Document:

EXHIBIT 10.3
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                               SECURITY AGREEMENT

                  THIS SECURITY AGREEMENT ("Agreement"), dated as of July 29,
2005, is made between ENDEAVOR PIPELINE INC., an Oklahoma corporation
("Grantor") and HIBERNIA NATIONAL BANK ("Lender"), who agree as follows:

                                    RECITALS

                  A. The Grantor is a wholly owned subsidiary of GMX RESOURCES
INC., an Oklahoma corporation ("Borrower"). Borrower is a party to that certain
Loan Agreement dated as of even date herewith between the Borrower and the
Lender (as such agreement may hereafter be amended, renewed, extended, increased
or restated from time to time, the "Loan Agreement").

                  B. The Grantor has executed and delivered to the Lender a
Guaranty Agreement of even date herewith (as amended or restated from time to
time, the "Guaranty Agreement").

                  C. In order to secure the full and punctual payment and
performance of the Indebtedness (as hereafter defined), the Grantor has agreed
to execute and deliver this Agreement and to grant a continuing security
interest in and to the Collateral (as hereafter defined).

                                    AGREEMENT

                                    ARTICLE 1

                                  GENERAL TERMS

                  Section 1.1 Terms Defined Above or Elsewhere. As used in this
Agreement, the terms "Agreement", "Borrower", "Grantor", "Guaranty Agreement",
"Lender" and "Loan Agreement" shall have the meanings indicated above.

                  Section 1.2 Certain Definitions. As used in this Agreement,
the following additional terms shall have the meanings indicated:

                  "Accounts" means all "accounts" (as defined in the UCC) now
owned or hereafter acquired by the Grantor, and shall also mean and include all
accounts receivable, notes, notes receivable, instruments, drafts, acceptances,
book debts and similar documents and other monies, obligations or indebtedness
owing or to become owing to the Grantor arising from the sale, lease or exchange
of goods or other property by the Grantor or the performance of services by the
Grantor or under any contracts for any of the foregoing (whether or not yet
earned by performance on the part of the Grantor), in each case whether now in
existence or hereafter arising or acquired.

                   "Collateral" has the meaning set forth in Section 2 of this
Agreement.

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                  "Collateral Account" has the meaning set forth in Section 5 of
this Agreement.

                  "Collateral Documents" means collectively all mortgages,
pledges, security agreements and other documents by which the Grantor, Borrower
or any affiliate grants liens and security interests in immovable or movable
property to the Lender.

                  "Contracts" means all natural gas gathering, dehydration,
transportation, marketing or sales contracts to which the Grantor is a party now
or hereafter, including without limitation all contracts with Borrower, and all
amendments, modifications, replacements and substitutions to any of the
foregoing.

                  "Equipment" means all equipment and goods used or held for use
in Grantor's business, now owned or hereafter acquired by the Grantor, wherever
located, including without limitation gas compressors and pipelines, together
with all additions, accessories, parts, attachments, special tools and
accessions now and hereafter affixed thereto or used in connection therewith,
and all replacements thereof and substitutions therefor.

                  "Event of Default" has the meaning set forth in the Loan
Agreement.

                  "General Intangibles" means all general intangibles now owned
or hereafter acquired by the Grantor, including, without limitation, (i) all
contractual rights and obligations or indebtedness owing to the Grantor (other
than Accounts) from whatever source arising, including without limitation all
rights to payment under the Contracts, and (ii) all things in action, rights
represented by judgments, claims arising out of tort and other claims relating
to the Collateral (including the right to assert and otherwise be the proper
party of interest to commence and prosecute actions).

                  "Goods" means all Equipment and fixtures and other tangible
personal property now owned or hereafter acquired by the Grantor.

                  "Indebtedness" means all present and future amounts,
liabilities or obligations owing from time to time to the Lender (1) by the
Grantor under the Guaranty Agreement or (2) by Borrower as any part of the
Secured Liabilities, including without limitation any such amounts, liabilities
or obligations under or pursuant to the Loan Agreement, this Agreement or the
other Collateral Documents (including attorneys' fees incurred in connection
with the execution, enforcement or collection of the Grantor's obligations
hereunder or thereunder or any part thereof), whether said amounts, liabilities
or obligations are liquidated or unliquidated, now existing or hereafter
arising, including without limitation all promissory term notes heretofore or
hereafter executed by Borrower pursuant to the Loan Agreement, in principal,
interest, deferral and delinquency charges, prepayment premiums, costs and
attorneys' fees, as therein stipulated, or pursuant to any additional Loan
Agreements and all notes issued thereunder, and under and pursuant to all
amendments, supplements and restatements to any of said documents.

                  "Inventory" means all inventory now owned or hereafter
acquired by the Grantor.

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                  "Lien" means any interest in property securing an obligation
owed to, or a claim by, a Person other than the owner of the property, whether
such interest is based on jurisprudence, statute or contract, and including but
not limited to the lien or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes. The term "Lien" shall
include reservations, exceptions, encroachments, easements, servitudes,
usufructs, rights-of-way, covenants, conditions, restrictions, leases and other
title exceptions and encumbrances affecting property. For the purposes of this
Agreement, the Grantor shall be deemed to be the owner of any property which it
has accrued or holds subject to a conditional sale agreement, financing lease or
other arrangement pursuant to which title to the property has been retained by
or vested in some other Person for security purposes.

                  "Other Revenues" means the revenues, if any, included within
the Accounts comprised of the portion of the accounts receivable owed to the
Grantor from the sale of hydrocarbons which are in turn owed by the Grantor to
the gas producers which are not affiliates of Borrower for gas sold by Grantor
on behalf of such producers.

                  "Permitted Liens" means the Security Interests, and any other
Liens in favor of the Lender or permitted by the Lender in writing to be created
or assumed or to otherwise exist on the Collateral.

                  "Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or any other form of entity.

                  "Proceeds" means all cash and non-cash proceeds of, and all
other profits, rentals or receipts, in whatever form, arising from the
collection, sale, lease, exchange, assignment, licensing or other disposition
of, or realization upon, Collateral, including without limitation all claims of
the Grantor against third parties for loss of, damage to or destruction of, or
for proceeds payable under, or unearned premiums with respect to, policies of
insurance in respect of, any Collateral, and any condemnation or requisition
payments with respect to any Collateral, and including proceeds of all such
proceeds, in each case whether now existing or hereafter arising.

                  "Secured Liabilities" has the meaning provided in the Guaranty
Agreement.

                  "Security Interests" means the security interests in the
Collateral granted hereunder securing the Indebtedness.

                  "UCC" means Article 9 of the Uniform Commercial Code in the
State of Texas, as amended from time to time; provided that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the Security Interests in any Collateral or the remedies
pertaining thereto is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than Texas, "UCC" means the Uniform Commercial Code as in
effect in such

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other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection or such remedies.

                                    ARTICLE 2

                                SECURITY INTEREST

                  Section 2.1 The Security Interests. In order to secure the
full and punctual payment and performance of all present and future
Indebtedness, the Grantor hereby grants to the Lender a continuing security
interest in and to all right, title and interest of the Grantor in, to or under
the following property, whether now owned or existing or hereafter acquired or
arising and regardless of where located:

                  (i) the Equipment, the Inventory and all fixtures and Goods;

                  (ii) the Accounts;

                  (iii) the Contracts and the General Intangibles;

                  (iv) the Collateral Account, all cash deposited therein from
time to time, and all other monies and property of any kind of the Grantor in
the possession or under the control of the Lender;

                  (v) all books and records (including, without limitation,
customer lists, credit files, computer programs, tapes, disks, punch cards, data
processing software, transaction files, master files, printouts and other
computer materials and records) of the Grantor pertaining to any of the
Collateral; and

                  (vi) all Proceeds and products of all or any of the Collateral
described in clauses i through v hereof.

The term "Collateral" means each and all of the items and property rights
described in clauses i through vi above.

                  Section 2.2 Other Revenues. Notwithstanding that the Security
Interests granted to the Lender cover all of the Accounts, in the event that
Other Revenues are included in the Accounts, then the Lender agrees that Lender
shall retain from such Accounts an amount equal to the difference between the
resale price of the natural gas less the actual price paid or owed by the
Grantor for the natural gas at the wellhead, and Lender will release such Other
Revenues of another Person to such Person (even if an Event of Default has
occurred and is continuing) upon the receipt by the Lender of appropriate
evidence that such funds are Other Revenues (i.e., are not the Grantor's funds)
before such funds are collected and applied by the Lender to the Indebtedness.
The Lender shall not be liable, however, for any actions by Lender which are
taken in compliance with the terms of this Agreement and the Loan Agreement with

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respect to funds that are Other Revenues and which are taken before Lender
receives such evidence that such funds are Other Revenues.

Section 2.3 No Liability. The Security Interests are granted as security only
and shall not subject the Lender to, or transfer or in any way affect or modify,
any obligation or liability of the Grantor with respect to any of the Collateral
or any transaction in connection therewith.

                                    ARTICLE 3

                         REPRESENTATIONS AND WARRANTIES

                  The Grantor represents and warrants to the Lender that:

                  Section 3.1 No Liens. Other than financing statements or other
similar or equivalent documents or instruments with respect to the Security
Interests and Permitted Liens, no financing statement, mortgage, security
agreement or similar or equivalent document or instrument covering all or any
part of the Collateral is on file or of record in any jurisdiction in which such
filing or recording would be effective to perfect a Lien on such Collateral. No
Collateral is in the possession of any Person (other than the Grantor) asserting
any claim thereto or security interest therein, except that the Lender or its
designee may have possession of Collateral as contemplated hereby.

                  Section 3.2 Name. The exact name of the Grantor as it appears
in its articles of incorporation is as it appears on page 1 of this Agreement.
The Grantor has used no other names (including trade names or similar
appellations) at any time during the past five years.

                  Section 3.3 Identification Number. The Oklahoma Secretary of
State does not assign an organizational identification number to the Grantor.

                  Section 3.4 Chief Executive Office. The chief executive office
of the Grantor is located at 9400 North Broadway, Suite 600, Oklahoma City,
Oklahoma 73114, and has been located continuously in the State of Oklahoma since
the date of Grantor's formation.

                  Section 3.5 Records Location. The Grantor maintains all of the
books or records relating to any Accounts or other Collateral at the location
specified in Section 3.4.

                  Section 3.6 Goods Location. All of the Goods are located in
Harrison and Panola Counties, Texas.

                  Section 3.7 Filing Location. When a UCC financing statement
has been filed in the offices of [Clerk of Court of Oklahoma County, Oklahoma],
the Security Interests shall constitute perfected security interests in the
Collateral to the extent that a security interest therein may be perfected by
filing pursuant to the UCC, prior to all other Liens and rights of others
therein except for the Permitted Liens to the extent that such priority is
afforded by the UCC, and

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except to the extent that fixture filings in the real estate records of the
counties listed in Section 3.6 may be required in some circumstances as to a
portion of the equipment, which fixture filings however are not being made at
this time.

                  Section 3.8 No Inconsistent Agreements. The Grantor has not
performed any acts or signed any agreements which might prevent the Lender from
enforcing any of the terms of this Agreement or which would limit the Lender in
any such enforcement.

                  Section 3.9 Title. The Grantor has good and merchantable title
to the Collateral (other than Other Revenues), except the portion thereof
consisting of after-acquired property, free of Liens except Permitted Liens, and
the Grantor will have good and merchantable title to such after-acquired
Collateral, free of Liens except Permitted Liens. Furthermore, the Grantor has
not heretofore conveyed or agreed to convey or encumber any Collateral in any
way, except in favor of the Lender.

                  Section 3.10 Accounts. The Accounts represent bona fide
obligations of the respective account debtors, which obligations are free and
clear of any set off, compensation, counterclaim, defense, allowance or
adjustment, other than discounts for prompt payment shown on the invoice and
other than as to the portion constituting Other Revenues, and arose in the
ordinary course of the Grantor's business.

                  Section 3.11 Goods Condition. The Goods are in good condition
and are free of damage caused by fire or other casualty.

                  Section 3.12 Special Collateral. No part of the portion of the
Equipment consisting of gas compressors is or will become fixtures. No other
portion of the Goods is known by Grantor to be fixtures, except possibly for
pipelines (as to which Grantor does not so intend, but as to which no such
representation is made). No part of the Goods is leased or held for lease by the
Grantor to others.

                                    ARTICLE 4

                                    COVENANTS

                  Section 4.1 Notice of Changes. The Grantor will not change its
name, identity, identification number or corporate structure in any manner
unless it shall have given the Lender at least 30 days' prior written notice
thereof. The Grantor will not change the location of its chief executive office
or chief place of business or of the records relating to any Collateral from the
applicable office location described in Article 3 unless it shall have given the
Lender at least 30 days' prior written notice thereof.

                  Section 4.2 Filing. The Grantor shall pay all costs of or
incidental to the recording or filing of any financing, amendment, continuation,
termination or other statements concerning the Collateral. The Grantor
authorizes the Lender to file a financing statement covering all personal
property of the Grantor.

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<PAGE>

                  Section 4.3 Condition of Goods. The Grantor will maintain,
preserve and keep the Goods at all times in thorough repair and good working
order and condition, and from time to time make all needful repairs, renewals
and additions so that its value and the Security Interests shall at no time
become impaired. The Grantor will not do or permit anything to be done to the
Collateral that may violate the terms of any insurance covering the Collateral
or any part thereof.

                  Section 4.4 Insurance. The Grantor will maintain with
financially sound and reputable insurers, insurance with respect to the Goods
against such liabilities, casualties, risks and contingencies and in such types
and amounts as are satisfactory to the Lender from time to time. The Grantor
will keep all such policies constantly assigned or payable to the Lender and to
have attached to each of such policies a non-contributory loss payable clause in
favor of and in form acceptable to the Lender. Upon request of the Lender, the
Grantor will furnish or cause to be furnished to the Lender from time to time a
summary of the insurance coverage of the Grantor in form and substance
satisfactory to the Lender and if requested will furnish the Lender original
certificates of insurance and/or copies of the applicable policies and all
renewals thereof. In the event the Grantor should, for any reason whatsoever,
fail to keep the Goods or any part thereof so insured, or to keep said policies
so assigned or payable, or fail to deliver to the Lender satisfactory evidence
thereof, then the Lender, if it so elects, may itself have such insurance
effected in such amounts and in such companies as it may deem proper and may pay
the premiums therefor and the Grantor shall reimburse the Lender upon demand for
the amount of the premiums paid, together with interest thereon at eighteen
percent per annum from date until paid. The Lender shall not be responsible for
the solvency of any company issuing any insurance policy, whether or not
selected or approved by it, or for the collection of any amounts due under any
such policy, and shall be responsible and accountable only for such money as may
be actually received by the Lender. The policy shall contain an agreement by the
insurer not to cancel or amend the policy without giving the Lender at least 30
days prior written notice of its intention to do so. The Grantor will notify the
Lender immediately in writing of any material fire or other casualty to or
accident involving the Goods, whether or not such fire, casualty or accident is
covered by insurance. The Grantor will promptly further notify the Grantor's
insurance company and submit an appropriate claim and proof of claim to the
insurance company as to any of the Collateral that is damaged or destroyed by
fire or other casualty.

                  Section 4.5 Equipment Not Fixtures. If, in the opinion of the
Lender any of the Equipment is or may become part of any real property, the
Grantor will furnish to the Lender a written waiver by the record owner of such
realty (immovable) of all interest in such Collateral and a written
subordination to the Lender's Security Interest by any Person who has a Lien on
such realty (immovable) which is or may be superior to the Lender's Security
Interest hereunder.

                  Section 4.6 Accounts Collection. The Grantor shall use its
best efforts to cause to be collected from its account debtors, as and when due,
any and all amounts owing under or on account of each Account (including,
without limitation, Accounts which are delinquent, such Accounts to be collected
in accordance with lawful collection procedures) and shall apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Account. Subject to the rights of the Lender hereunder if an Event of
Default shall have occurred and be continuing, the Grantor may allow as
adjustments to amounts owing under its

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Accounts (i) an extension or renewal of the time or times of payment, or
settlement for less than the total unpaid balance, and (ii) a refund or credit
due as a result of returned or damaged merchandise, all in accordance with the
Grantor's ordinary course of business consistent with its historical collection
practices and with sound business judgment. The costs and expenses (including,
without limitation, attorneys' fees) of collection, whether incurred by the
Grantor or the Lender, shall be borne by the Grantor.

                  Section 4.7 Instruments. While an Event of Default has
occurred and is continuing, the Grantor will immediately deliver and pledge to
the Lender each instrument evidencing, representing or otherwise arising from an
Account or General Intangible, appropriately endorsed to the Lender, provided
that so long as no Event of Default shall have occurred and be continuing, the
Grantor may refrain from such delivery and may retain possession of, for the
purpose of collection in the ordinary course, any such instruments received by
it in the ordinary course of business.

                  Section 4.8 Governmental Accounts. If the Collateral is or
becomes subject to the Federal Assignment of Claims Act, the Grantor will
immediately notify the Lender thereof in writing and execute all instruments and
take all steps required by the Lender to comply with that act.

                  Section 4.9 Transfer and Other Liens. The Grantor will not
sell, lease, transfer, exchange or otherwise dispose of the Collateral, or any
part thereof, without the prior written consent of the Lender and will not
permit any Lien to attach to the Collateral, or any part thereof, other than
Permitted Liens, except that the Grantor may, in the ordinary course of its
business and in the absence of an Event of Default, collect its Accounts and
General Intangibles and sell or otherwise dispose of obsolete or worn out Goods.

                  Section 4.10 Right of Inspection and Information. The Grantor
will permit any officer, employee or Lender of the Lender to visit and inspect
any of the Collateral, examine the books of record and accounts of the Grantor,
take copies and extracts therefrom, and discuss the affairs, finances and
accounts of the Grantor with the Grantor's officers, accountants and auditors,
all at such reasonable times and on reasonable notice and without hindrance and
delay and as often as the Lender may reasonably desire. The Grantor will furnish
to the Lender promptly upon request and in the form and content specified by the
Lender, schedules of Equipment and its locations and other data concerning the
Collateral as the Lender may from time to time specify.

                  Section 4.11 Taxes. The Grantor will pay as and when due and
payable all taxes, levies, license fees, assessments, and other impositions
levied on the Collateral or any part thereof before its use and operation.

                  Section 4.12 Further Assurances. On request of the Lender, the
Grantor will promptly (i) correct any defect, error or omission which may be
discovered in the contents of this Agreement or any financing statement relating
thereto or in the execution or acknowledgment of this Agreement or any financing
statement; (ii) execute, acknowledge, deliver and record in any

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jurisdictions such further instruments (including, without limitation, further
security agreements, financing statements, continuation statements and
assignments of proceeds) and do such further acts as may be necessary, desirable
or proper to carry out more effectively the purposes of this Agreement and to
more fully identify and subject to the Security Interest hereof any property
intended to be covered hereby, including without limitation any renewals,
additions, substitutions, replacements or accessions to the Collateral; and
(iii) execute, acknowledge, deliver and record any document or instrument
(including specifically any financing statement) necessary, desirable or proper
in any jurisdictions to protect the Lien and Security Interest hereunder against
the rights or interests of third persons. The Grantor shall pay all costs
connected with any of the foregoing.

                  Section 4.13 Collateral Indemnity. If the validity or priority
of this Agreement or any rights, security interests or other interests created
or evidenced hereby shall be attacked, endangered or questioned or if any legal
proceedings are instituted with respect thereto, the Grantor will give prompt
written notice thereof to the Lender and at the Grantor's own cost and expense
will diligently endeavor to cure any defect that may be developed or claimed,
and will take all necessary and proper steps for the defense of such legal
proceedings, and the Lender (whether or not named as a party to legal
proceedings with respect thereto) is hereby authorized and empowered to take
such additional steps as in its judgment and discretion may be necessary or
proper for the defense of any such legal proceedings or the protection of the
validity or priority of this Agreement and the rights, security interests and
other interests created or evidenced hereby, and all expenses so incurred of
every kind and character shall be a demand obligation owing by the Grantor to
the Lender and shall be a part of the Indebtedness.

                  Section 4.14 Compliance with Laws. The Grantor will observe
and comply with all laws, statutes, ordinances, rules, regulations, judgments,
decrees, franchises, permits, licenses, certificates and requirements of all
federal, state, parish, county, municipal and other governmental agencies,
departments, commissions, boards, courts and authorities applicable to the
Grantor or to the Collateral.

                                    ARTICLE 5

                                     DEFAULT

                  Section 5.1 Collateral Account. Without limiting any
requirements or agreements set forth in the Loan Agreement or the Guaranty
Agreement, upon the occurrence of an Event of Default, and at any time
thereafter, the Lender may require the Grantor to establish a cash collateral
account (the "Collateral Account") in the name and under the control of the
Lender at the Lender or a bank satisfactory to the Lender, which shall be
subject to access and withdrawal by the Lender only. In such event, all payments
(in the form of checks, drafts, cash or otherwise) received by the Grantor in
satisfaction, in whole or in part, of any Accounts or General Intangibles (or
Proceeds therefrom) of the Grantor shall be deposited by the Grantor in the
Collateral Account. The Grantor will deposit for credit to the Collateral
Account all such items of payment and remittances within one (1) business day of
the receipt thereof, and shall not commingle any such items of payment and
remittances with any of the Grantor's other property.

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Funds in the Collateral Account are and shall be subject to a security interest
in favor of the Lender to secure the Indebtedness, and the Lender may apply or
cause to be applied (subject to collection) any or all of the balance from time
to time standing in the Collateral Account against the Indebtedness in such
order as determined by the Lender, but subject to Lender's agreement in Section
2.2 with respect to Other Revenues.

                  Section 5.2 General Authority. The Grantor hereby irrevocably
appoints the Lender its agent and attorney in fact, with full power of
substitution, in the name of the Grantor or the Lender, for the sole use and
benefit of the Lender, but at the Grantor's expense, to exercise, at any time
and from time to time while an Event of Default has occurred and is continuing,
all or any of the following powers with respect to all or any of the Collateral:

                  (i) to endorse the name of the Grantor upon any check, draft,
note or other instrument payable to the Grantor evidencing payment upon any
Accounts or General Intangible,

                  (ii) to notify postal service authorities to change the
address for delivery of the Grantor's mail to a "lockbox" address designated and
controlled by the Lender, and to receive, open and dispose of all mail addressed
to the Grantor,

                  (iii) to demand, sue for, collect, receive and give
acquittance for any and all Accounts and other monies due or to become due for
or as Collateral or by virtue thereof,

                  (iv) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect to any of the Collateral, and

                  (v) to extend the time of payment of any or all of the
Collateral and to make any allowance and other adjustments with reference
thereto.

The aforesaid mandate and power of attorney, being coupled with an interest, is
irrevocable so long as any of the Indebtedness remains outstanding.

                  Section 5.3 Accounts. While an Event of Default has occurred
and is continuing, the Grantor will make no material change to the terms of any
Account without the prior written permission of the Lender. Upon the occurrence
of an Event of Default, and at any time thereafter, the Grantor upon request of
the Lender will promptly notify (and the Grantor hereby authorizes the Lender so
to notify) each account debtor in respect of any Account or General Intangible
that such Collateral has been assigned to the Lender hereunder, and that any
payments due or to become due in respect of such Collateral are to be made
directly to the Lender or its designee, and Lender may demand, sue for, collect
and receive all such Accounts or General Intangibles.

                  Section 5.4 Sale. Upon the occurrence of an Event of Default,
the Lender may exercise all rights of a secured party under the UCC and other
applicable law (including the Uniform Commercial Code as in effect in another
applicable jurisdiction) and, in addition, the Lender may, without being
required to give any notice, except as herein provided or as may be

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required by mandatory provisions of law, sell the Collateral or any part thereof
at public or private sale, for cash, upon credit or for future delivery, and at
such price or prices as the Lender may deem satisfactory. The Lender shall incur
no liability as a result of the sale of Collateral, or any part thereof, at any
private sale. The Grantor hereby waives, to the extent permitted by applicable
law, any claims against the Lender arising by reason of the fact that the price
at which the Collateral may have been sold at such private sale was less than
the price which might have been obtained at a public sale or was less than the
aggregate amount of the outstanding Indebtedness, even if the Lender accepts the
first offer received and does not offer such Collateral to more than one
offeree. The Lender may be the purchaser of any or all of the Collateral so sold
at any public sale (or, if the Collateral is of a type customarily sold in a
recognized market or is of a type which is the subject of widely distributed
standard price quotations, at any private sale). The Grantor will execute and
deliver such documents and take such other action as the Lender deems necessary
or advisable in order that any such sale may be made in compliance with law.
Upon any such sale the Lender shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral so sold. Each purchaser at any
such sale shall hold the Collateral so sold to it absolutely and free from any
claim or right of whatsoever kind, including any equity or right of redemption
of the Grantor which may be waived, and the Grantor, to the extent permitted by
law, hereby specifically waives all rights of redemption, stay or appraisal
which it has or may have under any law now existing or hereafter adopted. The
Grantor agrees that five (5) days prior written notice of the time and place of
any sale or other intended disposition of any of the Collateral constitutes
"reasonable notification" within the meaning of the UCC, except that shorter or
no notice shall be reasonable as to any Collateral which is perishable or
threatens to decline speedily in value or is of a type customarily sold on a
recognized market. The notice (if any) of such sale shall (l) in case of a
public sale, state the time and place fixed for such sale, and (2) in the case
of a private sale, state the day after which such sale may be consummated. Any
such public sale shall be held at such time or times within ordinary business
hours and at such place or places as the Lender may fix in the notice of such
sale. At any such sale the Collateral may be sold in one lot as an entirety or
in separate parcels or portions, as the Lender may determine. The Lender shall
not be obligated to make any such sale pursuant to any such notice. The Lender
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
same may be so adjourned. In case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Lender until the selling price is paid by the purchaser thereof,
but the Lender shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in case of any such
failure, such Collateral may again be sold upon like notice. The Lender shall
not be liable for any depreciation in the value of the Collateral. All rights to
marshaling of assets of the Grantor, including any such right with respect to
the Collateral, are hereby waived.

                  Section 5.5 Foreclosure; Receiver. The Lender, instead of
exercising the power of sale herein conferred upon it, may proceed by a suit or
suits at law or in equity to foreclose the Security Interests and sell the
Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction. Moreover, the Lender may apply for and

                                       11
<PAGE>

obtain, without notice and upon ex parte application, the appointment of a
receiver for the Collateral without regard to the Grantor's financial condition
or solvency, the adequacy of the Collateral to secure the payment or performance
of the Indebtedness, or the existence of any waste to the Collateral. In the
event that the Lender institutes an action to recover any Collateral or appoint
a receiver or seeks the recovery of any Collateral or the appointment of a
receiver by way of a pre-judgment remedy in an action against the Grantor, the
Grantor waives the posting of any bond which might otherwise be required.

                  Section 5.6 Assemble Collateral. For the purpose of enforcing
any and all rights and remedies under this Agreement the Lender may (i) require
the Grantor to, and the Grantor agrees that it will, at its expense and upon the
request of the Lender, forthwith assemble all or any part of the Collateral as
directed by the Lender and make it available at a place designated by the Lender
which is, in its opinion, reasonably convenient to the Lender and the Grantor,
whether at the premises of the Grantor or otherwise, and Lender shall be
entitled to specific performance of this obligation, (ii) to the extent
permitted by applicable law of any applicable state, enter, with or without
process of law and without breach of the peace, any premise where any of the
Collateral is or may be located, and without charge or liability to it seize and
remove such Collateral from such premises, (iii) have access to and use the
Grantor's books and records relating to the Collateral and (iv) prior to the
disposition of the Collateral, store or transfer it without charge in or by
means of any storage or transportation facility owned or leased by the Grantor,
process, repair or recondition it or otherwise prepare it for disposition in any
manner and to the extent the Lender deems appropriate and, in connection with
such preparation and disposition, use without charge any trademark, trade name,
copyright, patent or technical process used by the Grantor.

                  Section 5.7 Limitation on Duty of Lender. Beyond the exercise
of reasonable care in the custody thereof, the Lender shall have no duty as to
any Collateral in its possession or control or in the possession or control of
any agent or bailee or any income thereon. The Lender shall be deemed to have
exercised reasonable care in the custody of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that which it
accords its own property, and shall not be liable or responsible for any loss or
damage to any of the Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any warehouseman, carrier, forwarding agency,
consignee or other agent or bailee selected by the Lender in good faith. The
Grantor agrees that the Lender shall not be obligated to preserve rights against
prior parties obligated on any instruments.

                  Section 5.8 Appointment of Lender. At any time or times, in
order to comply with any legal requirement in any jurisdiction, the Lender may
appoint a bank or trust company or one or more other Persons with such power and
authority as may be necessary for the effectual operation of the provisions
hereof and may be specified in the instrument of appointment.

                  Section 5.9 Expenses. In the event that the Grantor fails to
comply with any provisions of this Agreement or the Collateral Documents, such
that the value of any Collateral or the validity, perfection, rank or value of
any Security Interest hereunder is thereby diminished or potentially diminished
or put at risk, the Lender may, but shall not be required to, effect such

                                       12
<PAGE>

compliance on behalf of the Grantor, and the Grantor shall reimburse the Lender
for the costs thereof on demand. All insurance expenses and all expenses of
protecting, storing, warehousing, appraising, preparing for sale, handling,
maintaining and shipping the Collateral, any and all excise, property, sales,
and use taxes imposed by any federal, state or local authority on any of the
Collateral, all expenses in respect of periodic appraisals and inspections of
the Collateral to the extent the same may be requested from time to time, and
all expenses in respect of the sale or other disposition thereof shall be borne
and paid by the Grantor; and if the Grantor fails to promptly pay any portion
thereof when due, the Lender may, at its option, but shall not be required to,
pay the same and charge the Grantor's account therefor, and the Grantor agrees
to reimburse the Lender therefor on demand. All sums so paid or incurred by the
Lender for any of the foregoing and any and all other sums for which the Grantor
may become liable hereunder and all costs and expenses (including reasonable
attorneys' fees, legal expenses and court costs) incurred by the Lender in
enforcing or protecting the Security Interests or any of its rights or remedies
under this Agreement or the other Collateral Documents, shall, together with
interest thereon until paid at the rate equal the then highest rate of interest
charged on the principal of any of the Indebtedness plus one (1%) percent, be
additional Indebtedness hereunder and Grantor agrees to pay all of the foregoing
sums promptly on demand.

                                    ARTICLE 6

                                  MISCELLANEOUS

                  Section 6.1 Notices. Any notice or demand which, by provision
of this Agreement, is required or permitted to be given or served to the Grantor
and the Lender shall be deemed to have been sufficiently given and served for
all purposes if made in accordance with the Loan Agreement to the following
addresses:

                  If to Grantor: Endeavor Pipeline Inc.
                                 9400 North Broadway
                                 Suite 600
                                 Oklahoma City, Oklahoma  73114

                  If to Lender:  Hibernia National Bank
                                 P.O. Box 61540 New Orleans, LA 70161

                                             or

                                 313 Carondelet Street
                                 New Orleans, LA 70130

                                 Attention:  Manager, Energy Maritime Department

                                       13
<PAGE>

                  Section 6.2 Amendment. Neither this Agreement nor any
provisions thereof may be changed, waived, discharged or terminated orally or in
any manner other than by an instrument in writing signed by the party against
whom enforcement of the change, waiver, discharge or termination is sought.

                  Section 6.3 Waivers. No course of dealing on the part of the
Lender, its officers, employees, consultants or agents, nor any failure or delay
by the Lender with respect to exercising any of its rights, powers or privileges
under this Agreement shall operate as a waiver thereof.

                  Section 6.4 Cumulative Rights. The rights and remedies of the
Lender under this Agreement and the other Collateral Documents shall be
cumulative, and the exercise or partial exercise of any such right or remedy
shall not preclude the exercise of any other right or remedy.

                  Section 6.5 Titles of Articles, Sections and Subsections. All
titles or headings to articles, sections, subsections or other divisions of this
Agreement or the exhibits hereto are only for the convenience of the parties and
shall not be construed to have any effect or meaning with respect to the other
content of such articles, sections, subsections or other divisions, such other
content being controlling as to the agreement between the parties hereto.

                  Section 6.6 Singular and Plural. Words used herein in the
singular, where the context so permits, shall be deemed to include the plural
and vice versa. The definitions of words in the singular herein shall apply to
such words when used in the plural where the context so permits and vice versa.

                  SECTION 6.7 GOVERNING LAW. THIS AGREEMENT IS A CONTRACT MADE
UNDER AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
UNITED STATES OF AMERICA AND THE STATE OF TEXAS.

                  Section 6.8 Termination. Upon full and final payment and
performance of the Indebtedness, this Agreement shall terminate, and the Lender
shall pay to the Grantor all amounts then remaining in the possession of the
Lender from collections on or proceeds of the Collateral. Upon request of the
Grantor, the Lender shall execute and deliver to the Grantor at the Grantor's
expense such termination statements as the Grantor may reasonably request to
evidence such termination.

                  Section 6.9 Successors and Assigns. (a) All covenants and
agreements contained by or on behalf of the Grantor in this Agreement shall bind
its successors and assigns and shall inure to the benefit of the Lender and its
successors and assigns.

                  (b) This Agreement is for the benefit of the Lender and for
such other Person or Persons as may from time to time become or be the holders
of any of the Indebtedness, and

                                       14
<PAGE>

this Agreement shall be transferrable and negotiable, with the same force and
effect and to the same extent as the Indebtedness may be transferrable.

                  Section 6.10 Counterparts. This Agreement may be executed in
two or more counterparts, and it shall not be necessary that the signatures of
all parties hereto be contained on any one counterpart hereof; each counterpart
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

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

GRANTOR:                   ENDEAVOR PIPELINE INC.,
                                    an Oklahoma corporation

                                    By:      /s/ Ken L. Kenworthy, Sr.
                                             ------------------------------
                                    Name:    Ken L. Kenworthy, Sr.
                                    Title:   President

LENDER:                    HIBERNIA NATIONAL BANK

                                    By:      /s/ H. Charles Voorhies IV
                                             ------------------------------
                                    Name:    H. Charles Voorhies IV
                                    Title:   Vice President

                                       15EXHIBIT 10.4
                                                                    ------------

                               GUARANTY AGREEMENT

         THIS GUARANTY AGREEMENT (this "Agreement") made and entered into
effective as of the 29th day of July, 2005, by ENDEAVOR PIPELINE INC., an
Oklahoma corporation (the "Guarantor") in favor of HIBERNIA NATIONAL BANK (the
"Lender"), guaranteeing the Secured Liabilities (as hereinafter defined) of GMX
RESOURCES INC., an Oklahoma corporation (the "Borrower").

                              W I T N E S S E T H:

         FOR VALUE RECEIVED, and in consideration of and for credit and
financial accommodations extended, to be extended, or continued to or for the
account of the above named Borrower, the undersigned Guarantor hereby agrees as
follows:

         SECTION 1. Guaranty of Borrower's Secured Liabilities.

         (a) Each Guarantor does hereby irrevocably, absolutely and
unconditionally guarantee for the benefit of the Lender the prompt and punctual
payment of all of the following items of indebtedness (collectively the "Secured
Liabilities") (capitalized terms used below in the description of the Secured
Liabilities have the meanings set forth in the definitions in paragraph (b)
below), as and when the same shall be due and payable, whether by passage of
time, acceleration of maturity or otherwise:

                    (i) All obligations of the Borrower now or hereafter
               existing under the Loan Agreement and other Loan Documents to the
               Lender, including all future advances and other future
               indebtedness under the Loan Agreement, all whether obligatory or
               discretionary, and including any extensions or renewals of all
               such indebtedness under the Loan Documents, whether or not the
               Borrower executes any extension agreement or renewal instrument,
               including without limitation: (1) all obligations, liabilities
               and indebtedness now or hereafter arising of the Borrower to the
               Lender in respect of the principal of and interest on the Note,
               the Loan, the Credit Obligations and any letters of credit issued
               under the Loan Agreement (including interest which, but for the
               filing of a petition in bankruptcy with respect to Borrower,
               would have accrued on any Secured Liabilities, whether or not a
               claim is allowed against Borrower for such interest in the
               related bankruptcy proceeding), and (2) the obligations of the
               Borrower in respect of fees and all other amounts payable by the
               Borrower to the Lender under any Loan Documents;

                    (ii) Any sums advanced or expenses or costs incurred by the
               Lender which are made or incurred pursuant to, or permitted by,
               the Collateral Documents and the Loan Agreement, plus interest
               thereon at the rate herein specified or otherwise agreed upon,
               from the date of the advances or the incurring of such expenses
               or costs until reimbursed;

                    (iii) Any increases to the Loan under the Loan Agreement
               which the Lender may from time to time make to the Borrower in
               agreement with the Borrower, the

<PAGE>

               Lender not being obligated, however, to make such increased
               loans, and any promissory notes evidencing the Loan (recognizing
               that the liability for the principal balance of the Loan is the
               aggregate unpaid principal balance of advances under the Loan and
               not necessarily the face amount of such promissory notes, which
               face amount may be larger than the actual liability); and

                    (iv) Any liabilities of the Borrower to the Lender under (x)
               transactions in futures, forwards, swaps or option contracts
               (including both physical and financial settlement transactions)
               engaged in by the Borrower as a hedge against adverse changes in
               the prices of natural gas or oil (including without limitation
               commodity price hedges, swaps, caps, floors, collars and similar
               agreements designed to protect the Borrower against fluctuations
               in commodity prices), or (y) forward contracts, futures
               contracts, swaps, option contracts or other financial agreements
               or arrangements relating to, or the value of which is dependent
               upon, interest rates or currency exchange rates (including
               without limitation caps, floors, collars, puts and similar
               agreements designed to protect the Borrower against fluctuations
               in interest rates or currency exchange rates) in each case
               engaged in by the Borrower as a risk-management strategy.

         (b) For all purposes of this Agreement, the following terms shall have
the meanings indicated:

               "Credit Obligations" shall mean the Borrower's obligations under
               the Loan Agreement and the other Loan Documents to pay (i)
               reimbursement of any and all drafts drawn under any letter of
               credit issued under the Loan Agreement, (ii) any and all costs,
               charges, fees and/or expenses incurred or paid by the Lender in
               connection with any such letter of credit issued under the Loan
               Agreement, (iii) any and all charges of the Lender arising out of
               the imposition of or change in any reserve or capitalization
               requirement with respect to letters of credit effective after the
               date of the Loan Agreement, and (iv) interest on such amounts
               described above under (i), (ii) and (iii) as provided in the Loan
               Agreement (including interest which, but for the filing of a
               petition in bankruptcy with respect to Borrower, would have
               accrued on any Secured Liabilities, whether or not a claim is
               allowed against Borrower for such interest in the related
               bankruptcy proceeding).

               "Loan Agreement" shall mean that certain Loan Agreement dated as
               of July 29 , 2005, between the Borrower and the Lender, as such
               agreement may hereafter be amended, renewed, extended, increased
               or replaced.

               "Loan Documents" shall mean the Loan Agreement, the Note, the
               Mortgage and any other Collateral Documents (as defined in the
               Loan Agreement), and any other instrument or document executed in
               connection herewith or therewith, as any of said documents may
               from time to time be amended, supplemented, renewed or restated.

               "Mortgage" shall mean collectively each and every mortgage or
               deed of trust granted by the Borrower in favor of the Lender
               pursuant to the Loan Agreement.

                                        2
<PAGE>

               "Note" shall mean the Line of Credit Note issued by the Borrower
               under the Loan Agreement payable to the order of the Lender, and
               shall also include any and all extensions, modifications or
               renewals from time to time of said Promissory Note.

         (c) Anything in this Agreement to the contrary notwithstanding, if any
Fraudulent Transfer Law (as hereinafter defined) is determined by a court of
competent jurisdiction to be applicable to the obligations of a Guarantor under
this Agreement, such obligations of such Guarantor hereunder shall be limited to
a maximum aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title XI of the United States Code or any
applicable provisions of comparable state law (collectively, the "Fraudulent
Transfer Laws"), in each case after giving effect to all other liabilities of
such Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws.

         (d) Without limiting any other provision of this Agreement, should an
Event of Default (as defined in the Loan Agreement) occur, each Guarantor
unconditionally and absolutely agrees to pay the full then unpaid amount of all
of Borrower's Secured Liabilities guaranteed hereunder. Such payment or payments
shall be made immediately following demand by Lender.

         SECTION 2. Joint and Several Liability. Each Guarantor further agrees
that its obligations and liabilities for the prompt and punctual payment,
performance and satisfaction or purchase of all of Borrower's Secured
Liabilities shall be on a "joint and several" basis with Borrower, subject to
Subsection 1(c). In the event that there is more than one guarantor under this
Agreement, or in the event that there are other guarantors, endorsers, or
sureties of all or any portion of Borrower's Secured Liabilities, each
Guarantor's obligations and liabilities hereunder shall be on a "joint and
several" basis along with such other guarantor or guarantors, endorsers and/or
sureties, subject to Subsection 1(c). The obligations of each Guarantor
contained in this Agreement shall be absolute and unconditional without regard
to the validity, legality, regularity or enforceability of the Secured
Liabilities, or any instrument evidencing, securing or relating to the Secured
Liabilities, and shall not be reduced or affected in any way by any action which
may in any manner or to any extent vary the risks of the Guarantor, or which
might otherwise constitute a legal or equitable discharge of the Guarantor. It
is the purpose and intent of the Guarantor and the Lender that this Agreement
and the obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances and shall not be discharged except
by payment and performance as herein provided, and that this Agreement be
construed as a payment guaranty and not as a guaranty of collection and each
Guarantor's liability under this Agreement shall be primary, and not secondary.
Additionally, subject to Subsection 1(c), each Guarantor, in furtherance of the
foregoing and not in limitation of any other right which the Lender may have
against the Guarantor by virtue hereof, hereby guarantees jointly and severally,
absolutely and unconditionally, the payment of any and all Secured Liabilities
to the Lender whether or not due or payable by the Borrower upon the occurrence
in respect of the Borrower of any of the events specified in Subsections (g) or
(h) of Section 8.1 of the Loan Agreement (including amounts that would become
due but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. 362(a)).

         SECTION 3. Duration. This Agreement and each Guarantor's obligations
and liabilities hereunder shall remain in full force and effect until such time
as all of Borrower's Secured Liabilities shall be paid, performed and/or
satisfied in full, in principal, interest, costs and attorney's fees.

                                        3
<PAGE>

         SECTION 4. Waivers. Each Guarantor hereby waives notice of acceptance
of this Agreement and of any Secured Liabilities to which it applies or may
apply. Each Guarantor further waives presentment and demand for payment of
Borrower's Secured Liabilities, notice of dishonor and of nonpayment, notice of
intention to accelerate, notice of acceleration, protest and notice of protest,
collection or institution of any suit or other action by Lender in collection
thereof, including any notice of default in payment thereof or other notice to,
or demand for payment thereof on any party. Each Guarantor additionally waives,
to the degree applicable, any and all rights and pleas of division and
discussion as provided under Louisiana law as well as any similar rights as may
be provided under the laws of any other state. Additionally, each Guarantor also
waives joinder of Borrower or any other obligor of any of the Secured
Liabilities in any suit or action to enforce this Agreement, and in particular,
and without in any way limiting the foregoing, each Guarantor also waives any
right (including without limitation each right created by the provisions of
Chapter 34 of the Texas Business & Commerce Code, Chapter 17 of the Texas Civil
Practice and Remedies Code, the Texas Rules of Civil Procedure or any other
applicable law) to require Lender to file suit against Borrower or any such
obligor or to take any other action against Borrower or any such obligor as a
prerequisite to Lender's taking any action or bringing any suit against
Guarantor under this Agreement. Each Guarantor also waives, to the maximum
extent permitted by law, all rights, remedies, claims, defenses and benefits
based upon or related to Sections 51.003, 51.004 and 51.005 of the Texas
Property Code, as it may be amended (or any successor statute or similar law).

         SECTION 5. Guarantor's Subordination of Loans and Rights. In the event
that any Guarantor should for any reason (A) advance or lend monies to Borrower,
whether or not such funds are used by Borrower to make payment(s) under
Borrower's Secured Liabilities, and/or (B) make any payment(s) to Lender for and
on behalf of Borrower under Borrower's Secured Liabilities, and/or (C) make any
payment to Lender in total or partial satisfaction of Guarantor's obligations
and liabilities under this Agreement, the Guarantor hereby agrees that any and
all rights that Guarantor may have or acquire to collect from or to be
reimbursed by Borrower (or from or by any other guarantor, endorser or surety of
Borrower's Secured Liabilities), whether Guarantor's rights of collection or
reimbursement arise by way of subrogation to the rights of Lender or otherwise,
shall in all respects, whether or not Borrower is presently or subsequently
becomes insolvent, be subordinate, inferior and junior to the rights of Lender
to collect and enforce payment, performance and satisfaction of Borrower's then
remaining Secured Liabilities, until such time as Borrower's Secured Liabilities
are fully paid and satisfied. So long as no Event of Default as defined in the
Loan Agreement exists, the Guarantor may be repaid by Borrower as to any
subordinated debt (if any) expressly permitted by the Loan Agreement. In the
event of Borrower's insolvency or consequent liquidation of Borrower's assets,
through bankruptcy, by an assignment for the benefit of creditors, by voluntary
liquidation, or otherwise, the assets of Borrower applicable to the payment of
claims of both Lender and Guarantor shall be paid to Lender and shall be first
applied by Lender to Borrower's then remaining Secured Liabilities. The
Guarantor hereby assigns to Lender all claims which it may have or acquire
against Lender for full payment of Borrower's Secured Liabilities guaranteed
under this Agreement. If Guarantor is, or at any time may be, an "insider" of
Borrower (or of any other guarantor, surety or endorser of Borrower's Secured
Liabilities) within the context of Section 101(30) of the Bankruptcy Code (11
U.S.C. 101(30)), Guarantor shall have no rights of, and unconditionally agrees
not to seek or obtain, collection or reimbursement from Borrower (or from any
other guarantor, surety or endorser of Borrower's Secured Liabilities), whether
by subrogation of Lender's rights or otherwise until the thirteenth (13th) month
anniversary date following the full and final payment and satisfaction of
Borrower's Secured Liabilities.

                                        4
<PAGE>

         SECTION 6. Covenants Relating to the Secured Liabilities. Each
Guarantor further agrees that Lender may, at its sole option, at any time, and
from time to time, without the consent of or notice to Guarantor or any other
party, and without incurring any responsibility to Guarantor or any other party,
and without impairing or releasing the obligations of Guarantor under this
Agreement:

         (a) Discharge or release any party (including, but not limited to,
Borrower, any Guarantor or any other co-guarantor) who is or may be liable to
Lender for any of Borrower's Secured Liabilities;

         (b) Sell, exchange, release, surrender, realize upon or otherwise deal
with, in any manner and in any order, any collateral directly or indirectly
securing repayment of any of Borrower's Secured Liabilities or the Guaranty
Agreement;

         (c) Change the manner, place or terms of payment, or change or extend
the time of payment of or renew or restate, as often and for such periods as
Lender may determine, or alter or increase, any of Borrower's Secured
Liabilities, including without limitation increases in the available principal
amount of the Borrower's line of credit or in the interest rate under the Note;

         (d) Settle or compromise any of Borrower's Secured Liabilities;

         (e) Subordinate and/or agree to subordinate the payment of all or any
part of Borrower's Secured Liabilities or Lender's security rights in and/or to
any collateral directly or indirectly securing any such Secured Liabilities, to
the payment and/or security rights of any other present and/or future creditors
of Borrower;

         (f) Apply any sums paid to any of Borrower's Secured Liabilities, with
such payments being applied in such priority or with such preferences as Lender
may determine in its sole discretion, regardless of what Secured Liabilities of
Borrower remains unpaid;

         (g) Take or accept any other security or guaranty for any or all of
Borrower's Secured Liabilities;

         (h) Make additional secured and/or unsecured loans to Borrower and/or
any other Guarantor; and/or

         (i) Enter into, deliver, modify, amend or waive compliance with, any
instrument or arrangement evidencing, securing or otherwise affecting, all or
any part of Borrower's Secured Liabilities.

         In addition, no course of dealing between Lender and Borrower (or any
other guarantor, surety or endorser of Borrower's Secured Liabilities), nor any
failure or delay on the part of the Lender to exercise any of Lender's rights
and remedies, or any other agreement or agreements by and between the Lender and
Borrower (or any other guarantor, surety or endorser) shall have the affect of
impairing or releasing Guarantor's obligations and liabilities to Lender or of
waiving any of Lender's rights and remedies. Any partial exercise of any rights
and remedies granted to Lender shall furthermore not constitute a waiver of any
of Lender's other rights and remedies, it being Guarantor's intent and agreement
that Lender's rights and remedies shall be cumulative in nature. The Guarantor
further agrees that, should Borrower default under any of Borrower's Secured
Liabilities, any waiver or forbearance on the part of Lender to pursue the
rights and remedies available to Lender's shall be

                                        5
<PAGE>

binding upon the Lender only to the extent that Lender specifically agrees to
such waiver or forbearance in writing. A waiver or forbearance on the part of
Lender as to one event of default shall not constitute a waiver or forbearance
as to any other default.

         SECTION 7. No Release of Guarantor. Each Guarantor's obligations and
liabilities under this Agreement shall not be released, impaired, reduced or
otherwise affected by, and shall continue in full force and effect,
notwithstanding the occurrence of any event, including without limitation any
one or more of the following events:

         (a) Death, insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of authority (whether
corporate, partnership or trust) of Borrower (or any person acting on Borrower's
behalf), or any other Guarantor, surety or endorser of any of Borrower's Secured
Liabilities;

         (b) Partial payment or payments of any amount due and/or outstanding
under any of Borrower's Secured Liabilities (except to the extent that any
payments by Guarantor under this Agreement or by Borrower reduce the Secured
Liabilities);

         (c) Any payment by Borrower or any other party to Lender is held to
constitute a preferential transfer or a fraudulent conveyance under any
applicable law, or for any reason, any Lender is required to refund such payment
or pay such amount to Borrower or to any other person;

         (d) Any dissolution of Borrower or any sale, lease or transfer of all
or any part of Borrower's assets;

         (e) Any failure of Lender to notify Guarantor of the acceptance of this
Agreement or of the making of loans or other extensions of credit in reliance on
this Agreement or of the failure of Borrower to make any payment due by Borrower
to Lender;

         (f) Any "one action" or "anti-deficiency" law or any other law which
may prevent Lender from bringing any action, including a claim for deficiency,
against Guarantor, before or after Lender's commencement or completion of any
foreclosure action, or any action in lieu of foreclosure; and/or

         (g) Any election of remedies by Lender that may destroy or impair
Guarantor's subrogation rights or Guarantor's right to proceed for reimbursement
against Borrower or any other guarantor, surety or endorser of any of Borrower's
Secured Liabilities, including without limitation any loss of rights Guarantor
may suffer by reason of any law limiting, qualifying or discharging Borrower's
Secured Liabilities.

         This Agreement and Guarantor's obligations and liabilities hereunder
shall continue to be effective, and/or shall automatically and retroactively be
reinstated if a release or discharge has occurred, as the case may be, if at any
time any payment or part thereof to Lender with respect to any of Borrower's
Secured Liabilities is rescinded or must otherwise be restored by Lender
pursuant to any insolvency, bankruptcy, reorganization, receivership, or any
other debt relief granted to Borrower or to any other party. In the event that
Lender must rescind or restore any payment received by Lender in satisfaction of
Borrower's Secured Liabilities, any prior release or discharge from the terms of
this Agreement given to any Guarantor shall be without effect, and this
Agreement and Guarantor's obligations and liabilities hereunder shall
automatically be renewed or reinstated and shall remain in full force and effect
to the same degree and extent as if such a release or discharge was never
granted.

                                        6
<PAGE>

It is the intention of Lender and Guarantor that Guarantor's obligations and
liabilities hereunder shall not be discharged except by Guarantor's full and
complete performance of such obligations and liabilities and then only to the
extent of such performance.

         SECTION 8. Representations and Warranties. Each Guarantor hereby
represents and warrants that:

         (a) The representations and warranties made in writing by the Borrower
with respect to such Guarantor in the Loan Agreement are true and correct.

         (b) Such Guarantor is duly organized, validly existing and in good
standing under the laws of the state of its incorporation or formation, has the
power to own its property and to carry on its business as now being conducted
and is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned by it therein or in
which the transaction of its business makes such qualification necessary and the
failure to so qualify would have a material adverse effect on its financial
condition, business or operations.

         (c) Such Guarantor has full power and authority to execute and deliver
this Agreement and to incur the obligations provided for herein, all of which
have been duly authorized by all proper and necessary corporate action.

         (d) Borrower owns one hundred (100%) percent of the voting and
ownership equity interests of such Guarantor, and a portion of the proceeds of
the Note may be advanced to Guarantor and thus the Secured Liabilities are being
incurred for and will inure to the benefit of such Guarantor, which benefit is
hereby acknowledged.

         (e) Such Guarantor has examined or has an opportunity to examine each
of the Loan Agreement and Loan Documents pertaining thereto executed and
delivered prior to or on the date hereof.

         (f) This Agreement constitutes the valid and binding obligations of
such Guarantor, enforceable in accordance with its terms (except that
enforcement may be subject to any applicable bankruptcy, insolvency or similar
laws generally affecting the enforcement of creditors' rights).

         (g) The execution, delivery and performance by such Guarantor of this
Agreement will not violate any contract, agreement, law, regulation, order or
judgment to which Guarantor is subject.

         (h) The execution, delivery and performance by such Guarantor of this
Agreement did not and do not require the consent or approval of any other
person, corporation, partnership, limited liability company or other legal
entity or governmental agency or entity.

         (i) All financial statements of such Guarantor (if any) delivered to
Lender fairly and accurately present the financial condition of Guarantor and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the period involved. Since the close of the
period covered by the latest financial statement delivered to Lender with
respect to Guarantor, there has been no material adverse change in the assets,
liabilities or financial condition of Guarantor.

                                        7
<PAGE>

         SECTION 9. Covenants.

         (a) Each Guarantor will at all times comply with the affirmative and
negative covenants undertaken by the Borrower with respect to such Guarantor in
the Loan Agreement.

         (b) Each Guarantor will promptly notify Lender in writing upon becoming
aware of any change or effect that individually or in the aggregate does or
could reasonably be anticipated to materially adversely affect the business,
prospects, profits, property or condition (financial or otherwise) of Guarantor,
including without limitation the arising of any litigation, governmental
investigation or arbitration or dispute threatened against or affecting
Guarantor.

         (c) Each Guarantor will file all tax returns and reports required to be
filed and pay and discharge promptly when due all taxes, assessments and
governmental charges or levies imposed upon it or upon income or upon any of its
property (including production, severance, windfall profit, excise and other
taxes assessed against or measured by the production of, or the value or
proceeds of production of, oil and gas properties) as well as all claims of any
kind (including claims for labor, materials, supplies and rent) which, if
unpaid, might become a Lien upon any or all of Lender's collateral under the
Collateral Documents; provided, however, Guarantor shall not be required to pay
any such tax, assessment, charge, levy or claim if the amount, applicability or
validity thereof shall currently be contested in good faith by appropriate
proceedings diligently conducted and if the contesting party shall have set up
reserves therefor adequate under generally accepted accounting principles
(provided that such reserves may be set up under generally accepted accounting
principles) and so long as the payment of same is not a condition to be met in
order to maintain an oil, gas or mineral lease in force.

         (d) Each Guarantor agrees to maintain all of its primary collection,
disbursement and operating accounts with Lender.

         SECTION 10. Enforcement of Guarantor's Obligations and Liabilities.
Each Guarantor agrees that following the occurrence of an Event of Default,
should Lender deem it necessary to file an appropriate collection action to
enforce Guarantor's obligations and liabilities under this Agreement, Lender may
commence such a civil action against Guarantor without the necessity of first
(i) attempting to collect Borrower's Secured Liabilities from Borrower or from
any other guarantor, surety or endorser, whether through filing of suit or
otherwise, (ii) attempting to exercise against any collateral directly or
indirectly securing repayment of any of Borrower's Secured Liabilities, whether
through the filing of an appropriate foreclosure action or otherwise, or (iii)
including Borrower or any other guarantor, surety or endorser of any of
Borrower's Secured Liabilities as an additional party defendant in such a
collection action against Guarantor. If there is more than one guarantor under
this Agreement, the Guarantor additionally agrees that Lender may file an
appropriate collection and/or enforcement action against any one or more of
them, without impairing the rights of Lender against any other guarantor under
this Agreement. In the event that Lender should ever deem it necessary during
the continuance of a Default (as defined in and occurring under the Loan
Agreement) to refer this Agreement to attorneys-at-law for the purpose of
enforcing Guarantor's obligations and liabilities hereunder, or of protecting or
preserving Lender's rights hereunder, Guarantor agrees to reimburse the Lender
for its reasonable attorneys' fees and disbursements. Guarantor additionally
agree that Lender shall not be liable for failure to use diligence in the
collection of any of Borrower's Secured Liabilities or any collateral security
therefor, or in creating or preserving the liability of any person liable on any

                                        8
<PAGE>

such Secured Liabilities, or in creating, perfecting or preserving any security
for any such Secured Liabilities.

         SECTION 11. Additional Documents. Upon the reasonable request of
Lender, each Guarantor will, at any time, and from time to time, duly execute
and deliver to Lender any and all such further instruments and documents, and
supply such additional information, as may be necessary or advisable in the
opinion of Lender, to further evidence or perfect this Agreement.

         SECTION 12. Transfer of Secured Liabilities. This Agreement is for the
benefit of Lender and for such other person or persons as may from time to time
become or be the holders of any of Borrower's Secured Liabilities hereby
guaranteed and this Agreement shall be transferable and negotiable, with the
same force and effect and to the same extent as Borrower's Secured Liabilities
may be transferable, it being understood that, upon the transfer or assignment
by Lender of any of Borrower's Secured Liabilities hereby guaranteed, the legal
holder of such Secured Liabilities shall have all of the rights granted to
Lender under this Agreement.

         Each Guarantor hereby recognizes and agrees that Lender may, from time
to time, one or more times, transfer any portion of Borrower's Secured
Liabilities to one or more third parties in accordance with the terms of the
Loan Agreement. Such transfers may include, but are not limited to, sales of a
participation interest in such Secured Liabilities in favor of one or more third
party lenders in accordance with any applicable terms in the Loan Agreement.
Guarantor specifically agrees and consents to all such transfers and assignments
and Guarantor further waives any subsequent notice of and right to consent to
any such transfers and assignments as may be provided under applicable Louisiana
(or other) law. Guarantor additionally agrees that the purchaser of a
participation interest in Borrower's Secured Liabilities will be considered as
the absolute owner of a percentage interest of such Secured Liabilities and that
such a purchaser will have all of the rights granted to the purchaser under any
participation agreement governing the sale of such a participation interest,
provided that such participation agreement cannot increase or alter the
obligations of Guarantor (other than as to the number or identity of Guarantor's
obligees).

         SECTION 13. Deposit Accounts. As collateral security for the repayment
of each Guarantor's obligations and liabilities under this Agreement, and for
the Borrower's Secured Liabilities, each Guarantor hereby grants Lender, as well
as its successors and assigns, a continuing security interest in, and the right
to apply at any time and from time to time during the continuance of an Event of
Default under the Loan Agreement, any and all funds, investment property and
proceeds that Guarantor may then have on deposit with or in the possession or
control of Lender and its successors or assigns or in certificates of deposit or
deposit accounts as to which Guarantor is account holder (with the exception of
funds deposited in IRA, pension or other tax-deferred deposit accounts), towards
repayment of any of Borrower's Secured Liabilities subject to this Agreement.
Guarantor agrees that any holder of a participation in the Note may exercise any
and all rights of counter-claim, set-off, banker's lien and other liens with
respect to any and all monies owing by Guarantor to such holder as fully as if
such holder of a participation were a holder of a note in the amount of such
participation. Guarantor waives and subordinates in favor of Lender any right of
set off (however arising, contractual or statutory) which it has or may
subsequently have with respect to any accounts payable owing by Guarantor to
Borrower or any of the Borrower's revenues, funds or monies comprising Lender's
collateral under the Collateral Documents which now or hereafter may be in the
possession or control of Guarantor including without limitation any funds in any
deposit account.

                                        9
<PAGE>

         SECTION 14. Marshaling. The Guarantor shall not at any time hereafter
assert any right under any law pertaining to marshaling (whether of assets or
liens) and the Guarantor expressly agree that the Lender may execute or
foreclose upon the Collateral Documents in such order and manner as the Lender,
in its sole discretion, deems appropriate.

         SECTION 15. Amendment. No amendment, modification, consent or waiver of
any provision of this Agreement, and no consent to any departure by Guarantor
therefrom, shall be effective unless the same shall be in writing signed by a
duly authorized officer of Lender, and then shall be effective only to the
specific instance and for the specific purpose for which given.

         SECTION 16. Successors and Assigns Bound. Each Guarantor's obligations
and liabilities under this Agreement shall be binding upon Guarantor's
successors, heirs, legatees, devisees, administrators, executors and assigns.
The rights and remedies granted to Lender under this Agreement shall also inure
to the benefit of Lender's successors and assigns, as well as to any and all
subsequent holder or holders of any of Borrower's Secured Liabilities subject to
this Agreement.

         SECTION 17. Caption Headings. Caption headings of the sections of this
Agreement are for convenience purposes only and are not to be used to interpret
or to define their provisions. In this Agreement, whenever the context so
requires, the singular includes the plural and the plural also includes the
singular.

         SECTION 18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS.

         SECTION 19. Severability. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable, this Agreement
shall be construed and enforceable as if the illegal, invalid or unenforceable
provision had never comprised a part of it, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom.

         SECTION 20. Waiver of Jury Trial; Consent to Jurisdiction.

         (a) Each Guarantor hereby waives trial by jury in any action or
proceeding to which Guarantor and Lender may be parties arising out of or in any
way pertaining to this Agreement. It is agreed and understood that this waiver
constitutes a waiver of trial by jury of all claims against all parties to such
actions or proceedings, including claims against parties who are not parties to
this Agreement. This waiver is knowingly, willingly and voluntarily made by
Guarantor, and Guarantor hereby represents that no representations of fact or
opinion have been made by any individual to induce this waiver of trial by jury
or to in any way modify or nullify its effect. Guarantor further represents that
it has been represented in the signing of this Agreement and in the making of
this waiver by independent legal counsel, selected by its own free will, and
that it had the opportunity to discuss this waiver with counsel.

         (b) Each Guarantor hereby irrevocably consents to the non-exclusive
jurisdiction of the state courts of Louisiana, and of the Federal Eastern
District Court in Louisiana, and agrees that any action or proceeding arising
out of or brought to enforce the provisions of this Agreement may be

                                       10
<PAGE>

brought in any court having subject matter jurisdiction. Each Guarantor hereby
irrevocably waives any objections that it may now or hereafter have to the venue
of any such action or proceeding in any such court and that any such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same. Each Guarantor agrees that nothing herein such limit the Lender's
right to sue in any other jurisdiction.

         SECTION 21. Notices. Any notice or demand which by provision of this
Agreement is required or permitted to be given by one party to the other party
hereunder shall be given by (i) deposit, postage prepaid, in the mail,
registered or certified mail, or (ii) delivery to a recognized express courier
service, or (iii) delivery by hand, or (iv) by facsimile, in each case addressed
(until another address or addresses is given in writing by such party to the
other party) as follows:

               If to any Guarantor:      9400 North Broadway, Suite 600
                                         Oklahoma City, Oklahoma 73114
                                         Attention: President
                                         Facsimile Number: (405) 600-0600

               If to Lender:             Hibernia National Bank
                                         P. O. Box 61540 New Orleans,
                                         Louisiana 70161

                                                       or

                                         313 Carondelet Street
                                         New Orleans, Louisiana 70130

                                         Attention: Manager
                                                    Energy/Maritime Department
                                         Facsimile Number: (504) 533-5434

All notices sent by facsimile transmission shall be deemed received by the
addressee upon the transmitter's receipt of acknowledgment of receipt from the
offices of such addressee (if before 5:00 p.m. on a business day; if later, then
on the next business day).

         SECTION 22. Compliance with Usury Laws. It is expressly stipulated and
agreed to be the intent of Guarantor and Lender at all times to comply with the
applicable Texas law governing the maximum non-usurious rate or amount of
interest payable on or in connection with the Borrower's Secured Liabilities (or
applicable United States federal law to the extent that it permits Lender to
contract for, charge, take, reserve or receive a greater amount of interest than
under Texas law). If the applicable law is ever judicially interpreted so as to
render usurious any amount called for under the Note or any other Loan Document,
or contracted for, charged, taken, reserved or received with respect to the loan
evidenced by the Note and/or the Loan Documents, or if the acceleration of the
maturity of the Borrower's Secured Liabilities or if any prepayment by Guarantor
results in Guarantor having paid any interest in excess of the maximum
non-usurious rate permitted by law, then it is Guarantor's and Lender's express
intent that all excess amounts theretofore collected by Lender be credited on
the principal balance of the Borrower's Secured Liabilities (or, if the
Borrower's Secured Liabilities has

                                       11
<PAGE>

been or would thereby be paid in full, refunded to Guarantor), and the
provisions of the Note and the other Loan Documents immediately be deemed
reformed and the amounts thereafter collectible thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for hereunder and thereunder. The right to accelerate maturity of the
Borrower's Secured Liabilities does not include the right to accelerate any
interest which has not otherwise accrued on the date of such acceleration. All
sums paid or agreed to be paid to Lender for the use, forbearance or detention
of the Borrower's Secured Liabilities shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of the Borrower's Secured Liabilities until payment in full so that the
rate or amount of interest on account of the Borrower's Secured Liabilities does
not exceed the applicable usury ceiling. As used in this Section 22, the term
"Loan Documents" shall mean all of the Loan Documents as such term is defined in
Section 1(b) hereof, together with this Agreement as may from time to time be
amended, supplemented, renewed or restated.

         IN WITNESS WHEREOF, each Guarantor has executed this Agreement in favor
of the Lender on the day, month and year first written above.

                                        ENDEAVOR PIPELINE INC.

                                        By: /s/ Ken L. Kenworthy, Sr.
                                            --------------------------------
                                            Name:   Ken L. Kenworthy, Sr.
                                            Titles: President

ACCEPTED:
---------

HIBERNIA NATIONAL BANK

By: /s/ H. Charles Voorhies IV
    -------------------------------
    Name:  H. Charles Voorhies IV
    Title: Vice President

July 29, 2005

                                       12
<PAGE>

STATE OF OKLAHOMA         )
                          )
                          ) SS:
                          )
COUNTY OF OKLAHOMA        )

         BEFORE ME, the undersigned Notary Public duly commissioned qualified
and sworn within and for the State and County written above, personally came and
appeared Ken L. Kenworthy, Sr., to me personally known, and who being by me duly
sworn, did say that he is the authorized President of Endeavor Pipeline Inc.,
whose name is subscribed to the foregoing Guaranty Agreement and that he
executed the foregoing Guaranty Agreement by authority of said corporation's
Board of Directors on behalf of said corporation.

         THUS DONE AND SIGNED before me and the two undersigned witnesses in the
County and State aforesaid, on this 29th day of July, 2005. Witness my hand and
official seal.

WITNESSES:

/s/ Amber Croisant                            /s/ Ken L. Kenworthy, Sr.
-------------------------                     -----------------------------
Name:                                         Name: Ken L. Kenworthy, Sr.

/s/ Marilyn Leonard
-------------------------
Name:

                                              /s/ Debra Barker
                                              -----------------------------
                                              NOTARY PUBLIC

                                              Seal

                                              My Commission expires: 3-16-06
                                              Comm # 02004134

                                       13

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