Document:

STOCK PURCHASE AND SALE AGREEMENT

                                     Between

                                  Mike Cantrell,

                                    as Seller,

                                       and

                             Pontotoc Production, Inc.,

                                     as Buyer

                                 Dated May 9, 2000

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                              TABLE OF CONTENTS
                              -----------------

ARTICLE I    DEFINITIONS                                                    1
     1.01    Certain Definitions                                            1
     1.02    Certain References                                             8
     1.03    Plurals                                                        9
     1.04    Interpretation                                                 9

ARTICLE II   REDEMPTION OF REDEEMED SHARES;PURCHASE AND SALE OF
             SELLER'S SHARES                                                9
     2.01    Redemption                                                     9
     2.02    Consideration for Redemption                                   9
     2.03    The Company's Oil and Gas Properties                           9
     2.04    Purchase and Sale                                              9
     2.05    Purchase Price                                                 9
     2.06    Adjustment Amount                                             10
     2.07    Closing                                                       11
     2.08    Deliveries at the Closing                                     11
     2.09    Earnest Money Deposit                                         11

ARTICLE III  REPRESENTATIONS AND WARRANTIES OF SELLER                      12
     3.01    Corporate Organization                                        12
     3.02    Capitalization; Seller's Shares; Subsidiaries                 12
     3.03    Validity and Binding Effect                                   13
     3.04    No Violation                                                  13
     3.05    Financial Statements                                          14
     3.06    No Material Adverse Change                                    14
     3.07    Oil and Gas Assets                                            15
     3.08    Equipment and Inventory                                       16
     3.09    Title to Real Property                                        16
     3.10    Compliance with Laws Other than Environmental Laws            16
     3.11    Contracts and Commitments                                     17
     3.12    Contracts Not in Default                                      19
     3.13    Insurance                                                     19
     3.14    Litigation and Judgments                                      20
     3.15    Brokers and Finders                                           20
     3.16    Labor Matters                                                 20
     3.17    Environmental Compliance                                      20
     3.18    No Condemnation or Expropriation                              21
     3.19    Accounts Receivable                                           22
     3.20    Powers of Attorney; Authorized Signature                      22
     3.21    Oil and Gas Reserves                                          22
     3.22    Absence of Certain Business Practices                         22

                                      -i-
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     3.23    Books and Records                                             22
     3.24    Employee Benefit Plans                                        22
     3.25    Tax Matters                                                   25
     3.26    Redeemed Interests                                            25
     3.27    Exchange and Replacement Properties                           26
     3.28    Disclosure                                                    26

ARTICLE IV   REPRESENTATIONS AND WARRANTIES OF BUYER                       26
     4.01    Corporate Organization                                        26
     4.02    Authorization; Validity and Binding Effect                    26
     4.03    No Violation                                                  27
     4.04    Brokers and Finders                                           27
     4.05    Investment Representation                                     27
     4.06    Independent Investigation                                     27

ARTICLE V    COVENANTS OF THE PARTIES                                      27
     5.01    Full Access                                                   27
     5.02    Approvals and Consents                                        27
     5.03    Filings                                                       28
     5.04    Covenants to Satisfy Conditions                               28
     5.05    Confidentiality; Employees; Negotiations                      28
     5.06    Publicity                                                     29
     5.07    Conduct of the Company's Business Pending the Closing         29
     5.08    Further Assurances                                            30
     5.09    Adjustments for Title Defects                                 31
             (a)    Access to Records                                      31
             (b)    Notice of Asserted Title Defects or
                    Interest Additions                                     31
             (c)    Method of Determination of Defect Amounts
                    and Purchase Price Adjustments                         31
             (d)    Resolution of Title Defects                            32
             (e)    Resolution of Interest Additions                       32
             (f)    Election to Terminate                                  32
             (g)    Curative Actions                                       33
             (h)    Exchange Properties                                    33
     5.10    Arbitration                                                   33
     5.11    Acquisition of Participant Interests                          35
     5.12    Release                                                       35
     5.13    Certain Operated Properties                                   35

ARTICLE VI   CONDITIONS TO OBLIGATIONS OF SELLER                           36
     6.01    Representations and Warranties True                           36
     6.02    Performance                                                   36
     6.03    No Injunction                                                 36

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     6.04    Certificates                                                  36

ARTICLE VII  CONDITIONS TO OBLIGATIONS OF BUYER                            36
     7.01    Representations and Warranties True                           36
     7.02    Performance                                                   37
     7.03    No Injunction                                                 37
     7.04    Certificates                                                  37
     7.05    Approvals and Consents                                        37
     7.06    Resignations                                                  37
     7.07    FIRPTA Affidavit                                              37
     7.08    Participant Agreements                                        37
     7.09    Opinion of Seller's Counsel                                   37
     7.10    Release of Liens                                              37
     7.11    Redemption Agreement                                          37

ARTICLE VIII INDEMNIFICATION; SURVIVAL AND LIMITATIONS OF
             REPRESENTATIONS AND WARRANTIES                                38
     8.01    Indemnity by Seller                                           38
             (a)    Additional Taxes                                       38
             (b)    Certain Liabilities                                    38
             (c)    Representations, Warranties, and Covenants             38
             (d)    Redeemed Interests and Replacement Properties          38
             (e)    Indemnified Wells                                      38
             (f)    Professional Fees                                      39
     8.02    Indemnity by Buyer                                            39
             (a)    Representations and Warranties                         39
             (b)    Professional Fees                                      39
     8.03    Investigations, Survival of Representations and Warranties    39
     8.04    Defense of Third Party Claims                                 39
     8.05    Limit on Indemnity Obligations                                40

ARTICLE IX   TERMINATION                                                   40
     9.01    Methods of Termination                                        40
     9.02    Procedure Upon Termination                                    41

ARTICLE X    DEFAULT AND REMEDIES                                          41

ARTICLE XI   MISCELLANEOUS PROVISIONS                                      42
    11.01    Amendment and Modification                                    42
    11.02    Waiver of Compliance                                          42
    11.03    Expenses                                                      42
    11.04    Notices                                                       42
    11.05    Assignment                                                    43

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    11.06    Governing Law                                                 43
    11.07    Prevailing Party                                              43
    11.08    Counterparts                                                  44
    11.09    Entire Agreement                                              44
    11.10    No Third Party Beneficiaries                                  44
    11.11    Severability                                                  44

EXHIBITS
--------

Exhibit A    -    Form of Escrow Agreement
Exhibit B    -    Form of Stock Redemption Agreement
Exhibit C    -    Form of Purchase and Sale Agreement
Exhibit D    -    Form of Opinion of Seller's Counsel
Exhibit E    -    Form of Exchange Agreement

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DISCLOSURE SCHEDULE
-------------------

Section 1.01A        Replacement Properties
Section 1.01B        Exchange Properties
Section 1.01C        Operated Wells
Section 2.02         Redeemed Interests
Section 3.02         Ownership of Stock or Other Equity Interests
Section 3.04         No Violation
Section 3.05         Company Financial Statements
Section 3.07         Oil and Gas Asset Matters
Section 3.08         Equipment and Inventory
Section 3.09         Real Property Matters
Section 3.11         Contracts and Commitments
Section 3.13         Insurance
Section 3.14         Litigation and Judgments
Section 3.19         Accounts Receivable
Section 3.20         Powers of Attorney; Bank Accounts; Safe Deposit Boxes
Section 3.21         Description of Reserve Report
Section 3.24         Employee Benefit Plans
Section 3.25         Tax Matters
Section 5.07         Conduct of the Company's Business Pending Closing
Section 5.09         WI, NRI and Value for each Property
Section 5.11         List of Participants, Interests to be Purchased
                       and Purchase Price
Section 5.13A        Oil Center/OBEC Properties
Section 5.13B        Oil Center Other Properties

                                      -v-
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                          LOCATIONS OF DEFINITIONS OF
                          TERMS OUTSIDE OF ARTICLE I
                          ---------------------------

                                                             Section Number
                                                             --------------

Agreement                                                 Opening Paragraph
Arbitrating Accountants                                             2.06(b)
Buyer                                                     Opening Paragraph
Buyer Indemnified Party                                                8.01
Buyer Losses                                                           8.01
Casualty                                                            5.07(c)
Closing Statement                                                   2.06(a)
Company                                                            Recitals
Company Benefit Program or Agreement                                   3.24
Company Employee Benefit Plans                                         3.24
Company ERISA Affiliate                                                3.24
Company Plan                                                           3.24
CPR Rules                                                              5.10
Deposit                                                                2.09
Exchange Agreement                                                 Recitals
Escrow Agent                                                           2.09
Indemnifying Party                                                     8.04
Indemnified Person                                                     8.04
Interest Addition                                                   5.09(b)
Interest Addition Notice                                            5.09(b)
Objection Period                                                    2.06(b)
OCC                                                                    5.13
Oil Center                                                             5.13
Oil Center/OBEC Properties                                             5.13
Oil Center Other Properties                                            5.13
Participant                                                            5.11
Participant Agreement                                                  5.11
Parties                                                            Recitals
Purchase Price                                                         2.05
Redeemed Shares                                                    Recitals
Redemption Agreement                                                   2.02
Redemption Interests                                                   2.02
Release Date                                                           8.03
Reserve Report                                                         3.21
Seller                                                    Opening Paragraph
Seller Claims                                                          5.12
Seller Losses                                                          8.02
Seller's Shares                                                    Recitals

                                      -vi-
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Target Adjustment Amount                                            2.06(a)
Third Party Claim                                                      8.04
Title Defect Notice                                                 5.09(b)

                                      -vii-
<PAGE>

                       STOCK PURCHASE AND SALE AGREEMENT

    THIS STOCK PURCHASE AND SALE AGREEMENT (this "Agreement") dated as of May
9, 2000, is by and between Mike Cantrell, an individual residing in Ada,
Oklahoma ("Seller"), and Pontotoc Production, Inc., a Nevada corporation
("Buyer").

                               W I T N E S S E T H:

    WHEREAS, Seller is the owner of all of the issued and outstanding shares
of capital stock of Oklahoma Basic Economy Corporation, an Oklahoma
corporation (the "Company"), consisting of 1,935 shares of common stock, par
value $10.00 per share; and

    WHEREAS, the Company is engaged in the ownership and operation of oil and
gas properties; and

    WHEREAS, prior to the Closing (as hereinafter defined), Seller desires
that the Company redeem 170 shares of its common stock owned by Seller (the
"Redeemed Shares"), in consideration of the assignment to Seller of certain
assets of the Company unrelated to the oil and gas business; and

    WHEREAS, subsequent to the redemption of the Redeemed Shares, Buyer
desires to purchase the remaining 1,765 shares of the Company's common stock
(the "Seller's Shares") from Seller, and Seller desires to sell the Seller's
Shares to Buyer, on the terms and subject to the conditions hereinafter set
forth; and

    WHEREAS, subsequent to the Closing, Seller and Buyer desire that the
Company and Seller engage in a transaction intended to qualify as a like-kind
exchange under Section 1031 of the Code (as hereinafter defined) pursuant to
the terms of a letter agreement between Seller and the Company in the form
attached hereto as Exhibit E (the "Exchange Agreement");

    NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, Buyer and Seller (the "Parties"), intending
to be legally bound hereby, agree as follows:

                                  ARTICLE I

                                 DEFINITIONS

    1.01    Certain Definitions.  For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:

    "Adjustment Amount" shall mean Current Assets minus Liabilities at any
given date.

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    "Affiliate" means, with respect to any Person, each other Person that
directly or indirectly (through one or more intermediaries or otherwise)
controls, is controlled by, or is under common control with such Person.  The
term "control" (including the terms "controlled by" and "under common control
with") means the possession, directly or indirectly, of the actual power to
direct or cause the direction of the management policies of a Person, whether
through the ownership of stock, by contract, credit arrangement or otherwise.

    "Balance Sheet Date" shall mean February 29, 2000.

    "Best Efforts" shall not include efforts which require the performing
Party (a) to do any act that is commercially unreasonable under the
circumstances, (b) to make any capital contribution not expressly contemplated
hereunder or (c) to amend or waive any rights under this Agreement.

    "Business Day" shall mean any day other than a Saturday, Sunday or day on
which banks in Oklahoma are required or permitted by law to be closed.

    "CERCLA" shall mean the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, or any successor statutes and any
regulations promulgated thereunder.

    "CERCLIS" shall mean the Comprehensive Environmental Response,
Compensation and Liability Information System List.

    "Claim" shall mean any demand, claim, action or cause of action based on
any Loss as to the Company.

    "Closing" shall mean the consummation of the purchase and sale of the
Seller's Shares contemplated by this Agreement.

    "Closing Date" shall mean the date on which the Closing occurs.

    "Code" shall mean the Internal Revenue Code of 1986, as amended.

    "Company Employees" shall mean all persons employed by the Company.

    "Company Financial Statements" shall mean the balance sheet, statement of
operations, and statement of cash flows, and the notes thereto, of the Company
at September 30, 1999, and February 29, 2000, and for the twelve and five
month periods, respectively, then ended.

    "Company's Business" shall mean the business of the Company as currently
conducted and as heretofore conducted, unless otherwise expressly stated.

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    "Contracts" shall mean all written or oral contracts, agreements, leases,
purchase orders, instruments, commitments and understandings relating to the
Company's Business to which the Company is a party or by which any of the
assets of the Company is bound or to which the Company's Business is subject.

    "Current Assets" shall mean the amount of the Company's cash plus its
accounts receivable which are less than 90 days old (excluding any accounts
receivable which are known by the Company or Seller to be uncollectible) at
any given date.

    "Defect Amount" shall mean the amount attributable to a Title Defect,
determined in accordance with Section 5.09(c).

    "Defensible Title" shall mean, with respect to the Company's ownership of
a Property, a record title or title established by orders of state regulatory
agencies that (a) entitles the Company to receive, throughout the life of such
Property, not less than the NRI for such Property shown in the Property
Schedule, (b) obligates the Company to bear, throughout the life of such
Property (and the plugging, abandonment and salvage thereof), no greater WI
for such Property than the WI shown therefor in the Property Schedule, except
increases in such WI that result in at least a proportionate increase in the
Company's NRI for such Property, and (c) is free and clear of all Encumbrances
except for Permitted Encumbrances.

    "Disclosure Schedule" shall mean the document delivered by Seller and
Buyer simultaneously with the execution of this Agreement containing the
information required to be included therein pursuant to this Agreement.

    "Environmental Claims" shall mean Claims alleging or brought in connection
with Environmental Noncompliances which first occurred prior to the Closing
Date, including Claims arising under CERCLA; Claims for personal injury or
property damage or damages to natural resources; and Claims for the recovery
of response costs, or costs in connection with administrative or judicial
orders directing the performance of investigations, response or Remedial
Actions under any Environmental Law.

    "Environmental Laws" shall mean all laws governing, regulating or
pertaining to environmental matters or the protection of the environment or
environmentally sensitive areas as in effect prior to the Closing Date
(including CERCLA and RCRA) and the common law related to nuisance.

    "Environmental Noncompliance" shall mean any aspect of the Company's
Business that gives rise to liability under or is not in compliance with any
applicable Environmental Laws and arises out of or relates to the operation of
the Company's Business prior to the Closing Date.

    "Encumbrance" shall mean any lien (statutory or other), claim, charge,
security interest, mortgage, deed of trust, pledge, hypothecation, assignment,
conditional sale or other title retention agreement, preference, priority or

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<PAGE>

other security agreement or preferential arrangement of any kind or nature,
and any easement, encroachment, covenant, restriction, contract right, right
of way, defect in or cloud on title or other encumbrance of any kind.

    "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder.

    "Escrow Agreement" shall mean the agreement the form of which is Exhibit A
to this Agreement.

    "Exchange Properties" shall mean all of Seller's interests in the
properties described in Section 1.01B of the Disclosure Schedule and other
assets related thereto which are to be transferred to the Company pursuant to
the Exchange Agreement.

    "Governmental Entity" shall mean any governmental, regulatory or Indian
authority or instrumentality, or any department or agency thereof, including
any court, administrative agency, commission or central banking authority.

    "Hazardous Materials" shall mean (a) hazardous waste, hazardous
substances, hazardous contents, toxic substances or related substances,
whether solids, liquids or gases, defined as "hazardous wastes," "hazardous
substances," "toxic substances," "pollutants," "contaminants," or other
similar designations in, or otherwise subject to, regulations under any
Environmental Law, including asbestos and polychlorinated biphenyls, and (b)
petroleum, refined petroleum products and any such substances in their used or
waste state.

    "Hydrocarbons" shall mean oil, condensate, natural gas, natural gas
liquids, casinghead gas and liquid and gaseous hydrocarbons and any
combination or mixture of the foregoing.

    "IRS" shall mean the United States Internal Revenue Service.

    "Lien" shall mean any mortgage, pledge, security interest, lien, charge,
encumbrance, equity, claim, option, tenancy, right or restriction on transfer
of any nature whatsoever.

    "Leases" shall mean all oil, gas and/or mineral leases in which the
Company owns an interest.

    "Liabilities" shall mean the current, long-term and other liabilities of
the Company at any given date.

    "Loss" shall mean any loss, damage, liability, cost, assessment or expense
including any interest, fine, court cost, reasonable investigation cost,
penalty, reasonable attorneys' and expert witnesses' fees, or reasonable
disbursements and expenses.

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<PAGE>

    "NRI" shall mean a fractional or percentage interest in and to all
Hydrocarbons produced from or allocated to a Property after deduction of all
lessors' royalties, overriding royalties, and other burdens and payments out
of production that burden such fractional or percentage interest in such
Property.

    "Oil and Gas Assets" shall mean collectively the Leases, Wells,
Properties, Systems and Related Facilities.

    "Oil and Gas Agreements" shall mean all of the Leases, assignments or
other instruments or agreements that comprise or affect the Oil and Gas Assets
or the ownership or operation thereof by the Company and all contractually
binding arrangements to which the Oil and Gas Assets may be subject (including
oil, gas and other mineral leases; overriding royalty assignments; net profits
interest assignments; farm-out and farming agreements; option agreements;
forced pooling orders; assignments of production payments; unit agreements;
joint operating agreements; unit operating agreements; production, marketing,
gathering, processing, purchase and transportation contracts; and division
orders).

    "Operated Wells" shall mean all oil and gas wells for which the Company
acts as operator, a complete list of which is set forth in Section 1.01C of
the Disclosure Schedule.

    "PBGC" shall mean the Pension Benefit Guaranty Corporation.

    "Permit" shall mean any permit, approval, authorization, license, variance
or permission required by a Governmental Entity under any applicable
Environmental Law.

    "Permitted Encumbrances" shall mean:

            (a)    liens for taxes and other governmental charges and
assessments arising in the ordinary course of business which are not yet due
and payable, or, if due, are being challenged in good faith by appropriate
proceedings and as to which adequate reserves have been established on the
Company's Financial Statements;

            (b)    liens of landlords and liens of carriers, warehousemen,
mechanics and materialmen and other like liens arising in the ordinary course
of business for sums not yet due and payable, and that will be paid or
discharged in the ordinary course of business or, if delinquent, that are
being contested in good faith in the ordinary course of business and as to
which adequate reserves have been established on the Company's Financial
Statements;

            (c)    Encumbrances under operating agreements, unitization and
pooling arrangements and Hydrocarbon sales contracts that secure payment of
amounts not yet due and payable, or, if due, that are being contested in good
faith in the ordinary course of business, which are of a nature and scope
customary in connection with oil and gas drilling and producing operations and

                                     5
<PAGE>

as to which adequate reserves have been established on the Company's Financial
Statements;

            (d)    easements, rights-of-way, servitudes, permits, surface use
limitations, surface leases, and other rights in respect of surface operations
that do not materially interfere with the Company's operations of the portion
of the Properties burdened thereby;

            (e)    rights reserved to or vested in any Governmental Entity to
control or regulate any of the Properties and all applicable laws, rules,
regulations, and orders of such authorities so long as the same do not (i)
decrease the Company's NRI below the NRI shown in the Property Schedule, or
increase the Company's WI above the WI shown in the Property Schedule, without
at least a proportionate increase in the Company's NRI, or (ii) create any
liens in respect of such Properties;

            (f)    the terms and conditions of the Contracts relating to the
Properties to the extent such terms and conditions (i) do not decrease the
Company's NRI below the NRI shown in the Property Schedule, or increase the
Company's WI above the WI shown in the Property Schedule, without at least a
proportionate increase in the Company's NRI, (ii) are normal and customary in
the oil and gas industry, and (iii) do not conflict with any other portion of
this definition of Permitted Encumbrances;

            (g)    royalties, overriding royalties, net profits interests,
production payments, reversionary interests, and similar interests that do not
decrease the Company's NRI below the NRI shown in the Property Schedule, or
increase the Company's WI above the WI shown in the Property Schedule, without
at least a proportionate increase in the Company's NRI;

            (h)    conventional rights of reassignment requiring the Company
to reassign interests in any Property to a third party, or to give notice to
the holders of such rights, prior to surrendering, abandoning or releasing
such Property;

            (i)    calls on production exercisable only at prices
substantially equivalent to then-current fair market value;

            (j)    consents to assignment and preferential rights to purchase
any or all of the Properties other than any such consents or rights which (i)
are applicable to the transactions contemplated by this Agreement or (ii) were
applicable to a previous transaction involving the transfer of all or any
portion of the Properties but were not complied with at the time of the
consummation of such transaction;

            (k)    all rights to consent by, required notices to, filings
with, or other action by Governmental Entities in connection with the
Properties; and

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<PAGE>

            (l)    mortgages, financing statements and other security
interests or liens in favor of the Citizens Bank of Ada covering any of the
assets or properties of the Company which are to be released or terminated
prior to the Closing.

    "Person" shall mean an individual, a partnership, a limited liability
company, a joint venture, a corporation, a trust, an unincorporated
organization, a Governmental Entity or any other entity.

    "Properties" shall mean the Exchange Properties and all of the Company's
right, title and interest in:  the Leases; fee, mineral, royalty,
nonparticipating royalty and overriding royalty interests; net profits
interests; production payments; other payments out of or pursuant to
production of Hydrocarbons and other rights, including contractual rights to
production, or rights acquired pursuant to regulatory order or rights acquired
pursuant to pooling or unitization.

    "Property Schedule" shall mean the Schedule included as Section 5.09 of
the Disclosure Schedule which sets forth the NRI, WI and Value attributed to
each Property.

    "RCRA" means the Resource Conservation and Recovery Act, as amended, or
any successor statutes or regulations promulgated thereunder.

    "Records" shall mean all books and records of the Company, including title
records, computer records, Contracts, correspondence, microfiche lists,
geological and geophysical records, data and information (including
interpretive information), production records, electric logs, core data,
pressure data, decline curves and graphical production curves and accounting
records.

    "Related Facilities" shall mean all property, whether real or personal,
(other than the Leases and the Properties) and other rights of any nature
whatsoever owned by the Company and used in connection with operations
conducted at or incident or related to the Properties or the Leases, whether
located on or off of the Properties or the Leases or on properties pooled or
unitized therewith, including the Systems; all wells, fixtures, casing and
tubing; production, gathering, treating, processing, compression, dehydration,
salt water disposal and pipeline equipment and facilities; tanks, machines,
tools, dyes, vessels, and similar equipment and facilities; and all licenses,
leases, easements, permits, actions and rights-of-way.

    "Release" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including the movement of any Hazardous
Material or other substance through or in the air, soil, surface water,
groundwater or property.

    "Remedial Action" shall mean all actions required by applicable
Environmental Law (whether voluntarily or involuntarily undertaken) to (a)
clean up, remove, treat or in any other way address any Hazardous Material or
other substance in the indoor or outdoor environment; (b) prevent the Release
or threat of Release, or minimize the further Release of any Hazardous
Material so it does not migrate or endanger or threaten to endanger the indoor

                                     7
<PAGE>

or outdoor environment; or (c) perform pre-remedial studies and investigations
and post-remedial monitoring and care.

    "Replacement Properties" shall mean all of the Company's interests in the
properties described in Section 1.01A of the Disclosure Schedule and other
assets related thereto which are to be transferred to Seller pursuant to the
Exchange Agreement.

    "Systems" shall mean all gas gathering facilities, pipelines and gas
processing plants in which the Company owns an interest and all licenses,
leases, easements, permits, actions, rights-of-way and all other real and
personal property related thereto.

    "Tax Return" shall mean any report, return, declaration or other
information required to be supplied to a Governmental Entity in connection
with Taxes.

    "Taxes" shall mean all taxes, levies or other like assessments, charges or
fees, including income, gross receipts, severance, excise, value added, real
or personal property, withholding, asset, sales, use, license, payroll,
transaction, capital, business, corporation, employment, net worth and
franchise taxes, or other governmental taxes imposed by or payable to the
United States of America or any State or foreign Governmental Entity, whether
computed on a separate, consolidated, unitary, combined or any other basis;
and in each instance such term shall include any interest, penalties or
additions to tax attributable to any such Tax.

    "Title Defect" shall mean any Encumbrance, irregularity of title or other
condition that causes the Company's title to one or more of the Properties (or
any portion thereof), or the Hydrocarbons attributable thereto, to be less
than Defensible Title.

    "Value" shall mean the value allocated to a Property set forth on the
Property Schedule.

    "Wells" shall mean all oil and gas wells located on the Properties in
which the Company owns an interest, including plugged and abandoned wells and
wells which require plugging and/or abandonment.

    "WI" shall mean a fraction or percentage of the costs and expenses
associated with the maintenance, exploration, development, operation and
abandonment of a Property.

    1.02    Certain References.  References made to an "Article" or a
"Section," unless otherwise specified, refer to the corresponding Article or
Section of this Agreement.  All references to the Company in Seller's
representations and warranties set forth in this Agreement shall be deemed to
include Oil Center Operating, Inc., an Oklahoma corporation, which merged into
the Company on December 31, 1998.  References in this Agreement to the
knowledge or belief of Seller mean the actual knowledge or conscious awareness
of Seller.  The words "this Agreement," "herein," "hereby," "hereunder" and
"hereof," and words of similar import, refer to this Agreement as a whole and
not to any particular subdivision unless expressly so limited.  The words
"this Article," "this Section" and "this subsection," and words of similar

                                     8
<PAGE>

import, refer only to the Article, Section or subsection hereof in which such
words occur.

    1.03    Plurals.  As used herein, the plural form of any noun shall
include the singular and the singular shall include the plural, unless the
context otherwise requires.  Each of the masculine,
neuter and feminine forms of any pronoun shall include all such forms unless
the context otherwise requires.

    1.04    Interpretation.  The Article and Section headings contained in
this Agreement are solely for the purpose of reference, and shall not in any
way affect the meaning or interpretation of this Agreement.  The word "or" is
not exclusive, and the word "including" (in its various forms) means including
without limitation.

                                  ARTICLE II

                          REDEMPTION OF REDEEMED SHARES;
                       PURCHASE AND SALE OF SELLER'S SHARES

    2.01    Redemption.  Prior to the Closing, Seller shall transfer, assign
and convey the Redeemed Shares to the Company and the Company shall purchase
and redeem the Redeemed Shares from Seller.  The stock certificate(s)
representing the Redeemed Shares shall be delivered by Seller to the Company
prior to the Closing duly endorsed for transfer free and clear of any Liens.

    2.02    Consideration for Redemption.  The consideration to be given by
the Company to Seller for the Redeemed Shares is set forth at Schedule 2.02 of
the Disclosure Schedule (the "Redemption Interests").  The Redemption
Interests shall be conveyed to Seller by the Company's execution and delivery
of the assignment and bill of sale contemplated by the form of Stock
Redemption Agreement attached hereto as Exhibit B (the "Redemption
Agreement").  Such assignment shall be effective as of the Closing Date and
shall be expressly made without any warranty or representation, express or
implied, as to title, condition or any other matter (but, to the extent
transferable, with subrogation of Seller to all covenants and warranties
theretofore made by any of the Company's predecessors in title).

    2.03    The Company's Oil and Gas Properties.  The redemption of the
Redeemed Shares shall involve only the Redemption Interests.  All oil and gas
properties of the Company and all other assets and properties of the Company
shall remain in the Company.

    2.04    Purchase and Sale.  At the Closing, Buyer shall purchase from
Seller, and Seller shall sell to Buyer, the Seller's Shares on the terms and
subject to the conditions set forth in this Agreement.

    2.05    Purchase Price.  In consideration for the purchase of the Shares,
Buyer shall pay to Seller the sum of $8,000,000.00 (the "Purchase Price"),

                                      9
<PAGE>

subject to adjustment (a) prior to the Closing as set forth in Sections
5.07(c) and 5.09 and (b) after the Closing as set forth in Section 2.06.  The
Purchase Price, as so adjusted prior to the Closing, shall be paid to Seller
at the Closing.

    2.06    Adjustment Amount.

            (a)     The Purchase Price was determined based on the assumption
that the Adjustment Amount at the Closing Date would be equal to $0.00 (the
"Target Adjustment Amount").  Within 90 days after the Closing Date, Buyer
will cause the Company to prepare and provide to Buyer and Seller a statement
showing Current Assets, Liabilities and the Adjustment Amount as of the
Closing Date (the "Closing Statement").  Seller shall be provided with
reasonable access to the Company's workpapers and back-up materials relating
to the preparation of the Closing Statement.

            (b)    If Seller objects to the Company's calculation of the
Adjustment Amount as reflected in the Closing Statement, Seller shall deliver
to Buyer within 30 days after receipt of the Closing Statement (the "Objection
Period"), a written statement describing his objections thereto.  In the event
Seller fails to deliver such written statement prior to the expiration of the
Objection Period, the Closing Statement shall be final, conclusive and binding
upon Buyer and Seller.  In the event Seller delivers such written statement
prior to the expiration of the Objection Period, Seller and Buyer will use all
reasonable efforts to resolve any dispute.  If a final resolution is not
obtained within 30 days after Seller has delivered such written notice, either
Seller or Buyer may submit any remaining disputes for resolution to a
nationally recognized accounting firm mutually agreeable to Seller and Buyer
(such accounting firm shall be referred to herein as the "Arbitrating
Accountants") which firm shall resolve such dispute within 30 days following
its selection.  The Arbitrating Accountants' determination of the Adjustment
Amount shall be final, conclusive and binding upon Buyer and Seller.

            (c)    Seller and Buyer shall cooperate with the Arbitrating
Accountants in all respects, including providing the Arbitrating Accountants
with all work papers and back-up materials used in preparation and review of
their calculations of the Adjustment Amount.

            (d)    The fees, expenses and costs of the Arbitrating Accountants
shall be borne by the party (Seller or Buyer) whose estimation of the
Adjustment Amount, taking into account any changes made prior to submission to
the Arbitrating Accountants, is farthest from the Adjustment Amount as finally
determined by the Arbitrating Accountants.

            (e)    Within 10 days after the first to occur of (i) the
expiration of the Objection Period, in the event no objection has been made,
(ii) the mutual resolution of any dispute, in the event an objection has been
made, or (iii) the delivery of the final calculation of the Adjustment Amount
by the Arbitrating Accountants:  (x) if the amount of the Adjustment Amount,
as reflected on the Closing Statement, is less than the Target Adjustment
Amount, Seller shall pay to Buyer the amount by which the Adjustment Amount,

                                     10
<PAGE>

as reflected on the Closing Statement, is less than the Target Adjustment
Amount, with interest from the Closing Date until payment at a rate per annum
equal to 8%, or (y) if the amount of the Adjustment Amount, as reflected on
the Closing Statement, is greater than the Target Adjustment Amount, Buyer
shall pay to Seller the amount by which the Adjustment Amount, as reflected on
the Closing Statement, is greater than the Target Adjustment Amount, with
interest from the Closing Date until payment at a rate per annum equal to 8%.
The amount of such payment shall be treated as an adjustment to the Purchase
Price.

    2.07    Closing.  Subject to Section 9.01, the Closing shall take place in
the offices of Conner & Winters in Tulsa, Oklahoma, at 10:00 a.m. local time
on June 1, 2000, or at such other place, date and time as the Parties may
mutually agree; provided, however, that Buyer may, upon notice to Seller given
prior to June 1, 2000, delay the Closing Date until June 30, 2000, in the
event Buyer's bank or other financing party has not satisfied itself as to
title or other issues with respect to the Company prior to June 1, 2000.

    2.08    Deliveries at the Closing.

            (a)    At the Closing, Buyer shall deliver the following to
Seller:

                   (i)    the Purchase Price, as the same may be adjusted
pursuant to Sections 5.07(c) and 5.09, less the Deposit, by wire transfer to
an account designated in writing by Seller at least two Business Days prior to
the Closing Date; and

                   (ii)    the written instructions to Escrow Agent
contemplated by Section 2.09(a).

            (b)    At the Closing, Seller shall deliver the following to
Buyer:

                   (i)    a certificate or certificates evidencing the
Seller's Shares, in negotiable form, duly endorsed in blank or with separate
stock powers executed in blank attached thereto; and

                   (ii)    the written instructions to Escrow Agent
contemplated by Section 2.09(a).

    2.09    Earnest Money Deposit.  Upon the signing of this Agreement, Buyer
has deposited with Citizens Bank of Ada as escrow agent ("Escrow Agent") Five
Hundred Thousand Dollars ($500,000.00) as an earnest money deposit ("Deposit")
pursuant to the Escrow Agreement.  The Deposit shall be invested in an
interest bearing account and any interest earned on the Deposit shall be
considered part of the Deposit.  Pursuant to the terms of the Escrow
Agreement:

            (a)    Escrow Agent will pay the Deposit to Seller in connection
with the Closing upon the Parties' written instructions to Escrow Agent to
such effect; or

                                      11
<PAGE>

            (b)    Escrow Agent will pay the Deposit to Seller no earlier than
the fifth Business Day after Seller's notification to Escrow Agent and Buyer
that (i) the Closing failed to occur on or before June 30, 2000 (or any
extension of such date by written agreement signed by Seller and Buyer and
furnished to Escrow Agent) because Buyer failed to make one or more of the
deliveries required of Buyer by Section 2.08(a) and (ii) the conditions to the
obligations of Buyer stated in Article VII have been fulfilled or waived in
writing by Buyer; or

           (c)    Escrow Agent will return the Deposit to Buyer (i) upon any
termination of this Agreement other than upon Escrow Agent's rightful payment
of the Deposit to Seller pursuant to Section 2.09(b) or (ii) if by 5:00 p.m.,
Central Time, on June 30, 2000 (or any extension of such time and/or date by
written agreement signed by Seller and Buyer and furnished to Escrow Agent)
Escrow Agent has received neither the written instructions specified in
subsection (a) of this Section 2.09 nor the written certification specified in
subsection (b) of this Section 2.09.

Buyer and Seller agree that (x) the amount of actual damages which Seller
would suffer as a result of Buyer's default would be extremely difficult to
determine and (y) the amount of the Deposit is a reasonable estimate of
Seller's damages, is intended to constitute a fixed amount of liquidated
damages in lieu of all other remedies available to Seller, and is not intended
to constitute a penalty.

                                 ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF SELLER

    Seller hereby represents and warrants to Buyer as follows:

    3.01    Corporate Organization.  The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Oklahoma.  The Company has all requisite corporate authority and power to
own and operate its properties and assets and to conduct its business as such
business is now being conducted by it.  The Company is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the conduct of its business or the ownership of its properties and
assets requires such qualification or good standing, except where the failure
to be so qualified and in good standing would not have a material adverse
effect on the Company's Business.  Copies of the certificate of incorporation
and bylaws of the Company have heretofore been delivered to Buyer, and such
copies are accurate and complete as of the date hereof.

                                      12
<PAGE>

    3.02    Capitalization; Seller's Shares; Subsidiaries.  The authorized
capital stock of the Company consists of Eight Thousand (8,000) shares of
common stock, par value $10.00 per share, of which One Thousand Nine Hundred
Thirty-five (1,935) shares are issued and outstanding.  The Redeemed Shares
and the Seller's Shares have been duly authorized and validly issued, are
fully paid and non-assessable, and were issued in compliance with all
applicable federal and state securities laws.  Seller owns all of the Redeemed
Shares and the Seller's Shares free and clear of all Liens.  There are no
outstanding subscriptions, options, warrants, convertible securities, calls,
commitments, agreements or rights (contingent or otherwise) to purchase or
otherwise acquire from the Company or Seller any shares of, or any securities
convertible into, the capital stock of the Company.  There are no preemptive
rights with respect to the issuance of any shares of the capital stock of the
Company.  The Redeemed Shares and the Seller's Shares are held beneficially
and of record by Seller.  The Seller's Shares will be conveyed to Buyer at the
Closing free and clear of any Lien, restriction on transfer (other than any
restrictions under federal and state securities laws), option, warrant,
purchase right or other contract or commitment (other than this Agreement).
The Redeemed Shares and the Seller's Shares are not subject to any proxy,
shareholders agreement, voting trust agreement or other contract, agreement,
arrangement, commitment or understanding restricting or otherwise relating to
the voting, dividend, disposition or other rights with respect to the Redeemed
Shares or the Seller's Shares.  Except as set forth on Section 3.02 of the
Disclosure Schedule, the Company has never owned and does not own any stock or
other equity interest (controlling or otherwise) in any Person excluding stock
representing less than 5% of the outstanding stock of a publicly traded
company and excluding any stock included in the Redeemed Interests.

    3.03    Validity and Binding Effect.  This Agreement has been duly and
validly executed and delivered by Seller and constitutes a valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
except that (a) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium (whether general or specific) or other similar laws
now or hereafter in effect relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.

    3.04    No Violation.   Except as set forth in Section 3.04 of the
Disclosure Schedule, none of the execution and delivery of this Agreement, the
performance by Seller of his obligations hereunder or the consummation by
Seller of the transactions contemplated hereby will:

            (a)    require Seller or the Company to file or register with, or
obtain any permit, authorization, consent or approval of, any Governmental
Entity;

            (b)    require Seller or the Company to obtain any authorization,
consent or approval of any other Person;

            (c)    violate any provision of the certificate of incorporation
or bylaws of the Company;

                                      13
<PAGE>

            (d)    either itself or with notice or lapse of time or both,
violate or be in conflict with, or constitute a breach or default under, or
result in the termination of, or accelerate the performance required by, or
cause the acceleration of the maturity of any debt or obligation pursuant to,
or result in the creation or imposition of any Lien upon any of the Seller's
Shares or any of the properties or assets of the Company under any Contract or
other arrangement to which Seller or the Company is a party or by which Seller
or the Company is bound or to which any of their assets is subject;

            (e)    violate any statute, law, regulation or rule of any
Governmental Entity applicable to Seller or the Company; or

            (f)    violate any judgment, decree or order of any Governmental
Entity or any arbitration award applicable to Seller or the Company.

    3.05    Financial Statements.  Annexed as Section 3.05(a) of the
Disclosure Schedule are the Company Financial Statements.  The Company
Financial Statements have been prepared in accordance with the accounting
principles described therein and present fairly in all material respects the
financial condition and results of operations of the Company at the dates
thereof and for the periods then ended.  At the Balance Sheet Date, the
Company did not have any indebtedness or liability, fixed or unfixed,
liquidated or unliquidated, secured or unsecured, accrued, absolute,
contingent or otherwise, which were not reflected or reserved against on the
Company Financial Statements or described in the notes thereto.

    3.06    No Material Adverse Change.  Since the Balance Sheet Date and
except as contemplated by this Agreement (including Section 2.02), the Company
has not

            (a)    experienced any change in the financial condition or
results of operations of the Company that is materially adverse to the
Company's Business;

            (b)    suffered any damage, destruction or similar Loss to any of
its properties or assets as a result of flood, fire, explosion or other
casualty (whether or not covered by insurance) in an amount in excess of
$10,000 in the aggregate;

            (c)    experienced any event or events which in any one case or in
the aggregate has resulted in a material adverse change in the Company's
Business;

            (d)    paid or declared any dividends or distributions or
purchased, redeemed, acquired or retired any of its indebtedness, stock or
other securities;

            (e)    except for Permitted Encumbrances, suffered or permitted
any Lien to arise or be granted or created against or upon any of its assets;

            (f)    amended its certificate of incorporation or bylaws;

                                      14
<PAGE>

            (g)    made or permitted any amendment, supplement, modification
or termination of any Contract other than in the ordinary course of business
and consistent with past practice;

            (h)    sold, leased, transferred, assigned or otherwise disposed
of any assets that, individually or in the aggregate, had a book value at the
time of such lease, transfer, assignment or disposition of $5,000 or more;
provided, however, that this subsection (h) shall not apply to products sold,
leased, transferred, assigned or otherwise disposed of in the ordinary course
of business and consistent with past practice;

            (i)    made any investment in or contribution, advance or loan to
any Person;

            (j)    paid, loaned or advanced (other than the payment, advance
or reimbursement of expenses in the ordinary course of business) any amounts
to, or sold, transferred or leased any of its assets to, or entered into any
other transactions with, any of its Affiliates which will remain outstanding
as of the Closing;

            (k)    made any material change in any of the accounting
principles followed by the Company;

            (l)    increased benefits or benefit plan costs or changed bonus,
insurance, pension, compensation or other benefit plans or arrangements or
granted any bonus or increase in wages, salary or other compensation or made
any other change in employment terms to any officers, directors or employees
of the Company;

            (m)    canceled, compromised, waived, or released any right or
claim (or series of related rights and claims) involving more than $5,000,
individually, or $25,000, in the aggregate;

            (n)    made any loan to, or entered into any other transaction
with, any of its directors, officers, or employees outside the ordinary course
of business which will remain outstanding as of the Closing;

            (o)    made any capital expenditures in excess of $10,000,
individually, or $25,000, in the aggregate; or

            (p)    agreed, whether in writing or otherwise, to do any of the
actions set forth in subsections (d) through (o) above.

                                      15
<PAGE>

    3.07    Oil and Gas Assets.

            (a)    Except as set forth in Section 3.07 of the Disclosure
Schedule, Section 1.01A of the Disclosure Schedule, and the Property Schedule,
the Company does not own any Oil and Gas Assets.

            (b)    Section 1.01A of the Disclosure Schedule and the Property
Schedule accurately reflects the Oil and Gas Assets as shown on the books and
records of the Company.

            (c)    For purposes of this Section 3.07, it is understood and
agreed that the sale of the Seller's Shares to Buyer is expressly conditioned
upon Buyer's approval of title to, ownership of, interest in and right to
possess the Properties.  Seller's sole warranty with respect to the title to
the Properties is limited to the warranty that there are no Title Defects
thereon created or arising by, through or under the Company (but not
otherwise).

            (d)    Section 1.01C of the Disclosure Schedule sets forth a
complete list of all Operated Wells.

            (e)    To Seller's or the Company's knowledge, Section 1.01C of
the Disclosure Schedule sets forth the number of Wells with respect to each
Lease that are currently inactive.

    3.08    Equipment and Inventory.  The Company has good and valid title,
free and clear of all Liens, to the equipment and inventory listed in Section
3.08 of the Disclosure Schedule.  Such equipment and inventory, together with
the Oil and Gas Assets, constitute all the material assets and properties that
are used in or necessary for the Company's Business.  All of such equipment
and inventory are in sufficient operating condition and repair for the conduct
of the Company's Business in the ordinary course and consistent with past
practices (except for ordinary wear and tear and obsolescence).

    3.09    Title to Real Property.  Except for the Oil and Gas Assets and
except as described in Section 3.08 and Section 3.09 of the Disclosure
Schedule and Section 1.01A of the Disclosure Schedule, the Company does not
own or lease any interest in real property.  The use and operation of the real
property described in such Section in the conduct of the business of the
Company does not violate in any material respect any instrument of record or
agreement affecting such real property.  The Company has good and valid title
to such real property free and clear of all Liens.  The existing office lease
between Seller and the Company shall be terminated prior to the Closing and
the Company shall have no further obligations thereunder.

    3.10    Compliance with Laws Other than Environmental Laws.  Except with
respect to Environmental Laws which are the subject of Section 3.17 to
Seller's or the Company's knowledge:

                                      16
<PAGE>

            (a)    the Company's Business and all operations and activities in
connection therewith have been and are conducted and operated in compliance in
all material respects with all laws, ordinances, regulations and orders of all
Governmental Entities;

            (b)    the Company has all permits, certificates, licenses,
approvals and other authorizations required in connection with the operation
of the Company's Business except those the absence of which will not have a
material adverse effect on the Company's Business; and

            (c)    no written notice has been received by the Company and, to
Seller's or the Company's knowledge, no investigation or review is pending or
threatened by any Governmental Entity, with respect to (i) any alleged
violation by the Company of any law, ordinance, regulation or order of any
Governmental Entity, or (ii) any alleged failure to have any permits,
certificates, licenses, approvals and other authorizations required in
connection with the operation of the Company's Business.

    3.11    Contracts and Commitments.

            (a)    Section 3.11 of the Disclosure Schedule sets forth a list
of (x) all non-competition or other agreements preventing or restricting the
Company from carrying on any business, (y)  all secrecy and confidentiality
agreements (other than in connection with this Agreement), and (z) all of the
following Contracts with respect to which the aggregate amount that could
reasonably  be expected to be paid or received thereunder in the future
exceeds $5,000 per annum or $10,000 in the aggregate:

                   (i)    all leases of personal or real property (other than
the Leases) to which the Company is a party;

                  (ii)    all commodity or other swap, exchange or futures
contracts;

                 (iii)    all marketing agreements;

                  (iv)    all Oil and Gas Agreements (excluding Leases);

                   (v)    all credit agreements, mortgages, security
agreements, letters of credit, pledge agreements, bonds, notes, indentures or
other instruments or agreements of the Company relating to borrowed or loaned
money or the extension of credit which will not be canceled or otherwise
terminated prior to the Closing Date;

                  (vi)    all guarantees and other agreements or instruments
executed by the Company with respect to the obligations of another Person;

                 (vii)    all surety, guarantee or indemnification agreements;

                                      17
<PAGE>

                (viii)    employment, consulting, agency, collective
bargaining and other similar contracts, agreements, and other instruments and
arrangements relating to or for the benefit of current, future or former
employees, officers, directors, agents, independent contractors or
consultants;

                  (ix)    brokerage or finder's agreements;

                   (x)    joint venture, partnership and similar contracts
involving a sharing of profits or expenses;

                  (xi)    asset purchase agreements and other acquisition or
divestiture agreements, including any agreements relating to the sale, lease
or disposal of any assets (other than sales of inventory in the ordinary
course of business) or involving continuing indemnity or other obligations;
and

                 (xii)    contracts, agreements or commitments with Seller or
any employee, director, officer, stockholder or Affiliate of the Company.

    Seller has delivered to Buyer complete and correct copies of all written
Contracts, together with all amendments thereto, and accurate descriptions of
all material terms of all oral Contracts, set forth or required to be set
forth in Section 3.11 of the Disclosure Schedule.

            (b)    Except as set forth in Section 3.11 of the Disclosure
Schedule and except those of which Buyer is notified by Seller pursuant to
Section 5.07(d), there are no agreements, authorizations for expenditures or
proposals pending that (i) require, permit or propose the drilling of wells or
other operations in order to earn or to continue to hold all or any portion of
the Properties or (ii) obligate the Company to make payments of any material
amounts in connection with the drilling of wells or other material
expenditures affecting the Properties.

            (c)    Except as set forth in Section 3.11 of the Disclosure
Schedule, the Company is not obligated by virtue of (i) a prepayment
arrangement under any contract for the sale of Hydrocarbons and containing a
"take or pay" or similar provision, (ii) a production payment or (iii) any
other arrangement to deliver Hydrocarbons or proceeds from the sale thereof
attributable to the Properties at some future time without then or thereafter
receiving full payment therefor.

            (d)    Except as set forth in Section 3.11 of the Disclosure
Schedule, there exist no gas or transportation imbalances with respect to the
Wells or the Properties.

            (e)    All ad valorem, property, production, severance, excise and
similar taxes and assessments based on or measured by the ownership of the

                                      18
<PAGE>

Properties or the production of Hydrocarbons or the receipt of proceeds
therefrom on the Properties that have become due and payable have been
properly paid, including any such taxes or assessments due on Indian leases.

            (f)    Except for items as to which a bona fide dispute exists
which either are not material in the aggregate or as to which appropriate
reserves have been established by the Company on the Company's Financial
Statements and items held in suspense and as set forth in Section 3.11 of the
Disclosure Schedule, the Company is current on all payments to vendors,
contractors or subcontractors and in its disbursements to royalty owners and
other parties to whom the Company has a duty to pay or disburse, and the
Company shall continue to cause such payment and disbursements to be made
until the Closing Date.

            (g)    The Company does not maintain suspense accounts.  All
suspense accounts relating to production from the Operated Wells are
maintained by the purchasers of such production.

            (h)    To the Seller's or the Company's knowledge, all payments
(including royalties, delay rentals, shut-in royalties, minimum royalties and
valid calls under unit or operating agreements) due under the Leases and Oil
and Gas Agreements have been made by the Company.

            (i)    Except for standard and customary provisions of joint
operating agreements and leases which entitle working interest and royalty
owners the right to take production in kind or as set forth in Section 3.11 of
the Disclosure Statement, no Person has any call upon any production for the
Properties, option to purchase any production from the Properties, or similar
rights with respect to any production from the Properties.

    3.12    Contracts Not in Default.  Neither Seller nor the Company has
received any notice that the Company is in default under any Contract listed
or required to be listed in Section 3.11 of the Disclosure Schedule, and all
of such Contracts are enforceable by the Company in all material respects in
accordance with their terms except that (a) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.  There does not exist
under any such Contract any event of default or event or condition that, after
notice or lapse of time or both, would constitute a violation, breach or event
of default thereunder on the part of the Company or, to the knowledge of
Seller or the Company, any other party thereto.  No consent of any third party
is required under any such Contract as a result of or in connection with, and
the enforceability of any such Contract will not be affected in any manner by,
the execution, delivery and performance of this Agreement.  The rights of the
Company under such Contracts are free of all Liens.

                                     19
<PAGE>

    3.13    Insurance.  Section 3.13 of the Disclosure Schedule lists all
policies or binders of insurance and programs of self-insurance relating to
fire, liability, worker's compensation and other forms of insurance currently
in effect covering the Company, the Oil and Gas Assets and the Company's
Business.  None of such policies or binders was obtained through the use of
materially false or misleading information or the failure to provide the
insurer with all information requested in order to evaluate the liabilities
and risks insured.  There is no material default by the Company with respect
to any provision contained in any such policy or binder, and the Company has
not failed to give any notice or present any claim under any such policy or
binder in due and timely fashion.  Insofar as such matters are within the
control of the Company, all such policies, binders and programs will be
maintained in force from the date hereof through the Closing Date.

    3.14    Litigation and Judgments.  Except as set forth in Section 3.14 of
the Disclosure Schedule, there is no action, suit, proceeding or investigation
by or before any Governmental Entity or by or on behalf of any Person pending
or, to Seller's or the Company's knowledge, threatened (i) against or
involving the Company or (ii) against or involving Seller or the Company which
questions or challenges the validity of this Agreement or any action taken or
to be taken pursuant to this Agreement or in connection with the transactions
contemplated hereby.  The Company is not subject to any judgment, order or
decree entered in any lawsuit or proceeding.

    3.15    Brokers and Finders.  Neither Seller nor the Company has retained
any broker, finder or investment banker or incurred any liability for any
brokerage fees, commissions, finders' fees or investment banking fees in
connection with the transactions contemplated by this Agreement.

    3.16    Labor Matters.  No Company Employees are represented by a labor
organization or covered by a collective bargaining agreement, nor have any
Company Employees made a pending demand for recognition or, to Seller's or the
Company's knowledge, filed a petition seeking a representation proceeding with
the National Labor Relations Board.  There are no pending or, to Seller's or
the Company's knowledge, threatened strikes, slowdowns or other stoppages with
respect to Company Employees.  To Seller's or the Company's knowledge, there
are no pending employment related complaints or charges with any federal,
state, local or foreign governmental agency or court with respect to any
Company Employee.

    3.17    Environmental Compliance.  Except as may have been previously
disclosed to Buyer in writing, to Seller's or the Company's knowledge:

            (a)    there are no Environmental Claims, investigations or
inquiries pending or threatened against the Company (or naming the Company as
a potentially responsible party) based on Environmental Noncompliance at any
of the Properties or any properties formerly owned, leased or operated by the
Company;

            (b)    all activities of the Company in the conduct of the
Company's Business have been conducted in compliance in all material respects
with all applicable Environmental Laws;

                                      20
<PAGE>

            (c)    the Company has not and no other Person has, with respect
to the Company's Business, filed any notice under any Environmental Law
reporting past or present treatment, storage or disposal of a Hazardous
Material or reporting a Release of a Hazardous Material;

            (d)    no Lien in favor of any Governmental Entity for (i) any
liability under Environmental Laws or (ii) damages arising from or costs
incurred by such Governmental Entity in response to a Release of a Hazardous
Material or other substance into the environment has been filed or is attached
to any property or assets of the Company;

            (e)    the Company does not have any material contingent liability
in connection with (i) the Release or threatened Release into the environment
at, beneath or on any property now or previously owned or leased by the
Company or (ii) the storage or disposal of any Hazardous Material;

            (f)    the Company has not received any claim, complaint, notice,
letter of violation, inquiry or request for information involving any matter
which remains unresolved as of the date hereof with respect to any alleged
violation of any Environmental Law or regarding potential liability under any
Environmental Law relating to operations or conditions of any facilities or
property (including off-site storage or disposal of any Hazardous Material
from such facilities or property) currently or formerly owned, leased or
operated by the Company;

            (g)    no property now or previously owned, leased or operated by
the Company is listed on the National Priorities List pursuant to CERCLA or on
the CERCLIS or on any other federal or state list as a site requiring
investigation or cleanup;

            (h)    the Company is not directly transporting, has not directly
transported and is not directly arranging for the transportation of any
Hazardous Material to any location which is listed on the National Priorities
List pursuant to CERCLA, on the CERCLIS, or on any similar federal or state
list or which is the subject of federal, state or local enforcement actions or
other investigations that would reasonably be expected to lead to material
claims against the Company for  removal or  remedial work, contribution for
removal or remedial work, damage to natural resources or personal injury,
including claims under CERCLA;

            (i)    there are no sites, locations or operations at which the
Company is currently undertaking, or has completed, any removal, remedial or
response action relating to any such disposal or release, as required by
Environmental Laws;

            (j)    the Company has obtained all Permits required in connection
with the Company's Business, such Permits are in full force and effect, and
the Company has complied with such Permits in all material respects; and

                                      21
<PAGE>

            (k)    the Company does not own or operate any underground storage
tanks, treatment, storage or disposal facilities under RCRA, or solid waste
disposal facilities.

    3.18    No Condemnation or Expropriation.  Neither the whole nor any
portion of the Properties is subject to any governmental decree or order to be
sold or is being condemned, expropriated or otherwise taken by any
Governmental Entity with or without payment of compensation therefor, nor to
the knowledge of Seller or the Company, has any such condemnation,
expropriation or taking been proposed.

    3.19    Accounts Receivable.  Except as set forth in Section 3.19 of the
Disclosure Schedule, all accounts receivable of the Company reflected in the
Company Financial Statements represent sales actually made in the ordinary
course of business.

    3.20    Powers of Attorney; Authorized Signature.  Section 3.20 of the
Disclosure Schedule is a complete and correct list of (a) the names and
addresses of all Persons holding powers of attorney on behalf of the Company
and (b) the account number and names of all banks and other institutions in
which the Company has an account, deposit or safe deposit box, along with the
names and addresses of all Persons to be authorized to draw on such accounts,
deposit or boxes or to have access thereto.

    3.21    Oil and Gas Reserves.  Seller has furnished to Buyer an estimate
of the Company's oil and gas reserves as of the date of the report described
in Section 3.21 of the Disclosure Schedule (the "Reserve Report").  To
Seller's or the Company's knowledge, the information contained in the Reserve
Report regarding the Properties was reasonable at such date and did not
contain materially untrue statements of fact or omit to state material facts
which if completely and accurately stated would have had a net effect upon the
estimated net recoverable quantities of oil and gas reflected in the Reserve
Report.  To Seller's or the Company's knowledge, all lease operating expenses
outlined in the Reserve Report were based upon good faith estimates of such
expenses and are not materially inconsistent with the Company's currently
existing related contractual obligations and currently existing legal
requirements.

    3.22    Absence of Certain Business Practices.  Neither the Company nor
any of its officers, employees or agents nor any other Person acting on any of
their behalf, has, directly or indirectly, given any gift or similar benefit
(other than with respect to bona fide payments for which adequate
consideration has been given) to any customer, supplier, governmental employee
or other Person who is in a position to help or hinder the business of the
Company (or assist the Company in connection with any actual or proposed
transaction) (a) which would subject the Company to any damage or penalty in
any civil, criminal or governmental litigation or proceeding; (b) which, if
not continued in the future, would have a material adverse effect on the
Company or which would subject the Company to suit or penalty in any private
or governmental litigation or proceeding; or (c) for establishment or
maintenance of any concealed fund or concealed bank account.

    3.23    Books and Records.  All Records (a) have been prepared, assembled
and maintained in accordance with the Company=s usual and customary policies

                                     22
<PAGE>

and procedures; and (b) fairly and accurately reflect the ownership, use,
enjoyment and operation by the Company of the Oil and Gas Assets.  The minute
book of the Company contains complete and accurate records of material actions
of the stockholders and directors of the Company.

    3.24    Employee Benefit Plans.  Seller represents and warrants to Buyer
as follows:

            (a)    Section 3.24 of the Disclosure Schedule sets forth a
complete and accurate list of each of the following which is or has been
sponsored, maintained or contributed to by the Company or any trade or
business, whether or not incorporated (a "Company ERISA Affiliate"), or in
which any employee or co-employee of the Company participates or is covered,
that together with the Company would be considered affiliated with the Company
under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of
ERISA for the benefit of any person who, as of the Closing, is a current or
former employee or subcontractor of the Company or any Company ERISA
Affiliate:  (i) each "employee benefit plan," as such term is defined in
Section 3(3) of ERISA (each, a "Company Plan"); and  (ii) each personnel
policy, stock option plan, bonus plan or arrangement, incentive award plan or
arrangement, vacation policy, severance pay plan, policy, program or
agreement, deferred compensation agreement or arrangement, executive
compensation or supplemental income arrangement, retiree benefit plan or
arrangement, fringe benefit program or practice (whether or not taxable),
employee loan, consulting agreement, employment agreement and each other
employee benefit plan, agreement, arrangement, program, practice or
understanding which is not described in Section 3.24(a)(i) (each, a "Company
Benefit Program or Agreement") (such Company Plans and Company Benefit
Programs or Agreements are sometimes collectively referred to in this
Agreement as the "Company Employee Benefit Plans").

            (b)    True, correct and complete copies of each of the Company
Plans and related trusts, if applicable, including all amendments thereto,
have been furnished or made available to Buyer.  There has also been furnished
or made available to Buyer, with respect to each Company Plan required to file
such report and description, the report on Form 5500 for the past three years,
to the extent applicable, and the most recent summary plan description.  True,
correct and complete copies or descriptions of all Company Benefit Programs or
Agreements have also been furnished or made available to Buyer.

            (c)    Except as otherwise set forth on Section 3.24 of the
Disclosure Schedule:  (i)  neither the Company nor any Company ERISA Affiliate
contributes to or has an obligation to contribute to, nor has at any time
contributed to or had an obligation to contribute to, a multiemployer plan
within the meaning of Section 3(37) of ERISA or any other plan subject to
Title IV of ERISA; (ii) each of the Company and the Company ERISA Affiliates
has performed all obligations, whether arising by operation of law or by
contract, including ERISA and the Code, required to be performed by it in
connection with the Company Employee Benefit Plans, and, to the knowledge of
Seller, there have been no defaults or violations by any other party to the
Company Employee Benefit Plans;  (iii) all reports, returns, notices,
disclosures and other documents relating to the Company Plans required to be
filed with or furnished to governmental entities, plan participants or plan

                                     23
<PAGE>

beneficiaries have been timely filed or furnished in accordance with
applicable law, and each Company Employee Benefit Plan has been administered
in compliance with its governing written documents;  (iv) each of the Company
Plans intended to be qualified under Section 401 of the Code satisfies the
requirements of such Section and has received a favorable determination letter
from the Internal Revenue Service regarding such qualified status and has not
been amended, operated or administered in a way which would adversely affect
such qualified status;  (v) there are no actions, suits or claims pending
(other than routine claims for benefits) or, to the knowledge of Seller,
contemplated or threatened against, or with respect to, any of the Company
Employee Benefit Plans or their assets; (vi) each trust maintained in
connection with each Company Plan, which is qualified under Section 401 of the
Code, is tax exempt under Section 501 of the Code;  (vii) all contributions
required to be made to the Company Employee Benefit Plans have been made
timely; (viii) no accumulated funding deiciency, whether or not waived, within
the meaning of Section 302 of ERISA or Section 412 of the Code has been
incurred, and there has been no termination or partial termination of any
Company Plan within the meaning of Section 411(d)(3) of the Code; (ix) no act,
omission or transaction has occurred which could result in imposition on the
Company or any Company ERISA Affiliate of (A) breach of fiduciary duty
liability damages under Section 409 of ERISA, (B) a civil penalty assessed
pursuant to subsections (c), (i) or (1) of Section 502 of ERISA or (C) a tax
imposed pursuant to Chapter 43 of Subtitle D of the Code; (x) to the knowledge
of Seller, there is no matter pending with respect to any of the Company Plans
before the Internal Revenue Service, the Department of Labor or the Pension
Benefit Guaranty Corporation; (xi) each of the Company Employee Benefit Plans
complies, in form and operation, with the applicable provisions of the Code
and ERISA; (xii) each Company Employee Benefit Plan may be unilaterally
amended or terminated in its entirety without any liability or other
obligation; (xiii) the Company and the Company ERISA Affiliates have no
liabilities or other obligations, whether actual or contingent, under any
Company Employee Benefit Plan for post-employment benefits of any nature
(other than COBRA continuation coverage); and (xiv) neither the Company nor
any of the Company ERISA Affiliate or any present or former director, officer,
employee or other agent of the Company or any of the Company ERISA Affiliates
has made any written or oral representations or promises to any present or
former director, officer, employee or other agent concerning his or her terms,
conditions or benefits of employment, including the tenure of any such
employment or the conditions under which such employment may be terminated by
the Company, any of the Company ERISA Affiliates or Buyer which will be
binding upon or enforceable against Buyer or the Company after the Closing.

            (d)    Except as otherwise set forth on Section 3.24 of the
Disclosure Schedule, no employee is currently on a leave of absence due to
sickness or disability and no claim is pending or expected to be made by an
employee, former employee or independent contractor for workers' compensation
benefits.

                                      24
<PAGE>

            (e)     With respect to the Company Employee Benefit Plans, there
exists no condition or set of circumstances in connection with the Company or
any of the Company ERISA Affiliates that could be expected to result in
liability reasonably likely to have a material adverse effect on the Company
under ERISA, the Code or any other applicable law.  With respect to the
Company Employee Benefit Plans, individually and in the aggregate, there are
no unfunded benefit obligations which have not been accounted for by reserves,
or otherwise noted, on the financial statements of the Company, which
obligations are reasonably likely to have a material adverse effect on the
Company.

            (f)    Except as set forth in Section 3.24 of the Disclosure
Schedule, neither the execution or delivery of this Agreement nor the
consummation of the transactions contemplated hereby will result in any
payment becoming due to any employee or group of employees of the Company.

    3.25    Tax Matters.  Seller represents, warrants and covenants to Buyer
that, except as set forth in Section 3.25 of the Disclosure Schedule:

            (a)    The Company has timely filed, caused to be timely filed,
will timely file or will cause to be timely filed all Tax Returns required to
be filed before the Closing Date with respect to the Company.  Such Tax
Returns were or will be properly prepared in all material respects in the
manner required by applicable law and all Taxes shown on such Tax Returns to
be payable by the Company have been paid or will be paid when due.  No request
has been made for any extension of time within which to file any Tax Return of
the Company which Tax Return has not been filed as of the date hereof.

            (b)    The Company has complied in all material respects with all
applicable laws, rules and regulations relating to the payment and withholding
of Taxes and has timely withheld from Company Employee wages and paid over
(and through the Closing Date will timely withhold and pay over) to the proper
Governmental Entities all amounts required to be so withheld and paid over for
all periods under all applicable laws.  The Company has timely paid or accrued
all Taxes that are due and payable for which the Company may be liable.

            (c)    The Company has not been made a party to any pending action
or proceeding by any Governmental Entity for the assessment or collection of
Taxes, nor, to Seller's or the Company's knowledge, has any claim for the
assessment or collection of Taxes been asserted against the Company.  The
Company has not been notified that any taxing authority intends to audit a Tax
Return for any period, and no such audit is presently pending.  No extension
of a statute of limitations relating to Taxes is in effect with respect to the
Company.  There are no Liens on any of the assets of the Company for unpaid
Taxes, other than Liens for Taxes not yet due and payable.

                                      25
<PAGE>

            (d)    The Company has not made or become obligated to make, and
will not, as a result of any transaction contemplated herein, make or become
obligated to make, any "excess parachute payment" as defined in section 280G
of the Code (without regard to subsection (b)(4) thereof).  The Company has
never been included in an affiliated group of corporations, within the meaning
of Section 1504 of the Code, and the Company is not and has not been a party
to any tax sharing agreement between related corporations.

    3.26    Redeemed Interests.  As of the Closing the assets and properties
of the Company will consist of the Properties described on the Property
Schedule, the assets and properties described in Sections 1.01A, 3.08, 3.09
and 3.11 of the Disclosure Schedule and all other assets and properties of the
Company owned by the Company as of the Balance Sheet Date and acquired by the
Company after the Balance Sheet Date except for the Redeemed Interests and
those assets and properties disposed of by the Company in the ordinary course
of business after the Balance Sheet Date consistent with past practice.  The
redemption contemplated by the Redemption Agreement will not impair the
capital of the Company and will otherwise be lawful under the Oklahoma General
Corporation Act.

    3.27    Exchange and Replacement Properties.  None of the Exchange
Properties or the Replacement Properties is subject to any preferential right
to purchase by any third party.  There are no consents, authorizations or
approvals of third parties required in connection with the transfer of any of
the Exchange Properties or the Replacement Properties pursuant to the Exchange
Agreement.

    3.28    Disclosure.  There is no fact (other than matters of a general
economic or political nature which do not affect the Company uniquely) known
to Seller or the Company that has not been disclosed to Buyer that might
reasonably be expected to have or result in a material adverse effect upon the
Company.

                                 ARTICLE IV

                    REPRESENTATIONS AND WARRANTIES OF BUYER

    Buyer hereby represents and warrants to Seller as follows:

    4.01    Corporate Organization.  Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada.
Buyer has all requisite corporate authority and power to own and operate its
properties and assets and to conduct its business as such business is now
being conducted by it.

    4.02    Authorization; Validity and Binding Effect.  Buyer has all
requisite authority and power to execute and deliver this Agreement, to
perform its obligations hereunder and to carry out the transactions
contemplated hereby.  The execution and delivery of this Agreement by Buyer
and  the consummation by Buyer of the transactions contemplated hereby have
been duly and validly authorized and no other corporate proceedings are
necessary to authorize the execution and delivery of this Agreement by Buyer,
the performance by Buyer of its obligations hereunder or the consummation by

                                    26
<PAGE>

Buyer of the transactions contemplated hereby.  This Agreement has been duly
and validly executed and delivered by Buyer and constitutes a valid and
binding obligation of Buyer, enforceable against Buyer in accordance with its
terms, except that (a) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium (whether general or specific) or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (b) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.

    4.03    No Violation.  None of the execution and delivery of this
Agreement, the performance by Buyer of its obligations hereunder or the
consummation of the transactions contemplated hereby will (i) require Buyer to
file or register with, or obtain any permit, authorization, consent or
approval of, any Governmental Entity or any other Person, (ii) violate any
provision of the certificate of incorporation or bylaws of Buyer, (iii)
violate any statute, law, regulation or rule of any Governmental Entity or
(iv) violate any judgment, decree, or order of any Governmental Entity or any
arbitration award applicable to Buyer.

    4.04    Brokers and Finders.  Buyer has not retained any broker, finder or
investment banker or incurred any liability for any brokerage fees,
commissions, finders' fees or investment banker fees in connection with the
transactions contemplated by this Agreement

    4.05    Investment Representation.  Buyer understands the risks of an
investment in Seller's Shares and is acquiring the Seller's Shares for its own
account, for investment purposes only and not with a view to or for sale in
connection with any distribution thereof in violation of the Securities Act of
1933, as amended.

    4.06    Independent Investigation.  Buyer has relied upon Seller's
representations, warranties and covenants in this Agreement and Buyer's
independent due diligence investigation and those of its representatives,
including legal, tax, financial, business, and other advisors, in entering
into this Agreement.  Buyer and its advisors have been given the opportunity
to examine all relevant documents and to ask questions of and receive answers
from Seller and the Company concerning all aspects of the Company.

                                      27
<PAGE>

                                  ARTICLE V

                           COVENANTS OF THE PARTIES

    5.01    Full Access.  Seller shall cause the Company to afford to Buyer
and its counsel, accountants and other representatives full access, during
regular business hours, to the properties, assets, plants, offices,
warehouses, properties, books and records of the Company in order that Buyer
may have full opportunity to make such investigations as it shall desire to
make of the affairs of the Company and will cause the officers, employees and
accountants of the Company to permit such access as Buyer shall from time to
time reasonably request; provided, however, that any such investigation shall
be conducted in such a manner as not to interfere unreasonably with the
operation of the Company's Business.

    5.02    Approvals and Consents.  To the extent that the approval, consent
or permission of any Governmental Entity or other Person (a) is necessary for
the consummation by Seller of the transactions contemplated hereby, Seller and
Buyer shall use their Best Efforts to obtain such consent or (b) is necessary
or desirable for Buyer to obtain in connection with the conduct of the
Company's Business after the Closing, including the issuance of such new
permits as may be required for Buyer to conduct said business, or otherwise,
Seller shall reasonably cooperate with Buyer in obtaining all such approvals,
consents or permissions.

    5.03    Filings.  Promptly after execution of this Agreement, each of
Seller and Buyer shall make or cause to be made any filings and submissions
required to be made under the laws of any jurisdiction to the extent that such
filings are necessary to consummate the transactions contemplated hereby and
each will use its or his Best Efforts to take all other actions necessary to
consummate the transactions contemplated hereby in a manner consistent with
applicable law.  Each Party will furnish to the other Party such necessary
information and reasonable assistance as such other Party may request in
connection with the foregoing.

    5.04    Covenants to Satisfy Conditions.  Upon the terms and subject to
the conditions set forth herein, Seller shall use his Best Efforts to ensure
that the conditions set forth in Article VI are satisfied, insofar as such
matters are within the control of Seller, and Buyer shall use its Best Efforts
to ensure that the conditions set forth in Article VII are satisfied, insofar
as such matters are within the control of Buyer, on or before the applicable
date set forth in Section 2.07, or as promptly as practical thereafter.

                                      28
<PAGE>

    5.05    Confidentiality; Employees; Negotiations.

            (a)    Until the Closing, each Party shall hold in strict
confidence (unless compelled to disclose by judicial or administrative process
or in making any filings with Governmental Entities with respect to the
transactions contemplated hereby or in connection with the financing thereof
or in connection with obtaining insurance or by requirements of law) all
documents and information concerning the other Party furnished to such Party
by such other Party or such other Party's representatives in connection with
the transactions contemplated by this Agreement (except to the extent that
such information can be shown to have been (i) previously known by the Party
to which it was furnished, (ii) in the public domain through no fault of such
Party, or (iii) later lawfully acquired by the Party to which it was furnished
from other sources not bound by a confidentiality obligation with respect to
such information), and neither Party will release or disclose such information
to any other Person, except its auditors, attorneys, financial advisors,
bankers, insurance brokers and consultants, and other consultants and advisors
who need to know such information in connection with the transactions
contemplated hereby.  If the transactions contemplated by this Agreement are
not consummated, such confidence shall be maintained except to the extent such
information comes into the public domain through no fault of the Party
required to hold it in confidence, or unless such Party is compelled to
disclose such information or documents by judicial or administrative process
or by other requirements of law, and all such documents (including copies
thereof) shall be returned to the other Party immediately upon the written
request of such other Party.

            (b)    Until termination of this Agreement, Seller will not and
Seller will not permit the Company or any of its directors, officers,
employees, partners, representatives, or agents to (i) facilitate, encourage,
solicit, initiate or continue negotiations or submissions of proposals or
offers in respect of all or any portion of the Company=s Business, by means of
acquisition of stock, assets or otherwise (other than the transactions
contemplated by this Agreement), (ii) furnish or cause to be furnished to any
Person (other than Buyer and its representatives) any information concerning
the Seller's Shares or the operations, properties or assets of the Company in
connection with any proposal to acquire all or a substantial portion of the
Company's Business, by means of an acquisition of stock, assets or otherwise,
or (iii) otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any effort or attempt by any such Person to do or
seek any of the activities set forth in subsections (i) and (ii) above.

            (c)    The Parties acknowledge and agree that, because of the
nature and subject matter of the provisions of this Section 5.05, it would be
impractical and extremely difficult to determine actual damages in the event
of the breach of any such provisions.  Accordingly, if Seller, the Company or
any of the Company's representatives set forth above, on the one hand, or
Buyer, on the other hand, commits a breach, or threatens to commit a breach,
of any matter set forth in this Section 5.05, the nonbreaching Party shall
have the right to have the provisions of this Section 5.05 specifically
enforced by any court having equity jurisdiction, it being further
acknowledged and agreed by the Parties that any such breach or threatened

                                      29
<PAGE>

breach will cause irreparable injury to the non-breaching Party and its
Affiliates and that an injunction may be issued against the breaching Party to
stop or prevent such breach or threatened breach.  If any such action shall be
instituted, the breaching Party agrees to waive, and does hereby waive to the
fullest extent permitted by law, the defense that the non-breaching Party has
an adequate remedy at law and agrees to interpose no opposition, legal or
otherwise, as to the propriety of pursuing specific performance as a remedy.

    5.06    Publicity.  No Party shall make or issue, or cause to be made or
issued, any announcement or written statement concerning this Agreement or the
transactions contemplated hereby for dissemination to the trade or general
public without the prior consent of the other Party.  This provision shall not
apply, however, to any requirement that a copy of this Agreement be attached
as an exhibit to a report on form 10-K or 8-K or to any announcement or
written statement which, in the opinion of counsel to the disclosing Party, is
required to be made by law, the regulations of any Governmental Entity or
NASDAQ rules.

    5.07    Conduct of the Company's Business Pending the Closing.

            (a)    Pending the Closing, and except as otherwise consented to
or approved by Buyer, disclosed in Section 5.07 of the Disclosure Schedule or
otherwise contemplated by this Agreement (including Section 2.02), Seller
agrees that he (i) will cause the Company's Business to be carried on only in
the ordinary course consistent with past practice, (ii) will cause the Company
to operate the Operated Wells as a prudent operator in a good and workmanlike
manner in accordance with the terms of the respective applicable operating
agreements; and as to those affirmative and negative obligations that would
ordinarily be the responsibility and under the direction and control of the
operator of  any Properties, Seller shall cause the Company, in those
instances where the Company is not the operator, to utilize its Best Efforts
as a non-operator to insure the operator's compliance with such obligations,
(iii) will cause the Company to maintain and keep the Properties and its other
assets in good condition and working order, (iv) will use Best Efforts
consistent therewith to cause the business organization of the Company to be
preserved intact, the services of the Company Employees to be kept available
and satisfactory relationships with suppliers, customers and others having
commercially beneficial business relationships with the Company to be
maintained, in each case in the ordinary course of Company's Business
consistent with past practice, (v) will not cause or permit the Company to
take any action or fail to take any action which would cause any of Seller's
representations and warranties in this Agreement not to be true and complete
on the Closing Date as though such representations and warranties were made on
the Closing Date, and (vi) will not permit any amendment of the Redemption
Agreement or the Exchange Agreement.

            (b)    Except as set forth in Section 5.07 of the Disclosure
Schedule or as permitted by subsection (a) of this Section 5.07 or otherwise
contemplated by this Agreement, no contract or commitment of a type that would

                                      30
<PAGE>

be required to be disclosed in Section 3.11 of the Disclosure Schedule if in
effect on the date hereof shall be entered into by or on behalf of the
Company, or with respect to the Company's Business, except for contracts or
commitments in the ordinary course of the Company's Business consistent with
past practice.

            (c)    If prior to the Closing any of the assets or properties of
the Company is substantially damaged or destroyed by fire or other casualty
(each such event, a "Casualty"), Seller shall notify Buyer promptly after
Seller has knowledge of such event.  If any uncured Casualties exist at the
Closing, the Purchase Price shall be reduced by the aggregate reduction in the
value of the assets or properties of the Company on account of such
Casualties, as determined by the mutual agreement of the Parties.

            (d)    Seller shall give notice to Buyer of any proposal to drill,
rework, or plug and abandon any Well or Wells, or to sell or exchange any Oil
and Gas Asset, that Seller receives prior to the Closing.  Seller will not
consent to any such proposal in excess of $5,000 (net to Seller's interest)
without the prior approval of Buyer.  Such approval or Buyer's refusal thereof
shall be due within three Business Days after Buyer's receipt of such notice.
Buyer's failure to respond to any such notice shall be deemed approval of
Seller=s recommendation with respect to such proposal.

    5.08    Further Assurances.  Upon the terms and subject to the conditions
herein provided, each of the Parties agrees to use such Party's Best Efforts
to take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations,
to consummate and make effective the transactions contemplated by this
Agreement as expeditiously as practicable.  In case, at any time after the
Closing Date, any further action is necessary or desirable to carry out the
purposes of this Agreement, Seller and/or the proper officers and directors of
Buyer shall take or cause to be taken all such necessary action, including the
execution and delivery of such further instruments and documents, as
reasonably may be requested by any Party for such purposes or otherwise to
complete or perfect the transactions contemplated hereby.

    5.09    Adjustments for Title Defects.  The procedures to be followed with
respect to Buyer's assertion of Title Defects, and the adjustment of the
Purchase Price attributable to such Title Defects, shall be as follows:

            (a)    Access to Records.  Promptly after execution of this
Agreement, Seller shall cause the Company to provide to Buyer and its
consultants and advisors access at all reasonable times to the Company's
accounting, land, production, engineering, and other records regarding the
Properties for the purpose of reviewing title to the Properties.  At Buyer's
request, to the extent any such records are in the possession of a co-working
interest owner, partner or other third party and the Company has the right of
access thereto, Seller shall cause the Company to use its Best Efforts to
provide Buyer access to such other records or obtain copies thereof for
Buyer's review.

                                       31
<PAGE>

            (b)    Notice of Asserted Title Defects or Interest Additions.  As
soon as reasonably practicable after Buyer discovers any Title Defect and in
any event on or before the fifth Business Day prior to the Closing Date, Buyer
shall furnish to Seller written notice specifying in reasonable detail each
matter which Buyer in good faith asserts is a Title Defect hereunder, together
with the Defect Amount estimated in good faith by Buyer for each such asserted
Title Defect and a reasonably detailed explanation of the computation of and
basis for such Defect Amount (each such notice, a "Title Defect  Notice").  On
or before the fifth Business Day prior to the Closing Date, Seller may request
an increase in the Purchase Price by notifying Buyer of any NRI owned by
Seller in a Property that is greater than that shown on the Property Schedule
(an "Interest Addition").  Each such notice of an Interest Addition (an
"Interest Addition Notice") shall set forth Seller's basis for the assertion
of such Interest Addition and Seller's proposed Purchase Price adjustment on
account thereof.

            (c)    Method of Determination of Defect Amounts and Purchase
Price Adjustments.  Defect Amounts for each asserted Title Defect shall be
determined as follows:

                   (i)    If the Title Defect relates to failure of title to
the entirety of the Company's title to a Property, the Defect Amount shall be
the Value of such Property.

                  (ii)    If the Title Defect results from a lien, security
interest, pledge or collateral assignment upon one or more Properties (or a
portion thereof) which is liquidated in amount, then the Defect Amount shall
be the amount necessary to remove such lien, security interest, pledge or
collateral assignment from the Company's title to such Properties (or portion
thereof).

                 (iii)    If the Title Defect results from the Company having
a lesser NRI in a Property than the NRI specified therefor in the Property
Schedule, the Defect Amount shall be equal to the product obtained by
multiplying the Value for such Property by a fraction, the numerator of which
is the reduction in the NRI and the denominator of which is the specified NRI
for such Property.

                  (iv)    If the Title Defect results from any matter not
described in subsections (i), (ii), or (iii) above, then the Defect Amount
shall be a portion of the Value for such Property, said portion to be equal to
the difference between the Value of the Company's title to such Property
without such Title Defect and with such Title Defect.

    Notwithstanding anything herein to the contrary, the aggregate Defect
Amounts attributable to Title Defects relating to a Property for which Buyer
receives an adjustment to the Purchase Price shall not exceed the Value of
such Property.  Purchase Price adjustments for each asserted Interest Addition
shall be equal to the product obtained by multiplying the Value for the
Property affected thereby by a fraction, the numerator of which is the
increase in the NRI and the denominator of which is the specified NRI for such
Property.

                                      32

<PAGE>

            (d)    Resolution of Title Defects.  Upon timely delivery of a
Title Defect Notice, Buyer and Seller shall meet and use their Best Efforts to
agree on the validity of the Title Defects asserted therein and the Defect
Amounts attributable thereto.  If, with respect to a Title Defect so asserted
by Buyer, the Parties cannot agree on the validity thereof and/or the Defect
Amount attributable thereto and if Seller does not cure or elect to attempt to
cure such Title Defect (at Seller's expense) to the reasonable satisfaction of
Buyer as provided in Section 5.09(g), such validity and/or Defect Amount shall
be determined by arbitration as provided in Section 5.10 (without the Closing
being delayed on account thereof).  In such event, the Purchase Price to be
paid to Seller at the Closing shall be reduced by the Value of the Property in
question and such portion of the Purchase Price shall be deposited by Buyer
with Escrow Agent at the Closing pursuant to the terms of the Escrow
Agreement.  Pursuant to the Escrow Agreement, Escrow Agent shall hold such
funds and disburse them in compliance with the determination of the
arbitrator(s) pursuant to Section 5.10.

            (e)    Resolution of Interest Additions.  Upon timely delivery of
an Interest Addition Notice, Buyer and Seller shall meet and use their Best
Efforts to agree on the validity of the Interest Additions asserted therein
and the adjustments to the Purchase Price attributable thereto.  If, with
respect to an Interest Addition so asserted by Seller, the Parties cannot
agree on the validity thereof and/or the amount of the Purchase Price
adjustment attributable thereto, such validity and/or adjustment shall be
determined by arbitration as provided in Section 5.10 (without the Closing
being delayed on account thereof).

            (f)    Election to Terminate.  Notwithstanding anything to the
contrary in this Agreement, if as of the Business Day prior to the Closing
Date (i) the sum of (A) Buyer's good faith estimates of Defect Amounts
attributable to Title Defects which have not been fully cured by Seller, plus
(B) the amount of Purchase Price adjustments pursuant to Section 5.07(c),
exceeds $750,000 or (ii) Seller's good faith estimates of Purchase Price
adjustments attributable to Interest Additions exceeds $750,000, then either
Party may elect to terminate this Agreement prior to the Closing in accordance
with the provisions of Article IX.

            (g)    Curative Actions.  If Seller causes the Company to cure (at
Seller's expense) a Title Defect to the reasonable satisfaction of Buyer prior
to the Closing, no Purchase Price adjustment shall be made on account thereof.
If the Parties agree as to the validity of a Title Defect asserted by Buyer
and the Defect Amount attributable thereto and if Seller believes in good
faith that such Title Defect may be cured within 90 days after the Closing,
Seller may elect, by notice given to Buyer at least one Business Day prior to
the Closing Date, to attempt to cure such Title Defect at Seller's expense
within such 90-day period.  In the event Seller makes such an election with
respect to one or more Title Defects, the Purchase Price to be paid to Seller
at the Closing shall be reduced by the aggregate Defect Amounts attributable
to such Title Defects and such aggregate Defect Amounts shall be deposited by
Buyer with Escrow Agent at the Closing pursuant to the terms of the Escrow
Agreement.  Pursuant to the Escrow Agreement:

                                      33
<PAGE>

                   (i)    Within five Business Days after the end of such
90-day period, Escrow Agent will pay to Seller the amount set forth in the
Parties' written instructions to Escrow Agent, which amount shall be equal to
the Defect Amounts attributable to all Title Defects which Seller elected to
cure and which have been cured to Buyer's reasonable satisfaction within such
90-day period; and

                  (ii)    On the tenth Business Day after such 90-day period,
Escrow Agent will return to Buyer all remaining amounts deposited by Buyer
pursuant to this Section 5.09(g) or, if Escrow Agent does not receive the
written instructions contemplated by Section 5.09(g)(i), all amounts so
deposited by Buyer.

        (h)     Exchange Properties.  For purposes of this Section 5.9, (i)
the Company's ownership of a Property shall be deemed to include any
additional ownership interest in such Property that the Company will obtain
upon the closing of the transactions contemplated by the Exchange Agreement
and (ii) it is understood that Buyer may assert Title Defects with respect to
one or more of the Exchange Properties as if the Company owned such Exchange
Properties.

    5.10    Arbitration.  Any dispute over the validity of a purported Title
Defect, Defect Amount attributable to a Title Defect, Interest Addition or any
Purchase Price adjustment on account of an Interest Addition which is not
resolved prior to the Closing shall be decided by arbitration in accordance
with the CPR Rules for Non-Administered Arbitration in effect on the date
hereof (the "CPR Rules"), by one arbitrator or three arbitrators as
hereinafter provided.  The arbitration shall be governed by the Oklahoma
Uniform Arbitration Act, as amended, and the place of the arbitration shall be
Tulsa, Oklahoma.  The following shall apply to arbitrations hereunder:

            (a)    Upon written demand of either Buyer or Seller, Buyer and
Seller shall attempt to agree upon a single arbitrator.  If Buyer and Seller
are unable to agree upon a single arbitrator within 10 days after such demand,
Buyer will appoint one arbitrator and Seller will appoint one arbitrator, and
the two arbitrators so appointed will select a third arbitrator.  Each
arbitrator must be an attorney-at-law who has practiced law continuously for
more than ten years and is familiar with matters relating to title to oil and
gas properties.  If the Parties are unable to agree upon a single arbitrator
and if either Buyer or Seller fails to appoint an arbitrator within ten days
after the expiration of the 10-day period referred to above, or if the two
appointed fail, within 10 days after the appointment of the second, to agree
on the third arbitrator, Buyer or Seller may request that arbitrator(s) to
complete the board of three be appointed in accordance with the CPR Rules.

            (b)    The dispute or disputes to be decided by the arbitrator(s)
will be submitted in writing by the Party requesting arbitration.  The
jurisdiction of the arbitrator(s) will be limited to the dispute or disputes
so stated.  The arbitrator(s) will rule on all requests for discovery and
disclosure and the Parties shall complete discovery within 30 days of the
appointment of the single arbitrator or the third arbitrator, as the case may
be.  The arbitrator(s) may consider any matter relevant to the subject of the
dispute or disputes.  The arbitrator(s) shall not have the authority or power

                                     34
<PAGE>

to alter, amend, or modify any of the terms and conditions of this Agreement
or any other agreement of the Parties, and the arbitrator(s) may not enter an
award that can alter, amend, or modify any of those terms and conditions in
any manner.

            (c)    The arbitrator(s) will convene a hearing and issue a final
ruling within 75 days of the appointment of the single arbitrator or the third
arbitrator, as the case may be.  Such ruling shall be in writing and shall set
forth the reasoning underlying the ruling.  If there is more than one
arbitrator, the decision or award of any two arbitrators will be conclusive
upon the Parties.  The decision or award may be enforced in any court of
competent jurisdiction.  Any payment called for by any such decision or award
shall be paid by the Party required to pay the same to the other Party within
30 days after the date of such decision or award.

            (d)    The Parties shall bear their own legal fees and costs
incurred in connection with an arbitration.  If there is more than one
arbitrator, the fees and expenses of an arbitrator appointed by or for a Party
shall be paid by the Party so appointing such arbitrator or for whom such
arbitrator was appointed.  Other costs, fees and expenses incurred in
connection with an arbitration, including the fees and expenses of the single
or third arbitrator, shall be borne by the non-prevailing Party; provided,
that, if there is a bona fide question as to which Party prevailed, the
arbitrator(s) shall decide who is the prevailing Party, or, if neither Party
prevailed, such costs, fees and expenses shall be shared equally by the
Parties.

    5.11    Acquisition of Participant Interests.  The Parties acknowledge
that, concurrently with the Closing, Buyer desires to acquire from each Person
listed in Section 5.11 of the Disclosure Schedule (a "Participant") all of
such Participant's working interests in and to the oil and gas properties
referred to in such Section 5.11 for the purchase price set forth in such
Section 5.11 pursuant to a separate Purchase and Sale Agreement, the form of
which is attached hereto as Exhibit B ("Participant Agreement").  Seller shall
use his Best Efforts to cause Participants representing at least 85% of the
aggregate purchase price set forth in Section 5.11 of the Disclosure Schedule
to execute Participant Agreements within five Business Days after the date
hereof, reflecting the terms set forth in Section 5.11 of the Disclosure
Schedule with respect to the applicable Participant.  In the event that such
Participants have not executed such a Participant Agreement within five
Business Days after the date hereof, Buyer shall have the right to terminate
this Agreement as provided in Article IX.  Seller shall use his Best Efforts
to cause Participants representing at least 95% of the aggregate purchase
price set forth in Section 5.11 of the Disclosure Schedule to execute
Participant Agreements prior to the Closing reflecting the terms set forth in
Section 5.13 of the Disclosure Schedule with respect to the applicable
Participant.  In the event that such Participants have not executed such a
Participant Agreement prior to the Closing, Buyer shall have the right to
terminate this Agreement as provided in Article IX.

                                      35
<PAGE>

    5.12    Release.  Effective upon the Closing and with respect to periods
prior to the Closing Date, Seller unconditionally releases and forever
discharges the Company from any and all claims, rights, duties, obligations,
contracts, debts, liabilities, damages, injuries, actions and causes of action
(collectively, "Seller Claims") of every kind and nature, whether foreseen or
unforeseen, contingent or actual, liquidated or unliquidated, and whether now
known or hereafter discovered, which Seller has or may hereafter acquire under
any federal, state or local statute or common or other law or otherwise, under
the Company's certificate of incorporation or bylaws or under any agreement to
which Seller and the Company are parties, including Seller Claims with respect
to employment and employee benefit matters and Seller Claims for
indemnification as a former officer, director or employee of the Company;
provided, however, that such release and discharge will not be applicable to
Seller Claims related to oil and gas properties in which both the Company and
Seller own an interest.  Seller represents and warrants to Buyer that, to his
knowledge, no Seller Claims exist with respect to such oil and gas properties.

    5.13    Certain Operated Properties.  The Parties acknowledge that Oil
Center Operating, Inc. ("Oil Center") continues to be listed by the Oklahoma
Corporation Commission ("OCC") as operator of certain properties with respect
to which either the Company should be listed as operator or Oil Center should
be removed as operator.  The properties which should be in the name of the
Company as operator are listed at Section 5.13A of the Disclosure Schedule
("Oil Center/OBEC Properties") and the properties with respect to which Oil
Center should be removed as operator are listed at Section 5.13B of the
Disclosure Schedule ("Oil Center Other Properties").  Seller shall undertake
the responsibility of making such filings with the OCC as may be necessary or
required to have the Company listed as operator of the Oil Center/OBEC
Properties and Oil Center removed as operator of the Oil Center Other
Properties.  This undertaking of Seller shall continue beyond the Closing
hereof and shall not delay Closing.  Buyer agrees to fully cooperate with
Seller, including the execution of filings with the OCC, as may be required in
correcting OCC records to properly reflect the current operator of the
properties.

                                  ARTICLE VI

                       CONDITIONS TO OBLIGATIONS OF SELLER

    The obligations of Seller to effect the transactions contemplated hereby
at the Closing shall be subject to the fulfillment, or written waiver by
Seller, at or prior to the Closing, of each of the following conditions:

    6.01    Representations and Warranties True.  The representations and
warranties of Buyer contained herein shall be correct and complete as of the
date when made and at and as of the Closing Date as though such
representations and  warranties were made at and as of the Closing Date,
except for changes contemplated by the terms of this Agreement.

                                      36
<PAGE>

    6.02    Performance.  Buyer shall have performed and complied with all
agreements, obligations, covenants and conditions required by this Agreement
to be performed or complied with by it on or prior to the Closing.

    6.03    No Injunction.  There shall be no effective injunction, writ,
preliminary restraining order or other order of any nature issued by a court
of competent jurisdiction directing that the transactions provided for at the
Closing not be consummated as so provided, nor shall there be any pending
injunction, writ or order seeking the same result.

    6.04     Certificates.  Buyer shall have furnished Seller with such
certificates of its officers and others to evidence its compliance with the
conditions set forth in this Article VI as may be reasonably requested by
Seller and delivery thereof shall be deemed to be a representation and
warranty by Buyer for purposes of Section 6.01.

                                  ARTICLE VII

                        CONDITIONS TO OBLIGATIONS OF BUYER

    The obligations of Buyer to effect the transactions contemplated hereby at
the Closing shall be subject to the fulfillment, or written waiver by Buyer,
at or prior to the Closing, of each of the following conditions:

    7.01    Representations and Warranties True.  The representations and
warranties of Seller contained herein shall be correct and complete as of the
date when made and at and as of the Closing Date as though such
representations and warranties were made at and as of the Closing Date, except
for changes contemplated by this Agreement.

    7.02    Performance.  Seller shall have performed and complied with all
agreements, obligations, covenants and conditions required by this Agreement
to be performed or complied with by Seller on or prior to the Closing.

    7.03    No Injunction.  There shall be no effective injunction, writ,
preliminary restraining order or other order of any nature issued by a court
of competent jurisdiction directing that the transactions provided for at the
Closing not be consummated as so provided, nor shall there be any pending
injunction, writ or order seeking the same result.

    7.04    Certificates.  Seller shall have furnished Buyer with such
certificates of Seller and the officers, partners and others of the Company to
evidence compliance with the conditions set forth in this Article VII as may
be reasonably requested by Buyer and delivery thereof shall be deemed to be a
representation and warranty by Seller for purposes of Section 7.01.

    7.05    Approvals and Consents.  The Parties shall have obtained all
approvals, consents and permissions of any Governmental Entity or other Person

                                      37
<PAGE>

which are listed in Sections 3.04 and 4.03 of the Disclosure Schedule, and any
approvals, consents, licenses, permits or permissions of any Governmental
Entity or other Person the absence of which would result in the inability of
Buyer to conduct the Company=s Business substantially as it is presently
conducted.

    7.06    Resignations.  Seller shall have delivered to Buyer at the Closing
the written resignations of each officer and director of the Company,
effective as of the Closing.

    7.07    FIRPTA Affidavit.  Seller shall have provided to Buyer a
non-foreign affidavit in compliance with United States Treasury Regulation
Section 1.1445-2(b)(2).

    7.08    Participant Agreements.  The transactions contemplated by each
Participant Agreement executed and delivered pursuant to Section 5.11 shall
have been consummated concurrently with the Closing.

    7.09    Opinion of Seller's Counsel.  Seller shall have delivered to Buyer
an opinion of Seller's counsel substantially in the form of Exhibit C hereto.

    7.10    Release of Liens.  Seller shall have delivered to Buyer releases
or terminations of all mortgages, financing statements and other security
interests or liens in favor of the Citizens Bank of Ada covering any of the
assets or properties of the Company.

    7.11    Redemption Agreement.  The transactions contemplated by the
Redemption Agreement shall have been consummated.

                                ARTICLE VIII

                    INDEMNIFICATION; SURVIVAL AND LIMITATIONS
                       OF REPRESENTATIONS AND WARRANTIES

    8.01    Indemnity by Seller. Subject to the limitations set forth in this
Article VIII, Seller hereby indemnifies and agrees to defend and hold harmless
Buyer, any Affiliate of Buyer and any director, officer, employee or agent of
any of them (a "Buyer Indemnified Party") from and against, and agrees to pay
or cause to be paid to Buyer all Losses ("Buyer Losses") equal to the sum of:

            (a)    Additional Taxes.  Any and all Claims against, or Losses
of, the Company or any of its assets for (i) any and all Taxes with respect to
all past fiscal years of the Company and the period ending on the Closing Date
(including any and all Taxes in connection with the transactions contemplated
by the Redemption Agreement), except Taxes reserved for on the Company
Financial Statements, (ii) any and all Taxes (A) in connection with the
transactions contemplated by the Exchange Agreement, (B) in the event such
transactions fail to qualify as a like-kind exchange under Section 1031 of the
Code or (C) in the event Seller disposes of any or all of the Replacement
Properties, and (iii) all deficiencies, interest or penalties in connection
with any such Taxes that may at any time be asserted or assessed against or

                                     38
<PAGE>

actually paid by the Company or a Buyer Indemnified Party by or to any
Governmental Entity;

            (b)    Certain Liabilities.  Any and all other Losses of the
Company or any of its assets, whether accrued, contingent or otherwise,
arising out of or on account of or with respect to any event, occurrence or
transaction (including employment and employee benefit matters) occurring or
existing at or prior to Closing, that may be asserted or assessed against or
actually paid by the Company, except (i) items reflected or reserved against
in the Company Financial Statements; and (ii) trade obligations incurred in
the ordinary course of business, consistent with past practices, since the
Balance Sheet Date;

            (c)    Representations, Warranties, and Covenants.  Any and all
Losses that a Buyer Indemnified Party may incur or suffer, which arise or
result from or relate to any breach of any of Seller's representations,
warranties, covenants, obligations or agreements in this Agreement, the
Disclosure Schedule or any certificate or other instrument furnished or to be
furnished by Seller under this Agreement;

            (d)    Redeemed Interests and Replacement Properties.  Any and all
Losses that the Company or a Buyer Indemnified Party may incur or suffer,
which arise or result from or relate to any of the Redeemed Interests or any
of the Replacement Properties; and

            (e)    Indemnified Wells.  Any and all Losses that the Company or
a Buyer Indemnified Party may incur or suffer, which arise or result from or
relate to the wells listed in Section 5.13B of the Disclosure Schedule,
including any and all Losses attributable to the designation of Oil Center
Operating, Inc. as the operator of record of any of such wells.

            (f)    Professional Fees.  All reasonable professional fees
(including those of attorneys, accountants, consultants and engineering fees)
and other expenses incurred by the Company or a Buyer Indemnified Party in
connection with any of the aforesaid matters.

    8.02    Indemnity by Buyer.  Subject to the limitations set forth in this
Article VIII, Buyer hereby indemnifies and agrees to defend and to hold
harmless Seller from and against, and agrees to pay or cause to be paid to
Seller all Losses ("Seller Losses") equal to the sum of:

            (a)    Representations and Warranties.  Any and all Losses that
Seller may incur or suffer, which arise or result from or relate to any breach
of any of Buyer's representations, warranties, covenants, obligations or
agreements in this Agreement, the Disclosure Schedule or any certificate or
other instrument furnished or to be furnished by Buyer under this Agreement;
and

            (b)    Professional Fees.  All reasonable professional fees
(including those of attorneys, accountants, consultants and engineering fees)
and other expenses incurred by Seller in connection with any of the aforesaid
matters.

                                      39
<PAGE>

    8.03    Investigations, Survival of Representations and Warranties.  The
respective representations and warranties contained herein or in any
certificates delivered pursuant to this Agreement prior to or at the Closing
shall not be deemed waived or otherwise affected by any investigation made by
any Party.  The Parties agree that each and every such representation and
warranty set forth in this Agreement, the representations and warranties
deemed made as provided by Sections 6.04 and 7.04 and the indemnifications set
forth in this Article VIII shall survive the Closing until the date which is
15 months after the Closing Date (the "Release Date"); provided, however, the
rights of the Buyer Indemnified Parties against Seller with respect to Buyer
Losses relating to a breach of a representation or warranty set forth in
Section 3.25 (Tax Matters), and with respect to any Buyer Losses covered by
Section 8.01(a) (Additional Taxes) and Buyer Losses covered by Section 8.01(e)
(Indemnified Wells), shall survive until the expiration of applicable statutes
of limitations (including all waivers and extensions thereof).  From and after
the Release Date (except as otherwise set forth in the preceding sentence),
neither Seller nor Buyer shall be under any liability whatsoever with respect
to any such representation or warranty or any obligation or liability based
upon such representation or warranty, except for breaches as to which a Party
shall have given notice (specifying, with reasonable particularity, the facts
establishing such breach and the specific nature and amount of damages sought)
to the other Party prior to the Release Date.  This Section 8.03 shall have no
effect upon any other obligation of the Parties, whether to be performed
before or after the Closing Date.

    8.04    Defense of Third Party Claims.  If a third party shall notify a
party entitled to indemnification pursuant to Section 8.01 or Section 8.02 (an
"Indemnified Person") with respect to any matter (a "Third Party Claim") that
may give rise to a claim for indemnification by a party obligated to provide
indemnification pursuant to Section 8.01or 8.02 (an "Indemnifying Party"), the
Indemnified Person shall, with reasonable promptness, notify the Indemnifying
Party of such Third Party Claim.  If the Indemnified Person does not so notify
the Indemnifying Party within 15 days after becoming aware of such Third Party
Claim, then the Indemnifying Party shall, if such delay materially prejudices
the Indemnifying Party with respect to the defense of such Third Party Claim,
be relieved of liability hereunder in respect of such Third Party Claim to the
extent of the damage caused by such delay.  In any such proceeding, following
receipt of notice properly given, the Indemnifying Party shall be entitled, at
its sole discretion, to assume the entire defense of such Third Party Claim
(with counsel selected by it which is reasonably satisfactory to the
Indemnified Person or Persons), and the Indemnifying Party shall bear the
entire cost of defending such Third Party Claim.  The Indemnifying Party shall
not have the right to settle any such Third Party Claim without the written
consent of the Indemnified Person or Persons, which consent shall not be
unreasonably withheld.  In the event of the assumption of the defense by the
Indemnifying Party, the Indemnifying Party shall not be liable for any further
legal or other expenses subsequently incurred by the Indemnified Persons in
connection with such defense unless otherwise agreed to in writing by the
Indemnifying Party or as herein provided; provided, however, the Indemnified
Persons shall have the right to participate in such defense, at their own
cost, and shall have the obligation to cooperate therewith.

                                     40
<PAGE>

    8.05    Limit on Indemnity Obligations.

            (a)    In the absence of fraud, the total amount of all Buyer
Losses (excluding Losses referred to in Section 8.01(e)) which Buyer or any of
its related persons has the right to assert against Seller under this Article
VIII may not exceed $1,000,000.  Losses referred to in Section 8.01(e) shall
not be subject to or count towards any such limitation.

            (b)    If the total amount of all Losses which a Party has a right
to assert against the other Party under this Article VIII does not exceed
$10,000, then there shall be no obligation to provide indemnification with
respect to such Losses.  If the total amount of such Losses exceeds $10,000,
then the Losses for which indemnification may be obtained shall be limited to
the amount by which the aggregate amount of all such Losses exceeds $10,000.
Losses not arising from breaches of representations and warranties under
Article III or Article IV shall not be subject to the limitation of this
Section 8.05(b).  Losses referred to in Section 8.01(e) shall also not be
subject to the limitations of this Section 8.05(b).

                                  ARTICLE IX

                                  TERMINATION

    9.01    Methods of Termination.  This Agreement may be terminated:

            (a)    at any time prior to the Closing Date by mutual consent of
Buyer and Seller;

            (b)    by Seller upon notice to Buyer if any of the conditions to
the obligations of Seller shall not have been fulfilled on or before June 30,
2000 (or any extension of such date by written agreement signed by Seller and
Buyer);

            (c)     by Buyer upon notice to Seller if any of the conditions to
the obligations of Buyer shall not have been fulfilled on or before June 30,
2000 (or any extension of such date by written agreement signed by Seller and
Buyer);

            (d)    by Buyer upon notice to Seller as provided in Section
5.09(f) or 5.11; or

            (e)    by Seller upon notice to Buyer as provided in Section
5.09(f).

This Agreement shall be terminated upon Escrow Agent's rightful payment of the
Deposit to Seller as provided in Section 2.09(b).

    9.02    Procedure Upon Termination.  In the event of termination, pursuant
to and in accordance with Section 9.01, the transactions contemplated by this
Agreement shall be terminated, without further action by Buyer or Seller.  If
the transactions contemplated by this Agreement are terminated as provided
herein:

                                      41
<PAGE>

            (a)    Each Party will deliver all documents, work papers and
other materials of any other Party relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, to the Party
furnishing the same;

            (b)    All confidential information received by any Party with
respect to the business, operations, assets or financial condition of the
other Party or its Affiliates shall be treated in accordance with Section
5.05; and

            (c)    Neither Party shall have any liability or further
obligation to the other Party except as stated in Sections 2.09, 5.05, 5.06
and 11.03 and Article X.

                                   ARTICLE X

                              DEFAULT AND REMEDIES

    If (i) Buyer fails to fulfill its obligation to make the deliveries
required of it pursuant to Section 2.08(a) and (ii) the conditions to the
obligations of Buyer stated in Article VII have been fulfilled or waived in
writing by Buyer, the payment to Seller of the Deposit as liquidated damages
pursuant to Section 2.09 shall constitute the sole and exclusive remedy of
Seller.  If Seller fails to fulfill its obligations to make the deliveries
required of him pursuant to Section 2.08(b) or otherwise commits a material
breach of this Agreement and the conditions to the obligations of Seller
stated in Article VI have been fulfilled or waived in writing by Seller,
Buyer, prior to pursuing any remedies, shall make written demand for
performance by Seller.  If Seller fails to satisfy such written demand within
ten (10) Business Days of Seller's receipt of such written demand, then Buyer
will have the option to waive the default, demand specific performance or
exercise any other remedy available at law or in equity.

                                  ARTICLE XI

                           MISCELLANEOUS PROVISIONS

    11.01    Amendment and Modification.  This Agreement may be amended,
modified and supplemented only by written agreement of the Parties.

    11.02    Waiver of Compliance.  Any failure of a Party to comply with any
obligation, covenant, agreement or condition herein may be expressly waived in
writing by the other Party, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.

    11.03    Expenses.  Except as otherwise expressly provided herein, whether
or not the transactions contemplated by this Agreement shall be consummated,
Buyer agrees that all fees and expenses incurred by it in connection with this
Agreement and the transactions contemplated herein shall be borne by it, and
Seller agrees that all fees and expenses incurred by Seller or the Company in

                                    42
<PAGE>

connection with this Agreement and the transactions contemplated herein shall
be borne by Seller.

    11.04    Notices.  All notices, requests, demands, consents and other
communications required or permitted hereunder shall be in writing and shall
be given or made by fax, delivered personally or mailed by certified mail
(return receipt requested), postage prepaid; provided that any notice
delivered by certified mail shall also be made by fax at the time that it is
mailed.  If such fax is sent, notice shall be deemed given upon the
transmission thereof.  If the notice is delivered personally, it shall be
deemed given when delivered.  All communications hereunder shall be delivered
to the respective Parties at the following addresses (or to such other Person
or at such other address for a Party as shall be specified by like notice,
provided that notices of a change of address shall be effective only upon
receipt thereof):

            (a)    If to Buyer, to:

                   Pontotoc Production, Inc.
                   Attention:  James Robson, Jr.
                   808 East Main
                   Ada, Oklahoma  74820

                   And by fax to:  (580) 332-6486

                   with a copy to:

                   Robert A. Curry, Esq.
                   Conner & Winters, A Professional Corporation
                   3700 First Place Tower
                   15 East 5th Street
                   Tulsa, Oklahoma  74103

                   And by fax to:  (918) 586-8548

            (b)    If to Seller, to:

                   Mike Cantrell
                   2313 North Broadway
                   Ada, Oklahoma  74820

                   And by fax to: (580) 332-4714

                                      43
<PAGE>

                   with a copy to:

                   W. Bland Williamson, Jr., Esq.
                   Pray, Walker, Jackman, Williamson & Marlar,
                   A Professional Corporation
                   900 ONEOK Plaza
                   100 West 5th Street
                   Tulsa, Oklahoma  74103

                   And by fax to: (918) 581-5599

    11.05    Assignment.  Except as expressly provided herein, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any Party (whether by operation of law or otherwise) without the
prior written consent of the other Parties.  Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns.

    11.06    Governing Law.  This Agreement and the legal relations between
the Parties shall be governed by and construed in accordance with the laws of
the State of Oklahoma applicable to agreements made in such state between
residents thereof and to be wholly performed therein.

    11.07    Prevailing Party.  Except as otherwise set forth in this
Agreement, the prevailing party in any legal proceeding brought under or to
enforce this Agreement shall be additionally entitled to recover court costs
and reasonable attorneys' fees from the non-prevailing party.

    11.08    Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

    11.09    Entire Agreement.  This Agreement, including the Disclosure
Schedule and the Exhibits, and all other agreements entered into by the
Parties simultaneously herewith set forth the entire agreement and
understanding of the Parties in respect of the subject matter contained
herein, and supersede all prior agreements, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
Party in respect of such subject matter.  There are no restrictions,
representations, warranties, covenants or undertakings between the Parties
other than those expressly set forth or referred to herein.

    11.10    No Third Party Beneficiaries.  Nothing herein expressed or
implied is intended or shall be construed to confer upon or give to any Person
other than the Parties and their respective successors or permitted assigns
any rights or remedies under or by reason of this Agreement.

    11.11    Severability.  Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without

                                     44
<PAGE>

rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.  If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.

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

BUYER:                        PONTOTOC PRODUCTION, INC.

                              By: /s/ James Robson, Jr.
                                  James Robson, Jr.
                                  President

SELLER:
                              /s/ Mike Cantrell
                              Mike Cantrell

                                      45AMENDED AND RESTATED CREDIT AGREEMENT

                                    Between

                           PONTOTOC PRODUCTION, INC.
                      PONTOTOC PRODUCTION COMPANY, INC.,
                      OKLAHOMA BASIC ECONOMY CORPORATION

                                     And

                            LOCAL OKLAHOMA BANK, N.A.

                                 June 1, 2000

<PAGE>

                               TABLE OF CONTENTS

ARTICLE I                                                                   1
    1    DEFINITIONS                                                        1
         1.1    Terms Defined Above                                         1
         1.2    Additional Defined Terms                                    2
         1.3    Undefined Financial Accounting Terms                       11
         1.4    References                                                 11

ARTICLE II                                                                 11
    2    AMOUNT AND TERMS OF CREDIT FACILITY                               11
         2.1    The Loan                                                   11
         2.2    The Note                                                   11
         2.3    Use of Proceeds                                            11
         2.4    Borrowing Procedures                                       12
         2.5    Interest Rate                                              12
         2.6    Letter of Credit Fees                                      12
         2.7    Scheduled Principal and Interest Payments                  12
         2.8    Making of Payments                                         13
         2.9    Maximum Lawful Interest Rate                               13
         2.10   Borrowing Base Determinations                              13
         2.11   Voluntary Prepayments                                      15
         2.12   Fees                                                       15
         2.13   Advances to Satisfy Obligations of Borrower                15
         2.14   Pledge of and Security Interest in Accounts and
                Right of Offset or Lien                                    15
         2.15   Letters in Lieu of Transfer Orders                         16
         2.16   Power of Attorney                                          16

ARTICLE III                                                                17
    3    COLLATERAL AND OTHER TYPES OF CREDIT ENHANCEMENT                  17
         3.1    Oil and Gas Properties                                     17
         3.2    New Properties                                             17

ARTICLE IV                                                                 17
    4    CONDITIONS                                                        17
         4.1    Receipt of Loan Documents and Other Items                  17
         4.2    Each Advance Under the Revolving Note                      19

ARTICLE V                                                                  21
    5    REPRESENTATIONS AND WARRANTIES                                    21
         5.1    Due Authorization and Corporate Existence                  21
         5.2    Consents, Conflicts and Creation of Liens                  21

<PAGE>

         5.3    Valid and Binding Obligations                              21
         5.4    Title to Assets and Oil and Gas Properties                 21
         5.5    Scope and Accuracy of Financial Statements                 21
         5.6    Liabilities, Litigation, and Restrictions                  22
         5.7    Authorizations and Consents                                22
         5.8    Compliance with Laws                                       22
         5.9    Proper Filing of Tax Returns and Payment of Taxes Due      22
         5.10   ERISA                                                      22
         5.11   Environmental Laws                                         23
         5.12   No Material Misstatements                                  23
         5.13   Casualties or Taking of Property                           23
         5.14   Locations of Business, Offices, and Property               23
         5.15   Security Instruments                                       23
         5.16   Subsidiaries                                               24

ARTICLE VI                                                                 24
    6    AFFIRMATIVE COVENANTS                                             24
         6.1    Maintenance and Access to Records                          24
         6.2    Quarterly Financial Statements                             24
         6.3    Annual Financial Statements                                24
         6.4    Reserve Reports                                            25
         6.5    Production Report                                          25
         6.6    Take or Pay Agreements                                     25
         6.7    Gas Balancing Status Report                                25
         6.8    Notices of Certain Events                                  25
         6.9    Letters in Lieu of Transfer Orders                         27
         6.10   Division Orders                                            27
         6.11   Additional Information                                     27
         6.12   Compliance with Laws                                       27
         6.13   Payment of Assessments and Charges                         28
         6.14   Hazardous Substances Indemnification                       28
         6.15   Maintenance of Corporate Existence and Good Standing       29
         6.16   Further Assurances                                         29
         6.17   Initial Fees and Expenses of Lender and/or Legal
                Counsel to Lender                                          29
         6.18   Subsequent Fees and Expenses                               29
         6.19   Maintenance and Inspection of Tangible Properties          29
         6.20   Maintenance of Insurance and Evidence Thereof              29
         6.21   Payment of Note and Performance of Obligations             30
         6.22   Operation of Oil and Gas Properties                        30
         6.23   Depository Accounts                                        30
         6.24   Existing Business                                          30
         6.25   SEC Filings                                                30

<PAGE>

ARTICLE VII                                                                30
    7    FINANCIAL COVENANTS                                               30
         7.1    Adjusted Current Ratio                                     30
         7.2    Debt Service Coverage Ratio                                30
         7.3    Tangible Net Worth                                         31

ARTICLE VIII                                                               31
    8    NEGATIVE COVENANTS                                                31
         8.1    Indebtedness                                               31
         8.2    Contingent Obligations                                     31
         8.3    Liens                                                      31
         8.4    Sales of Assets                                            31
         8.5    Loans or Advances                                          31
         8.6    Dividends and Distributions                                32
         8.7    Cancellation of Insurance                                  32
         8.9    Transactions with Affiliates                               32
         8.10   Lines of Business                                          32
         8.11   Organization or Acquisition of Subsidiaries                32
         8.12   Hedging Activities                                         32

ARTICLE IX                                                                 33
    9    EVENTS OF DEFAULT                                                 33
         9.1    Enumeration of Events of Default                           33
         9.2    Remedies                                                   35

ARTICLE X                                                                  36
    10   MISCELLANEOUS                                                     36
         10.1   Transfers and Participations                               36
         10.2   Survival of Representations, Warranties and Covenants      37
         10.3   Notices and Other Communications                           37
         10.4   Parties in Interest                                        37
         10.5   Rights of Third Parties                                    38
         10.6   Articles and Sections                                      38
         10.7   Number and Gender                                          38
         10.8   Renewals and Extensions                                    38
         10.9   No Waiver: Rights Cumulative                               38
         10.10  Incorporation of Exhibits                                  38
         10.11  Survival Upon Unenforceability                             38
         10.12  Amendments or Modifications                                39
         10.13  Controlling Provision Upon Conflict                        39
         10.14  Time, Place and Method of Payments                         39
         10.15  Time of Essence                                            39
         10.16  Disposition of Collateral                                  39
         10.17  GOVERNING LAW                                              39
         10.18  JURISDICTION AND VENUE                                     39
         10.19  WAIVER OF RIGHTS TO JURY TRIAL                             40
         10.20  ENTIRE AGREEMENT                                           40

<PAGE>

                              AMENDED AND RESTATED
                                CREDIT AGREEMENT

    THIS AMENDED AND RESTATED CREDIT AGREEMENT, made and entered into this 1st
day of June, 2000, by and between PONTOTOC PRODUCTION COMPANY, INC., a Texas
corporation ("PPC"), Oklahoma Basic Economy Corporation, an Oklahoma
corporation ("OBEC"), and PONTOTOC PRODUCTION, INC., a Nevada corporation (the
"PPI") and LOCAL OKLAHOMA BANK, N.A., a national banking association
("Lender").

                             W I T N E S S E T H:

    WHEREAS,  PPC and PPI formerly entered into that certain loan transaction
with Bank One, Oklahoma, N.A. ("Bank One") whereby PPC and PPI, as primary
obligors, borrowed amounts up to $7,500,000.00 from Bank One to be used for
the purposes set forth in that certain Credit Agreement dated as of February
23, 1998 as amended from time to time thereafter, and most recently by that
certain Second Amendment to Credit Agreement dated as of November 1, 1999 (the
"Bank One Agreement");

    WHEREAS, pursuant to the Bank One Agreement, PPC and PPI, as primary
obligors, executed and delivered their promissory note in the amount of
$7,500,000.00 (the "Bank One Note");

    WHEREAS, on June 1, 2000, Bank One assigned the Bank One Agreement, the
Bank One Note and all other loan and security documents executed in
conjunction therewith to Lender;

    WHEREAS, PPC, PPI and Lender desire to amend and restate the Bank One
Agreement in order to add OBEC as a borrower of funds thereunder, and for the
other modifications set forth herein;

    NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, PPC, PPI, OBEC and the Lender
hereby agree as follows:

                                   ARTICLE I

1    DEFINITIONS

     1.1    Terms Defined Above.  As used in this Credit Agreement, the terms
"Bank One", "Bank One Agreement", "Bank One Note", "Lender", "OBEC", "PPC",
and "PPI"shall have the meaning assigned to such terms hereinabove.  Defined
terms used herein in the singular shall import the plural and vice versa.

<PAGE>

     1.2    Additional Defined Terms.  As used in this Agreement, each of the
following terms shall have the meaning assigned thereto in this Section,
unless the context otherwise requires:

            "Advance" shall mean an advance of funds made by the Lender to the
Borrowers under this Agreement, including any amounts evidenced by the Note.

            "Advance Request" shall mean a written request from Borrowers, or
any Borrower, for an Advance under the Loan, substantially in the form of
Exhibit "E" attached hereto.

            "Affiliate"  shall mean any Person directly or indirectly
controlling, or under common control with, the Borrower and includes any
"affiliate" of the Borrowers within the  meaning of the regulations
promulgated pursuant to the Securities Act of 1933, as amended, with
"control," as used in this definition (including, with correlative meanings,
the terms "controlled by" and "under common control with"), and as used with
respect to any Person, meaning a member of the board of directors, a partner
or an officer of such Person, or any other Person with possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such Person, through the ownership (of record, as trustee, or
by proxy) of voting shares, partnership interests or voting rights, through a
management contract or otherwise.  Any Person owning or controlling directly
or indirectly ten percent (10%) or more of the voting shares, partnership
interests or voting rights, or other equity interest of another Person shall
be deemed to be an Affiliate of such Person.

            "Agreement" shall mean this Amended and Restated Credit Agreement
and all exhibits and schedules hereto, as the same may be amended, modified,
supplemented or restated from time to time according to the terms hereof.

            "Applicable LIBOR Rate" shall mean , at any time, that rate of
interest equal to the interest rate announced or published in the Money Rates
section of The Wall Street Journal (Southwest Edition), as the One Month
London Interbank Offered Rate on the first Business Day of the current month,
so as to reflect such rate as of the close of business on the last Business
Day of the preceding month.

            "Available Commitment" shall mean that amount determined by
subtracting the Loan Balance from the Commitment Amount.

            "Base Rate" shall mean, at any time, that rate of interest equal
to the interest rate then most recently announced or published in the "Money
Rates" section of The Wall Street Journal (Southwest Edition), as the "Prime
Rate" which such rate may not be the lowest interest rate charged by the Bank,
and which Prime Rate shall change upon any change in such announced or
published Prime Rate of the Bank, all without notice to the Borrowers.

            "Borrower" shall individually refer to each of PPC, PPI and OBEC
and the term "Borrowers" shall collectively refer to PPC, PPI and OBEC.

                                       2
<PAGE>

            "Borrowing Base" shall mean, at any time, the maximum amount of
credit that Lender is willing to extend against the Borrowers' Oil and Gas
Properties, as determined at the immediately preceding Borrowing Base
Determination in accordance with Section 2.10 at then in effect pursuant to
the terms of Section 2.10 which amount shall not exceed $15,000,000.00.

            "Borrowing Base Determination" shall mean a determination of the
Borrowing Base, Monthly Commitment Reduction, and Half Life made by the Lender
pursuant to Section 2.10.

            "Business Day" shall mean a day other than a Saturday, Sunday or
legal holiday for commercial banks under the laws of the State of Oklahoma.

            "Closing Date" shall mean the effective date of this Agreement.

            "Code" shall mean the United States Internal Revenue Code as
amended from time to time.

            "Collateral" shall mean the Mortgaged Properties, and any other
Property of the Borrowers, or any other Person, wherever located and whether
now owned or existing or hereafter acquired or arising, that is now or at any
time used or intended by the Borrowers and the Lender to be subject to the
Liens created in the Security Instruments or otherwise as security for the
payment or performance of all or any portion of the Obligations, including,
without limitation, products and proceeds existing in connection with any of
the foregoing.

            "Commitment Amount" shall mean the lesser of the amount of (i)
$15,000,000.00 or (ii) the amount of (A) the Borrowing Base less (B) the sum
of the Monthly Commitment Reductions with respect to the Loan which have
occurred subsequent to the immediately preceding Borrowing Base Determination.

            "Commitment Period" shall mean the period from and including the
Closing Date to but not including the Maturity Date.

            "Compliance Certificate" shall mean each certificate,
substantially in the form attached hereto as Exhibit "B", executed by a
Responsible Officer of the Borrowers and furnished to the Lender from time to
time in accordance with this Agreement.

            "Contested in Good Faith" shall mean a matter (a) which is being
contested in good faith by or on behalf of any Person, by appropriate and
lawful proceedings diligently conducted, satisfactory to the Lender, and for
which a reserve has been established in an amount determined in accordance
with GAAP, (b) in which foreclosure, distraint, sale,  forfeiture,  levy,
execution or other similar proceedings have not been initiated or have been
stayed and continue to be stayed, and (c) in which a good faith contest will
not materially detract from the value of the Collateral, materially jeopardize
the rights of the Lender or the Borrowers with respect thereto, materially
interfere with the operation by the Borrowers of their businesses, or
otherwise have a Material Adverse Effect.

                                      3
<PAGE>

            "Contingent Obligation" shall mean, as to any Person, any
obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations of any other Person (for
purposes of this  definition, a "primary  obligation") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, regardless of whether such obligation is contingent, (a) to purchase
any primary obligation or any Property constituting direct or indirect
security therefore, (b) to advance or supply funds (i) for the purchase or
payment of any primary obligation, or (ii) to maintain working capital or
equity capital of any other Person in respect of any primary obligation, or
otherwise to maintain the net worth or solvency of any other Person, (c) to
purchase Property, securities or services primarily for the purpose of
assuring the owner of any primary obligation of the ability of the Person
primarily liable for such primary obligation to make payment thereof, or (d)
otherwise to assure or hold harmless the owner of any such primary obligation
against loss in respect thereof, with the amount of any Contingent Obligation
being deemed to be equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by such Person in good faith.

            "Current Assets" and "Current Liabilities" shall mean, at any
time, all assets or liabilities, respectively, that  should, in accordance
with GAAP, be classified as current assets or current liabilities,
respectively, on a balance sheet of the Borrowers.

            "Default" shall mean any event or occurrence which with the lapse
of time or the giving of notice or both would become an Event of Default.

            "Default Rate" shall mean a per annum variable interest rate equal
to the Base Rate plus "three" percent (3%), calculated on the basis of a year
of 360 days and actual number of days elapsed (including the first day but
excluding the last  day), but in no event exceeding the Highest Lawful Rate.

            "Environmental Complaint" shall mean any written or oral
complaint, order, directive, claim, citation, notice of environmental report
or investigation or other notice by any Governmental Authority or any other
Person with respect to (a) air emissions, (b) spills, releases or discharges
to soils or any improvements located thereon, surface water, groundwater or
the sewer, septic system or waste treatment, storage or disposal systems
servicing any Property of the Borrowers, (c) solid or liquid waste disposal,
(d) either the use, generation, storage, transportation or disposal of any
Hazardous Substance, or (e) other environmental, health or safety matters
affecting any  Property of the Borrower or the business conducted thereon.

            "Environmental Laws" shall mean (a) the following federal laws as
they may be cited, referenced and amended from time to time:  the Clean Air
Act, the Clean Water Act, the Safe Drinking Water Act, the Water Pollution
Control Act, the Environmental Pesticides Act, the Comprehensive Environmental
Response, Compensation and Liability Act, the Endangered Species Act, the

                                     4
<PAGE>

Resource Conservation and Recovery Act, the Occupational Safety and Health
Act, the Hazardous Materials Transportation Act, the Superfund Amendments and
Reauthorization Act, and the Toxic Substances Control Act; (b) any and all
equivalent environmental statutes of any state in which Property of the
Borrower is situated, as they may be cited, referenced and amended from time
to time; (c) any so-called federal, state or local "Superfund" or "Superlien"
statutes, (d) any rules or regulations promulgated under or adopted pursuant
to the above federal and state laws; and (e) any other equivalent federal,
state or local statute or any requirement, rule, regulation, code, ordinance
or order adopted pursuant thereto, including, without limitation, those
relating to the generation, transportation, treatment, storage, recycling,
disposal, handling or release of Hazardous Substances.

            "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations thereunder and
interpretations thereof.

            "Event of Default" shall mean any of the events specified in
Section 9.

            "Financial Statements" shall mean  statements of the financial
condition of the Borrowers as at the point in time and for the period
indicated and consisting of at least a balance sheet, statement of income,
statement of cash flow and related statements of operations, common stock and
other stockholders' equity all of which shall be certified by each (and/or the
applicable) Borrower's Responsible Officer as being prepared pursuant to
accounting principles acceptable to Lender consistently applied and when
applicable in comparative form with respect to the corresponding period of the
preceding fiscal period or as otherwise required by Lender.

            "GAAP" shall mean generally accepted accounting principles
established by the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants and in effect in the United States
from time to time during the term of this Agreement.

            "Governmental Authority" shall mean any nation, country,
commonwealth, territory, government, state, county, parish, municipality or
other political subdivision and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.

            "Half Life" shall be defined as the lesser of: (i) the duration,
in months, as projected by Lender, in its sole discretion, acting reasonably,
during which one-half of the undiscounted future net income, net of lease
operating expenses, production taxes, and capital expenditures will be
realized from the Borrowers' Oil and Gas Properties, or (ii) eighty four (84)
months.

            "Hazardous  Substances" shall mean flammables, explosives,
radioactive materials, hazardous wastes, asbestos or any material containing
asbestos, polychlorinated biphenyls  (PCB's), toxic substances or related
materials, petroleum and petroleum products and associated oil or natural gas
exploration, production and development wastes or any substances defined as
"hazardous substances," "hazardous materials", "hazardous wastes" or "toxic
substances" under the Comprehensive Environmental Response, Compensation and

                                     5
<PAGE>

Liability Act, as amended, the Superfund Amendments and Reauthorization Act,
as amended, the Hazardous Materials Transportation Act, as amended, the
Resource Conservation and Recovery Act, as amended, the Toxic Substances
Control Act, as amended, or any other law or regulation now or hereafter
enacted or promulgated by any Governmental Authority, including, without
limitation, those elements or compounds which are contained in the list of
hazardous substances adopted by the United States Environmental Protection
Agency and the list of  toxic pollutants designated by Congress or the
Environmental Protection Agency or under any Environmental Law.

            "Highest Lawful Rate" shall mean the maximum non-usurious interest
rate permissible under applicable laws of the State of Oklahoma or those of
the United States of America applicable to the Lender, whichever authorizes
the greater rate.

            "Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all liabilities which would appear on a balance sheet of such
Person, prepared in accordance with GAAP (b) all obligations of such Person
evidenced by bonds, debentures, promissory notes or such similar evidences of
indebtedness, (c) all other indebtedness of such Person for borrowed money,
and (d) all obligations of others, to the extent any such obligation is
secured by a Lien, except a Permitted Lien, on the assets of such Person
(whether or not such Person has assumed or become liable for the obligation
secured by such Lien).

            "Insolvency Proceeding" shall mean application (whether voluntary
or instituted by another Person) for or the consent to the appointment of a
receiver, trustee, conservator, custodian or liquidator of any Person or of
all or a substantial part of the Property of such Person, or the filing of a
petition (whether voluntary or instituted by another Person) commencing a case
under Title 11 of the United States Code, seeking liquidation, reorganization
or rearrangement or taking advantage of any bankruptcy, insolvency, debtor's
relief or other similar Law of the United States, the State of Oklahoma or any
other jurisdiction.

            "Law(s)" shall mean all applicable statutes, laws, ordinances,
rules, rulings, interpretations, regulations, judgments, requirements,
governmental authorizations (including licenses, permits, franchises and other
governmental consents  necessary for the ownership or operation of Property),
orders, writs, injunctions or decrees (or interpretations of any of the
foregoing) of any Governmental Authority or Tribunal.

            "Letter of Credit" shall mean any stand-by letter of credit in a
form acceptable to Lender.  No Letter of Credit shall be issued with a
maturity in excess of one year.

            "Letter of Credit Fee" shall be that fee equal to the greater of
(i) one and one-half of one percent (1-1/2%) per annum of the face amount of
each Letter of Credit issued; provided, however, a Letter of Credit Fee shall
be pro-rated according to the number of days each Letter of Credit is issued
and outstanding in any year or (ii) $250.00.  For the purposes of this
definition, a year shall consist of 360 days, but counting the actual days
elapsed (including the first day but excluding the last day) during the period
any Letter of Credit is issued and outstanding.  This fee shall be due and
payable on or before the issuance of any Letter of Credit.

                                     6
<PAGE>

            "Lien" shall mean any lien, mortgage, security interest, tax lien,
pledge, conditional sale or title retention arrangement, or any other interest
in or encumbrance upon, property, which is designed to secure the repayment of
Indebtedness, whether arising by agreement, under any Law or otherwise.

            "Litigation" shall mean any proceeding, claim, lawsuit, and/or
investigation conducted or threatened by or before any Tribunal.

            "LIBOR Interest Period" means a period of one month beginning on
and including the date of this Agreement, and ending on and including the same
day of the next succeeding month as the day on which it began, provided that
each LIBOR Interest Period which would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day, provided that if
there are no more Business Days in that month, the LIBOR Interest Period shall
end on the next preceding Business Day.  No LIBOR Portion may be elected which
would extend beyond the date on which any Loan is due and payable or beyond
the Maturity Date.

            "Loan" shall mean the committed revolving loan facility to be
established by Lender in favor of Borrower pursuant to Section 2.1 hereof.
The term also includes the sum of all advances from time to time outstanding
under the Note.

            "Loan Balance" shall mean, at any time, the outstanding principal
balance of the Note plus the face amount of any Letters of Credit issued by
Lender for the benefit of each Borrower at such time.

            "Loan Documents" shall mean this Agreement, the Note, the Guaranty
Agreement, the Security Instruments and all other documents and instruments
now or hereafter delivered pursuant to the terms of or in connection with this
Agreement, the Guaranty Agreement, the Note, or the Security Instruments, and
all renewals and extensions of, or amendments or supplements to, or
restatements of any or all of the foregoing from time to time in effect.

            "Material Adverse Effect" shall mean any set of circumstances or
events which (a) would have any material adverse effect upon the validity or
enforceability of any of the Loan Documents, (b) is or could reasonably be
expected to become material and adverse to the business, condition (financial
or otherwise), operations or prospects of the Borrower, (c) could  reasonably
be expected to materially impair any Borrower's ability to fulfill its
obligations under the terms of the Loan Documents, or (d) causes a Default or
an Event of Default.

            "Maturity Date" shall be August 10, 2002.

            "Monthly Commitment Reduction" shall mean those monthly decreases
to the  Borrowing Base occurring as of the tenth (10th) day of each month
during the term hereof determined by Lender, in its sole discretion,
semi-annually following Lender's review and valuation of the Oil and Gas
Properties based upon the expected future production from existing wells.

                                      7
<PAGE>

            "Mortgaged Properties" shall mean all Oil and Gas Properties of
the Borrowers as evidenced by their working interests, royalty interests, any
distributive cash proceeds relating to general partnership and/or limited
partnership interests, now existing or hereafter acquired, subject to
perfected first-priority Liens pursuant to the Security Instruments in favor
of the Lender, subject only to Permitted Liens, mortgaged as security for the
Obligations.

            "New Properties" shall mean Oil and Gas Properties acquired by any
Borrower.

            "Note" shall mean the amended and restated promissory note of the
Borrowers in the original face amount of $15,000,000.00 in the form attached
hereto as Exhibit "A", together with any and all renewals, extensions for any
period, increases and rearrangements thereof.

            "Obligations" shall mean, without duplication, (a) all
Indebtedness evidenced by the Note and any Letter of Credit, and (b) all other
obligations and liabilities of the Borrowers to the Lender, now existing or
hereafter incurred, under, arising out of or in connection with any Loan
Document, and with respect to all of the foregoing to the extent that any of
the same includes or refers to the payment of amounts deemed or constituting
interest, only so much thereof as shall have accrued, been earned and remains
unpaid at each relevant time of determination.

            "Oil and Gas Properties" shall mean fee, leasehold or other
interests in or under mineral estates or oil, gas and other liquid or gaseous
hydrocarbon leases with respect to Oil and Gas Properties situated in the
United States or offshore from any State of the United States, including,
without limitation,  overriding royalty and royalty interests, leasehold
estate  interests, net profits interests, production payment interests and
mineral fee interests, together with contracts executed in connection
therewith and all tenements, hereditaments, appurtenances and Oil and Gas
Properties appertaining, belonging, affixed  or incidental thereto.

            "Permitted Liens" shall mean (a) Liens for Taxes incurred in the
course of business (which are not yet due or are being Contested in Good
Faith); (b) Liens in connection with  workers' compensation, unemployment
insurance or other social security (other than Liens created by Section 4068
of ERISA), old-age pension or public liability obligations which are not yet
due or are being Contested in Good Faith; (c) Liens in favor of vendors,
carriers, warehousemen, repairmen, mechanics, workmen,  materialmen,
construction or similar Liens arising by operation of Law in the ordinary
course of business in respect of obligations which are not yet due or are
being Contested in Good Faith; (d) Liens of operators and non-operators under
joint operating agreements arising in the ordinary course of the business of
the Borrowers to secure amounts owing, which amounts are not yet due and will
be paid in accordance with the Borrowers' customary business practices, as
same exist on the date hereof or are being Contested in Good Faith; (e) Liens
under production sales agreements, division orders, operating agreements and
other agreements customary in the oil and gas business for processing,
producing and selling hydrocarbons; (f) easements, rights of way, restrictions
and other similar encumbrances, and minor defects in the chain of title which

                                     8
<PAGE>

are customarily accepted in the oil and gas financing industry, none of which
interfere with the ordinary conduct of the business of the Borrowers or
materially detract from the value or use of the Property to which they apply;
(g) Liens of record under terms and provisions of the leases, unit agreements,
assignments and other transfer of title documents in the chain of title under
which the Borrowers acquired the relevant Property; (h) other Liens existing
as of the Closing Date and disclosed on Exhibit "F" attached hereto under the
heading "Permitted Liens"; (i) Liens created in favor of the Lender and other
Liens expressly permitted under the Security Instruments; (j) liens arising in
the ordinary course of business from  pledges or deposits to secure public or
statutory obligations, or  deposits to secure (or in lieu of) surety, stay,
appeal or customs bonds;  encumbrances consisting of easements, zoning
restrictions, or other restrictions on the use of Property, provided that such
encumbrances do not materially impair the use of such Property for the
purposes intended, and none of which are violated by existing or proposed
structure or land use, and such other material encumbrances as have been
disclosed to and approved by Lender in writing; and (k) good faith deposits in
connection with bids, tenders, contracts or leases, performance or other
similar bonds.

            "Person" shall mean an individual, corporation, partnership,
trust, unincorporated organization or a government  or any agency or political
subdivision thereof.

            "Plan" shall mean, at any time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrowers or any Commonly
Controlled Entity is or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be an "employer" as defined in
Section 3(5) of ERISA.

            "Principal Office" shall mean the office of Lender in Oklahoma
City, Oklahoma County, Oklahoma presently located at 3601 N.W. 63rd Street,
Oklahoma City, Oklahoma 73116.

            "Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, tangible or intangible.

            "Release of Hazardous Substances" shall mean any emission, spill,
release, disposal or discharge, except in accordance with a valid permit,
license, certificate or approval of the relevant Governmental Authority, and
notice of which is required to be given thereof by the person responsible for
such emission, spill, release, disposal or discharge to a Governmental
Authority of any Hazardous Substance into or upon (a) the air, (b) soils or
any improvements located thereon, (c) surface water or groundwater, or (d) the
sewer, septic system or waste treatment, storage or disposal system servicing
any Property of the Borrower.

            "Requirement of Law" shall mean, as to any Person, the certificate
or articles of incorporation and by-laws or other organizational or governing
documents of such Person, and any applicable Law, treaty, ordinance, order,
judgment, rule, decree or regulation or determination of any Tribunal or other
Governmental Authority, including, without limitation, rules, regulations and
orders and requirements  for  permits,  licenses,  registrations, approvals or
authorizations, in each case as such now exist or may be hereafter amended and
are applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.

                                    9
<PAGE>

            "Reserve Report" shall mean each report delivered to the Lender by
the Borrower pursuant to Section 6.4.

            "Responsible Officer" shall mean, as to each Borrower, the
President, Chief Financial Officer, or such other officer of such Borrower as
shall be designated in writing to the Lender by the previously mentioned
officer.

            "Security Instruments" shall mean the security instruments
executed and delivered in satisfaction of the condition set forth in
Subsection 3.1, and all other documents and instruments at any time executed
as security for all or any portion of the Obligations, as the same may be
amended from time to time.

            "Subsidiary" shall mean, as to any Person, a corporation of which
shares of stock having ordinary voting power (other than stock having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.

            "Superfund Site" shall mean those sites listed on the
Environmental Protection Agency National Priority List (NPL) and eligible for
remedial action, or any comparable state registry or list in any state of the
United States.

            "Tangible Net Worth" shall mean, on any date as of which the
amount thereof is to be determined, the sum of the following for Borrowers
calculated in accordance with GAAP:  (i) total shareholders' equity less (ii)
Intangible Assets and/or amounts due from Borrowers' Affiliates.

            "Taxes" shall mean all taxes, assessments, filing or other fees,
levies, imposts, duties, deductions, withholdings, stamp taxes, interest
equalization taxes, capital transaction taxes, foreign exchange taxes or
charges, or other charges of any nature whatsoever from time to time or at any
time imposed by any Law or Tribunal.

            "Transferee" shall mean any Person to which the Lender has sold,
assigned, transferred or granted a participation in any of the Obligations, as
authorized pursuant to Section 10.1, and any Person acquiring, by purchase,
assignment, transfer or participation, from any such purchaser, assignee,
transferee or participant, any part of such Obligations.

            "Tribunal" shall mean any court, governmental department or
authority, commission, board, bureau, agency, arbitrator or instrumentality of
any state, political subdivision, commonwealth, nation, territory, county,
parish, or municipality, whether now or hereafter existing, having
jurisdiction over the Lender, the Borrowers or their respective Property.

            "Unscheduled Redeterminations" shall mean a redetermination of the
Borrowing Base made at any time other than on the dates set for the regular

                                    10
<PAGE>

semi-annual redetermination of the Borrowing Base which is made (A) at the
reasonable request of a Borrower, (B) at any time it appears to the Lender, in
the exercise of its reasonable discretion, that either (i) there has been a
material decrease in the value of the Oil and Gas Properties, or (ii) an event
has occurred which is reasonably expected to have a Material Adverse Effect.

     1.3    Undefined Financial Accounting Terms.  Undefined financial
accounting terms used in this Agreement shall be defined according to GAAP at
the time in effect.

     1.4    References.  References in this Agreement to Exhibit, Article or
Section numbers shall be to Exhibits, Articles or Sections of this Agreement,
unless expressly stated to the contrary.  References in this Agreement to
"hereby," "herein," "hereinafter," "hereinabove," "hereinbelow," "hereof,"
"hereunder" and words of similar import shall be to this Agreement in its
entirety and not only to the particular Exhibit, Article or Section in which
such reference appears.

                                  ARTICLE II

2    AMOUNT AND TERMS OF CREDIT FACILITY

     2.1    The Loan.  Subject to the terms and conditions of this Agreement,
and in reliance upon the representations and warranties made by each Borrower
herein Lender agrees to make Advances from time to time, on or before the
Maturity Date, in accordance with the borrowing procedures set forth in
paragraph 2.4 hereof; provided, however, that the aggregate principal amount
at any one time outstanding under the Note shall not exceed the lesser of (i)
the Borrowing Base then in effect less  the sum of the Monthly Commitment
Reductions with respect to the Loan which have occurred subsequent to the
immediately preceding Borrowing Base Determination; or (ii) Commitment Amount.
No individual Advance when combined with all other unpaid and outstanding
Advances shall exceed the Available Commitment.  Within the limits set forth
herein, each Borrower may borrow, repay without penalty or premium, and
reborrow as provided in this paragraph 2.1.

     2.2    The Note.  All Advances made under the Note shall be evidenced by
the Note, which shall be made, executed and delivered by Borrowers to Lender
at the Closing.  Notwithstanding the principal amount stated on the face of
the Note, the actual principal amount due from Borrowers on account of the
Note shall be the sum of all Advances made by Lender under the Note, less all
principal payments actually received by Lender in collected funds for
application to the Loan.  The initial advance of approximately $10,000,000.00
shall be used to acquire 100% of the Stock of OBEC and additional non-operated
interests in Oil and Gas Properties operated by OBEC.

     2.3    Use of Proceeds.  Proceeds of Advances made under the Loan shall
be used to, among other things: (i) refinance the Bank One Note, (ii) provide
readily available financing for the acquisition and development of producing
oil and gas properties; and (iii) subject to a $1,500,000.00 sub-limit (A)
provide availability to issue necessary letters of credit to meet governmental

                                    11
<PAGE>

bonding requirements; (B) fund working capital needs and (C) meet any margin
calls required to secure hedging contracts, as permitted herein.

     2.4    Borrowing Procedures.  Borrowers may request an Advance under the
Loan on any Business Day on or before the Maturity Date.  Any Borrower shall
make  such a request by giving Lender written notice (which may be sent via
facsimile) in the form of a properly completed and executed Advance Request
stating the amount of the requested Advance; provided, however, that Borrowers
may give notice by telephone if confirmed by  a written notice (which may be
sent via facsimile) in the form of a properly completed and executed Advance
Request within two (2) Business Days thereafter.  Subject to Borrowers'
satisfaction of all other conditions precedent as set forth in Section 4.2
hereof, each Advance under the Loan will be made on the same Business Day on
which Lender receives  an Advance Request, if the Advance Request is received
by 2:00 p.m., or on the following Business Day, if it is received after 2:00
p.m.  Lender will make each Advance under the Loan by crediting the general
operating accounts maintained by Borrowers with Lender.  Unless Lender is
otherwise instructed by Borrowers, Advance Requests may be signed and
submitted on behalf of each Borrower by any Responsible Officer.

     2.5    Interest Rate.  The outstanding unpaid principal balance of the
Note shall bear interest, as determined herein, at a rate per annum (adjusted
monthly) equal to the Applicable LIBOR Rate plus 2.00%.  The Applicable LIBOR
Rate shall be adjusted monthly to be effective on the first day of each month
and lasting through the last day of each month. Upon notice from Lender to
Borrowers of the occurrence of any Event of Default, the unpaid principal
amount from time to time outstanding under the Note shall bear interest at a
fluctuating rate per annum equal to the Base Rate (but not less than the
Applicable LIBOR Rate in effect on the date of the occurrence of the Event of
Default), plus three percent (3%).  Interest shall be computed on the Note for
the actual number of days elapsed on the basis of a year consisting of 360
days.

     2.6    Letter of Credit Fees.  Upon the issuance of any Letter of Credit,
Borrowers agree to pay Lender the Letter of Credit Fee.

     2.7    Scheduled Principal and Interest Payments.  Beginning on the tenth
(10th) day of the calendar month following the date of the first Advance under
the Note and continuing on the tenth (10th) day of each month thereafter
through July 10, 2002, Borrowers shall, at a minimum make a payment of all
accrued but unpaid interest on the Note.  In the event the Loan Balance is, at
any time, greater than the Borrowing Base minus the sum of all Monthly
Commitment Reductions with respect to the Loan which have occurred subsequent
to the immediately preceding Borrowing Base Determination, Borrowers shall
prepay, without penalty, an amount sufficient to reduce the Loan Balance by
the difference set forth above.  The entire outstanding principal balance of
the Note and all unpaid interest accrued thereon shall be due and payable on
the Maturity Date.  If any Letter of Credit is called for funding, repayment
thereof shall be due and payable on demand from Lender but if no demand is
made, it shall be treated as an Advance under the Note.

                                    12
<PAGE>

     2.8    Making of Payments.  All payments (including prepayments) made by
Borrowers on account of the Note shall be made to Lender at its main office in
Oklahoma City, Oklahoma, at or before 2:00 p.m., local time, in lawful money
of the United States of America and in immediately available funds.  If any
payment under the Note shall be due and payable on a day other than a Business
Day, the maturity thereof shall be extended to the next succeeding Business
Day and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.

     2.9    Maximum Lawful Interest Rate.  It is not the intention of Lender
or Borrowers to violate the laws of any applicable jurisdiction relating to
usury or other restrictions on the maximum lawful interest rate.  The Loan
Documents and all other agreements between Borrowers and Lender, whether now
existing or hereafter arising and whether written or oral, are hereby limited
so that in no event shall the interest paid or agreed to be paid to Lender for
use, forbearance or detention of money loaned, or for the payment or
performance of any covenant or obligation contained herein or in any other
Loan Document exceed the maximum amount permissible under applicable law.  If
from any circumstances Lender shall ever receive anything of value deemed
interest under applicable law which would exceed interest at the highest
lawful rate, such excessive interest shall be applied to the reduction of the
principal amount owing hereunder, and not to the payment of interest, or if
such excessive interest exceeds any unpaid balance of principal, such excess
shall be refunded to Borrowers.  All sums paid or agreed to be paid to Lender
for the use, forbearance or detention of loans evidenced by the Note shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of the Note until payment in full so that the
rate of interest on account of such loans is uniform throughout the term
thereof.  This Section 2.9 shall control every other provision of the Loan
Documents and all other agreements between Lender and Borrowers contemplated
thereby.

     2.10    Borrowing Base Determinations.

             2.10.1    The Borrowing Base as of the Closing Date shall
represent the maximum amount of credit that Lender is willing to loan against
Borrowers' Oil and Gas Properties.  As of the Closing Date, the initial
Borrowing Base shall be Fourteen Million Five Hundred Fifty Thousand and
No/100 Dollars ($14,500,000.00).   The initial Monthly Commitment Reduction is
$265,000.00 per month beginning July 10, 2000 and continuing on the tenth
(10th) day of each month thereafter until Borrowers are notified of a change
to either the Borrowing Base or the Monthly Commitment Reduction, and the Half
Life of the Borrowers' Oil and Gas Properties is 55 months.  The Borrowing
Base shall reduce on the tenth (10th )day of each month in the amount of the
Monthly Commitment Reduction.  Nothing contained in this Section 2.10.1 shall
be construed to imply that the amount of the Monthly Commitment Reduction
cannot be zero (0).  Beginning February 10, 2001, the Borrowing Base and
Monthly Commitment Reduction shall be recalculated by Lender on, at least, a
semi-annual basis and in accordance with the procedures set forth in paragraph
2.10.2 below.  Semi-annually, within 30 days of Lender's receipt of the
Reserve Reports required pursuant to Section 6.4 herein, Lender shall
redetermine Borrowers' Borrowing Base, Monthly Commitment Reduction, and Half
Life.

                                    13
<PAGE>

             2.10.2    Except for such Unscheduled Redeterminations as the
Lender may otherwise require, on or before August 10th and February 10th of
each year beginning February 10, 2001, Lender will recalculate the Borrowing
Base, any Monthly Commitment Reduction and the  Half Life in the manner set
forth in this paragraph 2.10.2.  Lender will notify Borrower in writing of the
amount of the redetermined Borrowing Base, Monthly Commitment Reduction, and
Half Life and the redetermined Borrowing Base, Monthly Commitment Reduction
and Half Life will become effective on the date such notice is given.  The
Borrowing Base and any Monthly Commitment Reduction will be calculated as of
each determination date with reference to the net present value of the future
gross revenues expected to be received by Borrowers from the sale of oil, gas
and other hydrocarbons to be produced from Borrowers' interests in all of its
Oil and Gas Properties, after deducting Borrowers' share of lease operating
expenses (other than nonrecurring expenses), severance, ad valorem, excise,
windfall and production, and state gross production taxes.  Each determination
of the Borrowing Base, Monthly Commitment Reduction and Half Life: (i) shall
be made by Lender in its sole discretion, to be exercised in good faith,
consistent with its lending policies then in effect; (ii) shall utilize
pricing assumptions and discount rates consistent with those then being used
generally by Lender in evaluating oil and gas reserves; (iii) shall be based
upon expected future production from existing wells with existing equipment
and operating methods; (iv) shall take into account the information contained
in the engineering report and the monthly reports submitted since the last
determination of the Borrowing Base; and (v) shall be based upon such other
credit factors consistently applied (including, without limitation, the
assets, liabilities, cash flow, business, properties, prospects, management
and ownership of each Borrower) as Lender customarily considers in evaluating
similar credits.  Borrowers recognize that decreases in the Borrowing Base may
be caused by such factors as declines in production volumes, other adverse
changes in operating conditions, price decreases, other adverse market
conditions, and increases in interest rates and that Lender reserves the right
to conduct Unscheduled Redeterminations at any time.

             2.10.3    Mandatory Prepayments.  the Loan Balance as of the date
of Lender's redetermination of the Borrowing Base exceeds the redetermined
Borrowing Base (such excess amount being referred to in this paragraph 2.10.3
as the "Overage Amount"), at Lender's option, one or more of the following
remedies may be required:

                      (i)    within five (5) Business Days after Borrowers'
receipt of such notice, Borrowers shall be required to prepay a principal
amount of the Note, at Lender's discretion, without penalty or premium, equal
to the Overage Amount; or

                     (ii)    within five (5) Business Days after Borrowers'
receipt of such notice, pledge additional collateral of sufficient value (as
acceptable by Lender) as may be required to raise the available credit level
above the outstanding Loan Balances; or

                    (iii)    any combination of (i) and (ii) above.

                                      14
<PAGE>

             2.10.4    Reduction of Commitment.  Upon Lender's redetermination
of the Borrowing Base, if no Overage Amount exists but its commitment to make
future Advances exceeds the redetermined Borrowing Base, the Commitment Amount
shall be reduced to an amount equal to the difference between the redetermined
Borrowing Base and the then existing Loan Balance.

     2.11    Voluntary Prepayments.  The Borrowers shall have the right at any
time or from time to time to prepay without premium or penalty, all or any
part of the Loan Balance outstanding on the Note.  All prepayments made
pursuant to this Section shall be applied first to accrued and unpaid interest
and then to the Loan Balance.

     2.12    Fees.

             (a)    Non-Use.  In addition to interest on the Note as provided
herein, to compensate the Lender for maintaining funds available, the
Borrowers shall pay to the Lender, in immediately available funds, on the last
Business Day of each January, April, July and October during the Commitment
Period (retroactive to the date hereof), an annual fee in the amount of 1/4%
per annum, calculated on the basis of a year of 360 days, but counting the
actual days elapsed (including the first day but excluding the last day), on
the average daily amount of the Available Commitment during the preceding
calendar quarter for which payment is made.

             (b)    Facility Fee.  No initial commitment fee shall be assessed
hereunder.  However, in addition to interest on the Note as provided herein,
in order to compensate Lender for subsequent increases to the Borrowing Base
in accordance with scheduled Borrowing Base reviews, Borrowers shall pay to
the Lender, in immediately available funds and as a precondition to any
increase in the Borrowing Base, a fee of 1/4% of the incremental increase to
the Borrowing Base.  Additional fees may be negotiated between Lender and
Borrowers if Lender is requested to complete an unscheduled redetermination of
the Borrowing Base.

     2.13    Advances to Satisfy Obligations of Borrower.  The Lender may, but
shall not be obligated to, make Advances for the benefit of the Borrowers and
apply same to the satisfaction of any condition, warranty, representation or
covenant of the Borrower contained in this Agreement or any other Loan
Document.  However, if no Event of Default exists or is continuing, Lender
shall obtain Borrowers' approval prior to any such Advance.  Any funds so
advanced and applied shall be part of the proceeds advanced under and
evidenced by the Note and shall bear interest at the Base Rate.

     2.14    Pledge of and Security Interest in Accounts and Right of Offset
or Lien.  As security for the payment and/or  performance of the Obligations,
each Borrower hereby transfers, assigns and pledges to the Lender and/or
grants to the Lender a security interest in all funds of  such Borrower now or
hereafter or from time to time on deposit with the Lender, with such interest

                                     15
<PAGE>

of the Lender to be retransferred, reassigned and/or released by the Lender,
as the case may be, at the expense of  such Borrower upon payment in full
and/or complete performance by the Borrower of all Obligations.  The
aforementioned lien shall not apply to funds contained in any account,
including any drilling or escrow account, of Borrowers held for the benefit of
or in trust for any third party including royalty, overriding royalty, or
working interest owners.  All remedies as secured party or assignee of such
funds shall be exercisable, subject to applicable notice and cure periods
provided in this Agreement, by the Lender upon the occurrence of any Event of
Default, regardless of whether the exercise of any such remedy would result in
any penalty or loss of interest or profit with respect to any withdrawal of
funds deposited in a time deposit account prior to the maturity thereof.
Furthermore,  each Borrower hereby grants to the Lender the right,
exercisable, subject to applicable notice and cure periods provided in this
Agreement, at such time as any Obligation shall mature, whether by
acceleration of maturity or otherwise, of offset or banker's lien against all
funds of  such Borrower now or hereafter or from time to time on deposit with
the Lender, regardless of whether the exercise of any such remedy would result
in any penalty or loss of interest or profit with respect to any withdrawal of
funds deposited in a time deposit account prior to the maturity thereof.

     2.15    Letters in Lieu of Transfer Orders.  Notwithstanding any other
term or provisions hereof to the contrary, the Lender agrees that  the letters
in lieu of transfer or division orders provided by the Borrowers pursuant to
Subsections 4.1(h)(iii) and 6.10 will not be sent to the addressees thereof
prior to the occurrence of an Event of Default, at which time the Lender may,
at its option and in addition to the exercise of any of its other rights and
remedies, send any or all of such letters, provided however, that upon the
occurrence of an Event of Default other than those specified in Section 9.1(g)
or (h), the Lender shall not send any or all of such letters or division
orders until the applicable period to cure such Default has lapsed without
such Default being cured.

     2.16    Power of Attorney.  Borrowers hereby designate the Lender as
their agent and attorney-in-fact, to act in their name, place and stead
(individually and collectively) for the purpose of completing and delivering
any and all of the letters in lieu of transfer orders delivered by the
Borrowers to the Lender pursuant to Section 2.15 or Section 6.9, including,
without limitation, completing any blanks contained in such letters and
attaching exhibits thereto describing the relevant Collateral.  The Borrowers
hereby ratify and confirm all that the Lender shall lawfully do or cause to be
done by virtue of this power of attorney and the rights granted with respect
to such power of attorney.  This power of attorney is coupled with the
interests of the Lender in the Collateral, shall commence and be in full force
and effect as of the Closing Date and shall remain in full force and effect
and shall be irrevocable until the obligations, if any, of the Lender
hereunder have terminated and the full satisfaction of all Obligations.  The
powers conferred on the Lender by this appointment may only be exercised by
the Lender by execution by any Person who, at the time of exercise, is an
officer of the Lender, and are solely to protect the interests of the Lender
under the Loan Documents and shall not impose any duty upon the Lender to
exercise any such powers.  The Lender shall be accountable only for amounts
that it actually receives or has expressly directed that others receive as a
result of the exercise of such powers.

                                      16
<PAGE>

                                  ARTICLE III

3    COLLATERAL AND OTHER TYPES OF CREDIT ENHANCEMENT

     3.1    Oil and Gas Properties.    Borrowers shall grant and maintain in
favor of Lender at all times until the Obligations are paid and satisfied in
full, valid first mortgage liens and first, prior and perfected security
interests in and to all their right, title and interest in the Mortgaged
Properties.  Borrowers shall execute and deliver, or cause to be executed and
delivered, such oil and gas mortgages, deeds of trusts, instruments,
agreements, assignments, financing statements and other documents as may be
reasonably necessary in the opinion of Lender and Lender's counsel to grant
Lender valid first mortgage liens and first, prior and perfected security
interests in and to such Mortgaged Properties.   In conjunction with the
execution of this Agreement and the Note, Borrowers shall execute a mortgage,
deed of trust, or similar instrument(s) on the Oil and Gas Properties of
Borrowers representing, at least, 85% of the total value of all Oil and Gas
Properties owned by Borrowers, as determined by Lender in its sole discretion.
Oil and Gas Properties not mortgaged to Lender shall not be pledged or
encumbered by Borrowers, and such Oil and Gas Properties shall be available to
Lender to be mortgaged at its discretion.

     3.2    New Properties.  At the time any Advance is used to finance the
acquisition of any Oil and Gas Properties by Borrowers, Borrowers shall, at
Lender's discretion, grant and thereafter shall maintain in favor of Lender at
all times until the Obligations are paid and satisfied in full, valid first
mortgage liens and first, prior and perfected security interests in and to all
of their right, title and interest in such Oil and Gas Properties.  Borrowers
shall execute and deliver, or cause to be executed and delivered, such oil and
gas mortgages, deeds of trusts, instruments, agreements, assignments,
financing statements and other documents as may be reasonably necessary in the
opinion of Lender and Lender's counsel to grant Lender valid first mortgage
liens and first, prior and perfected security interests in and to such new Oil
and Gas Properties.

                                  ARTICLE IV

4    CONDITIONS

     The obligations of the Lender to enter into this Agreement and to make
Advances are subject to the satisfaction of the following conditions precedent
unless waived in writing by Lender:

     4.1    Receipt of Loan Documents and Other Items.  The Lender shall have
no obligation under this Agreement unless and until all matters incident to
the consummation of the transactions contemplated herein, including, without
limitation, the review by the Lender or its counsel of the title of the
Borrowers to the Oil and Gas Properties, shall be satisfactory in the good
faith judgment of the Lender, and the Lender shall have received, reviewed and
approved the following documents and other items, appropriately executed when
necessary and, where applicable, acknowledged, all in form and substance
satisfactory in the good faith judgment of the Lender and dated, where

                                    17
<PAGE>

applicable, of even date herewith or a date prior thereto (unless specifically
noted below to the contrary) and acceptable in the good faith judgment of the
Lender:

            (a)    multiple counterparts of this Agreement, as reasonably
requested by the Lender;

            (b)    the Note;

            (c)    copies of each  Borrower's Articles of Incorporation and

            (d)    Certificate of Incorporation and all amendments thereto and
by-laws and all amendments thereto, accompanied by a certificate issued by the
secretary or an assistant secretary of each Borrower, to the effect that each
such copy is correct and complete;

            (e)    certificates of incumbency and signatures of all of each
Borrower's officers who are authorized to execute Loan Documents on behalf of
the respective Borrower, executed by the secretary or an assistant secretary
of each Borrower;

            (f)    copies of corporate resolutions approving the Loan
Documents and authorizing the transactions contemplated herein and therein,
duly adopted by the board of directors of  each Borrower, as the case may be,
accompanied by a certificate of the respective secretary or an assistant
secretary of each Borrower, as the case may be, to the effect that such copies
are true and correct copies of resolutions duly adopted at a meeting or by
unanimous consent of the board of directors of each Borrower and that such
resolutions constitute all the resolutions adopted with respect to such
transactions, have not been amended, modified, or revoked in any respect, and
are in full force and effect as of the date of such certificate;

            (g)    the following Security Instruments transferring, creating,
evidencing, perfecting and otherwise establishing, as applicable, Liens in
favor of the Lender, in and to the Oil and Gas Properties listed and described
in Exhibit "D" and the Collateral;

                   (i)  Mortgage, Security Agreement, Financing Statement and
Assignment of Production from the Borrowers covering certain Oil and Gas
Properties located in any and all states in which the Oil and Gas Properties
lie, and all improvements, personal property and fixtures related thereto;

                  (ii)  Financing Statements from each  Borrower, as debtor,
constituent to the document described in clause (i) immediately above;

                 (iii)  Undated letters in lieu of transfer orders, in form
and substance satisfactory to the Lender, from the Borrowers to each purchaser
of production and disburser of the proceeds of production from or attributable
to the Mortgaged Properties, together with additional letters with the

                                    18
<PAGE>

addressees left blank, authorizing and directing the addressees to make future
payments attributable to production from the Mortgaged Properties directly to
the Lender;

            (h)    The consolidated Financial Statements of PPC and PPI dated
as of March 31, 2000, and of OBEC dated as of February 29, 2000;

            (i)    certificates dated as of a recent date from the Secretary
of State or other appropriate Governmental Authority evidencing the existence
or qualification and good standing of the Borrowers in all jurisdictions
covered by the Oil and Gas Properties where such qualification is required and
where failure to be qualified or in good standing could reasonably be expected
to have a Material Adverse Effect and for the States of Oklahoma and Nevada
for PPI;

            (j)    results of searches of the UCC records of the State of
Oklahoma and any and all other jurisdictions in which Oil and Gas Properties
are located from a source acceptable to the Lender and reflecting no Liens,
other than Permitted Liens, against any of the Collateral as to which
perfection of a Lien is accomplished by the filing of a financing statement;

            (k)    confirmation and/or evidence, acceptable to the Lender in
Lender's sole discretion, including, without limitation, opinions of counsel
satisfactory to the Lender, of the Borrowers having defensible  title to  the
Mortgaged Properties, free and clear of Liens other than Permitted Liens;

            (l)    opinion of Borrowers' counsel substantially in the form
acceptable to Lender;

            (m)    certificates evidencing the insurance maintained by the
Borrowers in compliance with applicable provisions of this Agreement;

            (n)    a Request for Advance received by the Lender on or before
11:00  a.m., Central Standard or Daylight Savings Time, as the case may be, on
the day preceding the Closing Date;

            (o)    such other agreements, documents, items, instruments,
opinions, certificates, waivers, consents and evidence as the Lender may
reasonably request;

            (p)    the Borrowers and any Affiliate thereof shall have
disclosed any and all pending or threatened litigation matters to Lender and
Lender shall be satisfied that such litigation matters are not expected to
result in any material impairment of the ownership of the Borrowers in any
Collateral or to have a Material Adverse Effect on either the Borrowers or any
Affiliate; and

            (q)    evidence satisfactory to Lender that PPI's acquisition of
OBEC and related assets have closed.

     4.2    Each Advance Under the Revolving Note.  In addition to the
conditions precedent stated in Section 4.1 having been fulfilled as of the
Closing Date, the Lender shall not be obligated to make any Advance unless;

                                      19
<PAGE>

            (a)    the Borrowers (or either Borrower) shall have delivered to
the Lender a Request for Advance at least the requisite time prior to the
requested date for the relevant Advance; and each statement or certification
made in such Request for Advance shall be true and correct in all material
respects on the requested date for such Advance;

            (b)    no Event of Default or Default exists or, or by virtue of
any requested Advance, shall exist or will occur;

            (c)    if requested by the Lender, the Borrowers shall have
delivered evidence satisfactory in the good faith judgment of the Lender
substantiating any of the matters contained in this Agreement which are
necessary to enable the Borrowers to qualify for such Advance;

            (d)    no event shall have occurred which, in the reasonable
opinion of the Lender, could have a Material Adverse Effect;

            (e)    each of the representations and warranties contained in
this Agreement shall be true and correct in all material respects and shall be
deemed to be repeated by the Borrowers as if made on the requested date for
such Advance;

            (f)    the Security Instruments shall be in full force and effect
and provide to the Lender the Liens intended thereby;

            (g)    to the extent of Borrowers' undivided interest therein, the
Borrowers shall hold full legal title to the Collateral and be the sole
beneficial owner thereof, except for Permitted Liens and shall provide
confirmation acceptable to Lender, including without limitation, opinions of
counsel satisfactory to Lender or other acceptable evidence of Borrowers
having marketable title to the New Properties free and clear of Liens other
than Permitted Liens;

            (h)    the Lender shall have received reimbursement from the
Borrowers, or legal counsel for the Lender shall have received payment from
the Borrowers, for (i) all reasonable fees and expenses of counsel to the
Lender for which the Borrowers are responsible pursuant to applicable
provisions of this Agreement and for which invoices have been presented as of
or prior to the date of the relevant Advance, and (ii) estimated fees charged
by filing officers and other public officials incurred or to be incurred in
connection with the filing and recordation of any of the Security Instruments,
for which invoices have been presented as of or prior to the date of the
requested Advance; and

            (i)    all material matters incident to the consummation of the
transactions hereby contemplated shall be satisfactory in the good faith
judgment of the Lender.

                                      20
<PAGE>

                                   ARTICLE V

5.   REPRESENTATIONS AND WARRANTIES

     To induce the Lender to enter into this Agreement and to make the
Advances, the Borrowers represent and warrant to the Lender (which
representations and warranties shall survive the delivery of the Note) that:

     5.1    Due Authorization and Corporate Existence.  The execution and
delivery by Borrowers of this Agreement and the borrowings hereunder; the
execution and delivery by Borrowers of the Note; the repayment of the Note and
interest and fees provided for in the Note and this Agreement; the execution
and delivery of the Security Instruments by Borrowers and the performance of
all obligations of Borrowers under the Loan Documents are within the power of
the Borrowers and have been duly authorized by all necessary corporate action
of the Borrowers.  Each Borrower is a corporation legally existing and in good
standing under the laws of the State of Oklahoma and is duly qualified as a
foreign corporation and is in good standing in all states in which it is doing
business, except where failure to be qualified will not have a Material
Adverse Effect.

     5.2    Consents, Conflicts and Creation of Liens.   The execution and
delivery by Borrowers of the Loan Documents and the performance (except upon
the occurrence of an Event of Default) of the obligations of the Borrowers
thereunder do not and will not (a) require the consent of any Governmental
Authority, (b) contravene or conflict with any Requirement of Law which
contravention or conflict would have a Material Adverse Effect, (c) contravene
or conflict with any indenture, instrument or other agreement to which
Borrowers  are a party or by which any Property of either Borrower may be
presently bound or encumbered, or (d) result in or require the creation or
imposition of any Lien in, upon or of any Property of either Borrower under
any such indenture, instrument or other agreement, other than the Loan
Documents.

     5.3    Valid and Binding Obligations.  All of the Loan Documents, when
duly executed and delivered by Borrowers, will be the legal, valid and binding
obligations of the Borrowers, enforceable against each Borrower by the Lender
in accordance with their respective terms, except as limited by equitable
principals and applicable liquidation, conservatorship, bankruptcy,
moratorium, arrangement, receivership, insolvency, reorganization or similar
laws from time-to-time affecting the rights of creditors generally.

     5.4    Title to Assets and Oil and Gas Properties.  The Borrowers have
defensible title to all of their Properties and Oil and Gas Properties, free
and clear of all Liens and such defects in title that individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect
except Permitted Liens.

     5.5    Scope and Accuracy of Financial Statements.  The Financial
Statements of the Borrowers dated as of the dates set forth in Section 4.1(i)
present fairly the financial position and results of operations of the
Borrowers as at the relevant point in time or for the period indicated.  No

                                    21
<PAGE>

event or circumstance has occurred since the dates set forth in Schedule
4.1(i) which could reasonably be expected to have a Material Adverse Effect.

     5.6    Liabilities, Litigation, and Restrictions.  Other than as
disclosed on the Financial Statements of the Borrowers dated as of the dates
set forth in Section 4.1(i), the Borrowers have no liabilities, direct or
contingent, which may materially and adversely affect its business, operations
or ownership of the Collateral.  Except as set forth under the heading
"Litigation" on Exhibit "F" hereto, no Litigation of any nature affecting
either Borrower is pending before any Tribunal or, to the best knowledge of
the Borrower, threatened against  or affecting either Borrower which might
reasonably be expected to result in any material impairment of its ownership
of any Collateral or to have a Material Adverse Effect.  To the best knowledge
of Borrowers, after due inquiry, no unusual or unduly burdensome restriction,
restraint or hazard exists by contract, Requirement of Law, or otherwise
relative to the material business or operations of Borrowers or the ownership
and operation of a material portion of the Collateral other than such as
relate generally to Persons engaged in business activities similar to those
conducted by Borrowers.

     5.7    Authorizations and Consents.  No authorization, consent, approval,
exemption, franchise, permit or license of, or filing with, any Governmental
Authority, Tribunal or any other Person is required to authorize or is
otherwise required in connection with the valid execution and delivery by the
Borrowers of the Loan Documents, or any instrument contemplated hereby or
thereby, the repayment by the Borrowers of the Note and the interest and fees
provided in the Note and this Agreement, or the performance (except in the
Event of Default) by the Borrowers of the Obligations.

     5.8    Compliance with Laws.  To the best of each Borrower's knowledge,
the Borrowers and each of their Property, including, without limitation, the
Mortgage Properties, are in compliance in all material respects with all
applicable Requirements of Law, including, without limitation, Environmental
Laws, the Natural Gas Policy Act of 1978, as amended, and ERISA, except such
noncompliance that would not reasonably be expected to have a Material Adverse
Effect.

     5.9    Proper Filing of Tax Returns and Payment of Taxes Due.  The
Borrowers have duly and properly filed their United States income tax returns
and all other tax returns which are required to be filed by the Borrowers and
have paid all taxes due except such as are being Contested in Good Faith and
as to which adequate provisions and disclosures have been made.  The charges
and reserves of the Borrowers with respect to taxes and other governmental
charges are adequate, and the Borrowers have no knowledge of any deficiency or
additional assessment in a material amount in connection with taxes,
assessments, or charges not provided for on its books.

     5.10    ERISA.  Neither Borrower  maintains or sponsors any Plan subject
to Title IV of ERISA.

                                      22
<PAGE>

     5.11    Environmental Laws.  To the best knowledge and belief of the
Borrowers, except as would not have a Material Adverse Effect, or as described
on Exhibit "F" under the  heading "Environmental Matters";

            (a)    no Property of Borrowers is currently on or has ever been
on, or is adjacent to any Property which is on or has ever been on, any
federal or state list of Superfund Sites;

            (b)    no Hazardous Substances have been generated, transported
and/or disposed of by Borrowers at a site which was, at the time of such
generation, transportation and/or disposal, or has since become, a Superfund
Site;

            (c)    except in accordance with applicable Requirements of Law or
the terms of a valid permit, license, certificate or approval of the relevant
Governmental Authority, no Release of Hazardous Substances by Borrowers or
from, affecting or related to any Property of any Borrowers or adjacent to any
Property of any Borrower has occurred; and

            (d)    no Environmental Complaint has been received by the
Borrowers.

     5.12    No Material Misstatements.  To each Borrower's knowledge, no
information, exhibit, statement or report furnished to the Lender by or at the
direction of Borrower in connection with this Agreement contains any material
misstatement of fact or omits to state a material fact necessary to make the
statements contained therein not misleading as of the date made or deemed
made.

     5.13    Casualties or Taking of Property.  Except as disclosed on Exhibit
"F" under the heading "Casualties," since the dates set forth in Section
4.1(i), neither the business nor any Property of either Borrower has been
materially adversely affected as a result of any fire, explosion, earthquake,
flood, drought, windstorm, accident, strike or other labor disturbance,
embargo, requisition or taking of Property or cancellation of contracts,
permits or concessions by any Governmental Authority, riot, activities of
armed forces or acts of God, which, as a result thereof, could reasonably be
expected to have a Material Adverse Effect.

     5.14    Locations of Business, Offices, and Property.  The principal
place of business and chief executive office of the Borrowers are located at
the addresses of the Borrowers set forth in Section 10.3 or at such other
location as the Borrowers may have, by proper written notice hereunder,
advised the Lender, provided that such other locations of the Borrowers are
within a state in which appropriate financing statements from the Borrowers in
favor of the Lender have been filed.

     5.15    Security Instruments.  The provisions of each Security Instrument
are effective to create in favor of the Lender, a legal, valid and enforceable
Lien, except as limited by equitable principles and applicable liquidation,
conservatorship, bankruptcy, moratorium, arrangement, receivership,
insolvency, reorganization or similar laws from time-to-time affecting the
rights of creditors generally, in all right, title and interest of the
Borrowers in the Collateral described therein, which Liens, assuming the
accomplishment of recording and filing in accordance with applicable Laws

                                    23
<PAGE>

prior to the intervention of rights of other Persons, shall constitute fully
perfected first-priority Liens on all right, title and interest of the
Borrowers in the Collateral described therein, subject to Permitted Liens.

     5.16    Subsidiaries.  Other than PPC and OBEC being wholly owned
Subsidiaries of PPI none of the Borrowers have any other  Subsidiaries as of
the Closing Date.

                                  ARTICLE VI

6.   AFFIRMATIVE COVENANTS

     Unless agreed in writing by the Lender to the contrary, so long as any
Obligation remains outstanding or unpaid or any commitment to make Advances
exists each Borrower shall:

     6.1    Maintenance and Access to Records.  Keep adequate records of all
its transactions so that at any time, and from time to time, its true and
complete financial condition may be readily determined, and promptly following
the reasonable request of the Lender, make such records available during
Borrower's customary business hours for inspection by the Lender and, at the
expense of the Borrowers, allow the Lender to make  copies thereof at the
Borrowers' premises and take same to Lender's place of business.

     6.2    Quarterly Financial Statements.  Beginning with the quarter ending
June 30, 2000, deliver to the Lender, (a) on or before the 60th day after the
close of each quarter, a copy of the unaudited Financial Statements of the
Borrowers on a consolidated and consolidating basis as at the close of such
monthly period, such Financial Statement to be certified by a Responsible
Officer of the Borrowers as having been prepared in accordance with GAAP,
consistently applied, and as a fair presentation of the consolidated financial
condition of the Borrowers, and (b) concurrent with (a) above, a Compliance
Certificate executed by each Borrower's  Responsible Officer stating that such
Officer, after due inquiry, has no knowledge of a Default or Event of Default
and containing a computation of, and demonstrating compliance with, each
financial covenant set forth in Section 7 herein.

     6.3    Annual Financial Statements.  Deliver to the Lender, (a) on or
before the 90th day after the close of each of its fiscal years, and prepared
in accordance with GAAP, a copy of the  annual Financial Statements of the
Borrowers prepared on a consolidated and consolidating basis, audited by a
nationally recognized firm of independent public accountants and (b)
concurrent with (a) above, a Compliance Certificate executed by each
Borrower's Responsible Officer stating that such Officer, after due inquiry,
has no knowledge of a Default or Event of Default and containing a computation
of, and demonstrating compliance with, each financial covenant set forth in
Section 7 herein.  Further, Borrowers shall deliver to the Lender a copy of
its March 31, 2000 audited Financial Statements by June 30, 2000.

                                      24
<PAGE>

     6.4    Reserve Reports.

            (a)    Deliver to the Lender no later than July 1 of each year
during the term of this Agreement, engineering (petroleum reserves) reports
with an effective date of April 1 of the current year and covering or
pertaining to substantially all of the Oil and Gas Properties of Borrowers in
form and substance acceptable to Lender, said report shall be prepared by an
independent consulting petroleum engineering firm acceptable in the good faith
judgment of the Lender as fairly and accurately setting forth (i) the proven
and producing oil and gas reserves, separately classified as such (and if
Borrowers desire them to be part of the Borrowing Base, a report including
proved, non-producing reserves) attributable to the Oil and Gas Properties as
of April 1 of the year for which such reserve reports are furnished, (ii) the
aggregate present value determined on the basis of stated pricing assumptions,
of the future net income with respect to such Oil and Gas Properties,
discounted at a stated per annum discount rate of proven and producing
reserves, and (iii) projections of the annual rate of production, gross income
and net income with respect to such proven and producing reserves. On or
before January 1 of each year and in conjunction with and as requested by
Lender in connection with any Unscheduled Redeterminations, Borrowers shall
provide Lender with such other reserve information as Lender may reasonably
request to complete its semi-annual redetermination and/or Unscheduled
Redetermination, as the case may be, of the Borrowing Base.

            (b)  The report provided pursuant to this Section shall be
submitted to the Lender together with additional data as the Lender may
reasonably request concerning pricing, quantities of production from the Oil
and Gas Properties, purchasers of production and engineering and geological
data.

     6.5    Production Report.  Within sixty (60) days from each calendar
quarter end, furnish Lender a quarterly summary report of oil and gas
production for said period detailing barrel and MCF volumes, pricing, lease
operating expenses and net cash flow on the Mortgaged Properties.

     6.6    Take or Pay Agreements.  In connection with the Reserve Reports,
deliver to Lender contracts or other agreements concerning "take or pay",
"prepayment", and gas balancing liabilities of Borrower which could have a
Material Adverse Effect.

     6.7    Gas Balancing Status Report.  Within ninety (90) days of the last
day of each Borrower's fiscal year-end, furnish Lender a report on the status
of all gas balancing (if any) affecting any of the Oil and Gas Properties.
Upon receipt of the Gas Balancing Status Report, Lender, at its discretion,
may redetermine the Borrowing Base.

     6.8    Notices of Certain Events.  Deliver to the Lender, immediately
upon a Responsible Officer's having knowledge of the occurrence of any of the
following events or circumstances, a written statement with respect thereto,
signed by a Responsible Officer and setting forth the relevant event or
circumstance and the steps being taken by the Borrowers with respect to such
event or circumstance:

                                      25
<PAGE>

            (a)    any Default or Event of Default;

            (b)    any Default or Event of Default under any material
contractual obligation of the Borrower, or any material Litigation, affecting
the Borrowers before any Governmental Authority or Tribunal;

            (c)    any Litigation involving either Borrower as a defendant or
in which any Property of either Borrower is subject to a claim (i) in which
the amount involved is $250,000 or more and which is not covered by insurance,
(ii) in which, together with any other outstanding litigation or proceeding
(whether or not previously disclosed hereunder), the aggregate amount involved
in all such litigation is $250,000 or more and which is not covered by
insurance, or (iii) in which injunctive or similar relief is sought which
affects a Property having a fair market value (net to the Borrower's interest
therein) of more than $250,000 or could reasonably be expected to result in an
expenditure by Borrowers of more than $250,000;

            (d)    any existing or asserted Lien on any of the Properties of
Borrowers, personal or real, tangible or intangible, including without
limitation the Mortgaged Properties, excluding Permitted Liens;

            (e)    the receipt by either Borrower of any Environmental
Complaint or any formal request from any Governmental Authority or other
Person for information (other than requirements for compliance reports)
regarding any Release of Hazardous Substances by Borrower from, affecting or
related to any Property of Borrower or adjacent to any Property of the
Borrower which Environmental Complaint or request could reasonably be expected
to have a Material Adverse Effect;

            (f)    any actual, proposed or threatened testing or other
investigation by any Governmental Authority or other Person concerning the
environmental condition of, or relating to, any Property of either Borrower or
adjacent to any Property of Borrower following any allegation of a violation
of any Environmental Law which testing or investigation could reasonably be
expected to have a Material Adverse Effect;

            (g)    any Release of Hazardous Substances by either Borrower
from, affecting or related to any Property of either Borrower or adjacent to
any Property of either Borrower except in accordance with applicable
Environmental Law or the terms of a valid permit,  license, certificate or
approval of the relevant Governmental Authority, or the violation of any
Environmental Law, or the revocation, suspension or forfeiture of or failure
to renew, any permit, license, registration, approval or authorization, which
Release, violation, revocation, suspension, forfeiture or failure could
reasonably be expected to have a Material Adverse Effect; and

            (h)    any change in either Borrower's accounting practices and
procedures, including a change in either Borrower's fiscal year; and

                                      26
<PAGE>

            (i)    any other event or condition which could reasonably be
expected to have a Material Adverse Effect.

     6.9    Letters in Lieu of Transfer Orders.  Promptly upon a reasonable
request by the Lender at any time and from time to time and without limitation
on the rights of the Lender in accordance with Sections 2.14 and 2.15, execute
such letters in lieu of transfer orders, in addition to the letters signed by
the Borrowers and delivered to the Lender in satisfaction of the conditions
set forth in Subsection 4.1(g)(iii),  as are necessary or appropriate to cover
any additional, material purchasers of production; provided, however, that
such letters shall only be delivered to the addressees thereof in accordance
with subsection 2.14 of this Agreement.

     6.10    Division Orders.  Promptly upon request by the Lender at any time
and from time to time following the occurrence of any Event of Default and
without limitation on the rights of the Lender in accordance with Sections
2.14 and 2.15, execute such division and/or transfer orders as are necessary
or appropriate to transfer and deliver to the Lender proceeds from the sale of
hydrocarbon production from or attributable to any Mortgaged Property,
provided, however, that such letters shall only be delivered to the addressees
thereof in accordance with subsection 2.14 of this Agreement.

     6.11    Additional Information.  Furnish to the Lender, promptly upon the
reasonable request of the Lender, such additional financial, engineering,
production or other information concerning the assets, liabilities, operations
and transactions of the Borrowers as the Lender may from time to time
reasonably request; and notify the Lender not less than ten Business Days
prior to the occurrence of any condition or event that may change the proper
location for the filing of any financing statement or other public notice or
recording for the purpose of perfecting a Lien in any Collateral, including,
without limitation, any change in name or the location of any principal place
of business or chief executive office of the Borrowers; and upon the
reasonable request of the Lender, the Borrowers shall execute such additional
Security Instruments as may be necessary or appropriate in connection
therewith.

     6.12    Compliance with Laws.  In all reasonable and in all material
respects, comply with all applicable Requirements of Law, including, without
limitation, (a) the Natural Gas Policy Act of 1978, as amended, (b) the
minimum funding requirements of ERISA so as not to give rise to any material
liability or reportable event, as defined by ERISA, thereunder, (c)
Environmental Laws (i) related to any natural or environmental resource or
media located on, above, within, in the vicinity of, related to or affected by
any Property of the Borrowers,  (ii) required for the performance or conduct
of the operations of the Borrowers, including, without limitation,  all
permits,  licenses, registrations, approvals and authorizations, or (iii)
applicable to the use, generation, handling, storage, treatment, transport or
disposal of any Hazardous Substances, the resulting non-compliance of which
could have a Material Adverse Effect; and (d) securities laws and cause all
operators, employees, crew members, agents, contractors, subcontractors and
future lessees (pursuant to appropriate lease provisions) of the Borrowers,
while such Persons are acting within the scope of their relationship with the
Borrowers, to comply with all such Requirements of Law as may be necessary or
appropriate to enable the Borrowers to so comply. Notwithstanding the

                                     27
<PAGE>

reasonable efforts of the Borrowers to comply with its obligations under this
Section 6.12, should any non-compliance with any Requirement of Law cause or
could reasonably be expected to cause a Material Adverse Effect, the Lender
shall be notified of such event pursuant to Section 6.9 and the Lender shall
be entitled to exercise its rights and remedies pursuant to Subsection 9.1 and
Section 9.2.

     6.13    Payment of Assessments and Charges.  Pay all taxes, assessments,
governmental charges, rent and other Indebtedness which, if unpaid, might
become a Lien, other than a Permitted Lien, against the Property of the
Borrowers, except any of the foregoing being Contested in Good Faith.

     6.14    Hazardous Substances Indemnification.  Indemnify and hold the
Lender harmless from and against any and all claims, losses, damages,
liabilities, fines, penalties, charges, administrative and judicial
proceedings and orders, judgments, remedial actions, requirements and
enforcement actions of any kind, and all costs and expenses incurred in
connection therewith (including, without  limitation,  reasonable attorneys'
fees and expenses), arising directly or indirectly, in whole or in part, from
(a) the presence of any Hazardous Substances on, under or from any Property of
the Borrowers, whether prior to or during the term hereof, (b) any activity
carried on or undertaken on or off any Property of the Borrowers, whether
prior to or during the term hereof, and whether by the Borrowers, or any
predecessor in title, employee, agent, contractor or subcontractor of the
Borrowers, or any other Person at any time occupying or present on such
Property, in connection with the handling, treatment, removal, storage,
decontamination, cleanup, transportation or disposal of any Hazardous
Substances at any time located or present on or under such Property, (c) any
residual contamination on or under any Property of the Borrowers, or (d) any
contamination of any Property or natural resources of the Borrowers arising in
connection with the generation, use, handling, storage, transportation or
disposal of any Hazardous Substances by the Borrowers, or any employee, agent,
contractor or subcontractor of the Borrowers, while such Persons are acting
within the scope of their relationship with the Borrowers, irrespective of
whether any of such activities were or will be undertaken in accordance with
applicable Requirements of Law, including, without limitation, any of the
foregoing arising from negligence, whether sole or concurrent, on the part of
the Lender; with the foregoing indemnity surviving satisfaction of all
Obligations and the termination of this Agreement, unless all such Obligations
have been satisfied wholly in cash from the Borrowers and not by way of
realization against any Collateral or the conveyance of any Property in lieu
thereof, provided that such indemnity shall not extend to any of the foregoing
resulting from the Lender's gross negligence or willful conduct or any act or
omission by the Lender with respect to any Property subsequent to the Lender
becoming the owner of such Property and with respect to which Property such
claim, loss, damage, liability, fine, penalty, charge, proceeding, order,
judgment, action or requirement arises subsequent to the acquisition of title
thereto by the Lender.

                                      28
<PAGE>

     6.15    Maintenance of Corporate Existence and Good Standing.  Maintain
its corporate existence or qualification and good standing in all states in
which it is doing business, except where failure to so preserve will not have
a Material Adverse Effect.

     6.16    Further Assurances.  Promptly cure any defects in the execution
and delivery of any of the Loan Documents and all agreements contemplated
thereby,  and execute,  acknowledge and deliver such other assurances and
instruments as shall, in the good faith and reasonable opinion of the Lender,
be necessary to fulfill the terms of the Loan Documents.

     6.17    Initial Fees and Expenses of Lender and/or Legal Counsel to
Lender.  Promptly reimburse the Lender for all reasonable and customary
out-of-pocket expenses of the Lender in connection with this Agreement and all
documentation contemplated hereby, the satisfaction of the conditions
precedent set forth herein and the consummation of the transactions
contemplated in this Agreement (including, without limitation, all recording
expenses and all filing fees and all title review and title due diligence fees
and including legal fees).

     6.18    Subsequent Fees and Expenses.  The Borrowers shall promptly
reimburse the Lender (after the Borrowers' receipt of the Lender's request for
reimbursement) for all amounts reasonably expended, advanced or incurred by
the Lender, together with interest thereon as provided in this Subsection 6.18
(i) to satisfy any of the Obligations, (ii) to protect or enforce the Lender's
rights under any of the Loan Documents or (iii) to protect the Collateral or
business of the Borrowers; provided, however, if an uncured Event of Default
does not exist, the Lender must obtain the Borrowers' contemporaneous written
consent prior to making any such expenditure or Advance, or incurring such
reimbursable amount.  The amount so reimbursable pursuant to this Subsection
6.18 shall bear interest in accordance with the terms contained in Section
2.5, with the obligations under this Subsection 6.18 surviving the
non-assumption of this Agreement in a case commenced under any Insolvency
Proceeding and being binding upon the Borrowers and/or a trustee, receiver,
custodian or liquidator of any Borrower appointed in any such case.

     6.19    Maintenance and Inspection of Tangible Properties. Maintain all
of its material tangible Properties in good repair and condition, ordinary
wear and tear excepted; make all necessary replacements thereof and operate,
if operated by any Borrower, such Properties in a good and workmanlike manner;
and permit any authorized representative or representatives of the Lender to
reasonably visit and inspect any tangible Property of the Borrowers.

     6.20    Maintenance of Insurance and Evidence Thereof. Continue to
maintain or continue to be maintained, insurance with respect to its
Properties and businesses against such liabilities, casualties, risks and
contingencies as is customary in the relevant industry and sufficient to
prevent a Material Adverse Effect, all such insurance to be in amounts and
from insurers reasonably acceptable to the Lender, and, on the Closing Date or
upon any renewal of any such insurance and at other times upon the reasonable
request by the Lender, furnish to the Lender evidence, satisfactory in the
good faith judgment of  the Lender of the maintenance of such insurance.

                                      29
<PAGE>

     6.21    Payment of Note and Performance of Obligations.  Pay the Note
according to the reading, tenor and effect thereof, as modified hereby, and do
and perform every act as required in the Loan Documents and discharge all
other Obligations.

     6.22    Operation of Oil and Gas Properties.  Develop, maintain and
operate, if either Borrower is designated as operator thereof, the Mortgaged
Properties in a prudent and workmanlike manner in accordance with industry
standards.

     6.23    Depository Accounts.  Maintain an operating account with Lender.

     6.24    Existing Business. Maintain its line of business as engaged in as
of the Closing Date unless otherwise consented to by Lender in writing.

     6.25    SEC Filings. Promptly upon there filing, provide Lender with a
copy of all documents and/or reports made with the Securities and Exchange
Commission and/or any state securities agency.

                                 ARTICLE VII

7.   FINANCIAL COVENANTS.

     Unless agreed in writing by the Lender to the contrary, so long as any
Obligation remains outstanding or unpaid or any commitment to make Advances
exists, on a consolidated basis, the Borrowers  shall:

     7.1    Adjusted Current Ratio.  Maintain an Adjusted Current Ratio of at
least, 1.00 to 1.00.  The "Adjusted Current Ratio" is defined as Current
Assets plus any unused availability under the Note divided by Current
Liabilities, exclusive of the Loan Balance.

     7.2    Debt Service Coverage Ratio.  Maintain a Debt Service Ratio,
calculated on a quarterly basis, of not less than 1.20:1.00  For purposes of
this calculation, the cash flow ratio is defined as the quotient of:

            the sum of Net Income (as defined by GAAP) less dividends, plus
            interest, depletion, depreciation and amortization expense, all
            for the quarter then ended

                                  DIVIDED BY

            the sum of the quarterly principal reductions required to amortize
            the Loan Balance (as of quarter end) over the Half Life of the
            Borrowers' Oil and Gas Properties, plus interest expense for the

                                      30
<PAGE>

            quarter then ended, plus any other current maturities of long term
            debt realized during the quarter then ended.

     7.3    Tangible Net Worth.  Maintain a Tangible Net Worth of at least
ninety percent (90%) of the amount reported as of March 31, 2000 in the final
audited Financial Statement plus (i) seventy-five percent (75%) of the net
income realized for each quarter thereafter, and (ii) 75% of any increase in
Tangible Net Worth resulting from any infusion of equity subsequent to March
31, 2000.

                                ARTICLE VIII

8    NEGATIVE COVENANTS

     Unless agreed in writing by the Lender to the contrary, which agreement
will not be unreasonably withheld, so long as any Obligation remains
outstanding or unpaid or any commitment exists hereunder, neither the
Borrowers nor the Guarantor shall:

     8.1    Indebtedness.  Create, incur, assume or suffer to exist any
Indebtedness, whether by way of loan or otherwise which exceeds, in the
aggregate, the sum of $250,000.00; provided however, the foregoing restriction
shall not apply to (a) the Obligations, or (b) current accounts payable
incurred in the ordinary course of business.

     8.2    Contingent Obligations.  Create, incur, assume or suffer to exist
any Contingent Obligation in an amount on an aggregate basis for each
Borrower , in excess of $250,000.00 on or after the Closing Date; provided
however, the foregoing restriction shall not apply to (a) performance
guarantees and performance surety or other bonds provided in the ordinary
course of business, or (b) trade credit incurred or operating leases entered
into in the ordinary course of business.

     8.3    Liens.  Create, incur, assume or suffer to exist any Lien on any
of its Oil and Gas Properties or any other Property of the Borrowers, whether
now owned or hereafter acquired, without the written consent of Lender;
provided however, the foregoing restrictions shall not apply to Permitted
Liens.  For the purposes of this Section 8.3, and only Section 8.3, the term
"Permitted Liens" shall also include purchase money security interests within
the dollar limitation set forth in Section 8.1 above.

     8.4    Sales of Assets.  Sell, transfer or otherwise dispose of (i) all
or any substantial portion (amounts in excess of $250,000.00 in the aggregate
during any one fiscal year) of their assets, real or personal, now owned or
hereafter acquired, whether pursuant to a single transaction or a series of
transactions.

     8.5    Loans or Advances.  With the exception of those loans or advances
permitted by Section 8.9 herein, make or agree to make or allow to remain
outstanding any loans or Advances to any Person or Affiliate in excess of
$250,000.00 in the aggregate (for each Borrower); provided  however, the

                                    31
<PAGE>

foregoing restrictions shall not apply to Advances or extensions of credit in
the form of accounts receivable incurred in the ordinary course of business
and upon terms common in the industry for such accounts receivable.

     8.6    Dividends and Distributions.  Declare, pay or make, whether in
cash or Property, or set aside or apply any money or assets to pay or make any
dividend or distribution on, or purchase, redeem or otherwise acquire for
value, any share of any class of its capital stock without the prior written
consent of Lender.

     8.7    Cancellation of Insurance.  Allow any insurance policy required to
be carried hereunder to be terminated or lapse or expire without provision for
adequate renewal or comparable substitution.

     8.8    Mergers and Consolidations; Changes in Corporate Structure.  (i)
merge or consolidate with any Person, or permit any such merger or
consolidation with Borrowers or their subsidiaries in which Borrowers or their
subsidiaries does not survive to be the controlling entity; (ii) discontinue
business; (iii) make any material change in the nature of or manner in which
it conducts its business; (iv) form any Plan which is subject to Title IV of
ERISA;  (v) liquidate, wind-up or dissolve; or (vi) incur any material change
in the current senior and/or executive management (Chief Executive or Chief
Operating Officer) of the Borrowers.

     8.9    Transactions with Affiliates.   No  Borrower will enter into any
transaction with any Affiliate (other than with a co-Borrower), except
transactions upon terms that are no less favorable to it than would be
obtained in a transaction negotiated at arm's length with an unrelated third
party.

     8.10    Lines of Business.  Expand, on its own or through any Subsidiary
or Affiliate, into any line of business other than those in which it is
engaged as of the Closing Date if such an expansion could have a Material
Adverse Effect.

     8.11    Organization or Acquisition of Subsidiaries.  Organize or acquire
any Subsidiary in addition to those existing as of the Closing Date, if any
such organization or acquisition would have a Material Adverse Effect.

     8.12    Hedging Activities.  Enter into any transaction providing (i) for
the hedging, forward sale, swap or any derivation thereof of crude oil or
natural gas or other commodities; or (ii) for a swap, collar, floor, cap,
option, corridor, or other contract which is intended to reduce or eliminate
the risk of fluctuation in interest rates, as such terms are referred to in
the capital markets, except the foregoing prohibitions shall not apply to (x)
transactions consented to in writing by the Lender which are on terms
acceptable to the Lender, or (y) Pre-Approved Contracts (hereafter defined).
The term "Pre-Approved Contracts" as used herein shall mean (i) any physical
delivery contract or agreement with an oil and gas purchaser under which the
Borrower agrees to sell its oil and gas at an agreed upon price for an agreed
upon period of time and for volume amounts which do not exceed the monthly
production forecast for all of the Borrower's proved developed producing
reserves and/or (ii) any financial contract or agreement which is consistent

                                    32
<PAGE>

with the following: (a) the volume amounts do not exceed 75% of the monthly
production forecast for all of the Borrowers' proved and producing oil and gas
properties and (b) the term does not extend beyond a twenty four (24) month
period.  Upon entering into any such contract hereunder, each Borrower agrees
to notify Lender of the terms of such contract so as to allow for an
adjustment to the Borrowing Base if and when deemed appropriate by the Lender
in its sole discretion.

     8.14    Investments.  Purchase or otherwise acquire any capital stock,
assets, obligations, or other securities of, make any capital contribution to,
or otherwise invest in, or acquire any interest in, any person or entity.
Provided, however, this Section 8.14 shall not apply to Borrowers' investment
in the acquisition or development of Oil and Gas Properties or in any company
whose principal activity is oil and gas exploration and production in which
any Borrower has controlling interest, direct obligations of the United States
or any agency thereof, certificates of deposit issued by any commercial bank
or any mutual fund consisting of obligations of the United States or any
agency thereof.

                                  ARTICLE IX

9.    EVENTS OF DEFAULT

     9.1    Enumeration of Events of Default.  Any of the following events
shall constitute an Event of Default as that term is used herein:

            (a)    default shall be made in the payment when due of any
installment of principal or interest under this Agreement, the Note or any Fee
provided for herein and such default is not cured to reasonable satisfaction
of Lender within 10 days after either Borrower's receipt of written
notification from Lender of the occurrence of such Event of Default;

            (b)    an Event of Default as defined in any Loan Document shall
have occurred;

            (c)    default shall be made by either Borrower in the due
observance or performance of any of its obligations, covenants or agreements
contained in any of the Loan Documents and such default could be expected to
have a Material Adverse Effect;

            (d)    any representation or warranty made by either Borrower or
Guarantor in any of the Loan Documents, including, without limitation, in a
Request for Advance, proves to have been untrue in any material respect or any
representation, statement (including Financial Statements), certificate or
data furnished or made to the Lender in connection herewith proves to have
been untrue in any material respect as of the date the facts therein set forth
were stated or certified and such misrepresentation or breach of warranty
could reasonably be expected to have a Material Adverse Effect;

                                       33
<PAGE>

            (e)    default shall be made by either Borrower or any Guarantor
(as principal or guarantor or other surety) in the payment or performance of
any bond, debenture, note or other evidence of indebtedness or under any
credit agreement, loan agreement, indenture, promissory note or similar
agreement or instrument executed in connection with any of the foregoing, and
such default shall remain unremedied far in excess of the period of grace, if
any, with respect thereto and such default is not being contested in good
faith by the Borrowers;

            (f)    the Borrowers shall be unable to satisfy any condition or
cure any circumstance specified in Article IV, unless the failure to so
satisfy would not have a Material Adverse Effect, the satisfaction or curing
of which is precedent to the right of the Borrowers to receive an Advance
hereunder, and such inability shall continue for a period in excess of 30
days;

            (g)    Either Borrower shall (i) apply for or consent to the
appointment of a receiver, trustee or liquidator of it or all or a substantial
part of its assets, (ii) file a voluntary petition commencing an Insolvency
Proceeding concerning either Borrower or Guarantor, (iii) make a general
assignment for the benefit of creditors, (iv) be unable, or admit in writing
its inability, to pay its debts generally as they become due, or (v) file an
answer admitting the material allegations of a petition filed against it in
any Insolvency Proceeding;

            (h)    an order, judgment or decree shall be entered against any
Borrower by any court of competent jurisdiction or by any other duly
authorized authority, on the petition of a creditor or otherwise, granting
relief in any Insolvency Proceeding or approving a petition seeking
reorganization or an arrangement of its debts or appointing a receiver,
trustee, conservator,  custodian  or liquidator of it or all or any
substantial part of its assets and such order, judgment or decree shall not be
dismissed or stayed within 30 days after the issuance and entry thereof;

            (i)    the levy against any significant portion of the Property of
any Borrower, or any execution, garnishment, attachment, sequestration or
other writ or similar proceeding which is not permanently dismissed or
discharged within 30 days after the levy and  which could reasonably be
expected to have a Material Adverse Effect;

            (j)    a final and non-appealable order, judgment or decree shall
be entered against Borrower for money damages and/or Indebtedness due in an
amount in excess of $250,000.00 which is not otherwise covered by insurance
for 100% of the judgment and such order, judgment or decree shall not be
dismissed or the execution thereof stayed within 30 days;

            (k)    any Person shall engage  in any Prohibited Transaction
involving any Plan; any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan for which an excise tax is due or would be due in the absence of a
waiver; a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable Event

                                    34
<PAGE>

or commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Lender, likely to result in the termination of such
Plan for purposes of Title IV of ERISA; any Single Employer Plan shall
terminate for purposes of Title IV of ERISA; the Borrower or any Commonly
Controlled Entity shall incur, or in the reasonable opinion of the Lender, be
likely to incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multi-Employer Plan; or any other event or
condition shall occur or exist with respect to a Plan and the result of such
events or conditions referred to in this Section 9.1(k) could subject the
Borrower or any Commonly Controlled Entity to any tax (other than an excise
tax under Section 4980 of the Code), penalty or other liabilities which taken
in the aggregate would have a Material Adverse Effect and any such
circumstance shall exist for in excess of 30 days;

            (l)    any charges are filed or any other action or proceeding is
instituted by any Governmental Authority against either Borrower under the
Racketeering Influence and Corrupt Organizations Statute (18 U.S.C. SS 1961 et
seq.), the result of which could be the forfeiture or transfer of any material
Property of the Borrower subject to a Lien in favor of the Lender without (i)
satisfaction or provision for satisfaction of such Lien, or (ii) such
forfeiture or transfer of such Property being expressly made subject to such
Lien, or (iii) the Borrowers paying to the Lender the amount of the resultant
decrease in the Borrowing Base, as a result thereof;

            (m)    Either Borrower shall have (i) concealed, removed or
diverted, or permitted to be concealed, removed or diverted, any part of its
Property, with intent to hinder, delay or defraud its creditors or any of
them; (ii) made or suffered a transfer of any of its Property which may be
fraudulent under any bankruptcy, fraudulent conveyance or similar Law; (iii)
made any transfer of its Property to or for the benefit of a creditor at a
time when other creditors similarly situated have not been paid with the
intent to hinder, delay or defraud its creditors or any of them; or (iv) shall
have suffered or permitted, while insolvent, any creditor to obtain a Lien
upon any of its Property through legal proceedings or distraint which is not
vacated within 30 days from the date thereof;

            (n)    any Security Instrument shall for any reason not, or cease
to, create valid and perfected first-priority Liens against the Collateral
purportedly covered thereby and such occurrence would have a Material Adverse
Effect;

            (o)    the good faith determination by the Lender that a Material
Adverse Effect has occurred or will occur or that the value of the Collateral
has, or will be, materially decreased; or

            (p)    the dissolution or loss of legal existence of Guarantor.

            (q)     any material and adverse change in either Borrower's
financial condition.

     9.2    Remedies.

            (a)    Upon the occurrence of an Event of Default specified in
Subsections 9.1(a), (d),(g), (h), (l) or (m) immediately and without notice,
(i) all Obligations shall automatically become immediately due and payable,

                                    35
<PAGE>

without presentment, demand, protest, notice of protest, default or dishonor,
notice of intent to accelerate maturity, notice of acceleration of maturity or
other notice of any kind, except as may be provided to the contrary elsewhere
herein, all of which are hereby expressly waived by the Borrower, and (ii) any
obligation to make an Advance shall immediately cease and terminate unless and
until reinstated by the Lender in writing, and in such event, the Lender is
hereby authorized at any time and from time to time, without notice to the
Borrowers (any such notice being expressly waived by the Borrowers), to
set-off and apply any and all deposits of the Borrower (general or special,
time or demand, provisional or final) held by the Lender, except to the extent
any such deposits contain funds of persons other than Borrowers, the
Guarantor, or either Borrower's subsidiaries and any and all other
indebtedness at any time owing by the Lender to or for the credit or account
of the Borrowers against any and all of the Obligations.

            (b)    Upon the occurrence of any Event of Default other than
those specified in Subsections 9.1(a), (d), (g), (h), (l) or (m) Borrowers
shall have thirty (30) days after receiving written notification of the Event
of Default to cure such Default but, during such cure period, the Lender will
not, as a result of such Default, accelerate the Note or exercise any of its
rights pursuant to the Loan Documents, and notwithstanding subsection 9.1,
such Default will not constitute an "Event of Default", unless such Default is
not remedied to the reasonable satisfaction of Lender within 30 days after
Borrowers' receipt of such written notification.  In the event Borrowers shall
fail to effectuate such a cure Lender may declare all Obligations immediately
due and payable, without presentment, demand, protest, notice of protest,
default or dishonor, notice of intent to accelerate maturity, notice of
acceleration of maturity or other notice of any kind, except as may be
provided to the contrary elsewhere herein, all of which are hereby expressly
waived by the Borrowers, and any obligation to make an Advance shall
immediately cease and terminate unless and until reinstated by the Lender in
writing, and in such event, the Lender is hereby authorized at any time and
from time to time, without notice to the Borrowers (any such notice being
expressly waived by the Borrowers), to set-off and apply any and all deposits
containing funds of the Borrowers (general or special, time or demand,
provisional or final) held by the Lender, and any and all other indebtedness
at any time owing by the Lender to or for the credit or account of the
Borrowers against any and all of the Obligations although such Obligations may
be unmatured.

            (c)    Subject to the provisions of this Agreement, upon the
occurrence of any Event of Default the Lender may, in addition to the
foregoing, exercise any or all of its rights and remedies provided by law or
pursuant to the Loan Documents.

                                   ARTICLE X

10   MISCELLANEOUS

     10.1    Transfers and Participations.  The Lender may, at any time, sell,
transfer, assign or grant participations in the Obligations or any portion
thereof; and the Lender may forward to each Transferee and each prospective
Transferee all documents and information relating to such obligations, whether

                                    36
<PAGE>

furnished by the Borrowers or otherwise obtained, as the Lender determines
necessary or desirable.  The Borrowers agree that each Transferee, regardless
of the nature of any transfer to it, may exercise all rights (including,
without limitation, rights of set-off) with respect to the Obligations held by
it as fully as if such Transferee were the direct holder thereof, subject to
any agreements between such Transferee and the transferor to such Transferee.
The Lender agrees that each such Transferee shall assume all of the
obligations of the Lender pursuant to the Loan Documents.

     10.2    Survival of Representations. Warranties and Covenants.  All
representations and warranties of the Borrowers and all covenants and
agreements herein made shall survive the execution and delivery of the Note
and the Security Instruments and shall remain in force and effect so long as
any Obligation is outstanding or any obligation to make an Advance exists.

     10.3    Notices and Other Communications.  Except as to verbal notices
expressly authorized herein, which verbal notices shall be confirmed in
writing, all notices, requests and communications hereunder shall be in
writing (including by telegraph or telecopy).  Unless otherwise expressly
provided herein, any such notice, request, demand or other communication shall
be deemed to have been duly given or made when delivered by hand, or, in the
case of delivery by mail, deposited in the mail, certified mail, return
receipt requested, postage prepaid, or, in the case of telegraphic notice,
when delivered to the telegraph company, or, in the case of telecopy notice,
when receipt thereof is acknowledged orally, addressed as follows:

            if to the Lender, to:

                        LOCAL OKLAHOMA BANK, N.A.
                        3601 N.W. 63rd Street
                        Oklahoma City, Oklahoma 73116-2087
                        Attention: John K. Slay, Jr., Sr. Vice President

            (a)    if to the Borrowers, to:

                        PONTOTOC PRODUCTION COMPANY, INC.
                        PONTOTOC PRODUCTION, INC.
                        OKLAHOMA BASIC ECONOMY CORPORATION
                        808 East Main Street
                        Ada, Oklahoma 74820
                        Attention: Robby Robson, President

     Any party may, by proper written notice hereunder to the other, change
the individuals or addresses to which such notices to it shall thereafter be
sent.

     10.4    Parties in Interest.  Subject to applicable restrictions
contained herein, all covenants and agreements herein contained by or on
behalf of the Borrowers or the Lender shall be binding upon and inure to the

                                    37
<PAGE>

benefit of the Borrowers or the Lender, as the case may be, and their
respective heirs, legal representatives, successors and assigns.

     10.5    Rights of Third Parties.  All provisions herein are imposed
solely and exclusively for the benefit of the Lender and the Borrowers.  No
other Person shall have any right, benefit, priority or interest hereunder or
as a result hereof or have standing to require satisfaction of provisions
hereof in accordance with their terms, and any or all of such provisions may
be freely waived in whole or in part by the Lender at any time if in its sole
discretion it deems it advisable to do so.

     10.6    Articles and Sections.  This Agreement, for convenience only, has
been divided into Articles and Sections and it is understood that the rights
and other legal relations of the parties hereto shall be determined from this
instrument as an entirety and without regard to the aforesaid division into
Articles and Sections and without regard to headings prefixed to such Articles
or Sections.

     10.7    Number and Gender.  Whenever the context requires, reference
herein made to the single number shall be understood to include the plural;
and likewise, the plural shall be understood to include the singular.
Definitions of terms defined in the singular or plural shall be equally
applicable to the plural or singular, as the case may be, unless otherwise
indicated.  Words denoting sex shall be construed to include the masculine,
feminine and neuter, when such construction is appropriate; and specific
enumeration shall not exclude the general but shall be construed as
cumulative.

     10.8    Renewals and Extensions.  All provisions of this Agreement
relating to the Note shall apply with equal force and effect to each
promissory note hereafter executed or issued which in whole or in part
represents a renewal or extension of any part of the Indebtedness of the
Borrowers under this Agreement, the Note, or any other Loan Document.

     10.9    No Waiver: Rights Cumulative.  No course of dealing on the part
of the Lender, its officers or employees, nor any failure or delay by the
Lender with respect to exercising any of its rights under any Loan Document
shall operate as a waiver thereof.  The rights of the Lender under the Loan
Documents shall be cumulative and the exercise or partial exercise of any such
right shall not preclude the exercise of any other right.  No Advance
hereunder shall constitute a waiver of any of the covenants, warranties or
conditions of the Borrowers contained herein.  In the event the Borrowers  are
unable to satisfy any such covenant, warranty or condition, no such Advance
shall have the effect of precluding the Lender from thereafter declaring such
inability to be an Event of Default if same constitutes an Event of Default
under the terms of this Agreement as hereinabove provided.

     10.10    Incorporation of Exhibits. The Exhibits attached to this
Agreement are incorporated herein and shall be considered a part of this
Agreement for all purposes.

     10.11    Survival Upon Unenforceability.  In the event any one or more of
the provisions contained in any of the Loan Documents or in any other

                                    38
<PAGE>

instrument referred to herein or executed in connection with the Obligations
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of any Loan Document or of any other instrument referred to
herein or executed in connection with such Obligations.

     10.12    Amendments or Modifications.  Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party against whom enforcement
of the change, waiver, discharge or termination is sought.

     10.13    Controlling Provision Upon Conflict.  In the event of a conflict
between the provisions of this Agreement and those of any other Loan Document,
the provisions of this Agreement shall control.

     10.14    Time, Place and Method of Payments.  All payments required
pursuant to this Agreement or the Note shall be made in lawful money of the
United States of America  and in immediately available funds; shall be deemed
received by the Lender on the next Business Day following receipt if such
receipt is after 2:00 p.m. Central Standard or Daylight Savings Time, as the
case may be, on any Business Day; and shall be made at the Principal Office of
the Lender.  Except as provided to the contrary herein, if the due date of any
payment hereunder or under the Note would otherwise fall on a day which is not
a Business Day, such date shall be extended to the next succeeding Business
Day and interest shall be payable for any principal so extended for the period
of such extension.

     10.15    Time of Essence.  Time is of the essence of this Agreement and
of each provision hereof.

     10.16    Disposition of Collateral.  Notwithstanding any term or
provision, express or implied, in any of the Security Instruments, the
realization, liquidation, foreclosure or any other disposition on or of any or
all of the Collateral shall be in the order and manner and determined in the
sole discretion of the Lender; provided however, that in no event shall the
Lender violate applicable Law or exercise rights and remedies other than those
provided in such Security Instruments or otherwise existing at law or in
equity.

     10.17    GOVERNING LAW.  THIS AGREEMENT, THE NOTE, AND THE GUARANTY SHALL
BE DEEMED TO BE CONTRACTS MADE UNDER AND SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF OKLAHOMA.

     10.18    JURISDICTION AND VENUE.  All actions or proceedings with respect
to, arising directly or indirectly in connection with, out of, related to or
from this Agreement or any other loan document may be litigated, at the sole
discretion and election of the Lender, in courts having situs in Oklahoma
City, Oklahoma County, Oklahoma.  The Borrowers hereby submit to the
jurisdiction of any local, state or federal court located in Oklahoma City,
Oklahoma County, Oklahoma and hereby waives any rights it may have to transfer

                                     39
<PAGE>

or change the jurisdiction or venue of any litigation brought against it by
the Lender in accordance with this Section.

     10.19    WAIVER OF RIGHTS TO JURY TRIAL.  The Borrowers and the Lender
hereby knowingly, voluntarily, intentionally, irrevocably and unconditionally
waive all rights to trial by jury in any action, suit, proceeding,
counterclaim or other litigation that relates to or arises out of this
Agreement or any other loan document or otherwise with respect thereto.  The
provisions of this Section are a material inducement for the Lender entering
into this Agreement.

     10.20    ENTIRE AGREEMENT.  This Agreement constitutes the entire
Agreement among the parties hereto with respect to the parties hereof and
shall supersede any prior agreement between the parties hereto, whether
written or oral, relating to the subject hereof.  Furthermore, in this regard,
this written Agreement and the other written loan documents represent,
collectively, the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties.  There are no unwritten oral agreements between the
parties.

     IN WITNESS WHEREOF, this Agreement is deemed executed effective as of the
date first above written.

                        BORROWERS:

                        PONTOTOC PRODUCTION, INC.,

                        By:  James Robson
                        Title: President

                        PONTOTOC PRODUCTION COMPANY, INC.

                        By: James Robson
                        Title: President

                        OKLAHOMA BASIC ECONOMY CORPORATION

                        By: James Robson
                        Title: President

                        LENDER:

                        LOCAL OKLAHOMA BANK, N.A.

                        By: John K. Slay, Jr.
                        Title: Senior Vice President

                                    40

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