Houston,  Texas  77057

                                             This  Mortgage  was  prepared  by,
                                             and recorded counterparts should be
                                             returned to:

                                             J.  Kevin  Raley
                                             Cotham,  Harwell  &  Evans,  P.C.
                                             1616  S.  Voss,  Suite  200
                                             Houston,  Texas  77057

<PAGE>

THE  STATE  OF  TEXAS     Sec.
                          Sec.
COUNTY  OF  HARRIS        Sec.

     BEFORE  ME,  the  undersigned  authority,  on  this day personally appeared
Edward  R.  DeStefano, President and CEO of NEW CENTURY ENERGY CORP., a Colorado
corporation,  and  known  to me to be the person whose name is subscribed to the
foregoing  instrument,  and acknowledged to me that he executed the same for the
purposes  and  considerations  therein  expressed,  as  the act and deed of such
corporation  and  in  the  capacity  therein  stated.

     GIVEN UNDER MY HAND AND SEAL OF OFFICE this  19    day of September, 2005.
                                                --------

                                               /s/ Kimberly Newman
                                               ---------------------------------
                                               Notary  Public,  State  of  Texas

THE  STATE  OF  TEXAS     Sec.
                          Sec.
COUNTY  OF  HARRIS        Sec.

     BEFORE  ME,  the  undersigned  authority,  on  this day personally appeared
Edward  R.  DeStefano,  President and CEO of CENTURY RESOURCES, INC., a Delaware
corporation,  and  known  to me to be the person whose name is subscribed to the
foregoing  instrument,  and acknowledged to me that he executed the same for the
purposes  and  considerations  therein  expressed,  as  the act and deed of such
corporation  and  in  the  capacity  therein  stated.

     GIVEN UNDER MY HAND AND SEAL OF OFFICE this  19     day of September, 2005.
                                                --------

                                               /s/ Kimberly Newman
                                               ---------------------------------
                                               Notary  Public,  State  of  Texas

<PAGE>

                                   EXHIBIT A

                             McMullen County, Texas

1.   Century  Resources  Inc.'s  100%  working  interest  in  the  Oil,  Gas and
     Mineral Lease dated September 6, 1940, between Sally Burmeister, as Lessor,
     and  Atlantic Refining Company, as Lessee, as evidenced of record in Volume
     27,  Page  632,  of  the  Deed  Records of McMullen County, Texas, save and
     except  gas  rights  as  to the Edwards Formation within the San Miguel Gas
     Unit  described  in Declaration of Unit dated January 30, 1961, recorded in
     Volume 80, Page 143, of the Deed Records of McMullen County, Texas.

2.   Century  Resources  Inc.'s  100%  working  interest  in  the  Oil,  Gas and
     Mineral  Lease  dated  June  16,  1951, between Clifton Wheeler, et ux., as
     Lessor,  and V.T. Donnelly, as Lessee, as evidenced of record in Volume 48,
     Page 480, of the Deed Records of McMullen County, Texas, to the extent that
     such  lease  covers  40  acres  more specifically described in that certain
     Assignment  and  Bill  of  Sale  dated  September  12,  2001, from Lakewood
     Operating, Ltd., et al. to Century Resources, Inc., recorded at Volume 411,
     Page 237, of the Deed Records of McMullen County, Texas.

New  Century  Energy  Corp.'s  5.464%  NRI  in  production  (working  interest,
overriding  royalty and term royalty) from the Lindholm-Hanson Gas Unit acquired
via  that  certain  Assignment of Overriding Royalty Interest recorded at Volume
437,  Page  56,  of  the  Deed  Records  of McMullen County, Texas, that certain
Assignment  of  Oil and Gas Leases and Bill of Sale recorded at Volume 437, Page
65,  of  the  Deed Records of McMullen County, Texas, that certain Assignment of
Oil and Gas Leases and Bill of Sale recorded at Volume 437, Page 80, of the Deed
Records  of McMullen County, Texas, that certain Assignment of Oil and Gas Lease
and  Bill  of  Sale  recorded  at  Volume  437,  Page 94, of the Deed Records of
McMullen  County,  Texas,  that  certain  Term  Assignment  of  Royalty Interest
recorded at Volume 437, Page 107, of the Deed Records of McMullen County, Texas,
and  that  certain  Term  Assignment of Royalty Interest recorded at Volume 437,
Page  112, of the Deed Records of McMullen County, Texas, and as such NRI arises
from  the  following  leases:

3.   Oil,  Gas  and  Mineral  Lease  dated  February  3,  2003, between Margaret
     Glasscock,  as  Lessor,  and  US  Enercorp, LLC, as Lessee, as evidenced of
     record  in  Volume  421,  Pages  210-213,  of  the Deed Records of McMullen
     County,  Texas,  to  the  extent  that  such  lease covers 290 acres in the
     Lindholm-Hanson  Gas  Unit being more specifically described as: the E/2 of
     the  E/2  of the BS&F Survey 45, A-22 ("BS&F 45"), save and except the NE/4
     of  the NE/4; the SW/4 of the SW/4 of the Alfred Spaulding Survey 48, A-915
     ("Spaulding  48"); the SW/4 of the NW/4 of Spaulding 48; the W/2 of the W/2
     of  the  NW/4  of  the  NW/4  of  Spaulding  48; and the W/2 of the NE/4 of
     Spaulding 48.

4.   Oil,  Gas  and  Mineral  Lease  dated  February  3,  2003,  between Colette
     Glasscock  Blakey, as Lessor, and US Enercorp, LLC, as Lessee, as evidenced
     of  record  in  Volume  421, Pages 214-217, of the Deed Records of McMullen
     County,  Texas,  to  the  extent  that  such  lease covers 290 acres in the
     Lindholm-Hanson  Gas  Unit being more specifically described as: the E/2 of
     the  E/2  of the BS&F Survey 45, A-22 ("BS&F 45"), save and except the NE/4
     of  the NE/4; the SW/4 of the SW/4 of the Alfred Spaulding Survey 48, A-915
     ("Spaulding  48"); the SW/4 of the NW/4 of Spaulding 48; the W/2 of the W/2
     of  the  NW/4  of  the  NW/4  of  Spaulding  48; and the W/2 of the NE/4 of
     Spaulding 48.

<PAGE>

5.   Oil,  Gas  and  Mineral  Lease  dated  February 14, 2003, between Gerald R.
     Gibbs  and wife Dolores Gibbs, as Lessors, and US Enercorp, LLC, as Lessee,
     as evidenced of record in Volume 421, Pages 223-226, of the Deed Records of
     McMullen  County,  Texas, to the extent that such lease covers 290 acres in
     the  Lindholm-Hanson Gas Unit being more specifically described as: the E/2
     of  the  E/2  of  the BS&F Survey 45, A-22 ("BS&F 45"), save and except the
     NE/4  of  the NE/4; the SW/4 of the SW/4 of the Alfred Spaulding Survey 48,
     A-915  ("Spaulding  48");  the SW/4 of the NW/4 of Spaulding 48; the W/2 of
     the W/2 of the NW/4 of the NW/4 of Spaulding 48; and the W/2 of the NE/4 of
     Spaulding 48.

6.   Oil  and  Gas  Lease  dated  April  1, 2003, between Neil E. Hanson, et ux,
     as  Lessors, and US Enercorp, LLC, as Lessee, as evidenced by Memorandum of
     Oil  and  Gas  Lease  recorded  in  Volume  425, Pages 465-468, of the Deed
     Records  of  McMullen County, Texas, covering the following described lands
     in  McMullen  County, Texas, to the extent that such lease covers 290 acres
     in  the  Lindholm-Hanson Gas Unit being more specifically described as: the
     E/2 of the E/2 of the BS&F Survey 45, A-22 ("BS&F 45"), save and except the
     NE/4  of  the NE/4; the SW/4 of the SW/4 of the Alfred Spaulding Survey 48,
     A-915  ("Spaulding  48");  the SW/4 of the NW/4 of Spaulding 48; the W/2 of
     the W/2 of the NW/4 of the NW/4 of Spaulding 48; and the W/2 of the NE/4 of
     Spaulding 48.

7.   Oil  and  Gas  Lease  dated  April  29, 2003, between Clifton Wheeler, Jr.,
     et  al,  as  Lessors,  and  US  Enercorp,  LLC,  as Lessee, as evidenced by
     Memorandum  of  Oil and Gas Lease recorded in Volume 425, Pages 368-374, of
     the  Deed  Records  of  McMullen  County, Texas, covering 80 acres, more or
     less,  in the Lindholm-Hanson Gas Unit being more specifically described as
     the W/2 of the NE/4 of Spaulding 48.

8.   Oil,  Gas  and  Mineral  Lease  dated  effective  October 23, 2002, between
     Conner  Scott,  as  Lessor and HHC Exploration, Inc. as Lessee, recorded in
     Volume  421,  Pages 278-280, of the Deed Records of McMullen County, Texas,
     covering 40 acres, more or less, in the Lindholm-Hanson Gas Unit being more
     specifically described as the NE/4 of the NE/4 of BS&F 45.

9.   Oil,  Gas  and  Mineral  Lease  dated  effective  October 23, 2002, between
     Hazel Andrews as Lessor, and HHC Exploration, Inc., as Leassee, recorded in
     Volume  421,  Pages  281-283,  of  Deed  Records of McMullen County, Texas,
     covering 40 acres, more or less, in the Lindholm-Hanson Gas Unit being more
     specifically described as the NE/4 of the NE/4 of BS&F 45.

10.  Oil,  Gas  and  Mineral  Lease  dated  effective  February  3, 2003 between
     Ben  E.  Jackson, as Lessor, and HHC Exploration, Inc., as Lessee, recorded
     in  Volume  421,  Pages  284-286,  of  the Deed Records of McMullen County,
     Texas,  covering  40  acres,  more or less, in the Lindholm-Hanson Gas Unit
     being more specifically described as the NE/4 of the NE/4 of BS&F 45.

<PAGE>

11.  Oil,  Gas  and  Mineral  Lease  dated  effective  February 3, 2003, between
     Joe  S.  Jackson, as Lessor, and HHC Exploration, Inc., as Lessee, recorded
     in  Volume  421,  Pages  471-473,  of  the Deed Records of McMullen County,
     Texas,  ,  covering 40 acres, more or less, in the Lindholm-Hanson Gas Unit
     being more specifically described as the NE/4 of the NE/4 of BS&F 45.

12.  Oil,  Gas  and  Mineral  Lease  dated  effective  March  12,  2003, between
     Linda Beth Raney, as Lessor, and HHC Exploration, Inc., as Lessee, recorded
     in  Volume  422,  pages 257-259, of the Deed of records of McMullen County,
     Texas,  ,  covering 40 acres, more or less, in the Lindholm-Hanson Gas Unit
     being more specifically described as the NE/4 of the NE/4 of BS&F 45.

13.  Gas  and  Mineral  Lease  dated  June  8,  2004,  from Peggy C. Pasquini et
     al., as Lessors, to Enercorp, LLC, as Lessee, recorded in Volume 432, Pages
     314,  Deed Records, McMullen County, Texas, , covering 40.43 acres, more or
     less,  in the Lindholm-Hanson Gas Unit being more specifically described as
     the NE/4 of the NE/4 of BS&F 45.

14.  Oil,  Gas  and  Mineral  Lease  dated  October  29,  2004,  from  Lee Davis
     Spencer,  as  Lessor, to U.S. Enercorp, Ltd., as Lessee, recorded in Volume
     433,  Pages 384, Deed Records, McMullen County, Texas, , covering 40 acres,
     more  or  less,  in  the  Lindholm-Hanson  Gas Unit being more specifically
     described as the NE/4 of the NE/4 of BS&F 45.

15.  Oil,  Gas  and  Mineral  Lease  dated  May  17,  2004,  from  George Warner
     Phillips,  Jr.,  as  Lessor, to U.S. Enercorp, LLC., as Lessee, recorded in
     Volume 430, Pages 239, Deed Records, McMullen County, Texas, covering 40.43
     acres,  more  or  less,  in  the  Lindholm-Hanson  Gas  Unit  being  more
     specifically described as the NE/4 of the NE/4 of BS&F 45.

16.  Oil  and  Mineral  Lease  dated  effective  March  6, 2003, between Charles
     Steven  Lindholm,  et  al,  as Lessors, and US Enercorp, LLC, as Lessee, as
     evidenced  by Memorandum of Oil and Gas Lease recorded in Volume 421, Pages
     427-429, of the Deed Records of McMullen County, Texas, covering 350 acres,
     more  or  less,  in  the  Lindholm-Hanson  Gas Unit being more specifically
     described  as: the W/2 of the E/2 of Spaulding 48, save and except the SW/4
     of  the  SE/4  of the same; the E/2 of the W/2 of Spaulding 48; the NW/4 of
     the  SW/4 of Spaulding 48; the E/2 of the NW/4 of the NW/4 of Spaulding 48;
     and the E/2 of the W/2 of NW/4 of the NW/4 of Spaulding 48.

17.  Oil  and  Gas  Lease  dated  effective  April  14,  2003, between Alfred B.
     Rhode  et  al, as Lessors, and US Enercorp, LLC, as Lessee, as evidenced by
     Memorandum  of  Oil and Gas Lease recorded in Volume 422, Pages 465-471, of
     the  Deed of Records of McMullen County, Texas, covering 110 acres, more of
     less, in the Lindholm-Hanson Gas Unit being more specifically described as:
     the  E/2  of  the  NW/4 of Spaulding 48; the E/2 of the NW/4 of the NW/4 of
     Spaulding  48;  and the E/2 of the W/2 of the NW/4 of the NW/4 of Spaulding
     48.

18.  Oil  and  Gas  Lease  dated  effective  October 15, 2003, between Reeves L.
     Smith,  et ux, as Lessors, and US Enercorp, LLC, as Lessee, as evidenced by
     Memorandum  of  Oil and Gas Lease recorded in Volume 426, Pages 164-165, of
     the  Deed  Records  of  McMullen  County, Texas, covering 40 acres, more or
     less,  in the Lindholm-Hanson Gas Unit being more specifically described as
     the NW/4 of the SW/4 of Spaulding 48.

<PAGE>

19.  Oil  and  Gas  Lease  dated  effective  November  20,  2003, between Pat R.
     Rutherford,  et  al,  as  Lessors,  and  US  Enercorp,  LLC,  as Lessee, as
     evidenced  by Memorandum of Oil and Gas Lease recorded in Volume 426, Pages
     330-332,  of  the  Deed  of  Records of McMullen County, Texas, covering 40
     acres,  more  or  less,  in  the  Lindholm-Hanson  Gas  Unit  being  more
     specifically described as the NW/4 of the SW/4 of Spaulding 48.

New  Century Energy Corp.'s 3% x 50% overriding royalty and 50% working interest
(burdened by the aforementioned royalty) in the following lease:

20.  Oil  and  Gas  Mineral  Lease  dated  effective  March  24,  2003,  between
     Charles  Steven Lindholm, et al, as Lessors, and Neil E. Hanson, as Lessee,
     as  evidenced  by  Memorandum  of Oil and Gas Lease recorded in Volume 422,
     Pages  210-212,  of the Deed of Records of McMullen County, Texas, covering
     120  acres,  more or less, in and adjacent to the Lindholm-Hanson Gas Unit,
     being  more specifically described as the SE/4 Spaulding 48 save and except
     the NW/4 of same.

and  New  Century  Energy  Corp.'s:

3.0% working interest, representing a net revenue interest of 0.022500, acquired
by  New  Century  Energy Corp. via that certain Assignment of Oil and Gas Leases
and  Bill  of Sale from Pat Baker d/b/a Baker Exploration Company to New Century
Energy  Corp.  dated  September  12,  2005;

2.25%  working  interest,  representing  a  net  revenue  interest  of 0.016875,
acquired  by New Century Energy Corp. via that certain Assignment of Oil and Gas
Leases and Bill of Sale from The Sebastian Revocable Trust to New Century Energy
Corp.  dated  September  14,  2005;  and

2.0%  working  interest,  burdened by a 0.25% overriding royalty, representing a
net  revenue  interest  of  0.012500,  and  that  0.25%  overriding  royalty,
representing  a  net  revenue interest of 0.002500, both acquired by New Century
Energy  Corp. via that certain Assignment of Oil and Gas Leases and Bill of Sale
and  Assignment  of  Overriding Royalty from George R. Smith Revocable Trust and
George  Smith  Family  Limited  Partnership d/b/a GSTX Limited Partnership dated
September  14,  2005;

all  such  interests  being  in  the  following  leases:

1.   Oil,  Gas  and  Mineral  Lease  dated  February  3,  2003, between Margaret
     Glasscock,  as  Lessor,  and  US  Enercorp, LLC, as Lessee, as evidenced of
     record  in  Volume  421,  Pages  210-213,  of  the Deed Records of McMullen
     County,  Texas,  covering the following described lands in McMullen County,
     Texas:

     470  acres,  more  or  less,  being  170  acres out of the Alfred Spaulding
     Survey  48,  A-915,  and 300 acres being out of the BS & F Survey, A-22, as
     more particularly described in the lease.

<PAGE>

2.   Oil,  Gas  and  Mineral  Lease  dated  February  3,  2003,  between Colette
     Glasscock  Blakey, as Lessor, and US Enercorp, LLC, as Lessee, as evidenced
     of  record  in  Volume  421, Pages 214-217, of the Deed Records of McMullen
     County,  Texas,  covering the following described lands in McMullen County,
     Texas:

     470  acres,  more  or  less,  being  170  acres out of the Alfred Spaulding
     Survey  48,  A-915,  and 300 acres being out of the BS & F Survey, A-22, as
     more particularly described in the lease.

3.   Oil,  Gas  and  Mineral  Lease  dated  February 14, 2003, between Gerald R.
     Gibbs and wife, Dolores Gibbs, as Lessors, and US Enercorp, LLC, as Lessee,
     as evidenced of record in Volume 421, Pages 223-226, of the Deed Records of
     McMullen  County, Texas, covering the following described lands in McMullen
     County, Texas:

     470  acres,  more  or  less,  being  170  acres out of the Alfred Spaulding
     Survey  48,  A-915,  and 300 acres being out of the BS & F Survey, A-22, as
     more particularly described in the lease.

4.   Oil  and  Gas  Lease  dated  April  1, 2003, between Neil E. Hanson, et ux,
     as  Lessors, and US Enercorp, LLC, as Lessee, as evidenced by Memorandum of
     Oil  and  Gas  Lease  recorded  in  Volume  425, Pages 465-468, of the Deed
     Records  of  McMullen County, Texas, covering the following described lands
     in McMullen County, Texas:

     470  acres,  more  or  less,  being  170  acres out of the Alfred Spaulding
     Survey  48,  A-915,  and 300 acres being out of the BS & F Survey, A-22, as
     more particularly described in the lease.

5.   Oil  and  Gas  Lease  dated  April  29, 2003, between Clifton Wheeler, Jr.,
     et  al.,  as  Lessors,  and  US  Enercorp,  LLC, as Lessee, as evidenced by
     Memorandum  of  Oil and Gas Lease recorded in Volume 425, Pages 368-374, of
     the  Deed  Records  of  McMullen  County, Texas, covering 80 acres, more or
     less,  as  the  W/2  of  the NE/4 of the Alfred Spaulding Survey 48, A-915,
     being more particularly described in the lease.

6.   Oil  and  Mineral  Lease  dated  effective  March  6, 2003, between Charles
     Steven  Lindholm,  et  al., as Lessors, and US Enercorp, LLC, as Lessee, as
     evidenced  by Memorandum of Oil and Gas Lease recorded in Volume 421, Pages
     427-429, of the Deed Records of McMullen County, Texas, covering 430 acres,
     more  or  less,  out  of  the  Alfred  Spaulding  No. 48, A-915, being more
     particularly described in the lease.

7.   Oil  and  Gas  Lease  dated  effective  April  14,  2003, between Alfred B.
     Rhode  et al., as Lessors, and US Enercorp, LLC, as Lessee, as evidenced by
     Memorandum  of  Oil and Gas Lease recorded in Volume 422, Pages 465-471, of
     the  Deed of Records of McMullen County, Texas, covering 110 acres, more of
     less,  out  of  the Alfred Spaulding No. 48, A-915, being more particularly
     described in the lease.

8.   Oil  and  Gas  Lease  dated  effective  October 15, 2003, between Reeves L.
     Smith,  et ux, as Lessors, and US Enercorp, LLC, as Lessee, as evidenced by
     Memorandum  of  Oil and Gas Lease recorded in Volume 426, Pages 164-165, of
     the  Deed  Records  of  McMullen  County, Texas, covering 40 acres, more or
     less,  being  more  specifically  described  as the NW/4 of the SW/4 of the
     Alfred Spaulding No. 48, A-915.

<PAGE>

9.   Oil  and  Gas  Lease  dated  effective  November  20,  2003, between Pat R.
     Rutherford,  et  al.,  as  Lessors,  and  US  Enercorp,  LLC, as Lessee, as
     evidenced  by Memorandum of Oil and Gas Lease recorded in Volume 426, Pages
     330-332,  of  the  Deed  of  Records of McMullen County, Texas, covering 40
     acres,  more  or less, being more specifically described as the NW/4 of the
     SW/4 of the Alfred Spaulding No. 48, A-915.

10.  Oil,  Gas  and  Mineral  Lease  dated  effective  October 23, 2002, between
     Conner  Scott,  as  Lessor and HHC Exploration, Inc. as Lessee, recorded in
     Volume  421,  Pages 278-280, of the Deed Records of McMullen County, Texas,
     covering  40  acres, more or less, being more specifically described as the
     NE/4 of the NE/4 of BS&F Survey, Section 45, A-22.

11.  Oil,  Gas  and  Mineral  Lease  dated  effective  October 23, 2002, between
     Hazel Andrews, as Lessor, and HHC Exploration, Inc., as Lessee, recorded in
     Volume  421,  Pages  281-283,  of  Deed  Records of McMullen County, Texas,
     covering  40  acres, more or less, being more specifically described as the
     NE/4 of the NE/4 of BS&F Survey, Section 45, A-22.

12.  Oil,  Gas  and  Mineral  Lease  dated  effective  February  3, 2003 between
     Ben  E.  Jackson, as Lessor, and HHC Exploration, Inc., as Lessee, recorded
     in  Volume  421,  Pages  284-286,  of  the Deed Records of McMullen County,
     Texas,  covering  40 acres, more or less, being more specifically described
     as the NE/4 of the NE/4 of BS&F Survey, Section 45, A-22.

13.  Oil,  Gas  and  Mineral  Lease  dated  effective  February 3, 2003, between
     Joe  S.  Jackson, as Lessor, and HHC Exploration, Inc., as Lessee, recorded
     in  Volume  421,  Pages  471-473,  of  the Deed Records of McMullen County,
     Texas,  covering  40 acres, more or less, being more specifically described
     as the NE/4 of the NE/4 of BS&F Survey, Section 45, A-22.

14.  Oil,  Gas  and  Mineral  Lease  dated  effective  March  12,  2003, between
     Linda Beth Raney, as Lessor, and HHC Exploration, Inc., as Lessee, recorded
     in  Volume  422,  pages  257-259,  of  the Deed Records of McMullen County,
     Texas,  covering  40 acres, more or less, being more specifically described
     as the NE/4 of the NE/4 of BS&F Survey, Section 45, A-22.

15.  Oil,  Gas  and  Mineral  Lease  dated  May  17,  2004,  from  George Warner
     Phillips,  Jr.,  as  Lessor,  to  US  Enercorp, LLC, as Lessee, recorded in
     Volume  430,  Page  239,  of  the  Deed  Records of McMullen County, Texas,
     covering  40.43  acres,  more or less, being more specifically described as
     the NE/4 of the NE/4 of BS&F Survey, Section 45, A-22.

16.  Oil,  Gas  and  Mineral  Lease  dated June 8, 2004, from Peggy C. Pasquini,
     et  al.,  as  Lessors, to Enercorp, LLC, as Lessee, recorded in Volume 432,
     Page  314,  of  the  Deed Records of McMullen County, Texas, covering 40.43
     acres,  more  or less, being more specifically described as the NE/4 of the
     NE/4 of BS&F Survey, Section 45, A-22.

17.  Oil,  Gas  and  Mineral  Lease  dated  October  29,  2004,  from  Lee Davis
     Spencer,  as  Lessor,  to  US Enercorp, Ltd., as Lessee, recorded in Volume
     433,  Page  384, of the Deed Records of McMullen County, Texas, covering 40
     acres,  more  or less, being more specifically described as the NE/4 of the
     NE/4 of BS&F Survey, Section 45, A-22.

<PAGE>Exhibit 10.8

                  MORTGAGE, DEED OF TRUST, SECURITY AGREEMENT,
                FINANCING STATEMENT AND ASSIGNMENT OF PRODUCTION

     THIS  MORTGAGE,  DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT AND
ASSIGNMENT  OF  PRODUCTION (this "Mortgage") is from New Century Energy Corp., a
Colorado  corporation,  and  Century  Resources,  Inc.,  a Delaware corporation,
together  as  Mortgagors  (individually  and  together, "Mortgagors"), to Eugene
Grin, 825 Third Avenue, New York, New York 10022, as Trustee ("Trustee") for the
benefit  of  LAURUS  MASTER  FUND, LTD., a Cayman Islands company ("Mortgagee"),
dated  as  of  September  19,  2005  between  Mortgagors  and  Mortgagee.

                                    RECITALS

     WHEREAS,  pursuant  to  the  terms of a Securities Purchase Agreement dated
September  19,  2005  between Mortgagors and Mortgagee as amended, modified, and
supplemented  from  time  to  time (the "Securities Purchase Agreement") and the
Related  Agreements  defined  therein,  Mortgagors  are  required to execute and
deliver  this  Mortgage  pursuant  to  which,  among other things, the Mortgaged
Property  (defined  below) is granted and assigned by Mortgagors to Mortgagee to
further  secure  the  Secured  Indebtedness  (defined  below).
NOW,  THEREFORE,  in  consideration  of  the  sum  of  $10.00 and other good and
valuable  consideration,  in hand paid by Mortgagee, the receipt and adequacy of
which  are  hereby  acknowledged  and confessed by Mortgagors, Mortgagors hereby
agree  as  follows:
                                    ARTICLE I
                                   DEFINITIONS

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

     "Accounts  and Contract Rights" shall mean all accounts (including accounts
in  the  form of joint interest billings under applicable operating agreements),
contract rights and general intangibles of Mortgagors now or hereafter existing,
or hereafter acquired by, or on behalf of, Mortgagors, or Mortgagors' successors
in  interest,  relating  to  or  arising  from  the  ownership,  operation  and
development  of  the  Mortgaged  Property  and  to  the  production, processing,
treating,  sale,  purchase,  exchange or transportation of Hydrocarbons (defined
below) produced or to be produced from or attributable to the Mortgaged Property
or any units or pooled interest units in which all or a portion of the Mortgaged
Property  forms  a  part,  together  with  all accounts and proceeds accruing to
Mortgagors  attributable to the sale of Hydrocarbons produced from the Mortgaged
Property  or any units or pooled interest units in which all or a portion of the
Mortgaged  Property  forms  a  part.

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

<PAGE>

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

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

     "Effective Date" shall mean September 19, 2005.

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

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

     "Gas  Balancing  Agreement"  means  any  agreement  or  arrangement whereby
Mortgagors,  or  any  other  party  having an interest in any Hydrocarbons to be
produced  from  mineral  interests  in  which Mortgagors own an interest, have a
right  or  an  obligation  to  take more or less than its proportionate share of
production therefrom.

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

     "June  2005  Credit  Agreements"  shall  mean, collectively, the Securities
Purchase  Agreement  dated  as of June 30, 2005 between Mortgagors and Mortgagee
(as  amended,  modified  and  supplemented  from  time  to time) and the Related
Agreements  as  defined therein, and "June 2005 Credit Agreement" shall mean any
one or more of the foregoing.

     "June  2005  Note"  means  the Secured Convertible Term Note dated June 30,
2005  made  by  Mortgagors  in  favor  of  Mortgagee,  as  amended, modified and
supplemented from time to time.

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

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

<PAGE>

     "Loans"  shall  mean collectively, all amounts advanced by the Mortgagee to
Mortgagors under the Note and the Credit Agreements.

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

     "Mortgaged  Property"  shall  have  the meaning stated in Article 2 of this
Mortgage.

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

     "Note" shall have the meaning set forth in the Credit Agreements.

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

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

     "Operation Equipment" shall mean all Personal Property and fixtures affixed
or  situated  upon all or any part of the Mortgaged Property, including, without
limitation,  all surface or subsurface machinery, equipment, facilities or other
property  of  whatsoever  kind  or nature now or hereafter located on any of the
Lands  which are useful for the production, treatment, storage or transportation
of  oil  or  gas,  including,  but  not by way of limitation, all oil wells, gas
wells,  water  wells,  injection  wells, casing, tubing, rods, pumping units and
engines,  Christmas trees, derricks, separators, gun barrels, flow lines, tanks,
gas  systems  (for  gathering,  treating  and  compression),  water systems (for
treating,  disposal  and  injection),  power plants, poles, lines, transformers,
starters  and  controllers,  machine  shops,  tools, storage yards and equipment
stored  therein,  buildings  and  camps,  telegraph,  telephone  and  other
communication systems, roads, loading racks and shipping facilities.

<PAGE>

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

          (a) Liens securing the obligations;

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

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

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

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

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

          (g)  Liens,  charges  and  encumbrances upon Mortgagors' assets, other
     than  Proved  Mineral Interests, which in the aggregate do not have a value
     in excess of $50,000.

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

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

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

<PAGE>

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

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

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

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

     "Secured  Indebtedness"  shall have the meaning stated in Article 3 of this
Mortgage.

     "Subject  Interests"  shall  have  the  meaning stated in Article 2 of this
Mortgage.

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

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

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

                                   ARTICLE II
                       GRANTING CLAUSE: MORTGAGED PROPERTY

     Mortgagors,  for  and  in consideration of the sum of $10.00 and other good
and  valuable consideration, in hand paid by Mortgagee, the receipt and adequacy
of  which  are  hereby  acknowledged and confessed by Mortgagors, and for and in
consideration of the debt and purposes hereinafter set forth, to secure the full
and  complete  payment and performance of the Secured Indebtedness and to secure
the  performance  of  the covenants, obligations, agreements and undertakings of
Mortgagors hereinafter described, have GRANTED, BARGAINED, WARRANTED, MORTGAGED,
ASSIGNED,  TRANSFERRED  and  CONVEYED,  and by these presents do GRANT, BARGAIN,
WARRANT,  MORTGAGE,  ASSIGN,  TRANSFER  and  CONVEY  unto  Trustee and Trustee's
substitutes  or successors, and his and their assigns, for the uses and purposes
herein  set  forth,  with  warranties  and covenants of title only to the extent
provided  herein  and  in the Credit Agreements, all of Mortgagors' right, title
and interest, whether now owned or hereafter acquired, in all of the hereinafter
described  properties,  rights  and  interests; and, insofar as such properties,
rights  and  interests  consist  of  equipment,  general  intangibles, accounts,

<PAGE>

contract rights, inventory, goods, chattel paper, instruments, documents, money,
fixtures,  as  extracted  collateral, proceeds and products of collateral or any
other  Personal  Property  of  a  kind or character defined in or subject to the
applicable  provisions  of  the  Code,  Mortgagors  hereby  grant to Mortgagee a
security interest therein, whether now owned or hereafter acquired, namely:

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

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

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

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

          (e) the Accounts and Contract Rights;

          (f) the Operating Equipment;

          (g) the Well Data;

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

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

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

<PAGE>

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

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

     TO  HAVE  AND  TO  HOLD  the  Mortgaged  Property  unto  Mortgagee  and its
successors,  legal  representatives and assigns, forever, subject to Section 7.3
hereof,  to  secure,  in  each such instance, the payment and performance of the
Secured Indebtedness and the Obligations.

                                   ARTICLE III
                              SECURED INDEBTEDNESS

     This Mortgage is given to secure the Loans and all of the Obligations under
and  as  described in the Credit Agreements and the June 2005 Credit Agreements,
including,  without  limitation:

          (a) interest on all credit outstanding under the Credit Agreements and
     the  June  2005  Credit Agreements, as applicable, at the rates provided in
     the Credit Agreements;

          (b)  the  Obligations, including, without limitation, the indebtedness
     evidenced by the Note and the June 2005 Note;

          (c)  payment  and  performance  of  any  and  all  present  and future
     obligations  of  Mortgagors according to the terms of any present or future
     hedge  transaction,  including,  without  limitation, any present or future
     swap  agreements,  cap,  floor,  collar,  exchange  transaction,  forward
     agreement  or  other exchange or protection agreements relating to any such
     transaction  now  existing or hereafter entered into between Mortgagors and
     Mortgagee;

          (d)  any  sums advanced as expenses or costs incurred by, or on behalf
     of,  Mortgagee  which  are  made  or incurred pursuant to the terms of this
     Mortgage  or  any  Credit Agreement pr any June 2005 Credit Agreement, plus
     interest  thereon  at  the rate set forth in Section 1.1(a) of the Note and
     Section  1.1(a)  of  the  June  2005  Note, as applicable, from the date of
     advance or expenditure until reimbursed; and

          (e)  all  other  and  additional debts, obligations and liabilities of
     every kind and character of Mortgagors now existing or hereafter arising in
     connection  with  any  of  the  Credit  Agreements and the June 2005 Credit
     Agreements  (all  of  the  obligations and indebtedness referred to in this
     Article  3,  and  all  renewals, refinancings, extensions and modifications
     thereof,  and  all  substitutions therefor, in whole or in part, are herein
     sometimes referred to as the "Secured Indebtedness").

<PAGE>

     NOTWITHSTANDING  ANY  OTHER  PROVISION  CONTAINED  HEREIN  OR  IN ANY OTHER
AGREEMENT  BETWEEN  MORTGAGORS  AND  MORTGAGEE, the lien granted hereunder shall
only  serve  to  encumber the properties described in Exhibit A until payment in
full  by  Mortgagors  to Mortgagee of the Secured Indebtedness arising under the
Credit  Agreements.

                                   ARTICLE IV
       COVENANTS, REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF MORTGAGOR

     Mortgagors  hereby  covenant,  represent,  warrant  and  agree  that:

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

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

     4.3  Further Assurances. Mortgagors will execute and deliver such other and
          ------------------
further instruments and will do such other and further acts as in the reasonable
discretion  of  Mortgagee  may  be  necessary  or  desirable  to  carry out more
effectively  the  purposes  of  this  Mortgage,  including, without limiting the
generality  of the foregoing, (a) prompt correction of any material defect which
may  hereafter  be  discovered  in the title to the Mortgaged Property or in the
execution  and acknowledgment of this Mortgage, any Notes, or any other document
used  in connection herewith or at any time delivered to Mortgagee in connection
with  any  Obligations,  and  (b)  if  required  by  Section  8.1 hereof, prompt
execution and delivery of all division or transfer orders that in the reasonable
discretion of Mortgagee are needed to transfer effectively the assigned proceeds
of production from the Mortgaged Property to Mortgagee.

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

<PAGE>

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

          (a)  Mortgagors  shall  observe  and  comply with all of the terms and
     provisions,  express  or implied, of all Oil and Gas Leases relating to the
     Subject  Interests  so  long  as  such  Oil  and  Gas Leases are capable of
     producing  Hydrocarbons  in paying quantities, except where such failure to
     comply would not have a Material Adverse Effect;

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

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

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

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

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

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

<PAGE>

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

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

     4.9  Right  of  Entry.  Mortgagors  will permit Mortgagee, or the agents or
          ----------------
designated  representatives  of Mortgagee, to enter upon the Mortgaged Property,
and  all  parts  thereof,  for  the purposes of investigating and inspecting the
condition and operation thereof.

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

                                    ARTICLE V
                         ADDITIONS TO MORTGAGED PROPERTY

     It  is  understood  and  agreed  that  Mortgagors  may periodically subject
additional properties to the Lien of this Mortgage. In the event that additional
properties  are  to be subjected to the Lien hereof, the parties hereto agree to
execute  a  supplemental  mortgage,  satisfactory  in  form  and  substance  to
Mortgagee,  together  with  any security agreement, financing statement or other
security  instrument  required  by  Mortgagee,  all  in  form  and  substance
satisfactory  to  Mortgagee  and  in a sufficient number of executed (and, where
necessary  or  appropriate,  acknowledged)  counterparts for recording purposes.
Upon  execution of such supplemental mortgage, all additional properties thereby
subjected  to  the  Lien  of  this  Mortgage  shall become part of the Mortgaged
Property for all purposes.

                                   ARTICLE VI
                           ENFORCEMENT OF THE SECURITY

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

          (a)  exercise  all  of  the rights, remedies, powers and privileges of
     Mortgagors with respect to the Mortgaged Property or any part thereof, give
     or  withhold  all  consents  required  therein  which,  with respect to the
     Mortgaged  Property  or  any  part  thereof,  Mortgagors would otherwise be
     entitled  to  give  or  withhold  and  perform  or  attempt  to perform any
     covenants  in  this  Mortgage  which  Mortgagors  are obligated to perform;

<PAGE>

     provided  that  no  payment  or performance by Mortgagee shall constitute a
     waiver  of  any  Event  of Default and Mortgagee shall be subrogated to all
     rights and Liens securing the payment of any debt, claim, tax or assessment
     for  the  payment of which Mortgagee may make an advance or which Mortgagee
     may pay.

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

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

          (d)  if  Mortgagors  have  failed  to  keep  or  perform  any covenant
     whatsoever  contained  in  any Credit Agreement or this Mortgage, Mortgagee
     may,  at  its  option,  perform  or  attempt  to perform such covenant. Any
     payment  made  or  expense  incurred  in  the  performance  or  attempted
     performance  of  any  such  covenant  shall  be  a  part  of  the  Secured
     Indebtedness,  and Mortgagors promise, upon demand, to pay to Mortgagee, at
     the  place  where  the Note is payable, or at such other place as Mortgagee
     may  direct  by  written notice, all sums so advanced or paid by Mortgagee,
     with  interest  at  the rate set forth in Section 4.11 of the Note from the
     date when paid or incurred by Mortgagee. No such payment by Mortgagee shall
     constitute a waiver of any Event of Default.

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

          (f)  Upon  the occurrence of an Event of Default, this Mortgage may be
     foreclosed  as  to  the  Mortgaged  Properties, or any part thereof, in any
     manner permitted by applicable law.

     Mortgagee  may  request  Trustee  to,  and  in such event Trustee is hereby
authorized  and  empowered  and  it  shall  be his or her special duty upon such
request of Mortgagee and to the extent permitted by applicable law, proceed with
foreclosure  and  sell  all or any part of the Mortgaged Property at one or more
sales,  as  an  entirety or in parcels, at such place or places and otherwise in
such manner and upon such notice as may be required by applicable law or, in the
absence  of  any such requirement, as Trustee or Mortgagee may deem appropriate,
and  to  make  conveyance  to the purchaser or purchasers thereof. Any such sale
shall  be made to the highest bidder or bidders for cash, at the courthouse door
of  the county wherein the Mortgaged Property is situated; provided that, if the
Mortgaged  Property  is  situated  in  more  than  one  county, such sale of the
Mortgaged  Property, or part thereof, may be made in any county wherein any part
of the Mortgaged Property is situated. Such sale shall be made at public outcry,

<PAGE>

on the day of any month, during the hours of such day, and after written notices
thereof  have  been publicly posted in such places and for such time periods and
all  Persons  entitled  to  notice  thereof  have  been sent such notice, all as
required  by  applicable law. If the applicable law in force as of the Effective
Date  hereof  should  hereafter be amended to require a different notice of sale
applicable  to  sales  of property of the nature of the Mortgaged Property under
powers  of sale conferred by mortgages or deeds of trust, Trustee may, in his or
her  sole discretion, to the extent permitted by applicable law, give either the
notice of sale required by applicable law in effect on the Effective Date or the
notice of sale prescribed by the amended law; and nothing herein shall be deemed
to  require  Mortgagee  or Trustee to do, and Mortgagee and Trustee shall not be
required  to  do,  any act other than as required by applicable law in effect at
the  time of any such sale. After such sale, Trustee shall make to the purchaser
or purchasers thereunder good and sufficient deeds, assignments or bills of sale
in  the name of Mortgagors, conveying or transferring the Mortgaged Property, or
any  part  thereof,  so  sold  to  the  purchaser  or purchasers containing such
warranties  of title as are customarily given, which warranties shall be binding
upon Mortgagors.

     Sale  of  a  part  of the Mortgaged Property shall not exhaust the power of
sale  granted  hereby, but sales may be made from time to time until the Secured
Indebtedness  is  paid  and performed in full. It shall not be necessary to have
present or to exhibit at any such sale any of the Personal Property. In addition
to the rights and other powers of sale granted under the preceding provisions of
this Section 6.1(f), if default is made in the payment of any installment of the
Obligations,  Mortgagee  may,  at  its option, at once or at any time thereafter
while  any  matured  installment  remains  unpaid,  without declaring the entire
Secured  Indebtedness  to  be  due and payable, orally or in writing, enforce or
direct  Trustee  to enforce (as provided by applicable law) the Liens created by
this  Mortgage  and  sell  the  Mortgaged  Property  subject  to  such  matured
indebtedness and the Liens securing its payment, in the same manner, on the same
terms,  at  the  same  place  and time and after having given notice in the same
manner,  all  as  provided  in  the preceding provisions of this Section 6.1(f).
After such sale, Mortgagee or Trustee (as provided by applicable law) shall make
due  conveyance  to the purchaser or purchasers. Sales made without maturing the
Secured  Indebtedness  may  be made hereunder whenever there is a default in the
payment  of  any  installment of the Secured Indebtedness without exhausting the
power  of sale granted hereby and without affecting in any way the power of sale
granted  under  this  Section  6.1(f),  the  unmatured  balance  of  the Secured
Indebtedness (except as to any proceeds of any sale which Mortgagee may apply as
prepayment  of  the  Secured Indebtedness), or the Liens securing payment of the
Secured  Indebtedness. The sale or sales of less than the whole of the Mortgaged
Property  shall  not  exhaust the power of sale herein granted, and Mortgagee or
Trustee  (as  provided  by  applicable  law)  is  specifically empowered to make
successive  sale  or  sales  under  such  power until the whole of the Mortgaged
Property  shall  be  sold. It is intended by each of the foregoing provisions of
this  Section  6.1(f)  that  Trustee  may,  after  any  request  or direction by
Mortgagee,  sell  not  only  the  Subject  Interests  but  also  all other items
constituting  a part of the Mortgaged Property along with the Subject Interests,
or  any  part thereof, all as a unit and as a part of a single sale, or may sell
any  part  of  the  Mortgaged  Property  separately  from  the  remainder of the
Mortgaged Property. If the proceeds of such sale or sales of less than the whole
of  such  Mortgaged  Property  shall  be  less than the aggregate of the Secured
Indebtedness  and  the  expense of enforcing the trust created by this Mortgage,
the  Liens  of  this  Mortgage  shall  remain in full force and effect as to the
unsold  portion of the Mortgaged Property just as though no sale or sale of less
than  the whole of the Mortgaged Property had occurred, but Mortgagee shall have
the  right, at its sole election, to request Trustee to sell less than the whole
of the Mortgaged Property. In the event any questions should be raised as to the
regularity  or validity of any sale hereunder, Mortgagee or Trustee (as provided
by  applicable law) shall have the right and is hereby authorized to make resale

<PAGE>

of  said property so as to remove any questions or doubt as to the regularity or
validity  of  the  previous  sale,  and  as  many  resales may be made as may be
appropriate.  It  is  agreed  that,  in  any deed or deeds given by Mortgagee or
Trustee (as provided by applicable law), any and all statements of fact or other
recitals  therein  made as to the identity of Mortgagee, or as to the occurrence
or  existence  of  any Event of Default, or as to the request to sell, notice of
sale,  time,  place,  terms,  and manner of sale, and receipt, distribution, and
application  of  the  money  realized  therefrom,  or  as  to the due and proper
appointment  of  a  substitute  trustee,  and,  without  being  limited  by  the
foregoing, as to any other act or thing having been duly done by Mortgagee or by
Trustee  shall  be  taken  by any Governmental Authority as prima facie evidence
that  the  said  statements  or  recitals  are  true and correct and are without
further  question to be so accepted, and Mortgagors do hereby ratify and confirm
any  and  all  acts that Trustee or Mortgagee may lawfully do in the premises by
virtue  hereof.  In  the event of the resignation or death of Trustee, or his or
her  failure, refusal, or inability, for any reason, to make any such sale or to
perform  any  of  the  trusts  herein  declared, or, at the option of Mortgagee,
without  cause,  Mortgagee  may  appoint  at  its sole discretion, in writing, a
substitute  trustee,  who  shall  thereupon  succeed to all the estates, titles,
rights, powers, and trusts herein granted to and vested in Trustee. If Mortgagee
is a national banking association or a corporation, such appointment may be made
on  behalf  of  such  Mortgagee  by any Person who is then the president, or any
vice-president,  or the cashier or secretary, or any other authorized officer or
agent  of  Mortgagee.  In  the  event  of  the  resignation or death of any such
substitute  trustee,  or  his or her failure, refusal, or inability to make such
sale  or  perform  such  trusts,  or, at the option of Mortgagee, without cause,
Mortgagee  may  appoint  successive substitute trustees from time to time in the
same manner. Wherever herein the word "Trustee" is used, the same shall mean the
Person  who is the duly appointed Trustee or substitute trustee hereunder at the
time in question.

          (g)  Mortgagee  may, or Trustee may upon written request of Mortgagee,
     in  lieu  of or in addition to exercising the power of sale provided for in
     Section  6.1(f)  hereof,  proceed by suit or suits, at law or in equity, to
     enforce  the  payment  and  performance  of  the  Secured  Indebtedness  in
     accordance  with  the  terms hereof and of the Credit Agreements evidencing
     it,  to  foreclose the Liens of this Mortgage as against all or any part of
     the  Mortgaged  Property,  and  to  have  all  or any part of the Mortgaged
     Property  sold  under  the  judgment  or  decree  of  a  court of competent
     jurisdiction.

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

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

<PAGE>

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

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

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

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

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

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

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

     6.2 Foreclosure by Judicial Proceedings. Upon the occurrence of an Event of
         ----------------------------------
Default,  Mortgagee  may  proceed, where permitted by law, by a suit or suits in
equity  or  at  law, whether for a foreclosure hereunder, or for the sale of the

<PAGE>

Mortgaged Property, or for the specific performance of any covenant or agreement
herein  contained or in aid of the execution of any power herein granted, or for
the  appointment  of a receiver pending any foreclosure hereunder or the sale of
the Mortgaged Property, or for the enforcement of any other appropriate legal or
equitable remedy.

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

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

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

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

<PAGE>

     6.7  Costs  and  Expenses.  All  reasonable  costs,  expenses  (including
          --------------------
attorneys'  fees)  and  payments incurred or made by Mortgagee in protecting and
enforcing  its  rights  hereunder  shall constitute a demand obligation owing by
Mortgagors  to  the  party  incurring  such  or  making  such costs, expenses or
payments and shall bear interest at a rate per annum equal to the rate set forth
in  Section  4.11  of  the  Note, all of which shall constitute a portion of the
Secured Indebtedness.

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

     6.9  Additional  Waivers.  In  order to enforce this Mortgage, Mortgagee or
          -------------------
Trustee  shall  not  be obligated (a) to foreclose any other mortgage or deed of
trust  covering  Mortgaged  Property located in another State, seek a deficiency
after any such foreclosure or otherwise enforce Mortgagee's rights in any of the
other  Mortgaged  Property;  or  (b)  to  seek  an  injunction  (prohibitive  or
mandatory),  the  appointment  of a receiver, an order modifying any stay in any
federal  or  state  bankruptcy,  reorganization  or other insolvency proceedings
relating  to  any of the Mortgaged Property or any portion thereof, or any other
extraordinary  relief. Mortgagors waive, to the fullest extent permitted by law,
any  defense Mortgagors may have to any liability hereunder based on Mortgagee's
failure  or  refusal  to  prosecute,  or  any  lack  of  diligence  or  delay in
prosecuting,  any  action or proceeding to enforce any other mortgage or deed of
trust.  If  Mortgagee  elects  to  enforce  this  Mortgage  before,  or without,
enforcing its rights with respect to any Mortgaged Property covered by any other
Mortgage,  Mortgagors  waive,  to the fullest extent permitted by law, any right
Mortgagors may have, whether statutory or otherwise, to set off the value of any
other  Mortgaged  Property,  or  any  portion  thereof,  against  the  Secured
Indebtedness.  If  Mortgagee  elects  to enforce its mortgages or deeds of trust
covering  all  or any portion of the Mortgaged Property located in other States,

<PAGE>

or in conjunction with the enforcement of this Mortgage, Mortgagee is authorized
to  purchase  all  or  any  part  of  such other Mortgaged Property at public or
private  sale  or  as  otherwise  provided  by applicable law, and to credit the
purchase  price  against  the  Secured  Indebtedness  in such order or manner as
Mortgagee  determines  in its sole discretion and to preserve Mortgagee's rights
and  Liens  under this Mortgage for any portion of the Secured Indebtedness that
remains  unpaid.  Mortgagors waive to the fullest extent permitted by applicable
law  any  right  to claim or seek any credit against the Secured Indebtedness in
excess  of the actual amount bid or received by Mortgagee in connection with the
foreclosure  of  Mortgagee's  Liens  on any of the Mortgaged Property located in
such other States. Mortgagors further agree that Mortgagee shall not be required
(a)  to  seek  or  obtain  a deficiency judgment in or pursuant to any action or
proceeding  to  foreclose  this  Mortgage  as a condition of later enforcing any
mortgage  or deed of trust covering Mortgaged Property located in another State,
or  (b)  to seek or obtain a deficiency judgment in or pursuant to any action or
proceeding  to foreclose any such other mortgage or deed of trust as a condition
of later enforcing this Mortgage. Notwithstanding the foregoing, if Mortgagee in
good  faith  believes  that  it  may  be  required either to obtain a deficiency
judgment  to  enforce  this  Mortgage after enforcement of a mortgage or deed of
trust covering Mortgaged Property located in another State or to enforce another
mortgage  or  deed  of  trust after enforcement of this Mortgage then Mortgagors
agree  that  Mortgagee  shall  be  entitled to seek and obtain such a deficiency
judgment notwithstanding any contrary or inconsistent provision contained in any
Credit Agreement.

                                   ARTICLE VII
                                  MISCELLANEOUS

     7.1  Advances  by Mortgagee. Each and every covenant herein contained shall
          ----------------------
be performed and kept by Mortgagors solely at Mortgagors' expense. If Mortgagors
shall  fail to perform or keep any of the covenants of whatsoever kind or nature
contained  in  this Mortgage, Mortgagee or any receiver appointed hereunder may,
but  shall not be obligated to, make advances to perform the same on Mortgagors'
behalf, and Mortgagors hereby agree to repay such sums upon demand plus interest
at  a  rate per annum equal to the rate of interest set forth in Section 4.11 of
the  Note.  No such advance shall be deemed to relieve Mortgagors from any Event
of Default hereunder.

     7.2  Defense  of  Claims.  Mortgagors  will  notify  Mortgagee, in writing,
          -------------------
promptly  of  the commencement of any legal proceedings of which Mortgagors have
notice  affecting  or which could adversely effect the Lien hereof or the status
of or title to the Mortgaged Property or any material part thereof and will take
such  action, employing attorneys agreeable to Mortgagee, as may be necessary to
preserve  Mortgagors'  or  Mortgagee's  rights  affected  thereby;  and  should
Mortgagor fail or refuse to take any such action, Mortgagee may take such action
on  behalf  and  in  the  name  of  Mortgagors  and at Mortgagors' sole cost and
expense.  Moreover,  Mortgagee  may  take  such independent action in connection
therewith  as  it may, in its sole discretion, deem proper without any liability
or  duty  to  Mortgagors except to use ordinary care, Mortgagors hereby agreeing
that all sums advanced or all expenses incurred in such actions plus interest at
a  rate per annum equal to the rate of interest set forth in Section 4.11 of the
Note  will,  on  demand,  be  reimbursed  to Mortgagee or any receiver appointed
hereunder.

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

<PAGE>

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

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

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

     7.7  Unenforceable  or  Inapplicable  Provisions.  If any provision of this
          -------------------------------------------
Mortgage  or  in any of the Credit Agreements is invalid or unenforceable in any
jurisdiction,  the  other  provisions  hereof or of any of the Credit Agreements

<PAGE>

shall  remain  in  full force and effect in such jurisdiction, and the remaining
provisions hereof shall be liberally construed in favor of Mortgagee in order to
effectuate  the provisions hereof, and the invalidity of any provision hereof in
any  jurisdiction  shall  not  affect the validity or enforceability of any such
provision  in any other jurisdiction. Any reference herein contained to statutes
or  laws of a state in which no part of the Mortgaged Property is situated shall
be deemed inapplicable to, and not used in, the interpretation hereof.

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

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

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

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

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

     7.13  Special  Filing as Financing Statements. This Mortgage shall likewise
           ---------------------------------------
be  a  security  agreement and a financing statement by virtue of Mortgagors, as
debtors,  granting  to  Mortgagee,  its  successors,  legal  representatives and
assigns,  as  secured  party,  a  security  interest  in  all personal property,
as-extracted  collateral,  fixtures,  accounts,  contract  rights,  general
intangibles,  inventory,  goods, chattel paper, instruments, documents and money
described or referred to in granting clauses (a) through (j) of Article 2 hereof
and  all  proceeds and products from the sale, lease or other disposition of the
Mortgaged  Property  or  any  part  thereof. The addresses shown in Section 7.14
hereof  are the addresses of Mortgagors and Mortgagee and information concerning
the  security interest may be obtained from Mortgagee at its address. Without in
any  manner  limiting  the generality of any of the foregoing provisions hereof:

<PAGE>

(a) some portion of the goods described or to which reference is made herein are
or  are  to become fixtures on the Lands described or to which reference is made
herein;  (b)  the  minerals and the like (including oil and gas) included in the
Mortgaged  Property  and  the  accounts  resulting from the sale thereof will be
financed  at the wellhead(s) or minehead(s) of the well(s) or mine(s) located on
the  Lands described or to which reference is made herein; and (c) this Mortgage
is to be filed of record, among other places, in the real estate records of each
county  or  parish  in  which the Lands, or any part thereof, are situated, as a
financing  statement,  but  the  failure  to do so will not otherwise affect the
validity  or  enforceability of this Mortgage. Mortgagors authorize Mortgagee to
file  such  amendments  to  this  Mortgage,  financing statements and amendments
thereto,  and continuation statements as Mortgagee deems reasonable or necessary
to  perfect  and  maintain the perfection of the Liens granted herein, including
such  Liens  with respect to any additions to the Mortgaged Property as provided
in Article 5.

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

MORTGAGORS-DEBTORS                            MORTGAGEE-SECURED  PARTY

New  Century  Energy  Corp.                   Laurus Master Fund, Ltd.
Attn:  Edward  R.  DeStefano                  c/o M&C Corporate Services Limited
5851  San  Felipe,  Suite  775                PO Box 309 G.T.
Houston,  Texas  77057                        Ugland House, South Church Street,
                                              George Town
Fax:  713-266-4358                            Grand Cayman, Cayman Islands

Century  Resources,  Inc.                     Facsimile:  345-949-8080
Attn:  Edward  R.  DeStefano
5851  San  Felipe,  Suite  775
Houston,  Texas  77057

Fax:  713-266-4358

with  copies  to:                             with  copies  to:

J.  Kevin  Raley                              Scott  J.  Giordano,  Esq.
Cotham, Harwell & Evans                       Loeb  &  Loeb,  LLP
1616 S. Voss, Suite 200                       345  Park  Avenue
Houston, Texas 77057                          New York, New  York 10154

Facsimile:  713-647-7512                      Facsimile  212-407-4990

     7.15 GOVERNING LAW. THIS MORTGAGE, THE NOTE AND THE CREDIT AGREEMENTS SHALL
          ------------
BE  CONSTRUED  IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS
AND THE LAWS OF THE UNITED STATES OF AMERICA.

     7.16 Future Advances: Maximum Secured Amount. This Mortgage covers not only
          --------------------------------------
the proceeds of the Loan, but all advances hereafter made by Mortgagee to or for
the  benefit  of  Mortgagors  (the  "Future  Advances"),  including,  without
limitation,  any  amounts  advanced  by  Mortgagee in satisfying, on Mortgagors'
behalf,  any  of  Mortgagors'  Obligations,  and any advances made in accordance
herewith  by  Mortgagee  to  protect  its  security,  and  any other advances by
Mortgagee.  The  maximum  amount  secured hereby may be advanced and repaid, and
again  advanced  and  repaid  from time to time, in Mortgagee' sole and absolute
discretion,  and this Mortgage shall become enforceable upon recording and shall
have  priority  over  all  other  parties whose rights arose after the recording
hereof,  with  respect  to  all  funds  advanced  by  Mortgagee  to  Mortgagors,
regardless  of  whether  such funds were advanced before or after the arising of
such  other  party's  rights.  Nothing  herein shall be interpreted as requiring
Mortgagee  to  make  any Future Advances hereunder. The maximum principal amount
secured by this Mortgage at any one time shall be $50,000,000.

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

                                  ARTICLE VIII
                            ASSIGNMENT OF PRODUCTION

     8.1  Assignment.  For  the  purpose  of  further  securing  the  Secured
          ---------
Indebtedness  and the performance of Mortgagors' covenants hereunder, Mortgagors
do  hereby  TRANSFER,  ASSIGN,  AND  CONVEY  unto  Mortgagee  any and all of the
interests of Mortgagors in and to the Hydrocarbons that may be produced from, or
attributable  to,  the  Mortgaged  Property  on  and  after  the Effective Date,
together  with  the  proceeds of the sale thereof and attributable thereto. This
assignment  is  made  upon  the  following  terms  and  conditions: (a) pipeline

<PAGE>

companies  and  others  purchasing  the  oil, gas, minerals and other substances
listed  above  produced  and  to  be  produced  from  said  property  are hereby
authorized and directed to pay directly to Mortgagee the interests of Mortgagors
in  and  to  the  proceeds  of  the  sale  of  the  oil, gas, minerals and other
substances  listed  above  produced,  to  be  produced  and attributable to said
property  and  to  continue  such payments until they have been furnished with a
release  hereof  executed  in writing by Mortgagee, and the receipt of Mortgagee
for  monies  so  paid  to it shall be a full and complete release, discharge and
acquittance  to  any  such pipeline company or other purchaser, to the extent of
all  amounts  so paid; (b) Mortgagee is hereby authorized to receive and collect
the  proceeds  of the sale of the oil, gas, minerals and other substances listed
above  assigned  to it hereunder and to apply the funds so received first toward
the  payment  of  the  expenses, if any, incurred in the collection thereof then
toward  the payment of the Secured Indebtedness, any balance remaining after the
full  and  final  payment  of the Secured Indebtedness to be held subject to the
order  of Mortgagors; (c) Mortgagee shall have the right, at its sole option, at
any  time,  and from time to time, to release to, or on the order of, Mortgagors
all  or  any  portion  of the funds assigned to Mortgagee hereunder, and no such
releases  shall  affect  or impair the Lien of this Mortgage or the validity and
effect  of the assignment contained in this Article 8; (d) Mortgagee shall never
be  under  any  obligation to enforce the collection of the funds assigned to it
hereunder,  nor shall it ever be liable for failure to exercise diligence in the
collection  of such funds, but it shall only be accountable for the sums that it
shall  actually receive; (e) Mortgagors covenant to cause all pipeline companies
or  other purchasers of the oil, gas, minerals and other substances listed above
produced from and attributable to said property to pay promptly to Mortgagee, at
the  office of Mortgagee at the address of Mortgagee stated above, the interests
of  Mortgagors in and to the proceeds of the sale thereof; and (f) upon the full
and  final  payment  of  the  Secured Indebtedness, Mortgagee, at the request of
Mortgagors,  at  Mortgagors' sole cost and expense, shall execute and deliver to
Mortgagors  a  reassignment  hereof,  without  recourse,  representations  or
warranties.  Notwithstanding  the  foregoing  provisions of this Section 8.1, so
long as no Event of Default has occurred and shall be continuing, Mortgagors may
continue  to receive from the purchasers of production all such Hydrocarbons and
proceeds  of the sale thereof, subject, however, to the Liens created under this
Mortgage.  If  an Event of Default has occurred and is continuing, Mortgagee may
exercise  all  rights  and  remedies  granted  hereunder,  including,  without
limitation,  the  right to obtain possession of all Hydrocarbons and proceeds of
the  sale  thereof  then  held  by  Mortgagors  or  to receive directly from the
purchasers all other Hydrocarbons and proceeds of the sale thereof.

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

                           [Signature Page to Follow]

<PAGE>

     IN WITNESS WHEREOF, Mortgagors, acting by and through their duly authorized
officers  have  executed  this  Mortgage  on the date of its acknowledgment.

                                              NEW CENTURY ENERGY CORP.

                                              /s/ Edward R. DeStefano
                                              ----------------------------------
                                              Edward  R.  DeStefano
                                              President  &  CEO

                                              CENTURY  RESOURCES,  INC.

                                              /s/ Edward R. DeStefano
                                              ----------------------------------
                                              Edward  R.  DeStefano
                                              President  &  CEO

The  address  of  Mortgagors  are:

New  Century  Energy  Corp.
5851  San  Felipe,  Suite  775
Houston,  Texas  77057

Century  Resources,  Inc.
5851  San  Felipe,  Suite  775
Houston,  Texas  77057

                                             This  Mortgage  was  prepared  by,
                                             and recorded counterparts should be
                                             returned to:

                                             J.  Kevin  Raley
                                             Cotham,  Harwell  &  Evans,  P.C.
                                             1616  S.  Voss,  Suite  200
                                             Houston,  Texas  77057

<PAGE>

THE  STATE  OF  TEXAS     Sec.
                          Sec.
COUNTY  OF  HARRIS        Sec.

     BEFORE  ME,  the  undersigned  authority,  on  this day personally appeared
Edward  R.  DeStefano, President and CEO of NEW CENTURY ENERGY CORP., a Colorado
corporation,  and  known  to me to be the person whose name is subscribed to the
foregoing  instrument,  and acknowledged to me that he executed the same for the
purposes  and  considerations  therein  expressed,  as  the act and deed of such
corporation  and  in  the  capacity  therein  stated.

     GIVEN UNDER MY HAND AND SEAL OF OFFICE this  19    day of September, 2005.
                                                --------

                                               /s/ Kimberly Newman
                                               ---------------------------------
                                               Notary  Public,  State  of  Texas

THE  STATE  OF  TEXAS     Sec.
                          Sec.
COUNTY  OF  HARRIS        Sec.

     BEFORE  ME,  the  undersigned  authority,  on  this day personally appeared
Edward  R.  DeStefano,  President and CEO of CENTURY RESOURCES, INC., a Delaware
corporation,  and  known  to me to be the person whose name is subscribed to the
foregoing  instrument,  and acknowledged to me that he executed the same for the
purposes  and  considerations  therein  expressed,  as  the act and deed of such
corporation  and  in  the  capacity  therein  stated.

     GIVEN UNDER MY HAND AND SEAL OF OFFICE this  19     day of September, 2005.
                                                --------

                                               /s/ Kimberly Newman
                                               ---------------------------------
                                               Notary  Public,  State  of  Texas

<PAGE>

                                   EXHIBIT A

                             Matagorda County, Texas
     Attached  to  and  made  a  part  of  that certain MORTGAGE, DEED OF TRUST,
SECURITY  AGREEMENT,  FINANCING  STATEMENT AND ASSIGNMENT OF PRODUCTION from New
Century  Energy  Corp.  and  Century Resources, Inc. to Laurus Master Fund, Ltd.
dated  September  19,  2005.

1.   Century  Resources,  Inc.'s  80%  working  interest  in  existing wells and
     new  wells  above  7,000'  and  its 40% working interest in new wells below
     7,000'  arising out of the Oil, Gas and Mineral Lease dated April 16, 1951,
     between  Hamill  &  Hamill,  a  partnership,  et al., as Lessors, and Frank
     Hawkins,  as Lessee, as evidenced of record in Volume 225, Page 290, of the
     Deed  Records  of  Matagorda County, Texas, and amended of record in Volume
     543, Page 7 of the Deed Records of Matagorda County, Texas.

2.   Century  Resources,  Inc.'s  interest  in  that certain subsurface easement
     dated  August 17, 2001, between Michael W. Collier, as Grantor, and Calpine
     Natural Gas Company, as Grantee, as evidenced of record in Volume 629, Page
     754, of the Deed Records of Matagorda County, Texas.

3.   Century  Resources,  Inc.'s  interest  in  that certain subsurface easement
     dated August 14, 2001, between Michael A. Hankins, et ux., as Grantors, and
     Calpine  Natural  Gas Company, as Grantee, as evidenced of record in Volume
     629, Page 756, of the Deed Records of Matagorda County, Texas.

4.   Century  Resources,  Inc.'s  interest  in  that certain subsurface easement
     dated  May  29, 2001, between Deborah Jean Perkins, as Grantor, and Calpine
     Natural Gas Company, as Grantee, as evidenced of record in Volume 628, Page
     417, of the Deed Records of Matagorda County, Texas.

5.   Century  Resources,  Inc.'s  interest  in  that certain subsurface easement
     dated  July  16,  2001, between Mitchell Melnyczuk, as Grantor, and Calpine
     Natural Gas Company, as Grantee, as evidenced of record in Volume 628, Page
     439, of the Deed Records of Matagorda County, Texas.

6.   Century  Resources,  Inc.'s  interest  in  that  certain  unrecorded
     subsurface  easement  dated  August  8, 2001, between the U.S. Dept. of the
     Army, as Grantor, and Calpine Natural Gas Company, as Grantee.

<PAGE>

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