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                                                                      EXHIBT 4.1

                                WARRANT AGREEMENT

                  THIS AGREEMENT dated as of November 1, 1990, among MIDLAND
RESOURCES, INC., a Texas corporation (the "Company") and Stock Transfer Company
of America, Inc., (the "Warrant Agent").

                                   WITNESSETH:

                  WHEREAS, the Company proposes to issue Warrants, as
hereinafter described (the "Warrants"), to purchase up to an aggregate of
4,529,044 shares of its common shares, par value $.001 per share, (the "Common
Shares") in connection with the consummation of the Consolidated Plan of
Reorganization of Morgan Energy Partners 1982-83 Oil and Gas Income Program
Series "A", "B", "C" and "D" and the Morgan Energy Partners 1984 Oil and Gas
Income Program Series "84-1", "84-2" and "84-3" to the equity interest holders
of the limited partnerships, each whole Warrant evidencing the right to purchase
one Common Share; and

                  WHEREAS, to provide for the appointment of a Warrant Agent, to
provide for countersignature of the Warrants by the Warrant Agent, and to
establish the terms and conditions of the Warrants, the Company in and by
resolutions of its Board of Directors has duly authorized the execution and
delivery of this Warrant Agreement and the execution, issuance and delivery of
the certificates evidencing the Warrants (the "Warrant Certificates").

                  NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:

                  SECTION 1. Appointment of Warrant. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the terms
and conditions hereinafter in this Agreement set forth, and the Warrant Agent
hereby accepts such appointment. The Company may from time to time appoint such
additional or substitute Warrant Agents as it may deem necessary or desirable.

                  SECTION 2. Form of Warrant Certificates. The Warrant
Certificates (and the form of election to purchase Common Shares and of
assignment to be printed on the reverse thereof) to be delivered pursuant to
this Agreement shall be in registered form only, shall be substantially in the
form set forth in Exhibit "A" hereto, and may have such letters, numbers of
other marks of identification or designation and such legends, summaries or
endorsements printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Warrant
Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Warrants may from time to time be listed, or to conform to
usage. Each Warrant Certificate shall be dated as of the date of issuance
thereof by the Warrant Agent issuing such Warrant Certificate, either upon
initial issuance or upon transfer or exchange, and on its face shall entitle the
registered holder thereof to purchase one Common Share for each Warrant
evidenced by such Warrant Certificate, initially at the price per share set
forth therein, but the number of such shares and such price per share shall be
subject to adjustments as provided therein.

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                  SECTION 3. Issuance of Warrant Certificates; Countersignature
and Registration.

                  (a) Warrant Certificates not to exceed in the aggregate
4,529,044 Warrants (except as provided in Section 5 hereof) upon the execution
of this Warrant Agreement, or from time to time thereafter, may be executed by
the Company and delivered to the Warrant Agent for authentication, and the
Warrant Agent shall thereupon authenticate and deliver said Warrant Certificates
to or upon the written order of the Company signed by any two of its officers
listed in subsection (b) below, without further action by the Company hereunder.

                  (b) The Warrant Certificates shall be executed on behalf of
the Company by its Chief Executive Officer, President or any Vice-President and
by the Secretary, Treasurer, Assistant Secretary or Assistant Treasurer by
facsimile signature. The Warrant Certificates shall be manually countersigned by
the Warrant Agent (or by any successor as a Warrant Agent hereunder) and shall
not be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any Warrant Certificate shall cease to be such
officer of the Company before countersignature by a Warrant Agent and issuance
and delivery by the Company, such Warrant Certificate, nevertheless, may be
countersigned by the Warrant Agent, and issued and delivered with the same force
and effect as though the person who signed such Warrant Certificate had not
ceased to be such officer of the Company; and any Warrant Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Warrant Certificate, shall be a proper officer of the Company,
to sign such Warrant Certificate although at the date of the execution of this
Warrant Agreement any such person was not such an officer. Upon countersignature
by the Warrant Agent and delivery, the Warrant Certificate shall be valid and
binding upon the Company, and the holder thereof shall be entitled to all the
benefits of this Agreement.

                  (c) The Warrant Agent shall keep or cause to be kept at its
principal office in Dallas, Texas, books for registration and registration of
transfer of the Warrant Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Warrant Certificates, the
number of Warrants evidenced on its face by each of the Warrant Certificates,
and the date of each of the Warrant Certificates.

                  SECTION 4. Transfer, Split Up, Combination and Exchange of
Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates.
Subject to the provision of Section 13 hereof, any Warrant Certificate, with or
without other Warrant Certificates, may be transferred, split up, combined or
exchanged for another Warrant Certificate or Warrant Certificates representing
in the aggregate a like number of Warrants. Subject to any restriction on
transferability that may appear on a Warrant Certificate in accordance with the
terms hereof, any registered holder desiring to register the transfer of, or to
split up, combine or exchange any Warrant Certificate shall make such request in
writing delivered to the Warrant Agent, and shall surrender such Warrant
Certificate or Warrant Certificates to the Warrant Agent, at its principal
offices maintained for the purpose in Dallas, Texas. Warrant Agent shall require
production of proof reasonably satisfactory to it with respect to the identity
of the registered holder and the genuineness and effectiveness of any signature
on any surrendered Warrant Certificates. Thereupon such Warrant Agent shall
countersign and deliver to the person entitled thereto a

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Warrant Certificate or Warrant Certificates, as the case may be, as so
requested. The Warrant Agent shall require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Warrant Certificates.

                  Upon receipt by the Company and the Warrant Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Warrant Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and such Warrant Agent of all reasonable expenses incidental thereto, and upon
surrender and cancellation of the Warrant Certificate if mutilated, the Company
will make and deliver a new Warrant Certificate of like tenor for the same
number of Warrants to such Warrant Agent for delivery to the registered owner in
lieu of the Warrant Certificates so lost, stolen, destroyed or mutilated.

                  SECTION 5. Subsequent Issue of Warrant Certificates.
Subsequent to their original issuance, no Warrant Certificates shall be issued
except (a) Warrant Certificates issued upon any transfer, combination, split up
or exchange of Warrants pursuant to Section 4 hereof, (b) Warrant Certificates
issued in replacement of mutilated, destroyed, lost or stolen Warrant
Certificates pursuant to Section 4 hereof, (c) Warrant Certificates issued
pursuant to Section 6 hereof upon the partial exercise of Warrants represented
by any Warrant Certificate to evidence the unexercised Warrants represented by
such Warrant Certificate and (d) Warrant Certificates issued pursuant to
Sections 10(g) or 19 hereof. All Warrant Certificates shall rank part passu
regardless of the actual date of issue thereof.

                  SECTION 6. Exercise of Warrants; Exercise Price; Expiration
Date of Warrants; Call of Warrants.

                  (a) Each Warrant may be exercised on any business day on or
after the date of issue until the close of business on the twelfth anniversary
of the issuance date (such date is herein called the "Expiration Date") or the
first business day thereafter if such date is not a regular business day.

                  (b) Subject to the provisions of this Agreement, including
Section 10, the registered holder of each Warrant shall have the right to
purchase from the Company (and the Company shall issue and sell to such
holder(s) of a Warrant) one fully paid and non-assessable Common Share at the
price set forth in the Warrant Certificate, as such price may be adjusted in
accordance with the provisions herein (the "Exercise Price"), upon surrender to
the Warrant Agent, at its principal corporate office maintained for that purpose
in Dallas, Texas, of the Warrant Certificate evidencing such Warrant, with the
form of election to purchase on the reverse thereof duly completed and signed,
and upon payment of the Exercise Price. Payment of the Exercise Price shall be
in cash or by certified or official bank check or bank draft or money order
payable to the order of the Company. Under the terms of this Agreement, Warrants
may be issued in classes representing the right to purchase (i) an aggregate of
2,264,522 Common Shares at $2.50 per share, and (ii) an aggregate of 2,264,522
Common Shares at $4.00 per share.

                  (c) Upon receipt of a Warrant Certificate, with the form of
election to purchase duly executed, accompanied by proof reasonably satisfactory
to the Warrant Agent

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with respect to the identity of the registered holder and the genuineness and
effectiveness of any signature on any surrendered Warrant Certificate, payment
of the Exercise Price for the Common Shares to be purchased and an amount (ff
required by Section 8 hereof) equal to any applicable transfer tax in cash or by
certified or official bank check or bank draft or money order payable to the
order of the Company, the Warrant Agent receiving such Warrant Certificates
shall thereupon promptly (i) requisition from any transfer agent of the Common
Shares of the Company certificates for the number of Common Shares to be
purchased, (ii) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional Common Shares or Warrants, and
(iii) promptly after receipt of such certificates cause the same to be delivered
to or upon the order of the registered holder of such Warrant Certificate,
registered in such name or names as may be designated by such holder, and, when
appropriate, after receipt promptly deliver such cash to or upon the order of
the registered holder of such Warrant Certificate.

                  (d) In case the registered holder of any Warrant Certificate
shall exercise fewer than all of the Warrants evidenced thereby, a new Warrant
Certificate evidencing Warrants equivalent to the Warrants remaining unexercised
shall be issued by the Warrant Agent to the registered holder of such Warrant
Certificate or to his duly authorized assignee, subject to the provisions of
Section 13 hereof.

                  (e) The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and concurrently pay to the Company all
monies received for the purchase of Common Shares through the exercise of
Warrants.

                  (f) Call of Warrants. The Company shall have the right to
redeem any class of the Warrants if the current Market Value (as such term is
defined in Section 10(d) hereof) per Common Share of the Company exceeds the
Exercise Price of the class of Warrants being redeemed by fifty percent (50%)
for ninety (90) consecutive calendar days.

                  Notice of any redemption made pursuant to this section shall
be mailed at least 30 days prior to the date scheduled for such redemption (the
"Call Date") and shall be given to the Warrant Agent and the Warrant Holders of
the class of Warrants being redeemed in accordance with the provisions of
Section 21 hereof. The notice of redemption also shall be given no more than 20
days nor less than 10 days prior to the mailing of notice to the Warrant Agent
and the Warrant Holders pursuant to this section, by publishing at least once in
The Wall Street Journal. Such notice shall state the date, place and price of
such repurchase. The $2.50 Warrants may be redeemed at a price of $.05 per
Warrant, and the $4.00 Warrants may be redeemed at a price of $.08 per Warrant.
Each Warrant Holder shall continue to have the right to exercise the warrants
until the close of business on the fifth business day immediately preceding the
Call Date. No less than one business day prior to the Call Date, the Company
shall deposit with the Warrant Agent funds sufficient to purchase all of the
Warrants which are outstanding at the close of business on the date when the
right to exercise expired.

                  SECTION 7. Cancellation and Destruction of Warrant
Certificates. All Warrant Certificates surrendered for the purpose of exercise,
exchange, substitution or registration of transfer shall, if surrendered to the
Company or to any of its agents, be delivered to the Warrant Agent for
cancellation or in cancelled form or, if surrendered to Warrant Agent, shall be

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cancelled by it. The Company shall deliver to the Warrant Agent for cancellation
and retirement, and such Warrant Agent shall so cancel and retire, any other
Warrant Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Warrant Agent shall deliver all cancelled Warrant
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Warrant Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.

                  SECTION 8. Reservation and Availability of Common Shares. The
Company will at all times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued Common Shares, for
the purpose of enabling it to satisfy any obligation to issue Common Shares upon
exercise of Warrants, the full number of Common Shares deliverable upon the
exercise of all outstanding Warrants.

                  Before taking any action which would cause an adjustment
pursuant to Section 10 reducing the Exercise Price, the Company will take any
corporate action which may, in the opinion of its counsel (which may be counsel
employed by the Company), be necessary in order that the Company may validly and
legally issue fully paid and non-assessable Common Shares at the Exercise Price
as so adjusted.

                  The Company covenants that all Common Shares which may be
issued upon exercise of Warrants will upon issue be fully paid and
non-assessable and free from all taxes, liens, charges and security interests
with respect to the issue thereof.

                  The Warrant Agent is hereby authorized to requisition from
time to time from the transfer agent for the Common Shares, and any subsequent
transfer agent of any of the Company's securities issuable upon the exercise of
the Warrants, share certificates required to honor outstanding Warrants. The
Company hereby directs its present and shall direct any future transfer agent to
comply with all such requests. The Company will supply such transfer agent with
duly executed share certificates for such purpose and will itself provide or
otherwise make available any cash which may be payable as provided in Section
13.

                  So long as the Common Shares issuable upon the exercise of
Warrants may be listed on any securities exchange in the United States, the
Company shall use its best efforts to cause all shares reserved for such
issuance to be listed on each such exchange upon official notice of issuance
upon such exercise.

                  The Company further covenants and agrees that it will pay when
due and payable any and all U.S. federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Warrant
Certificates or of any Common Shares upon the exercise of Warrants. The Company
shall not, however, be required to pay any transfer tax which may be payable in
respect of any transfer involved in the transfer or delivery of Warrant
Certificates or the issuance or delivery of certificates for Common Shares in a
name other than that of the registered holder of the Warrant Certificate
evidencing Warrants surrendered for exercise or to issue or deliver any
certificates for Common Shares upon the exercise of any Warrants until any such
tax shall have been paid (any such tax being payable by the holder of such
Warrant Certificate at the time of surrender) or until it has been established
to the Company's satisfaction that no such tax is due.

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                  SECTION 9. Common Share Record Date. Each person in whose name
any certificate for Common Shares is issued upon the exercise of Warrants shall
for all purposes be deemed to have become the holder of record of the Common
Shares represented thereby on, and such certificate shall be dated the date upon
which the Warrant Certificate evidencing such Warrants, together with reasonable
proof of the identity of the registered holder and the genuineness and
effectiveness of any signature on any surrendered Warrant Certificate and
payment of the Exercise Price (and any applicable transfer taxes) was duly
received by a Warrant Agent. Prior to the exercise of the Warrants evidenced
thereby, the holder of a Warrant Certificate shall not be entitled to any rights
of a shareholder of the Company with respect to shares for which the Warrants
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions, except as set forth herein, or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.

                  SECTION 10. Adjustment of Exercise Price, Number of Shares or
Number of Warrants. The Exercise Price, the number and kind of securities
purchasable upon the exercise of each Warrant and the number of Warrants
outstanding shall be subject to adjustment from time to time upon the happening
of the events enumerated in this Section 10.

                  (a) In case the Company shall at any time after the date of
this Agreement (i) pay a dividend in Common Shares (except dividends on Common
Shares payable at the option of the holder in cash or in Common Shares) or make
a distribution in Common Shares (or securities exchangeable for or convertible
into Common Shares) to holders of all or substantially all of its outstanding
Common Shares, (ii) subdivide the outstanding Common Shares, (iii) combine the
outstanding Common Shares into a smaller number of Common Shares or (iv) issue
by reclassification of its Common Shares other securities of the Company
(including any such reclassification in connection with an amalgamation,
consolidation or merger in which the Company is the continuing corporation), the
Exercise Price, the number and the kind of shares purchasable upon exercise of
each Warrant immediately prior thereto shall be adjusted so that the holder of
each Warrant shall be entitled to receive the kind and number of Common Shares
or other securities of the Company which he would have owned or have been
entitled to, had he exercised immediately prior to the earlier of the happening
of such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph 10(a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event. Such adjustment shall be made successively whenever any event listed
above shall occur.

                  (b) In case the Company shall issue rights, options or
warrants to all or substantially all of the holders of its outstanding Common
Shares, entitling them (for a period expiring within 45 days after the record
date mentioned below) to subscribe for or purchase Common Shares (or securities
exchangeable for or convertible into Common Shares) at a price per Common Share
(or having an exchange or conversion price per Common Share with respect to a
security exchangeable for or convertible into Common Shares) which is less than
95% of the current Market Price per Common Share (as defined in paragraph (d)
below) on the record date for such event, then the Exercise Price shall be
adjusted by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, of which the numerator shall be the number of Common
Shares outstanding on such record date plus the number of Common Shares

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which the aggregate offering price of the total number of Common Shares so to be
offered (or the aggregate initial exchange or conversion price of the
exchangeable or convertible securities so to be offered) would purchase at such
current Market Price and of which the denominator shall be the number of Common
Shares outstanding on such record date plus the number of additional Common
Shares to be offered for subscription or purchase (or into which the
exchangeable or convertible securities so to be offered are initially
exchangeable or convertible). Such adjustment shall become effective at the
close of business on such record date; however, to the extent that Common Shares
(or securities exchangeable for or convertible into Common Shares) are not
delivered after the expiration of such rights or warrants, the Exercise Price
shall be readjusted (but only with respect to Warrants exercised after such
expiration) to the Exercise Price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made upon the
basis of delivery of only the number of Common Shares (or securities
exchangeable for or convertible into Common Shares) actually issued. In case any
subscription price may by paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined by the Board of Directors of the Company and shall be described in a
statement filed with the Warrant Agent. Common Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation.

                  (c) In case the Company shall distribute to all or
substantially all of the holders of its Common Shares (including any such
distribution made in connection with an amalgamation, consolidation or merger in
which the Company is the surviving corporation) evidences of its indebtedness or
assets (other than cash dividends or distributions and dividends payable in
Common Shares described in paragraph (a) above and dividends on Common Shares
payable at the option of the holder in cash or Common Shares) or shares of the
Company of any class other than Common Shares (or securities exchangeable for or
convertible into Common Shares) or rights, options or warrants or exchangeable
or convertible securities containing the right to subscribe for or purchase
Common Shares (excluding those expiring within 45 days after the record date
mentioned in (b) above), then the Exercise Price shall be adjusted by
multiplying the Exercise Price in effect immediately prior to the record date
for the determination of shareholders entitled to receive such distribution by a
fraction, of which the numerator shall be the current Market Price per Common
Share (as defined in subsection (d) of this Section 10) on such record date,
less the fair market value (as determined by the Board of Directors of the
Company, whose determination shall be conclusive, and described in a statement
filed with each of the Warrant Agents) of the portion of the evidences of
indebtedness or assets or shares so to be distributed or of such subscription
rights or warrants applicable to one Common Share and of which the denominator
shall be such current Market Price per Common Share. Such adjustment shall be
made whenever any such distribution is made and shall become effective on the
date of distribution retroactive to the record date for the determination of
shareholders entitled to receive such distribution.

                  (d) For the purpose of any computation under paragraphs (b)
and (c) of this Section, the current Market Price per Common Share at any date
shall be deemed to be (i) the average of the daily closing prices on the
principal national securities exchange on which the Common Shares are traded for
the 15 consecutive trading days commencing 20 trading days before the day in
question or (ii) if the Common Shares are not traded on a national securities

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exchange, the average of the mean between the bid and asked prices in the United
States over-the-counter market, as reported by the National Association of
Securities Dealers Automated Quotation System (NASDAQ), or if not so quoted,
then by The National Quotation Bureau, Inc., or an equivalent generally accepted
reporting service, for the 15 consecutive trading days commencing 20 trading
days before the day in question. The closing price referred to in clauses (i)
and (ii) above shall be the last reported sale price or, in case no reported
sale takes place on such day, the average of the reported closing bid and asked
prices on the applicable quotation medium.

                  (e) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least one
percent or more of the Exercise Price; provided, however, that any adjustments
which by reason of this paragraph (e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 10 shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be.

                  (f) Unless the Company shall have exercised its election as
provided in paragraph (g) of this Section 10, upon each adjustment of the
Exercise Price as a result of the calculations made in paragraphs (a), (b) or
(c) of this Section 10, each Warrant outstanding prior to the making of the
adjustment in the Exercise Price shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of Common Shares
(calculated to the nearest hundredth) obtained by (A) multiplying the number of
Common Shares purchasable upon exercise of a Warrant prior to adjustment of the
number of Common Shares by the Exercise Price in effect prior to adjustment of
the Exercise Price and (B) dividing the product so obtained by the Exercise
Price in effect after such adjustment of the Exercise Price.

                  (g) The Company may elect on or after the date of any
adjustment of the Exercise Price to adjust the number of Warrants, in
substitution for any adjustment in the number of Common Shares purchasable upon
the exercise of a Warrant as provided in paragraph (f) of this Section 10. Each
of the Warrants outstanding after such adjustment of the number of Warrants
shall be exercisable for one Common Share. Each Warrant held of record prior to
such adjustment of the number of Warrants shall become that number of Warrants
(calculated to the nearest hundredth) obtained by dividing the Exercise Price in
effect prior to adjustment of the Exercise Price by the Exercise Price in effect
after adjustment of the Exercise Price. The Company shall send to each
Warrantholder an announcement of its election to adjust the number of Warrants
indicating the record date for the adjustment and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Exercise Price is adjusted or any day thereafter, but shall be at least 10
days later than the date such announcement is sent to the Warrantholders. Upon
each adjustment of the number of Warrants pursuant to this paragraph (g), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Warrant Certificates on such record date Warrant Certificates
evidencing, subject to Section 13, the additional Warrants to which such holders
shall be entitled as a result of such adjustment or, at the option of the
Company, shall cause to be distributed to such holders of record in substitution
and replacement for the Warrant Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company, new
Warrant Certificates evidencing all the Warrants to which such holder shall be
entitled after such

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adjustment. Warrant Certificates so to be distributed shall be issued, executed
and countersigned in the manner specified in Section 3 (but may bear, at the
option of the Company, the adjusted Exercise Price) and shall be registered in
the names of the holders of record of Warrant Certificates on the record date
specified in the announcement sent to Warrantholders.

                  (h) In case of any capital reorganization of the Company, or
of any reclassification of the Common Shares (other than a reclassification of
the Common Shares referred to in subsection (a) of this Section 10), or in case
of the amalgamation or consolidation of the Company with or the merger of the
Company into any other corporation (other than a reclassification of the Common
Shares referred to in subsection (a) of this Section 10) or of the sale of the
properties and assets of the Company as, or substantially as, an entirety to any
other corporation or entity, each Warrant shall, after such capital
reorganization, reclassification of Common Shares, consolidation, amalgamation,
merger or sale, be exercisable, upon the terms and conditions specified in this
Agreement, for the number of shares or other securities, assets or cash to which
a holder of the number of Common Shares purchasable (at the time of such capital
reorganization, reclassification of Common Shares, consolidation, amalgamation,
merger or sale) upon exercise of such Warrant would have been entitled upon such
capital reorganization, reclassification of Common Shares, consolidation,
amalgamation, merger or sale; and in any such case, if necessary, the provisions
set forth in this Section 10 with respect to the rights and interests thereafter
of the holders of the Warrants shall be appropriately adjusted so as to be
applicable, as nearly as may reasonably be, to any shares or other securities,
assets or cash thereafter deliverable on the exercise of the Warrants.

                  The subdivision or combination of Common Shares at any time
outstanding into a greater or lesser number of shares shall not be deemed to be
a reclassification of the Common Shares for the purposes of this paragraph. The
Company shall not effect any such consolidation, amalgamation, merger or sale,
unless prior to or simultaneously with the consummation thereof the successor
corporation or entity (if other than the Company) resulting from such
consolidation, amalgamation or merger or the corporation or entity purchasing
such assets or other appropriate corporation or entity shall assume, by written
instrument executed and delivered to the Warrant Agent, the obligation to
deliver to the holder of each Warrant such shares, securities or assets as, in
accordance with the foregoing provisions, such holders may be entitled to
purchase and the other obligations under this Warrant Agreement.

                  (i) In the event that at any time, as a result of an
adjustment made pursuant to this Section 10, the holders of a Warrant or
Warrants shall become entitled to purchase any shares or securities of the
Company other than the Common Shares, thereafter the number of such other shares
or securities so purchasable upon exercise of each Warrant and the Exercise
Price for such shares or securities shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Shares contained in paragraphs (a) through
(h) inclusive, above, and the provisions of Sections 6, 8, 9 and 13, with
respect to the Common Shares shall apply on like terms to any such other shares.

                  (j) In any case in which this Section 10 shall require that an
adjustment in the Exercise Price be made effective upon the happening of a
specified event or as of a record date

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for a specified event, the Company may elect to defer, until the later of the
occurrence of such event and the date that the notice referred to in Section 11
is filed with the Warrant Agent, issuing to the holder of any Warrant exercised
after such date or such record date, as the case may be, the Common Shares, if
any, issuable upon such exercise over and above the Common Shares, if any,
issuable upon such exercise on the basis of the Exercise Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's right
to receive such additional Common Shares upon the occurrence of the event
requiring such adjustment.

                  SECTION 11. Notices to Warrant Holders. Upon any adjustment of
the Exercise Price pursuant to Section 10, the Company within 20 days thereafter
shall (i) cause to be filed with the Warrant Agent a certificate of a firm of
independent public accountants of recognized standing (who may be the regular
auditors of the Company) selected by the Board of Directors of the Company
setting forth the Exercise Price after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculations are based and setting forth the number of Warrants to be issued
under Section 10(g) hereof, or the number of Common Shares (or portion thereof)
or other property purchasable upon exercise of a Warrant after such adjustment
in the Exercise Price, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, and (ii) cause to be given to each
of the registered holders of the Warrant Certificates at his address appearing
on the Warrant register written notice of such adjustment by first-class mail,
postage prepaid. Where appropriate, such notice may be given in advance and
included as a part of the notice required to be mailed under the other
provisions of this Section 11.

                  In the event of any of the following:

                  (a) the Company shall authorize the issuance to all holders of
Common Shares of rights or warrants to subscribe for or purchase Common Shares
or of any other subscription rights or warrants; or

                  (b) the Company shall authorize the distribution to all
holders of Common Shares of evidences of its indebtedness or assets; or

                  (c) any consolidation, amalgamation or merger to which the
Company is a party and for which approval of any shareholders of the Company is
required, or of the conveyance or transfer of the properties and assets of the
Company as, or substantially as, an entirety, or of any reclassification or
change of outstanding Common Shares issuable upon exercise of the Warrants
(other than a change in par value, or from par value to no par value or from no
par value to par value, or as a result of a subdivision or combination); or

                  (d) the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or

                  (e) the Company proposes to take any action (other than
actions of the character described in Section 10(a) except as required under (c)
above) which would require an adjustment of the Exercise Price pursuant to
Section 10; then the Company shall cause to be filed with the Warrant Agent and
shall cause to be given to each of the registered holders of the

                                      -10-
<PAGE>

Warrant Certificates at his address appearing on the Warrant register, at least
20 days (or 10 days in any case specified in clauses (a) or (b) above) prior to
the applicable record date hereinafter specified, by first-class mail, postage
prepaid, a written notice stating (i) the date as of which the holders of record
of Common Shares to be entitled to receive any such rights, warrants or
distribution are to be determined, or (ii) the date on which any such
consolidation, merger, amalgamation, conveyance, transfer, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of record of Common Shares shall be entitled
to exchange their Common Shares for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, amalgamation,
conveyance, transfer, dissolution, liquidation or winding up. The failure to
give the notice required by this Section 11 or any defect therein shall not
affect the legality or validity of any distribution, right, warrant,
consolidation, merger, amalgamation, conveyance, transfer, dissolution,
liquidation or winding up, or the vote upon any action.

                  Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof the right
to vote or to consent or to receive notice as shareholders in respect of the
meetings of shareholders or the election of Directors of the Company or any
other matter or any rights whatsoever as shareholders of the Company.

                  SECTION 12. Obtaining of Governmental Approvals. The Company
will from time to time take all action which may be necessary to obtain and keep
effective any and all permits, consents and approvals of governmental agencies
and authorities and should make all securities acts filings under United States
federal and state laws which may be or become requisite in connection with the
issuance, sale, transfer and delivery of the Warrant Certificates, the exercise
of the Warrants and the issuance, sale, transfer and delivery of the Common
Shares issued upon exercise of the Warrants.

                  SECTION 13. Fractional Warrants and Fractional Shares.

                  (a) The Company shall not be required to issue fractions of
Warrants on any distribution of Warrants to holders of Warrant Certificates
pursuant to Section 10(g) or to distribute Warrant Certificates which evidence
fractional Warrants. In lieu of such fractional Warrants, there shall be paid to
the registered holders of Warrant Certificates with regard to which such
fractional Warrants would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Warrant. For purposes of
this Section 13(a), the current market value of a Warrant shall be the closing
price of the Warrant for the trading day immediately prior to the date on which
fractional Warrant would have been otherwise issuable (as determined pursuant to
Section 10(d)).

                  (b) If the number of Common Shares purchasable upon the
exercise of each Warrant is adjusted pursuant to Section 10(f), the Company
shall nonetheless not be required to issue fractions of Common Shares upon
exercise of the Warrants or to distribute Common Share certificates which
evidence fractional Common Shares. In lieu of fractional Common Shares, there
shall be paid to the registered holders of Warrant Certificates at the time such
Warrants are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of a Common Share. For purposes of this
Section 13(b), the current market value of a

                                      -11-
<PAGE>

Common Share shall be the closing price of a Common Share (as determined
pursuant to Section 10(d)) for the trading day immediately prior to the date of
such exercise.

                  (c) The holder of a Warrant, by the acceptance of the Warrant,
expressly waives his right to receive any fractional Warrant or any fractional
Common Share upon exercise of a Warrant.

                  SECTION 14. Rights of Action. All rights of action in respect
of this Agreement are vested in the respective registered holders of the Warrant
Certificates; and any registered holder of any Warrant Certificate, without the
consent of any Warrant Agent or of the holder of any other Warrant Certificate,
may, in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of his right to exercise the Warrants evidenced by such
Warrant Certificate in the manner provided in such Warrant Certificate and in
this Agreement.

                  SECTION 15. Agreement of Warrant Certificate Holders. Every
holder of a Warrant Certificate by accepting the same consents and agrees with
the Company and the Warrant Agent and with every other holder of a Warrant
Certificate that:

                  (a) transfer of the Warrant Certificates shall be registered
on the registry books of the Warrant Agent only if surrendered at the principal
corporate trust office of the Warrant Agent set forth in Section 4 hereof, duly
endorsed or accompanied by a proper instrument of transfer; and

                  (b) prior to due presentment for registration of transfer, the
Company and the Warrant Agent may deem and treat the person in whose name the
Warrant Certificate is registered as the absolute owner thereof and of the
Warrants evidenced thereby (notwithstanding any notations of ownership or
writing on the Warrant Certificates made by anyone other than the Company or the
Warrant Agent) for all purposes whatsoever, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.

                  SECTION 16. The Warrant Agent. The Warrant Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Warrants, by
their acceptance thereof, shall be bound:

                  (a) The statements contained herein and in the Warrant
Certificates shall be taken as statements of the Company and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe such Warrant Agent or action taken or to be taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Warrant
Certificates except as herein otherwise provided.

                  (b) The Warrant Agent shall not be responsible for any failure
of the Company to comply with any of the covenants contained in this Agreement
or in the Warrant Certificates to be complied with by the Company.

                  (c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company), and the Warrant Agent
shall incur no liability or

                                      -12-
<PAGE>

responsibility to the Company or to any holder of any Warrant Certificate in
respect of any action taken in accordance with the opinion or the advice of such
counsel, provided such Warrant Agent shall have exercised reasonable care in the
selection and continued employment of such counsel.

                  (d) The Warrant Agent shall incur no liability or
responsibility to the Company or to any holder of any Warrant Certificate for
any action taken in reliance on any notice, resolution, waiver, consent, order,
certificates, or other paper, document or instrument believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties.

                  (e) The Company agrees to pay to the Warrant Agent reasonable
compensation for the services rendered by such Warrant Agent in the execution of
this Agreement, to reimburse such Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by such
Warrant Agent in the execution of this Agreement, and to indemnify such Warrant
Agent and hold it harmless against any and all liabilities, including judgments,
expenses and counsel fees, for anything done or omitted by such Warrant Agent in
connection with this Agreement except as a result of the Warrant Agent's
negligence or bad faith.

                  (f) Except as otherwise provided by law, the Warrant Agent and
any shareholder, director, officer or employee of the Warrant Agent may buy,
sell or deal in any of the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to or otherwise act as fully and
freely as though it were not a Warrant Agent under this Agreement. Nothing
herein shall preclude the Warrant Agent from acting in any other capacity for
the Company or for any other legal entity.

                  (g) The Warrant Agent shall act hereunder solely as agent for
the Company, and its duties shall be determined solely by the provisions hereof
and of the Warrant Certificate. The Warrant Agent shall not be liable for
anything which it may do or refrain from doing in connection with this Agreement
except for its own negligence or bad faith.

                  (h) The Warrant Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Chief Executive Officer, President or any Vice President, or the Secretary,
Treasurer, Assistant Secretary or Assistant Treasurer of the Company, and to
apply to such officers for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer.

                  SECTION 17. Change of Warrant Agents. The Warrant Agent may
resign and be discharged from its duties under this Agreement by giving to the
Company notice in writing, and by giving notice in writing by first class mail,
postage prepaid, to each registered holder of a Warrant Certificate at his
address appearing in the registry books of the Warrant Agent, specifying a date
when such resignation shall take effect, which notice shall be sent at least 30
days prior to the date so specified. The Company may remove the Warrant Agent or
any successor warrant agent upon 30 days' notice in writing, mailed to such
Warrant Agent and any

                                      -13-
<PAGE>

successor warrant agent and to each transfer agent of the Common Shares by
registered or certified mail, and to the holders of Warrant Certificates at
their addresses appearing in such registry books. If any Warrant Agent shall
resign or shall otherwise become incapable of acting, the Company shall appoint
a successor to such Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Warrant Agent
or by the registered holder of a Warrant Certificate, then the registered holder
of any Warrant Certificate may apply to any court of competent jurisdiction for
the appointment of a successor to such Warrant Agent. Pending appointment of a
successor to a Warrant Agent, either by the Company or by such a court, the
duties of such Warrant Agent shall be carried out by the Company. Any warrant
agent that is to be the successor of the Warrant Agent or any of its successors,
whether appointed by the Company or by such a court, shall be a registered
transfer agent, bank or trust company in good standing, incorporated under the
laws of any State or of the United States of America, and having its principal
office in the United States, and if a bank or trust company, having at the time
of its appointment as warrant agent a combined capital and surplus of at least
$25,000,000. After appointment, any successor warrant agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Warrant Agent without further act or deed; but the former
Warrant Agent shall deliver and transfer to the successor warrant agent any
property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Failure to give
any notice provided for in this Section, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Warrant
Agent or the appointment of the successor warrant agent, as the case may be. The
Company may at any time no earlier than one month after the Expiration Date
terminate the appointment of the Warrant Agent.

                  SECTION 18. Maintenance of Office. As long as any of the
Warrant Certificates remain unexercised, the Company will maintain an office or
agency within the United States, where the Warrant Certificates may be presented
for registration, transfer, exchange or exercise pursuant to the terms of this
Agreement, and where notices and demands to or upon the Company in respect of
the Warrants, Warrant Certificates or this Agreement may be served. The
principal address of the Warrant Agent shall be the office or agency for such
purposes, which at the date hereof is:

                           Stock Transfer Company of America, Inc.
                           P. 0. Box 515943
                           Dallas, Texas 75251

                  SECTION 19. Issuance of New Warrant Certificates.
Notwithstanding any of the provisions of this Agreement or of the Warrants to
the contrary, the Company may, at its option, issue new Warrant Certificates
evidencing Warrants in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Exercise Price and the number or kind or
class of shares of stock or other securities or property purchasable under the
several warrant Certificates made in accordance with the provisions of this
Agreement.

                                      -14-
<PAGE>

                  SECTION 20. Expiration of Warrants. To the extent that any
Warrant Certificates remain outstanding after the Expiration Date, as set forth
in Section 6(a) hereof, the unexercised Warrants represented thereby shall be
void and of no effect.

                  SECTION 21. Notices. Notices or demands authorized by this
Agreement to be given or made by the Warrant Agent or by the holder of any
Warrant Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Warrant Agent) as follows:

                           Midland Resources, Inc.
                           731 West Wadley, Suite K-200
                           Midland, Texas 79705
                           Attention: Deas H. Warley, III

Subject to the provisions of Section 17, any notice or demand authorized by this
Agreement to be given or made by the Company, or by the holder of any Warrant
Certificate to or on the Warrant Agent shall be sufficiently given or made,
except as provided in Sections 3 and 6(c), if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Company)
as follows:

                           Stock Transfer Company of America, Inc.
                           P. O. Box 515943
                           Dallas, Texas 75251

Notices or demands authorized by this Agreement to be given by the Company or
the Warrant Agent to the holder of any Warrant Certificate shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Warrant Agent.

                  SECTION 22. Supplements and Amendments. The Company and the
Warrant Agent may from time to time supplement or amend this Agreement without
the approval of any holders of Warrant Certificates in order to cure any
ambiguity, to correct or supplement any provision contained herein which may be
defective or inconsistent with any provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
and the Warrant Agent may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Warrant Certificates.

                  SECTION 23. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Warrant Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.

                  SECTION 24. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation other than the
Company, the Warrant Agent and the registered holders of the Warrant
Certificates any legal or equitable right, remedy or claim under this Agreement,
but this Agreement shall be for the sole and exclusive benefit of the Company,
the Warrant Agent and the registered holders of the Warrant Certificates.

                                      -15-
<PAGE>

                  SECTION 25. Texas Contract. This Agreement and each Warrant
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Texas and for all purposes shall be governed and construed
in accordance with the laws of such state applicable to contracts to be made and
performed entirely within such state.

                  SECTION 26. Counterparts. This Agreement may be executed in
any number of counterparts, and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.

                  SECTION 27. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above written.

                                     MIDLAND RESOURCES, INC.

                                     By: /s/ [Signature illegible]
                                         ---------------------------------------

                                     [WARRANT AGENT]
                                     STOCK TRANSFER COMPANY OF AMERICA, INC.

                                     By: /s/ [Signature illegible]
                                         ---------------------------------------
                                         Its  President
                                              ----------------------------------

                                      -16-

<PAGE>

             EXERCISABLE ON OR BEFORE ________________________, 2002

No. W.                                                         ________ Warrants

                               WARRANT CERTIFICATE

                             MIDLAND RESOURCES, INC.

                        Initial Warrant Exercise Price $

                  This certifies that ________________________________________
is the registered holder of _____________________(______) Warrants of Midland
Resources, Inc., each of which entitles the holder to purchase one Common Share
of Midland Resources, Inc. at an initial exercise price of $_____________ per
share, subject to adjustment as provided in the Warrant Agreement. The right to
purchase Common Shares of Midland Resources, Inc. may be exercised by the holder
by completing the Purchase Form on the back of this certificate and delivering
this certificate with the required payment in cash or by certified or official
bank check or bank draft or money order (payable to the order of Midland
Resources, Inc.) before the close of business on _______________________, 2002
to __________________________________, at its principal office in ____________,
Texas.

                  The Warrants evidenced by this certificate are issued under
the provisions of a Warrant Agreement dated as of _________________________,
1990, among Midland Resources, Inc. and __________________________, as Warrant
Agent, and reference is made to the Warrant Agreement for particulars of the
rights and obligations of the holders of Warrants, the Warrant Agent and Midland
Resources, Inc. and for the terms and conditions upon which the Warrants are
issued and held. The provisions of the Warrant Agreement form part of the
Warrants evidenced hereby, and the holder of this certificate, by the acceptance
hereof, assents to the provisions of the Warrant Agreement. Holders of Warrants
are entitled to receive a copy of the Warrant Agreement without charge upon
request made to Midland Resources, Inc. or the Warrant Agent.

                  A registered holder may transfer Warrants by completing the
Transfer Form on the back of this certificate. If fewer than all of the Warrants
represented by this certificate are to be transferred, the number being
transferred should be inserted in the Transfer Form, and a separate certificate
for the Warrants being retained will be issued to the transferor. Warrants may
be combined into one or more new certificates or may be subdivided into a number
of certificates as desired by the holder. If there is to be a change of name of
the registered holder in such combination or division, it is necessary to
complete the Transfer Form in order to obtain new certificates. Warrants may be
transferred, subdivided or combined at the principal corporate office of
___________________________, in ________________________, Texas.

<PAGE>

THIS CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE WARRANT AGENT

Dated: _____________________

                                              MIDLAND RESOURCES, INC.

                                              By:
                                                  ------------------------------
                                                  DEAS H. WARLEY, III, President

                                              By:
                                                  ------------------------------
                                                  ___________________, Secretary

Countersigned and Registered:

------------------------------------
Warrant Agent

By:
    --------------------------------
         Authorized Signature

Void after ___________________, 2002

<PAGE>

                                  PURCHASE FORM

TO MIDLAND RESOURCES, INC.

The undersigned hereby irrevocably
subscribes for Common Shares of Midland
Resources, Inc. as indicated below.

NUMBER OF COMMON SHARES SUBSCRIBED FOR

                                                       -------------------------

                                                       -------------------------
        TOTAL PRICE $________________

Payment of the purchase price must be
made in full at the time of purchase either in
cash or by certified or official bank check or
bank draft payable to the order of Midland
Resources, Inc.

NAME AND ADDRESS    --------------------------------
OF PERSON IN WHOSE             (Name)
NAME PURCHASED
COMMON SHARES ARE   --------------------------------
TO BE REGISTERED              (Address)

                                                       -------------------------

                                                       -------------------------

Please check if share certificates representing
Common Shares purchased are to be delivered at
the office of the Warrant Agent where this
certificate is surrendered failing which the
share certificates will be mailed.

                                                       -------------------------

                                                       -------------------------

<PAGE>

If any warrants represented by this certificate
are not being exercised, a new warrant
certificate will be issued in the name of the
registered holder of this certificate and mailed
to the address of the holder entered on the books
of Midland Resources, Inc.

---------------------------------               --------------------------------
            (Date)                                   (Subscriber's Signature)

                                  TRANSFER FORM

For value received, the undersigned
hereby sells, assigns and transfers unto

--------------------------------------------------------------------------------
                           (Print Name of Transferee)

--------------------------------------------------------------------------------
                             (Address of Transferee)

--------------------------------------------------------------------------------
                        (Number of Warrants Transferred)

Warrants of Midland Resources, Inc. represented by
this Certificate and does hereby irrevocably
constitute and appoint

--------------------------------------------------------------------------------

as attorney to transfer the said Warrants on the
books of Midland Resources, Inc., with full power
of substitution

Date:
     ----------------------------------

---------------------------------------     ------------------------------------
         Signature Guarantee                    Signature of Registered Holder

NOTICE: The signature of the registered holder must correspond in every
particular with the name appearing on the face of this certificate without any
change whatsoever.<PAGE>

                                                                     EXHIBIT 4.2

                                WARRANT AGREEMENT

         THIS AGREEMENT is dated as of October 28, 1998, among VISTA ENERGY
RESOURCES, INC., a Delaware corporation (the "Company") and American Stock
Transfer & Trust Company (the "Warrant Agent").

                                   WITNESSETH:

         WHEREAS, the Company proposes to issue Warrants, as hereinafter
described (the "Warrants"), to purchase up to an aggregate of 9,558,403 shares
of its common shares, par value $.01 per share, (the "Common Shares") with each
whole Warrant evidencing the right to purchase one Common Share; and

         WHEREAS, to provide for the appointment of a Warrant Agent, to provide
for countersignature of the Warrants by the Warrant Agent, and to establish the
terms and conditions of the Warrants, the Company in and by resolutions of its
Board of Directors has duly authorized the execution and delivery of this
Warrant Agreement and the execution, issuance and delivery of the certificates
evidencing the Warrants (the "Warrant Certificates").

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:

         SECTION 1. APPOINTMENT OF WARRANT. The Company hereby appoints the
Warrant Agent to act as agent for the Company in accordance with the terms and
conditions hereinafter in this Agreement set forth, and the Warrant Agent hereby
accepts such appointment. The Company may from time to time appoint such
additional or substitute Warrant Agents as it may deem necessary or desirable.

         SECTION 2. FORM OF WARRANT CERTIFICATES. The Warrant Certificates (and
the form of election to purchase Common Shares and of assignment to be printed
on the reverse thereof) to be delivered pursuant to this Agreement shall be
substantially in the form set forth in Exhibit "A" hereto, and may have such
letters, numbers of other marks of identification or designation and such
legends, summaries or endorsements printed, lithographed or engraved thereon as
the Company may deem appropriate and as are not inconsistent with the provisions
of this Warrant Agreement, or as may be required to comply with any law or with
any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Warrants may from time to time be listed, or to
conform to usage. Each Warrant Certificate shall be dated as of the date of
issuance thereof by the Warrant Agent issuing such Warrant Certificate, either
upon initial issuance or upon transfer or exchange, and on its face shall
entitle the registered holder thereof to purchase one Common Share for each
Warrant evidenced by such Warrant Certificate, initially at the price per share
set forth therein, but the number of such shares and such price per share shall
be subject to adjustments as provided therein.

         SECTION 3. ISSUANCE OF WARRANT CERTIFICATES; COUNTERSIGNATURE AND
REGISTRATION.

                  (a) Warrant Certificates not to exceed in the aggregate
         9,558,403 Warrants (except as provided in Section 5 hereof) upon the
         execution of this Warrant Agreement, or from time to time thereafter,
         may be executed by the Company and delivered to the

                                       1
<PAGE>

         Warrant Agent for authentication, and the Warrant Agent shall thereupon
         authenticate and deliver said Warrant Certificates to or upon the
         written order of the Company signed by any two of its officers listed
         in subsection (b) below, without further action by the Company
         hereunder.

                  (b) The Warrant Certificates shall be executed on behalf of
         the Company by its Chief Executive Officer, President or any
         Vice-President and by the Secretary, Treasurer, Assistant Secretary or
         Assistant Treasurer by facsimile signature. The Warrant Certificates
         shall be manually countersigned by the Warrant Agent (or by any
         successor as a Warrant Agent hereunder) and shall not be valid for any
         purpose unless so countersigned. In case any officer of the Company who
         shall have signed any Warrant Certificate shall cease to be such
         officer of the Company before countersignature by a Warrant Agent and
         issuance and delivery by the Company, such Warrant Certificate,
         nevertheless, may be countersigned by the Warrant Agent, and issued and
         delivered with the same force and effect as though the person who
         signed such Warrant Certificate had not ceased to be such officer of
         the Company; and any Warrant Certificate may be signed on behalf of the
         Company by any person who, at the actual date of the execution of such
         Warrant Certificate, shall be a proper officer of the Company, to sign
         such Warrant Certificate although at the date of the execution of this
         Warrant Agreement any such person was not such an officer. Upon
         countersignature by the Warrant Agent and delivery, the Warrant
         Certificate shall be valid and binding upon the Company, and the holder
         thereof shall be entitled to all the benefits of this Agreement.

                  (c) The Warrant Agent shall keep or cause to be kept at its
         principal office in New York, New York, books for registration and
         registration of transfer of the Warrant Certificates issued hereunder.
         Such books shall show the names and addresses of the respective holders
         of the Warrant Certificates. the number of Warrants evidenced on its
         face by each of the Warrant Certificates, and the date of each of the
         Warrant Certificates

         SECTION 4. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF WARRANT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN WARRANT CERTIFICATES. Subject
to the provision of Section 13 hereof, any Warrant Certificate, with or without
other Warrant Certificates, may be transferred, split up, combined or exchanged
for another Warrant Certificate or Warrant Certificates representing in the
aggregate a like number of Warrants. Subject to any restriction on
transferability that may appear on a Warrant Certificate in accordance with the
terms hereof, any registered holder desiring to register the transfer of, or to
split up, combine or exchange any Warrant Certificate shall make such request in
writing delivered to the Warrant Agent, and shall surrender such Warrant
Certificate or Warrant Certificates to the Warrant Agent, at its principal
offices maintained for the purpose in New York, New York. Warrant Agent shall
require production of proof reasonably satisfactory to it with respect to the
identity of the registered holder and the genuineness and effectiveness of any
signature on any surrendered Warrant Certificates. Thereupon such Warrant Agent
shall countersign and deliver to the person entitled thereto a Warrant
Certificate or Warrant Certificates, as the case may be, as so requested. The
Warrant Agent shall require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Warrant Certificates.

                                       2
<PAGE>

         Upon receipt by the Company and the Warrant Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Warrant Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and such Warrant Agent of all reasonable expenses incidental thereto, and upon
surrender and cancellation of the Warrant Certificate if mutilated, the Company
will make and deliver a new Warrant Certificate of like tenor for the same
number of Warrants to such Warrant Agent for delivery to the registered owner in
lieu of the Warrant Certificates so lost, stolen, destroyed or mutilated.

         SECTION 5. SUBSEQUENT ISSUE OF WARRANT CERTIFICATES. Subsequent to
their original issuance, no Warrant Certificates shall be issued except (a)
Warrant Certificates issued upon any transfer, combination, split up or exchange
of Warrants pursuant to Section 4 hereof, (b) Warrant Certificates issued in
replacement of mutilated, destroyed, lost or stolen Warrant Certificates
pursuant to Section 4 hereof, (c) Warrant Certificates issued pursuant to
Section 6 hereof upon the partial exercise of Warrants represented by any
Warrant Certificate to evidence the unexercised Warrants represented by such
Warrant Certificate and (d) Warrant Certificates issued pursuant to Sections
10(g) or 19 hereof. All Warrant Certificates shall rank part passu regardless of
the actual date of issue thereof.

         SECTION 6. EXERCISE OF WARRANTS; EXERCISE PRICE; EXPIRATION DATE OF
WARRANTS.

                  (a) Each Warrant may be exercised on any business day on or
         after the date of issue until the close of business on the date upon
         which the warrants issued and outstanding pursuant to that certain
         Warrant Agreement dated as of November 1, 1990 between Midland
         Resources, Inc. and Stock Transfer Company of America, Inc. expire by
         their own terms (such date is herein called the "Expiration Date") or
         the first business day thereafter if such date is not a regular
         business day.

                  (b) Subject to the provisions of this Agreement, including
         Section 10, the registered holder of each Warrant shall have the right
         to purchase from the Company (and the Company shall issue and sell to
         such holder(s) of a Warrant) one fully paid and non-assessable Common
         Share at the price set forth in the Warrant Certificate, as such price
         may be adjusted in accordance with the provisions herein (the "Exercise
         Price"), upon surrender to the Warrant Agent, at its principal
         corporate office maintained for that purpose in New York, New York, of
         the Warrant Certificate evidencing such Warrant, with the form of
         election to purchase on the reverse thereof duly completed and signed,
         and upon payment of the Exercise Price. Payment of the Exercise Price
         shall be in cash or by certified or official bank check or bank draft
         or money order payable to the order of the Company. Under the terms of
         this Agreement, Warrants may be issued representing the right to
         purchase an aggregate of 9,558,403 Common Shares at $4.00 per share.

                  (c) Upon receipt of a Warrant Certificate, with the form of
         election to purchase duly executed, accompanied by proof reasonably
         satisfactory the Warrant Agent with respect to the identity of the
         registered holder and the genuineness and effectiveness of any
         signature on any surrendered Warrant Certificate, payment of the
         Exercise Price for the Common Shares to be purchased and an amount (as
         required by Section 8 hereof) equal to any applicable transfer tax in
         cash or by certified or official bank check or bank draft or money
         order payable to the order of the Company, the Warrant Agent receiving

                                       3
<PAGE>

         such Warrant Certificates shall thereupon promptly (i) requisition from
         any transfer agent of the Common Shares of the Company certificates for
         the number of Common Shares to be purchased, (ii) when appropriate,
         requisition from the Company the amount of cash to be paid in lieu of
         issuance of fractional Common Shares or Warrants, and (iii) promptly
         after receipt of such certificates cause the same to be delivered to or
         upon the order of the registered holder of such Warrant Certificate,
         registered in such name or names as may be designated by such holder,
         and, when appropriate, after receipt promptly deliver such cash to or
         upon the order of the registered holder of such Warrant Certificate.

                  (d) In case the registered holder of any Warrant Certificate
         shall exercise fewer than all of the Warrants evidenced thereby, a new
         Warrant Certificate evidencing Warrants equivalent to the Warrants
         remaining unexercised shall be issued by the Warrant Agent to the
         registered holder of such Warrant Certificate or to his duly authorized
         assignee, subject to the provisions of Section 13 hereof.

                  (e) The Warrant Agent shall account promptly to the Company
         with respect to Warrants exercised and concurrently pay to the Company
         all monies received for the purchase of Common Shares through the
         exercise of Warrants.

         SECTION 7. CANCELLATION AND DESTRUCTION OF WARRANT CERTIFICATES. All
Warrant Certificates surrendered for the purpose of exercise, exchange,
substitution or registration of transfer shall, if surrendered to the Company or
to any of its agents, be delivered to the Warrant Agent for cancellation or in
cancelled form or, if surrendered to Warrant Agent, shall be cancelled by it.
The Company shall deliver to the Warrant Agent for cancellation and retirement,
and such Warrant Agent shall so cancel and retire, any other Warrant Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Warrant Agent shall deliver all cancelled Warrant Certificates to the
Company, or shall, at the written request of the Company, destroy such cancelled
Warrant Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.

         SECTION 8. RESERVATION AND AVAILABILITY OF COMMON SHARES. The Company
will at all times reserve and keep available, free from preemptive rights, out
of the aggregate of its authorized but unissued Common Shares, for the purpose
of enabling it to satisfy any obligation to issue Common Shares upon exercise of
Warrants, the full number of Common Shares deliverable upon the exercise of all
outstanding Warrants.

         Before taking any action which would cause an adjustment pursuant to
Section 10 reducing the Exercise Price, the Company will take any corporate
action which may, in the opinion of its counsel (which may be counsel employed
by the Company), be necessary in order that the Company may validly and legally
issue fully paid and non-assessable Common Shares at the Exercise Price as so
adjusted.

         The Company covenants that all Common Shares which may be issued upon
exercise of Warrants will upon issue be fully paid and non-assessable and free
from all taxes, liens, charges and security interests with respect to the issue
thereof.

         The Warrant Agent is hereby authorized to requisition from time to time
from the transfer agent for the Common Shares, and any subsequent transfer agent
of any of the Company's

                                       4
<PAGE>

securities issuable upon the exercise of the Warrants, share certificates
required to honor outstanding Warrants. The Company hereby directs its present
and shall direct any future transfer agent to comply with all such requests. The
Company will supply such transfer agent with duly executed share certificates
for such purpose and will itself provide or otherwise make available any cash
which may be payable as provided in Section 13.

         The Company further covenants and agrees that it will pay when due and
payable any and all U.S. federal and state transfer taxes and charges which may
be payable us respect of the issuance or delivery of the Warrant Certificates or
of any Common Shares upon the exercise of Warrants. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer involved in the transfer or delivery of Warrant Certificates or the
issuance or delivery of certificates for Common Shares in a name other than that
of the registered holder of the Warrant Certificate evidencing Warrants
surrendered for exercise or to issue or deliver any certificates for Common
Shares upon the exercise of any Warrants until any such tax shall have been paid
(any such tax being payable by the holder of such Warrant Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.

         SECTION 9. COMMON SHARE RECORD DATE. Each person in whose name any
certificate for Common Shares is issued upon the exercise of Warrants shall for
all purposes be deemed to have become the holder of record of the Common Shares
represented thereby on, and such certificate shall be dated the date upon which
the Warrant Certificate evidencing such Warrants, together with reasonable proof
of the identity of the registered holder and the genuineness and effectiveness
of any signature on any surrendered Warrant Certificate and payment of the
Exercise Price (and any applicable transfer taxes) was duly received by a
Warrant Agent. Prior to the exercise of the Warrants evidenced thereby, the
holder of a Warrant Certificate shall not be entitled to any rights of a
shareholder of the Company with respect to shares for which the Warrants shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions, except as set forth herein, or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.

         SECTION 10. ADJUSTMENT OF EXERCISE PRICE, NUMBER OF SHARES OR NUMBER OF
WARRANTS. The Exercise Price, the number and kind of securities purchasable upon
the exercise of each Warrant and the number of Warrants outstanding shall be
subject to adjustment from time to time upon the happening of the events
enumerated in this Section 10.

                  (a) In case the Company shall at any time after the date of
         this Agreement (i) pay a dividend in Common Shares (except dividends on
         Common Shares payable at the option of the holder in cash or in Common
         Shares) or make a distribution in Common Shares (or securities
         exchangeable for or convertible into Common Shares) to holders of all
         or substantially all of its outstanding Common Shares, (ii) subdivide
         the outstanding Common Shares, (iii) combine the outstanding Common
         Shares into a smaller number of Common Shares or (iv) issue by
         reclassification of its Common Shares other securities of the Company
         (including any such reclassification in connection with an
         amalgamation, consolidation or merger in which the Company is the
         continuing corporation), the Exercise Price, the number and the kind of
         shares purchasable upon exercise of each Warrant immediately prior
         thereto shall be adjusted so that the holder of each Warrant

                                       5
<PAGE>

         shall be entitled to receive the kind and number of Common Shares or
         other securities of the Company which he would have owned or have been
         entitled to, had he exercised immediately prior to the earlier of the
         happening of such event or any record date with respect thereto. An
         adjustment made pursuant to this paragraph 10(a) shall become effective
         immediately after the effective date of such event retroactive to the
         record date, if any, for such event. Such adjustment shall be made
         successively whenever any event listed above shall occur.

                  (b) In case the Company shall issue rights, options or
         warrants to all or substantially all of the holders of its outstanding
         Common Shares, entitling them (for a period expiring within 45 days
         after the record date mentioned below) to subscribe for or purchase
         Common Shares (or securities exchangeable for or convertible into
         Common Shares) at a price per Common Share (or having an exchange or
         conversion price per Common Share, with respect to a security
         exchangeable for or convertible into Common Shares) which is less than
         95% of the current Market Price per Common Share (as defined in
         paragraph (d) below) on the record date for such event, then the
         Exercise Price shall be adjusted by multiplying the Exercise Price in
         effect immediately prior to such record date by a fraction, of which
         the numerator shall be the number of Common Shares outstanding on such
         record date plus the number of Common Shares which the aggregate
         offering price of the total number of Common Shares so to be offered
         (or the aggregate initial exchange or conversion price of the
         exchangeable or convertible securities so to be offered) would purchase
         at such current Market Price and of which the denominator shall be the
         number of Common Shares outstanding on such record date plus the number
         of additional Common Shares to be offered for subscription or purchase
         (or into which the exchangeable or convertible securities so to be
         offered are initially exchangeable or convertible). Such adjustment
         shall become effective at the close of business on such record date;
         however, to the extent that Common Shares (or securities exchangeable
         for or convertible into Common Shares) are not delivered after the
         expiration of such rights or warrants, the Exercise Price shall be
         readjusted (but only with respect to Warrants exercised after such
         expiration) to the Exercise Price which would then be in effect had the
         adjustments made upon the issuance of such rights or warrants been made
         upon the basis of delivery of only the number of Common Shares (or
         securities exchangeable for or convertible into Common Shares) actually
         issued. In case any subscription price may by paid in a consideration
         part or all of which shall be in a form other than cash, the value of
         such consideration shall be as determined by the Board of Directors of
         the Company and shall be described in a statement filed with the
         Warrant Agent. Common Shares owned by or held for the account of the
         Company shall not be deemed outstanding for the purpose of any such
         computation.

                  (c) In case the Company shall distribute to all or
         substantially all of the holders of its Common Shares (including any
         such distribution made in connection with an amalgamation,
         consolidation or merger in which the Company is the surviving
         corporation) evidences of its indebtedness or assets (other than cash
         dividends or distributions and dividends payable in Common Shares
         described in paragraph (a) above and dividends on Common Shares payable
         at the option of the holder in cash or Common Shares) or shares of the
         Company of any class other than Common Shares (or securities
         exchangeable for or convertible into Common Shares) or rights, options
         or warrants or exchangeable or convertible securities containing the
         right to subscribe for or purchase

                                       6
<PAGE>

         Common Shares (excluding those expiring within 45 days after the record
         date mentioned in (b) above), then the Exercise Price shall be adjusted
         by multiplying the Exercise Price in effect immediately prior to the
         record date for the determination of shareholders entitled to receive
         such distribution by a fraction, of which the numerator shall be the
         current Market Price per Common Share (as defined in subsection (d) of
         this Section 10) on such record date, less the fair market value (as
         determined by the Board of Directors of the Company, whose
         determination shall be conclusive, and described in a statement filed
         with each of the Warrant Agents) of the portion of the evidences of
         indebtedness or assets or shares so to be distributed or of such
         subscription rights or warrants applicable to one Common Share and of
         which the denominator shall be such current Market Price per Common
         Share. Such adjustment shall be made whenever any such distribution is
         made and shall become effective on the date of distribution retroactive
         to the record date for the determination of shareholders entitled to
         receive such distribution.

                  (d) For the purpose of any computation under paragraphs (b)
         and (c) of this Section, the current Market Price per Common Share at
         any date shall be deemed to be (i) the average of the daily closing
         prices on tile principal national securities exchange on which the
         Common Shares are traded for the 15 consecutive trading days commencing
         20 trading days before the day in question or (ii) if the Common Shares
         are not traded on a national securities exchange, the average of the
         mean between the bid and asked prices in the United States
         over-the-counter market, as reported by the National Association of
         Securities Dealers Automated Quotation System (NASDAQ), or if not so
         quoted, then by The National Quotation Bureau, Inc., or an equivalent
         generally accepted reporting service, for the 15 consecutive trading
         days commencing 20 trading days before the day in question. The closing
         price referred to in clauses (i) and (ii) above shall be the last
         reported sale price or, in case no reported sale takes place on such
         day, the average of the reported closing bid and asked prices on the
         applicable quotation medium.

                  (e) No adjustment in the Exercise Price shall be required
         unless such adjustment would require an increase or decrease of at
         least one percent or more of the Exercise Price; provided, however,
         that any adjustments which by reason of this paragraph (e) are not
         required to be made shall be carried forward and taken into account in
         any subsequent adjustment. All calculations under this Section 10 shall
         be made to the nearest cent or to the nearest one-hundredth of a share,
         as the case may be.

                  (f) Unless the Company shall have exercised its election as
         provided in paragraph (g) of this Section 10, upon each adjustment of
         the Exercise Price as a result of the calculations made in paragraphs
         (a), (b) or (c) of this Section 10, each Warrant outstanding prior to
         the making of the adjustment in the Exercise Price shall thereafter
         evidence the right to purchase, at the adjusted Exercise Price, that
         number of Common Shares (calculated to the nearest hundredth) obtained
         by (A) multiplying the number of Common Shares purchasable upon
         exercise of a Warrant prior to adjustment of the number of Common
         Shares by the Exercise Price in effect prior to adjustment of the
         Exercise Price and (B) dividing the product so obtained by the Exercise
         Price in effect after such adjustment of the Exercise Price.

                  (g) The Company may elect on or after the date of any
         adjustment of the Exercise Price to adjust the number of Warrants, in
         substitution for any adjustment in the

                                       7
<PAGE>

         number of Common Shares purchasable upon the exercise of a Warrant as
         provided in paragraph (f) of this Section 10. Each of the Warrants
         outstanding after such adjustment of the number of Warrants shall be
         exercisable for one Common Share. Each Warrant held of record prior to
         such adjustment of the number of Warrants shall become that number of
         Warrants (calculated to the nearest hundredth) obtained by dividing the
         Exercise Price in effect prior to adjustment of the Exercise Price by
         the Exercise Price in effect after adjustment of the Exercise Price.
         The Company shall send to each Warrantholder an announcement of its
         election to adjust the number of Warrants indicating the record date
         for the adjustment and, if known at the time, the amount of the
         adjustment to be made. This record date may be the date on which the
         Exercise Price is adjusted or any day thereafter, but shall be at least
         10 days later than the date such announcement is sent to the Warrant
         holders. Upon each adjustment of the number of Warrants pursuant to
         this paragraph (g), the Company shall, as promptly as practicable,
         cause to be distributed to holders of record of Warrant Certificates on
         such record date Warrant Certificates evidencing, subject to Section
         13, the additional Warrants to which such holders shall be entitled as
         a result of such adjustment or, at the option of the Company, shall
         cause to be distributed to such holders of record in substitution and
         replacement for the Warrant Certificates held by such holders prior to
         the date of adjustment, and upon surrender thereof, if required by the
         Company, new Warrant Certificates evidencing all the Warrants to which
         such holder shall be entitled after such adjustment. Warrant
         Certificates so to be distributed shall be issued, executed and
         countersigned in the manner specified in Section 3 (but may bear, at
         the option of the Company, the adjusted Exercise Price) and shall be
         registered in the names of the holders of record of Warrant
         Certificates on the record date specified in the announcement sent to
         Warrantholders.

                  (h) In case of any capital reorganization of the Company, or
         of any reclassification of the Common Shares (other than a
         reclassification of the Common Shares referred to in subsection (a) of
         this Section 10), or in case of the amalgamation or consolidation of
         the Company with or the merger of the Company into any other
         corporation (other than a reclassification of the Common Shares
         referred to in subsection (a) of this Section 10) or of the sale of the
         properties and assets of the Company as, or substantially as, an
         entirety to any other corporation or entity, each Warrant shall, after
         such capital reorganization, reclassification of Common Shares,
         consolidation, amalgamation, merger or sale, be exercisable, upon the
         terms and conditions specified in this Agreement, for the number of
         shares or other securities, assets or cash to which a holder of the
         number of Common Shares purchasable (at the time of such capital
         reorganization, reclassification of Common Shares, consolidation,
         amalgamation, merger or sale) upon exercise of such Warrant would have
         been entitled upon such capital reorganization, reclassification of
         Common Shares, consolidation, amalgamation, merger or sale; and in any
         such case, if necessary, the provisions set forth in this Section 10
         with respect to the rights and interests thereafter of the holders of
         the Warrants shall be appropriately adjusted so as to be applicable, as
         nearly as may reasonably be, to any shares or other securities, assets
         or cash thereafter deliverable on the exercise of the Warrants.

                  The subdivision or combination of Common Shares at any time
         outstanding into a greater or lesser number of shares shall not be
         deemed to be a reclassification of the

                                       8
<PAGE>

         Common Shares for the purposes of this paragraph. The Company shall not
         effect any such consolidation, amalgamation, merger or sale, unless
         prior to or simultaneously with the consummation thereof the successor
         corporation or entity (if other than the Company) resulting from such
         consolidation, amalgamation or merger or the corporation or entity
         purchasing such assets or other appropriate corporation or entity shall
         assume, by written instrument executed and delivered to the Warrant
         Agent, the obligation to deliver to the holder of each Warrant such
         shares, securities or assets as, in accordance with the foregoing
         provisions, such holders may be entitled to purchase and the other
         obligations under this Warrant Agreement.

                  (i) In the event that at any time, as a result of an
         adjustment made pursuant to this Section 10, the holders of a Warrant
         or Warrants shall become entitled to purchase any shares or securities
         of the Company other than the Common Shares, thereafter the number of
         such other shares or securities so purchasable upon exercise of each
         Warrant and the Exercise Price for such shares or securities shall be
         subject to adjustment from time to time in a manner and on terms as
         nearly equivalent as practicable to the provisions with respect to the
         Common Shares contained in paragraphs (a) through (h) inclusive, above,
         and the provisions of Sections 6, 8, 9 and 13, with respect to the
         Common Shares shall apply on like terms to any such other shares.

                  (j) In any case in which this Section 10 shall require that an
         adjustment in the Exercise Price be made effective upon the happening
         of a specified event or as of a record date for a specified event, the
         Company may elect to defer, until the later of the occurrence of such
         event and the date that the notice referred to in Section 11 is filed
         with the Warrant Agent, issuing to the holder of any Warrant exercised
         after such date or such record date, as the case may be, the Common
         Shares, if any, issuable upon such exercise over and above the Common
         Shares, if any, issuable upon such exercise on the basis of the
         Exercise Price in effect prior to such adjustment; provided, however,
         that the Company shall deliver to such holder a due bill or other
         appropriate instrument evidencing such holder's right to receive such
         additional Common Shares upon the occurrence of the event requiring
         such adjustment.

         SECTION 11. NOTICES TO WARRANT HOLDERS. Upon any adjustment of the
Exercise Price pursuant to Section 10, the Company within 20 days thereafter
shall (i) cause to be filed with the Warrant Agent a certificate of a firm of
independent public accountants of recognized standing (who may be the regular
auditors of the Company) selected by the Board of Directors of the Company
setting forth the Exercise Price after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculations are based and setting forth the number of Warrants to be issued
under Section 10(g) hereof, or the number of Common Shares (or portion thereof)
or other property purchasable upon exercise of a Warrant after such adjustment
in the Exercise Price, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, and (ii) cause to be given to each
of the registered holders of the Warrant Certificates at his address appearing
on the Warrant register written notice of such adjustment by first-class mail,
postage prepaid. Where appropriate, such notice may be given in advance and
included as a part of the notice required to be mailed under the other
provisions of this Section 11.

                                       9
<PAGE>

         In the event of any of the following:

                  (a) the Company shall authorize the issuance to all holders of
         Common Shares of rights or warrants to subscribe for or purchase Common
         Shares or of any other subscription rights or warrants; or

                  (b) the Company shall authorize the distribution to all
         holders of Common Shares of evidences of its indebtedness or assets; or

                  (c) any consolidation, amalgamation or merger to which the
         Company is a party and for which approval of any shareholders of the
         Company is required, or of the conveyance or transfer of the properties
         and assets of the Company as, or substantially as, an entirety, or of
         any reclassification or change of outstanding Common Shares issuable
         upon exercise of the Warrants (other than a change in par value, or
         from par value to no par value, or from no par value to par value, or
         as a result of a subdivision or combination); or

                  (d) the voluntary or involuntary dissolution, liquidation or
         winding up of the Company; or

                  (e) the Company proposes to take any action (other than
         actions of the character described in Section 10(a) except as required
         under (c) above) which would require an adjustment of the Exercise
         Price pursuant to Section 10; then the Company shall cause to be filed
         with the Warrant Agent and shall cause to be given to each of the
         registered holders of the Warrant Certificates at his address appearing
         on the Warrant register, at least 20 days (or 10 days in any case
         specified in clauses (a) or (b) above) prior to the applicable record
         date hereinafter specified, by first-class mail, postage prepaid, a
         written notice stating (i) the date as of which the holders of record
         of Common Shares to be entitled to receive any such rights, warrants or
         distribution are to be determined, or (ii) the date on which any such
         consolidation, merger, amalgamation, conveyance, transfer, dissolution,
         liquidation or winding up is expected to become effective, and the date
         as of which it is expected that holders of record of Common Shares
         shall be entitled to exchange their Common Shares for securities or
         other property, if any, deliverable upon such reclassification,
         consolidation, merger, amalgamation, conveyance, transfer, dissolution,
         liquidation or winding up. The failure to give the notice required by
         this Section 11 or any defect therein shall not affect the legality or
         validity of any distribution, right, warrant, consolidation, merger,
         amalgamation, conveyance, transfer, dissolution, liquidation or winding
         up, or the vote upon any action.

         Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof the right
to vote or to consent or to receive notice as shareholders in respect of the
meetings of shareholders or the election of Directors of the Company or any
other matter or any rights whatsoever as shareholders of the Company.

         SECTION 12. OBTAINING OF GOVERNMENTAL APPROVALS. The Company will from
time to time take all action which may be necessary to obtain and keep effective
any and all permits, consents and approvals of governmental agencies and
authorities and shall make all securities acts filings under United States
federal and state laws which may be or become requisite in connection with the
issuance, sale, transfer and delivery of the Warrant Certificates,

                                       10
<PAGE>

the exercise of the Warrants and the issuance, sale, transfer and delivery of
the Common Shares issued upon exercise of the Warrants.

         SECTION 13. FRACTIONAL WARRANTS AND FRACTIONAL SHARES.

                  (a) The Company shall not be required to issue fractions of
         Warrants on any distribution of Warrants to holders of Warrant
         Certificates pursuant to Section 10(g) or to distribute Warrant
         Certificates which evidence fractional Warrants. In lieu of such
         fractional Warrants, there shall be paid to the registered holders of
         Warrant Certificates with regard to which such fractional Warrants
         would otherwise be issuable, an amount in cash equal to the same
         fraction of the current market value of a whole Warrant. For purposes
         of this Section 13(a), the current market value of a Warrant shall be
         the closing price of a Prior Warrant for the trading day immediately
         prior to the date on which a fractional Warrant would have been
         otherwise issuable (as determined pursuant to Section 10(d)).

                  (b) If the number of Common Shares purchasable upon the
         exercise of each Warrant is adjusted pursuant to Section 10(f), the
         Company shall nonetheless not be required to issue fractions of Common
         Shares upon exercise of the Warrants or to distribute Common Share
         certificates which evidence fractional Common Shares. In lieu of
         fractional Common Shares, there shall be paid to the registered holders
         Warrant Certificates at the time such Warrants are exercised as herein
         provided an amount in cash equal to the same fraction of the current
         market value of a Common Share. For purposes of this Section 13(b), the
         current marked value of a Common Share shall be the closing price of a
         Common Share (as determined pursuant to Section 10(d)) for the trading
         day immediately prior to the date of such exercise.

                  (c) The holder of a Warrant, by the acceptance of the Warrant,
         expressly waives his right to receive any fractional Warrant or any
         fractional Common Share upon exercise of a Warrant.

         SECTION 14. RIGHTS OF ACTION. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Warrant
Certificates; and any registered holder of any Warrant Certificate, without the
consent of any Warrant Agent or of the holder of any other Warrant Certificate,
may, in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of his right to exercise the Warrants evidenced by such
Warrant Certificate in the manner provided in such Warrant Certificate and in
this Agreement.

         SECTION 15. AGREEMENT OF WARRANT CERTIFICATE HOLDERS. Every holder of a
Warrant Certificate by accepting the same consents and agrees with the Company
and the Warrant Agent and with every other holder of a Warrant Certificate that:

                  (a) transfer of the Warrant Certificates shall be registered
         on the registry books of the Warrant Agent only if surrendered at the
         principal corporate trust office of the Warrant Agent set forth in
         Section 4 hereof, duly endorsed or accompanied by a proper instrument
         of transfer; and

                                       11
<PAGE>

                  (b) prior to due presentment for registration of transfer, the
         Company and the Warrant Agent may deem and treat the person in whose
         name the Warrant Certificate is registered as the absolute owner
         thereof and of the Warrants evidenced thereby (notwithstanding any
         notations of ownership or writing on the Warrant Certificates made by
         anyone other than the Company or the Warrant Agent) for all purposes
         whatsoever, and neither the Company nor the Warrant Agent shall be
         affected by any notice to the contrary.

         SECTION 16. THE WARRANT AGENT. The Warrant Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Warrants, by their
acceptance thereof, shall be bound:

                  (a) The statements contained herein and in the Warrant
         Certificates shall be taken as statements of the Company, and the
         Warrant Agent assumes no responsibility for the correctness of any of
         the same except such as describe such Warrant Agent or action taken or
         to be taken by it. The Warrant Agent assumes no responsibility with
         respect to the distribution of the Warrant Certificates except as
         herein otherwise provided.

                  (b) The Warrant Agent shall not be responsible for any failure
         of the Company to comply with any of the covenants contained in this
         Agreement or in the Warrant Certificates to be complied with by the
         Company.

                  (c) The Warrant Agent may consult at any time with counsel
         satisfactory to it (who may be counsel for the Company), and the
         Warrant Agent shall incur no liability or responsibility to the Company
         or to any holder of any Warrant Certificate in respect of any action
         taken in accordance with the opinion or the advice of such counsel,
         provided such Warrant Agent shall have exercised reasonable care in the
         selection and continued employment of such counsel.

                  (d) The Warrant Agent shall incur no liability or
         responsibility to the Company or to any holder of any Warrant
         Certificate for any action taken in reliance on any notice, resolution,
         waiver, consent, order, certificates, or other paper, document or
         instrument believed by it to be genuine and to have been signed, sent
         or presented by the proper party or parties.

                  (e) The Company agrees to pay to the Warrant Agent reasonable
         compensation for the services rendered by such Warrant Agent in the
         execution of this Agreement, to reimburse such Warrant Agent for all
         expenses, taxes and governmental charges and other charges of any kind
         and nature incurred by such Warrant Agent in the execution of this
         Agreement, and to indemnify such Warrant Agent and hold it harmless
         against any and all liabilities, including judgments, expenses and
         counsel fees, for anything done or omitted by such Warrant Agent in
         connection with this Agreement except as a result of the Warrant
         Agent's negligence or bad faith.

                  (f) Except as otherwise provided by law, the Warrant Agent and
         any shareholder, director, officer or employee of the Warrant Agent may
         buy, sell or deal in any of the Warrants or other securities of the
         Company or become pecuniarily interested in any transaction in which
         the Company may be interested, or contract with or lend

                                       12
<PAGE>

         money to or otherwise act as fully and freely as though it were not a
         Warrant Agent under this Agreement. Nothing herein shall preclude the
         Warrant Agent from acting in any other capacity for the Company or for
         any other legal entity.

                  (g) The Warrant Agent shall act hereunder solely as agent for
         the Company, and its duties shall be determined solely by the
         provisions hereof and of the Warrant Certificate. The Warrant Agent
         shall not be liable for anything which it may do or refrain from doing
         in connection with this Agreement except for its own negligence or bad
         faith.

                  (h) The Warrant Agent is hereby authorized and directed to
         accept instructions with respect to the performance of its duties
         hereunder from the Chief Executive Officer, President or any Vice
         President, or the Secretary, Treasurer, Assistant Secretary or
         Assistant Treasurer of the Company, and to apply to such officers for
         advice or instructions in connection with its duties, and it shall not
         be liable for any action taken or suffered to he taken by it in good
         faith in accordance with instructions of any such officer.

         SECTION 17. CHANGE OF WARRANT AGENTS. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving to the Company
notice in writing, and by giving notice in writing by first class mail, postage
prepaid, to each registered holder of a Warrant Certificate at his address
appearing in the registry books of the Warrant Agent, specifying a date when
such resignation shall take effect, which notice shall be sent at least 30 days
prior to the date so specified. The Company may remove the Warrant Agent or any
successor warrant agent upon 30 days' notice in writing, mailed to such Warrant
Agent and any successor warrant agent and to each transfer agent of the Common
Shares by registered or certified mail, and to the holders of Warrant
Certificates at their addresses appearing in such registry books. If any Warrant
Agent shall resign or shall otherwise become incapable of acting, the Company
shall appoint a successor to such Warrant Agent. If the Company shall fail to
make such appointment within a period of 30 days after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Warrant Agent or by the registered holder of a Warrant Certificate, then the
registered holder of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a successor to such Warrant Agent. Pending
appointment of a successor to a Warrant Agent, either by the Company or by such
a court, the duties of such Warrant Agent shall be carried out by the Company.
Any warrant agent that is to be the successor of the Warrant Agent or any of its
successors, whether appointed by the Company or by such a court, shall be a
registered transfer agent, bank or trust company in good standing, incorporated
under the laws of any State or of the United States of America, and having its
principal office in the United States, and if a bank or trust company, having at
the time of its appointment as warrant agent a combined capital and surplus of
at least $25,000,000. After appointment, any successor warrant agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed; but the
former Warrant Agent shall deliver and transfer to the successor warrant agent
any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Failure to
give any notice provided for in this Section, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Warrant Agent or the appointment of the successor warrant agent, as the case may
be. The Company may at any time no earlier than one month after the Expiration
Date terminate the appointment of the Warrant Agent.

                                       13
<PAGE>

         SECTION 18. MAINTENANCE OF OFFICE. As long as any of the Warrant
Certificates remain unexercised, the Company will maintain an office or agency
within the United States, where the Warrant Certificates may be presented for
registration, transfer, exchange or exercise pursuant to the terms of this
Agreement, and where notices and demands to or upon the Company in respect of
the Warrants, Warrant Certificates or this Agreement may be served. The
principal address of the Warrant Agent shall be the office or agency for such
purposes, which at the date hereof is:

                        American Transfer & Trust Company
                           40 Wall Street, 46th Floor
                            New York, New York 10005

         SECTION 19. ISSUANCE OF NEW WARRANT CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Warrants to the contrary, the
Company may, at its option, issue new Warrant Certificates evidencing Warrants
in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Exercise Price and the number or kind or class of
shares of stock or other securities or property purchasable under the several
Warrant Certificates made in accordance with the provisions of this Agreement.

         SECTION 20. EXPIRATION OF WARRANTS. To the extent that any Warrant
Certificates remain outstanding after the Expiration Date, as set forth in
Section 6(a) hereof, the unexercised Warrants represented thereby shall be void
and of no effect.

         SECTION 21. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Warrant Agent or by the holder of any Warrant
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Warrant Agent) as follows:

                          Vista Energy Resources, Inc.
                        550 West Texas Avenue, Suite 700
                              Midland, Texas 79701
                           Attention: C. Randall Hill

Subject to the provisions of Section 17, any notice or demand authorized by this
Agreement to be given or made by the Company, or by the holder of any Warrant
Certificate to or on the Warrant Agent shall be sufficiently given or made,
except as provided in Sections 3 and 6(c), if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Company)
as follows:

                        American Transfer & Trust Company
                           40 Wall Street, 46th Floor
                            New York, New York 10005

Notices or demands authorized by this Agreement to be given by the Company or
the Warrant Agent to the holder of any Warrant Certificate shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Warrant Agent.

                                       14
<PAGE>

         SECTION 22. SUPPLEMENTS AND AMENDMENTS. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Warrant Certificates in order to cure any ambiguity,
to correct or supplement any provision contained herein which may be defective
or inconsistent with any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Warrant Agent may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Warrant Certificates.

         SECTION 23. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

         SECTION 24. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant Certificates any legal
or equitable right, remedy or claim under this Agreement, but this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the registered holders of the Warrant Certificates.

         SECTION 25. TEXAS CONTRACT. This Agreement and each Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
[State of Texas] and for all purposes shall be governed and construed in
accordance with the laws of such state applicable to contracts to be made and
performed entirely within such state.

         SECTION 26. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

         SECTION 27. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.

                                   VISTA ENERGY RESOURCES, INC.

                                   By:      /s/      C. Randall Hill
                                      ------------------------------------------
                                   Name:             C. Randall Hill
                                        ----------------------------------------
                                   Title:            Chairman and CEO
                                         ---------------------------------------

                                   AMERICAN STOCK TRANSFER & TRUST COMPANY

                                   By:      /s/      Herbert J. Lemmer
                                      ------------------------------------------
                                   Name:             Herbert J. Lemmer
                                        ----------------------------------------
                                   Title:            Vice President
                                         ---------------------------------------

                                       15
<PAGE>

THIS WARRANT AND THE SHARES OF COMMON SHARES PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR SALE OR
OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION OF
COUNSEL IN REASONABLY ACCEPTABLE FORM AND SCOPE REASONABLY SATISFACTORY TO THE
COMPANY THAT REGISTRATION, QUALIFICATION OR OTHER SUCH ACTIONS ARE NOT REQUIRED
UNDER ANY SUCH LAWS. THE OFFERING OF THIS SECURITY HAS NOT BEEN REVIEWED OR
APPROVED BY ANY STATE'S SECURITIES ADMINISTRATOR. THE SHARES OF COMMON STOCK
PURCHASABLE HEREUNDER ARE ALSO BENEFITED BY AND SUBJECT TO A REGISTRATION RIGHTS
AGREEMENT DATED AS OF OCTOBER 28, 1998, BY AND AMONG THE COMPANY AND THE OTHER
PARTIES LISTED THEREIN, COPIES OF WHICH ARE ON FILE WITH THE COMPANY AND WILL BE
FURNISHED UPON WRITTEN REQUEST AND WITHOUT CHARGE.

                    EXERCISABLE ON OR BEFORE November 1, 2002

No. W.                                                  ________________Warrants

                               WARRANT CERTIFICATE

                          VISTA ENERGY RESOURCES, INC.

                      Initial Warrant Exercise Price $4.00

         This certifies that _______________________ is the registered holder of
________________ (_________) Warrants of Vista Energy Resources, Inc., each of
which entitles the holder to purchase one Common Share of Vista Energy
Resources, Inc. at an initial exercise price of $4.00 per share, subject to
adjustment as provided in the Warrant Agreement. The right to purchase Common
Shares of Vista Energy Resources, Inc. may be exercised by the holder by
completing the Purchase Form and Certification on the back of this certificate
and delivering this certificate with the required payment in cash or by
certified or official bank check or bank draft or money order (payable to the
order of Vista Energy Resources, Inc.) before the close of business on November
1, 2002 to American Stock Transfer & Trust Company, at its principal office in
New York, New York.

         The Warrants evidenced by this certificate are issued under the
provisions of a Warrant Agreement dated as of October 28, 1998, among Vista
Energy Resources, Inc. and American Stock Transfer & Trust Company, as Warrant
Agent, and reference is made to the Warrant Agreement for particulars of the
rights and obligations of the holders of Warrants, the Warrant Agent and Vista
Energy Resources, Inc. and for the terms and conditions upon which the Warrants
are issued and held. The provisions of the Warrant Agreement form part of the
Warrants evidenced hereby, and the holder of this certificate, by the acceptance
hereof, assents to the provisions of the Warrant Agreement. Holders of Warrants
are entitled to receive a copy of the Warrant Agreement without charge upon
request made to Vista Energy Resources, Inc. or the Warrant Agent.

                                       16
<PAGE>

         Each certificate for Common Shares issued upon exercise of this
Warrant, unless at the time of exercise such shares are registered under the
Securities Act of 1933, shall bear the following legend:

         Share Legend. Each certificate for shares of Common Stock issued upon
exercise of this Warrant, unless at the time of exercise such shares are
registered under the Securities Act of 1993 shall bear the following legend:

         "This security has not been registered under the Securities Act of
         1933, as amended, or under the securities laws of any state or other
         jurisdiction and may not be sold, offered for sale or otherwise
         transferred unless registered or qualified under said Act and
         applicable state securities laws or unless the Company receives an
         opinion of counsel in reasonably acceptable form and scope reasonably
         satisfactory to the Company that registration, qualification or other
         such actions are not required under any such laws. The offering of this
         security has not been reviewed or approved by any state securities
         administrator. This security is also benefited by and subject to a
         Registration Rights Agreement dated as of October 28, 1998 between the
         Company and the other parties listed therein, copies of which are on
         file with the Company and will be furnished upon written request and
         without charge."

         Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a registration statement under the
Securities Act of 1933) shall also bear such legend unless, in the opinion of
counsel selected by the holder of such certificate (who may be an employee of
such holder) and reasonably acceptable to the Company, the securities
represented thereby are no longer subject to restrictions on resale under the
Securities Act of 1933.

         Subject to the restrictions set forth above, a registered holder may
transfer Warrants by completing the Transfer Form on the back of this
certificate. If fewer than all of the Warrants represented by this certificate
are to be transferred, the number being transferred should be inserted in the
Transfer Form, and a separate certificate for the Warrants being retained will
be issued to the transferor. Warrants may be combined into one or more new
certificates or may be subdivided into a number of certificates as desired by
the holder. If there is to be a change of name of the registered holder in such
combination or division, it is necessary to complete the Transfer Form in order
to obtain new certificates. Warrants may be transferred, subdivided or combined
at the principal corporate office of American Stock Transfer & Trust Company in
New York, New York.

                                       17
<PAGE>

         THIS CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE WARRANT AGENT.

         Dated:
                 --------------

                                        VISTA ENERGY RESOURCES, INC.

                                        By:
                                            ------------------------------------
                                        Name:                        , President
                                              -----------------------

                                        By:
                                            ------------------------------------
                                        Name:                        , Secretary
                                              -----------------------

Countersigned and Registered:

-------------------------------
Warrant Agent

By:
    ---------------------------
       Authorized Signature

Void after November 1, 2002

                                       18
<PAGE>

                                  PURCHASE FORM

TO VISTA ENERGY RESOURCES, INC.

The undersigned hereby irrevocably
subscribes for Common Shares of Vista
Resources, Inc. as  indicated below.

NUMBER OF COMMON SHARES SUBSCRIBED FOR

                                                    ----------------------------

                                                    ----------------------------
         TOTAL PRICE $________________

Payment of the purchase price must be made in full at the time of purchase
either in cash or by certified or official bank check or bank draft payable to
the order of Vista Resources. Inc.

NAME AND ADDRESS    --------------------------      ----------------------------
OF PERSON IN WHOSE            (Name)
NAME PURCHASED
COMMON SHARES ARE   --------------------------
TO BE REGISTERED             (Address)              ----------------------------

Please check if share certificates representing
Common Shares purchased are to be delivered at
the office of the Warrant Agent where this
certificate is surrendered failing which the
share certificates will be mailed.
                                                    ----------------------------

                                                    ----------------------------

                                       19
<PAGE>

                                  CERTIFICATION

         The undersigned hereby certifies that he, she or it is:

         a.       an "accredited investor" as that term is defined in Regulation
                  D promulgated pursuant to the Securities Act of 1933 or any
                  successor regulation, as such provisions may be in effect on
                  the date hereof, and is an "accredited investor" pursuant to
                  Section of such provision; or

         b.       is knowledgeable, sophisticated and experienced in business
                  and financial matters and in securities similar to the Common
                  Stock; is aware of the limitation on the transfer of the
                  Common Stock imposed by applicable securities laws and any
                  limitations on transfer imposed by contracts with the Company
                  or others; and has had access to, or been furnished with, all
                  information about the Common Stock and the Company deemed
                  necessary to conclude that he, she or it has the ability to
                  bear the economic risk of the investment in the Common Stock
                  and to afford the complete loss of such investment.

         IN WITNESS WHEREOF, the undersigned has executed this CERTIFICATION
this ____ day of ____________, 199__.

For Individuals:                              For Entities:

---------------------------                   ----------------------------------
Signature                                     Printed Name of Entity

                                              By:
---------------------------                       ------------------------------
Printed Name                                  Name:
                                                    ----------------------------
                                              Title:
                                                     ---------------------------

                                       20
<PAGE>

If any warrants represented by this certificate
are not being exercised, a new warrant
certificate will be issued in the name of the
registered holder of this certificate and mailed
to the address of the holder entered on the books
of Vista Energy Resources, Inc.

------------------------------                 ---------------------------------
           (Date)                                   (Subscriber's Signature)

                                  TRANSFER FORM

For value received, the undersigned
hereby sells, assigns and transfers unto

--------------------------------------------------------------------------------
                           (Print Name of Transferee)

--------------------------------------------------------------------------------
                             (Address of Transferee)

--------------------------------------------------------------------------------
                        (Number of Warrants Transferred)

Warrants of Vista Energy Resources, Inc. represented by
this Certificate and does hereby irrevocably
constitute and appoint

--------------------------------------------------------------------------------

as attorney to transfer the said Warrants on the
books of Vista Energy Resources, Inc., with full power
of substitution

Date:
     ----------------------------

---------------------------------           ------------------------------------
       Signature Guarantee                      Signature of Registered Holder

NOTICE: The signature of the registered holder must correspond in every
particular with the name appearing on the face of this certificate without any
change whatsoever.

                                       21

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