Document:

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Exhibit 10.11

THE  SECURITIES  REPRESENTED  BY THESE  WARRANTS AND THE COMMON  STOCK  ISSUABLE
THEREBY HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES  ACT"), OR ANY OTHER APPLICABLE  SECURITIES LAW. THE SECURITIES
REPRESENTED  BY THESE  WARRANTS MAY NOT BE  TRANSFERRED,  EXCEPT  PURSUANT TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER,  OR  IN  A  TRANSACTION  EXEMPT  FROM
REGISTRATION  UNDER,  THE  SECURITIES  ACT  AND IN  ACCORDANCE  WITH  ANY  OTHER
APPLICABLE SECURITIES LAWS.

                                    WARRANTS

                           TO PURCHASE COMMON STOCK OF

                      CONTINENTAL SOUTHERN RESOURCES, INC.
                             (A NEVADA CORPORATION)

                           EXPIRING ON APRIL 30, 2012

Warrant No. 2003-1

         This Common Stock Purchase  Warrant (the "Warrant")  certifies that for
value  received,  Trident Growth Fund,  L.P. (the  "Holder") or its assigns,  is
entitled  to  subscribe  for and  purchase  from  the  Company  (as  hereinafter
defined), in whole or in part, 25,000 shares of duly authorized, validly issued,
fully paid and nonassessable  shares of Common Stock (as hereinafter defined) at
an initial Exercise Price (as hereinafter defined) of $1.60 per share,  subject,
however,  to the provisions and upon the terms and  conditions  hereinafter  set
forth. The number of Warrants (as hereinafter defined),  the number of shares of
Common stock purchasable hereunder, and the Exercise Price therefore are subject
to adjustment as hereinafter set forth.. These Warrants and all rights hereunder
shall  expire on the earlier of (i) 5:00 p.m.,  Houston,  Texas time,  April 30,
2012 or (ii) the date all of the Convertible  Notes issued pursuant to a certain
Loan  Agreement  dated  April  30,  2002 are  converted  to  Common  Stock  (the
"Expiration Date").

                                    ARTICLE I

                                   Definitions

         As used herein,  the following  terms shall have the meanings set forth
below:

         1.1 "Company" shall mean Continental Southern Resources, Inc., a Nevada
corporation,  and shall also include any  successor  thereto with respect to the
obligations hereunder, by merger, consolidation or otherwise.

         1.2 "Common  Stock" shall mean and include the Company's  common stock,
$0.001  par value per share,  authorized  on the date of the  original  issue of
these   Warrants  and  shall   include  (i)  in  case  of  any   reorganization,
reclassification,  consolidation,  merger,  share exchange or sale,  transfer or

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other disposition of assets, the stock or other securities  provided for herein,
and (ii) any other shares of common stock of the Company to which such shares of
Common Stock may be converted.

         1.3 "Exercise Price" shall mean the initial exercise price of $5.00, as
adjusted from time to time pursuant to the provisions hereof..

         1.4  "Market  Price" for any day,  when used with  reference  to Common
Stock,  shall mean the price of said Common Stock determined by reference to the
last  reported  sale  price for the  Common  Stock on such day on the  principal
securities  exchange on which the Common  Stock is listed or admitted to trading
or if no such sale take place on such date,  the  average of the closing bid and
asked prices thereof as officially reported, or, if not so listed or admitted to
trading on any securities exchange,  the last sale price for the Common Stock on
the National  Association of Securities  Dealers  national market system on such
date,  or, if there  shall have been no  trading on such date or if the  Commons
tock shall not be listed on such  systems,  the  average of the  closing bid and
asked prices in the over-the-counter market as furnished by any NASD member firm
selected  from time to time by the  Company  for such  purpose or, if the Common
Stock  is not  traded,  then  such  price  as is  reasonably  determined  by the
Company's Board of Directors.

          1.5  "Warrant"  shall mean the right upon  exercise  to  purchase  one
Warrant Share.

          1.6 "Warrant  Shares" shall mean the shares of Common Stock  purchased
or purchasable hereof upon exercise of the Warrants.

                                   ARTICLE II

                              Exercise of Warrants

         2.1  Method  of  Exercise.  The  Warrants  represented  hereby  may  be
exercised by the holder  hereof,  in whole or in part, at any time and from time
to time on or after the date hereof until 5:00 p.m., Houston,  Texas time on the
Expiration  Date. To exercise the  Warrants,  the holder hereof shall deliver to
the Company,  at the Warrant Office designated  herein,  (i) a written notice in
the form of the  Subscription  Notice  attached  as an exhibit  hereto,  stating
therein  the  election of such  holder to  exercise  the  Warrants in the manner
provided in the Subscription  Notice; (ii) payment in full of the Exercise Price
(A) in cash or by bank check for all Warrant Shares purchased hereunder,  or (B)
through a "cashless"  or  "net-issue"  exercise of each such Warrant  ("Cashless
Exercise");  the  holder  shall  exchange  each  Warrant  subject  to a Cashless
Exercise for that number of Warrant Shares  determined by multiplying the number
of Warrant Shares issuable hereunder by a fraction, the numerator of which shall
be the  difference  between (x) the Market Price and (y) the  Exercise  Price of
each such Warrant,  and the denominator of which shall be the Market Price;  the
Subscription  Notice  shall set forth the  calculation  upon which the  Cashless
Exercise is based, of (C) (a combination of (A) and (B) above;  and (iiii) these
Warrants. The Warrants shall be deemed to be exercised on the date of receipt by
the Company of the Subscription  Notice,  accompanied by payment for the Warrant
Shares and surrender of these Warrants, as aforesaid,  and such date is referred
to herein as the "Exercise  Date".  Upon such exercise,  the Company  shall,  as

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promptly as practicable  and in any event within five business  days,  issue and
deliver to such holder a certificate or certificates  for the full number of the
Warrant Shares purchased by such holder hereunder, and shall, unless the Warrant
shave  expired,  deliver to the holder  hereof a new  Warrant  representing  the
number of  Warrants,  if any,  that shall not have been  exercised  in all other
respects identical to these Warrants. As permitted by applicable law, the person
in whose name the certificates for Common Stock are to be issued shall be deemed
to have become a holder of record of such Common tock on the  Exercise  Date and
shall be entitled to all of the  benefits of such holder on the  Exercise  Date,
including   without   limitation  the  right  to  receive  dividends  and  other
distributions  for which the record date falls on or after the Exercise Date and
to exercise voting rights.

         2.2  Expenses and Taxes.  The Company  shall pay all expenses and taxes
(including  without  limitation,  all  documentary,  stamp,  transfer  or  other
transactional  taxes) other than income taxes  attributable to the  preparation,
issuance or deliver of the Warrants  and of the shares of Common Stock  issuable
upon exercise of the Warrants.

         2.3  Reservation  of Shares.  The  Company  shall  ensure that there is
reserved  at all times so long as the  Warrants  remain  outstanding,  free from
preemptive  rights,  out of its authorized but unissued  shares of Common Stock,
solely for the purpose of effecting the exercise of the  Warrants,  a sufficient
number o shares of Common Stock to provide for the exercise of the Warrants.

         2.4 Valid Issuance.  All shares of Common Stock that may be issued upon
exercise of the Warrants will, upon issuance by the Company, be duly and validly
issued,  fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issuance  thereof and without limiting the generality of the
foregoing,  the  Company  shall take no action or fail to take any action  which
will cause a contrary result  (including,  without  limitation,  any action that
would  cause the  Exercise  Price to be less than the par value,  if any, of the
Common Stock).

         2.5  Loan  Agreement.  The  Warrants  represented  hereby  were  issued
pursuant to a waiver of certain  requirements  and/or  covenants  contained in a
certain Loan  Agreement  between the Holder and the Company dated April 30, 2002
which was provided by the Holder to the Company. The Holder shall be entitled to
the rights to  registration  under the Securities  Act and any applicable  state
securities or blue sky laws to the extent set forth in the  registration  rights
provision  found in the Loan  Agreement.  The terms of the  registration  rights
provisions  are  herby  incorporated  herein  for  all  purposes  and  shall  be
considered a part of this Warrant as if they had been fully set forth herein.

         2.6  Acknowledgement  of  Rights.  At the time of the  exercise  of the
Warrants in accordance with the terms hereof and upon the written request of the
holder hereof, the Company will acknowledge in writing its continuing obligation
to afford to such holder any rights (including, without limitation, any right to
registration  of the Warrant  Shares) to which such holder shall  continue to be
entitled after such exercise in accordance with the provision of these Warrants'

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provided,  however,  that if the  Holder  hereof  shall  fail to make  any  such
request,  such failure shall not affect the continuing obligation of the Company
to afford to such Holder any such rights.

         2.7 No Fractional  Shares.  The Company shall not be required to issued
fractional  shares of Common  Stock on the exercise of these  Warrants.  If more
than one Warrant  shall be  presented  for exercise at the same time by the same
holder,  the number of full shares of Common Stock which shall be issuable  upon
such exercise  shall be computed on the basis of the  aggregate  number of whole
shares of Common Stock purchasable on exercise of the Warrants so presented.  If
any fraction of a share of Common Stock would, except for the provisions of this
Section,  be issuable on the exercise of this Warrant,  the Company shall pay an
amount in cash  calculated by it to be equal to the Market Price of one share of
Common stock at the time of such exercise  multiplied by such fraction  computed
to the nearest whole cent.

                                   ARTICLE III

                                    Transfer

         3.1 Warrant  Office.  The Company shall  maintain an office for certain
purposes  specified  herein (the  "Warrant  Office"),  which office shall be the
Company's  offices to 111  Presidential  Boulevard,  Suite  158-A,  Bala Cynwyd,
Pennsylvania  19004 and may  subsequently be such other office of the Company or
of any transfer agent of the Common Stock in the continental United States as to
which written notice has previously been given to the Holder.  The Company shall
maintain,  at the  Warrant  Office,  a register  for the  Warrants  in which the
Company  shall  record  the name and  address  of the Person in whose name these
Warrants  has been  issued,  as well as the name and  address of each  permitted
assignee of the rights of the registered owner hereof.

         3.2 Ownership of Warrants. The Company may deem and treat the Person in
whose name the  Warrants  are  registered  as the holder and owner  hereof until
provided  with notice to the  contrary.  The  Warrants  may be  exercised  by an
assignee for the purchase of Warrant Shares without having new Warrants issued.

         3.3  Restrictions  on  Transfer  of  Warrants.  These  Warrants  may be
transferred,  in whole or in part, by the Holder. The Company agrees to maintain
at the Warrant Office books for the  registration  and transfer of the Warrants.
The Company,  from time to time,  shall register the transfer of the Warrants in
such  books  upon  surrender  of this  Warrant at the  Warrant  Office  properly
endorsed or  accompanied  by  appropriate  instruments  of transfer  and written
instructions for transfer. Upon any such transfer and upon payment by the holder
or its transferee of any applicable transfer taxes, new Warrants shall be issued
to the transferee and the transferor (as their respective  interests may appear)
and the  surrendered  Warrants  shall be cancelled  by the Company.  The Company
shall pay all taxes(other  than  securities  transfer taxes or income taxes) and
all other  expenses and charges  payable in connection  with the transfer of the
Warrants pursuant to this Section.

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         3.4  Compliance  with  Securities  Laws.  Subject  to the  terms of the
Registration Rights Agreement and notwithstanding any other provisions contained
in these  Warrants,  the  Holder  understands  and  agrees  that  the  following
restrictions  and  limitations  shall be applicable to all Warrant Shares and to
all resales or other transfer thereof pursuant to the Securities Act:

                  3.4.1 The holder hereof agrees that the Warrant Shares may not
be sold or otherwise  transferred unless the Warrant Shares are registered under
the  Securities  Act and  applicable  state  securities  or blue sky laws or are
exempt therefrom.

                  3.4.2 A legend in  substantially  the  following  form will be
placed on the certificate(s) evidencing the Warrant Shares:

         "THE  SECURITIES   REPRESENTED  BY  THIS   CERTIFICATE  HAVE  NOT  BEEN
         REGISTERED   UNDER  THE   SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE
         "SECURITIES   ACT"),   OR   ANY   OTHER   APPLICALBE   SECURITIES   LAW
         AND,ACCORDINGLY, THE SECURITIES REPRESENTED BY THIS CERTIFICATEM;AY NOT
         BE RESOLD,  PLEDGED,  OR OTHERWISE  TRANSFERRED,  EXCEPT PURSUANT TO AN
         EFFECTIVE REGISTRATION STATEMENT UNDER, OR IN A TRANSACTION EXEMPT FROM
         REGISTRATION  UNDER, THE SECURITIES ACT AND IN ACCORDANCE WITHANY OTHER
         APPLICABLE SECURITIES LAWS."

                                   ARTICLE IV

                                  Anti-Dilution

         4.1 If and whenever  any  Additional  Common Stock (as herein  defined)
shares  shall  be  issued  by  the  company  (the  "Stock  Issue  Date")  for  a
consideration per share less than the Exercise Price, then in each such case the
initial  Exercise  Price shall be reduced to a new  Exercise  Price in an amount
equal to the  consideration per share received by the Company for the additional
shares of Common  Stock then issued and the number of shares  issuable to Holder
upon conversion shall be proportionately  increased;  and, in the case of shares
issued without consideration,  the initial Exercise Price shall be reduced in an
amount and number of shares  issued upon  conversion  shall be  increased  in an
amount so as to maintain for the Holder the right to exercise  into shares equal
in amount to the same percentage  interest in the Common Stock of the Company as
existed for the Holder immediately preceding the Stock Issue Date.

         4.2 Sale of Shares:  In case of the issuance of Additional Common Stock
for a  consideration  part or all of which shall be cash, the amount of the cash
consideration therefore shall be deemed to be the amount of the case received by
the company for such  shares,  after any  compensation  or discount in the sale,
underwriting or purchase thereof by underwriters or dealers or others performing
similar services or for any expenses incurred in connection  therewith.  In case
of the issuance of any shares of  Additional  Common  Stock for a  consideration
part or all of which shall be other than cash,  the amount of the  consideration
therefore,  other than cash, shall be deemed to be the then fair market value of
the property  received as determined  by an investment  banking firm selected by
Lender.

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         4.3  Reclassification  of Shares:  In case of the  reclassification  of
securities  into shares of Common  Stock,  the shares of Common  Stock issued in
such  reclassification  shall be deemed to have been issued for a  consideration
other than cash.  Shares of Additional Common Stock issued by way of dividend or
other  distribution on any class of stock of the Company shall be deemed to have
been issued without consideration.

         4.4 Split up of Combination of Shares:  In case issued and  outstanding
shares of Common Stock shall be subdivided or split up into a greater  number of
shares  of the  Common  Stock,  the  Exercise  Price  shall  be  proportionately
decreased,  and in case issued and  outstanding  shares of Common Stock shall be
combined  into a smaller  number of shares of Common Stock,  the Exercise  Price
shall be proportionately  increased,  such increase or decrease, as the case may
be, becoming effective at the time of record of the split-up or combination,  as
the case may be.

         4.5 Exceptions: The term "Additional Common Stock" herein shall mean in
the most  broadest  sense all  shares of Common  Stock  hereafter  issued by the
Company (including,  but not limited to Common Stock held in the treasury of the
Company and common stock  purchasable  via derivative  security or option on the
date of such  grant),  except  Common  Stock  issued  upon the  exercise of this
warrant or Convertible Notes.

         4.6 In the event of  distribution  to all Common  Stock  holders of any
stock,  indebtedness  of the  Company  or  assets or other  rights  to  purchase
securities or assets,  then,  after such event, the Exercise Price reduced to so
entitle  the Holder to the  economic  interest he had  immediately  prior to the
occurrence of such event.

         4.7 In  case of any  capital  reorganization,  reclassification  of the
stock of the Company (other than a change in par value or as a result of a stock
dividend,  subdivision,  split up or combination of shares),  the Exercise Price
reduced  to so as to  entitle  the  Holder  to  the  economic  interest  he  has
immediately  prior to the  occurrence  of such event.  The  provisions  of these
foregoing   sentence  shall  similarly  apply  to  successive   reorganizations,
reclassifications,   consolidations,   exchanges,  leases,  transfers  or  other
dispositions or other share exchanges.

         4.8 Notice of Adjustment. (A) In the event the Company shall propose to
take any action which shall result in an adjustment in the Exercise  Price,  the
Company  shall give notice to the Holder,  which notice shall specify the record
date,  if any,  with respect to such action and the date on which such action is
to take place.  Such  notice  shall be given on or before the earlier of 10 days
before the record  date or the date on which such  action  shall be taken.  Such
notice  shall also set forth all facts (to the  extent  known)  material  to the
effect of such action on the  Exercise  Price and the  number,  kind or class of
shares or other securities or property which shall be deliverable or purchasable
upon the occurrence of such action or deliverable  upon exercise of this warrant
(B)  Following  completion  of an event  wherein  the  Exercise  Price  shall be
adjusted,  the Company  shall  furnish to the Holder a  statement,  signed by an
authorized  officer of the Company of the facts  creating  such  adjustment  and
specifying the resultant adjusted Exercise Price then in effect.

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                                    ARTICLE V

                                  Miscellaneous

         5.1 Entire Agreement. These Warrants, together with the Loan Agreement,
contain the entire agreement  between the holder and the Company with respect to
the Warrant Shares purchasable upon exercise hereof and the related transactions
and supersedes all prior arrangements or understanding with respect thereto.

         5.2  Governing  Law. This Warrant shall be governed by and construed in
accordance  with the laws of the State of Texas in the courts located in Dallas,
Texas.

         5.3 Waiver and  Amendment.  Any term or provision of these Warrants may
be waived at any time by the party which is entitled to the benefits thereof and
any term or provision of these  Warrants may be amended or  supplemented  at any
time by agreement of the holder  hereof and the Company,  except that any waiver
of any term or condition, or any amendment or supplementation, of these Warrants
shall be in  writing.  A waiver of any breach or  failure to enforce  any of the
terms or  conditions  of these  Warrants  shall not in any way effect,  limit or
waive a  party's  rights  hereunder  at any time to  enforce  strict  compliance
thereafter with every term or condition of these Warrants.

         5.4  Illegality.  In the event  that any one or more of the  provisions
contained  in this  Warrant  shall  be  determined  to be  invalid,  illegal  or
unenforceable  in any  respect  for  any  reason,  the  validity,  legality  and
enforceability  of any such  provision  in any other  respect and the  remaining
provision of these Warrants shall not, at the election of the party for whom the
benefit of the provision exists, be in any way impaired.

         5.5 Notice.  Any notice or other  document  required or permitted to be
given or delivered to the holder hereof shall be in writing and delivered at, or
sent by certified or  registered  mail to such holder at, the last address shown
on  the  books  of  the  Company  maintained  at  the  Warrant  Office  for  the
registration of these Warrants or at any more recent address of which the holder
hereof shall have notified the Company in writing.

         5.6 Limitation of Liability;  Note Stockholders.  No provision of these
Warrants  shall be construed as  conferring  upon the holder hereof the right to
vote,  consent,  receive  dividends  or receive  notices  (other  than as herein
expressly  provided) in respect of meetings of stockholders  for the election of
directors of the Company or any other matter  whatsoever as a stockholder of the
Company. No provision hereof, in the absence of affirmative action by the holder
hereof to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder  hereof,  shall give rise to any liability of
such  holder  for the  purchase  price of any  shares  of  Common  Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.

         5.7  Exchange,  Loss,  Destruction,  etc. of Warrant.  Upon  receipt of
evidence reasonably  satisfactory to the Company of the loss, theft,  mutilation
or  destruction  of these  Warrants,  and in the case of ay such loss,  theft or
destruction upon delivery of any appropriate  affidavit in such form as shall be

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reasonably satisfactory to the Company and include reasonable indemnification of
the Company,  or in the event of such mutilation upon surrender and cancellation
of these Warrants, the Company will make and deliver new Warrants of like tenor,
in lieu of such lost,  stolen,  destroyed  or mutilated  Warrants.  Any Warrants
issued under the  provisions of this Section in lieu of any Warrants  alleged to
be lost,  destroyed  or  stolen,  or in lieu of any  mutilated  Warrants,  shall
constitute an original contractual  obligation on the part of the Company. These
shall  be  promptly  canceled  by the  Company  upon  the  surrender  hereof  in
connection  with any exchange or  replacement.  The Company  shall pay all taxes
(other than  securities  transfer  taxes or income taxes) and all other expenses
and charges payable in connection with the  preparation,  execution and delivery
of Warrants pursuant to this Section.

         5.8 Headings. The Article and Section and other headings herein are for
convenience  only and are not a party of this  Warrant  and shall not affect the
interpretation thereof.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name dated March 24, 2003.

                                         Continental Southern Resources, Inc.

                                         By:___________________________________
                                              Stephen P. Harrington, President

<PAGE>

                               SUBSCRIPTION NOTICE

The undersigned, the holder of the foregoing Warrants, hereby elects to exercise
purchase   rights   represented   thereby  for,   and  to  purchase   thereunder
___________________  shares of the Common stock  covered by such  Warrants,  and
herewith  makes  payment  in  full  for  such  shares,  and  requests  (a)  that
certificates  for  such  shares  (and any  other  securities  or other  property
issuable  upon  such  exercise)  be  issued  in the name of,  and  delivered  to
____________________  __________________________________ and (b), if such shares
shall not include all of the shares issuable as provided in such Warrants,  that
new  Warrants  of like tenor and date for the  balance  of the  shares  issuable
thereunder be delivered to the undersigned.

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

Date:__________________________

<PAGE>

                                   ASSIGNMENT

         For value received,  __________________________________,  hereby sells,
assigns and transfers unto _____________________________________ these Warrants,
together  with all rights,  title and  interest  therein,  and does  irrevocably
constitute and appoint _______________ _______________________________ attorney,
to  transfer  such  Warrants  on the books of the  Company,  with full  power of
substitution.

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

Date:________________________________

<PAGE><PAGE>

EXHIBIT 10.12

                          EXPLORATION AND DEVELOPMENT
                         AGREEMENT BLACK WARRIOR BASIN,
                                  MISSISSIPPI

     THIS  AGREEMENT  is  entered  into  this 23 day of May 2002, by and between
CLAYTON  WILLIAMS  ENERGY,  INC.  ("Williams"),  and  KNOX  MISS. PARTNERS, L.P.
("Knox").

     WHEREAS,  Williams  and Knox have acquired undivided leasehold interests in
approximately  42,000 acres covering lands in Clay, Chickasaw, Calhoun, Choctaw,
Lowndes,  Oktibbeha,  Noxubee,  Webster, and Winston Counties of Mississippi and
being  those  leases  described  on  Exhibit "A" attached hereto (the "Leases");

     WHEREAS,  the  Parties  have  identified  certain  prospects believed to be
prospective  for the development of oil and/or gas, which prospects are depicted
in  the  Blue  outlines  on  Exhibit  "B" attached hereto (the "Prospects"); and

     WHEREAS,  the  Parties desire to set forth the terms under which the Leases
will  be  jointly  developed  and  further desire to establish an area of mutual
interest  for the acquisition and development of additional interests in the oil
and  gas  rights  thereunder.

NOW, THEREFORE, for and in consideration of the mutual premises herein set forth
the parties agree as follows.

1.  AREA  OF  MUTUAL  INTEREST.  The Parties agree to an Area of Mutual Interest
("AMI")  comprising  all  of  the  following  Counties  in Mississippi: Calhoun,
Chickasaw,  Choctaw,  Clay,  Lowndes, Noxubee, Oktibbeha, and Webster; excluding
the  area identified as the "SKH Maben AMI" depicted in a red outline on Exhibit
"B".  Any Party acquiring an "oil and gas mineral interest" within the AMI shall
notify  the  other  Party  in  writing  of  such acquisition, which notice shall
include all pertinent terms of such acquisition (the "Notice"). For the purposes
of  this  Agreement  an  oil  and  gas mineral interest shall include, leasehold
working  interest,  overriding  royalty  interest,  mineral  interest,  royalty
interest,  farm-outs,  farm-ins, or any other oil and gas interest of any nature
or  kind. The non-acquiring Party may elect to participate for its fifty percent
50%  share  in  the  acquisition by giving written notice of its election to the
acquiring  party  within  ten  (10)  days  from  receipt  of the Notice. A Party
electing  to  participate  in  an  acquisition  shall  make  payment  of  its
proportionate  part  of  all  acquisition  costs  within twenty (20) days of its
election.  A  Party's  failure  to  timely  elect  or  make

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its payment thereafter shall be deemed an election not to participate in the
acquisition. If subsequent hereto there are multiple Parties to this Agreement,
each Party participating in the acquisition shall have the option to participate
proportionately in any interest attributable to a nonparticipating Party. The
term of the AMI shall run from the date hereof and continue for a period of six
years.

2.  PROSPECTS.  For  purposes  of  this agreement, a Prospect shall include such
lands  to  the  nearest quarter section line or lines outside the lowest closing
contour  of  the structure to be tested, or in the case of a stratigraphic trap,
the Prospect shall be drawn to the nearest quarter section line or lines outside
the  stratigraphic  trapping  boundary or the t rapping fault plane. The Parties
have  identified  a  n  umber  of  geologic prospects based on the evaluation of
available  geologic  and  seismic information (the "PROSPECTS"), which Prospects
are  identified  on  Exhibit "B." It is contemplated that a number of additional
Prospects  will  be identified as additional data becomes available. Likewise as
additional  data  becomes  available,  an  existing  undrilled  Prospect  may be
modified  on the basis of such additional data. All such additional Prospects or
modification  of  existing  Prospects  shall be included on a mutually agreeable
revised  Exhibit  "B"  which will accurately reflect the defined Prospects under
this  Agreement.  In  the  event  of  a  dispute  between  the Parties as to the
existence  or  area  of  a  new  Prospect,  the Parties shall meet to attempt to
amicably resolve any such dispute, m the event the Parties are unable to resolve
the  dispute, a Party may require arbitration of the dispute by a panel of three
(3)  arbitrators.  The  Party  proposing  the new Prospect shall select a single
arbitrator  and  the  Party  or Parties objecting to the proposed Prospect shall
jointly  select a single arbitrator, and the two chosen arbitrators shall select
a  third  arbitrator.  The  dispute  shall be resolved by a majority vote of the
panel  of  arbitrators  and  such  decision  shall be binding on all Parties. An
arbitrator  shall  be  a  qualified geologist or geophysicist with experience in
Mississippi.  The Parties agree to pay the costs of its chosen arbitrator and to
share  proportionately  the  costs associated with the arbitration and the third
party  arbitrator.

3.  INITIAL WELLS ON A PROSPECT. A Party desiring to drill the initial well on a
Prospect  shall  give  notice  to  the  other  Parties  identifying the proposed
location, objective formation and an authority for expenditure ("AFE") depicting
the  anticipated  costs  of  the  proposed initial well. If the location is on a
Prospect  that is not identified on Exhibit "B", then the notice shall also give
the  boundaries  of  the  proposed Prospect. The P arties shall have thirty (30)
days  from  receipt  of  such  well proposal within which to notify the Operator
whether  they  elect  to  participate  in the drilling of such initial well (the
"Election  Period").  The initial well on each such Prospect shall be deemed the
Initial  Well under VI A. of the JOA, as the terms is hereinafter defined. As to
the participating parties, all operations on the initial well shall be conducted
under the terms on the JOA. If a party elects not to participate in the drilling
of  an  initial  well on a Prospect, upon the commencement of such initial well,
which  shall  be  no  more  than  ninety  (90)

<PAGE>

days from the expiration of the Election Period, a non-participating Party shall
forfeit  all  of  its right, title and interest in and to the oil and gas leases
insofar  as  they  are  located  within the Prospect. Any such non-participating
Party  shall assign its interests to the participating Parties in the proportion
of  their  participation.

4.  JOINT  OPERATING AGREEMENT. The AMI shall be subject to the terms of a Joint
Operating Agreement (the "JOA"), the form of which is attached hereto as Exhibit
"C".  The  JOA  shall  designate Williams as Operator, and shall include Article
VIII. F. the Preferential Right to Purchase. The JOA shall also provide for 400%
non-consent  penalties  for  all  operations  subsequent  to  the drilling of an
initial well, except as to an "Obligation Well." An "Obligation Well" shall be a
well  in which the drilling or other proposed operation is necessary in order to
comply  with  any  express  or  implied covenants of a lease and/or leases or an
interest  subject  to  the JOA or any operation necessary to maintain a lease or
any  part  thereof  under  any agreement that will otherwise expire or terminate
unless  such  operations are conducted. The failure of a Party to participate in
an  operation  on  an  Obligation  Well  shall  result  in the forfeiture to the
participating  parties  of  all  the  non-participating Party's right, title and
interest in and to the Prospect upon which such Obligation Well is located, save
and except any interest in a well on the Prospect previously drilled or drilling
in  which  the  Party  is  then  participating.

5.  AMI  MANAGEMENT.   Williams  as  operator shall be responsible from the date
hereof  for  the  management  of  the  AMI,  including  the  future  leasing and
development  activities  and  where  applicable the design and implementation of
additional  seismic  programs  within  the  AMI.  The  Parties  have agreed that
Williams  shall initially retain Karl Kaufman and Ed Hollingsworth (the "Project
Managers")  to  implement these programs. Williams shall be authorized to charge
to  the joint account of the Parties a fee for management and professional time,
including  the  Project  Managers,  and  Knox  agrees  to  bear  and  pay  its
proportionate  amount  of  such  management fee, limited to $1,000,000.00, which
shall  be  payable  by  the  parties  hereto  in  twenty-four (24) equal monthly
payments,  for  in-house  supervision  of  (a)  land  matters  including  lease
acquisition,  administration  and  curative;  (b)  geologic  services  including
mapping,  geophysical  interpretations  and seismic acquisition; (c) engineering
services  including horizontal drilling and completion techniques; and (d) other
management  services.  Williams  shall  provide  Knox  with  copies  of all work
product resulting from the management of the AMI as set forth herein, including,
without  limiting the generality of the foregoing, oil and gas leases, title run
sheets,  title  curative, title opinions, engineering data, geologic and seismic
data,  and/or geologic and seismic interpretations. Williams agrees to give Knox
technical  presentations  on a quarterly basis, or as may be mutually agreed and
agrees  to  allow  Knox  reasonable  access  to all technical data maintained in
Williams  offices.  This fee is in addition to, and not in lieu of those charges
set  forth  in  the  COPAS  attached  to  the  JOA.

<PAGE>

6. PREFERENTIAL RIGHTS. Should any party desire to sell all or any part of its
interests under this Agreement, it shall give written notice to the other
parties, with full information concerning its proposed disposition, which shall
include the name and address of the prospective transferee (who must be ready,
willing and able to purchase), the purchase price, a legal description
sufficient to identify the property, and all other terms of the offer. The other
parties shall then have an optional prior right, for a period often (10) days
after the notice is delivered, to purchase for the stated consideration on the
same terms and conditions the interest which the other party proposes to sell;
and, if this optional right is exercised, the purchasing parties s hall s hare t
he purchased interest in the proportions that the interest of each bears to the
total interest of all purchasing parties. However, there shall be no
preferential right to purchase in those cases where any party wishes to mortgage
its interests, or to transfer title to its interests to its mortgagee in lieu of
or pursuant to foreclosure of a mortgage of its interests, or to dispose of its
interests by merger, reorganization, consolidation, or by sale of all or
substantially all of its assets to any party, or by transfer of its interests to
a subsidiary or parent company or to a subsidiary of a parent company, or to any
company in which such party owns a majority of the stock.

7.  SEISMIC  PROGRAM. The Parties agree to conduct a seismic program which shall
include  the  shooting  or acquisition of an additional 40 to 60 linear miles of
seismic data and/or the reprocessing of existing seismic data. Each Party agrees
to  pay  its  proportionate part of the costs for any mutually agreeable seismic
program.  The  Parties  agree  to  participate in additional seismic operations,
including  3-D  as may be mutually agreed. Knox agrees to reimburse Williams for
its  proportionate part of all such mutually agreed seismic program costs within
(30)  days  from  the  date  of  the  receipt  of  an  invoice  from  Williams.

8.  LIMITATION  ON  DRILLING. The Parties agree that there shall be no more than
one  (1)  well being proposed and/or drilled (jointly by the Parties) at any one
time  within  the AMI without the consent of 75% or more of the working interest
in  the  Prospect for the proposed well. Provided, however, that this limitation
on  drilling  shall  not  apply  to  the  proposal  for  and  commencement of an
Obligation  Well  while  another  well  is  then  being  drilled.

9. CONFLICTS. In the event of a conflict between this Agreement and any of the
Exhibits hereto, the terms of this Agreement shall prevail.

10.  NOTICES.  All  notices  required  by  this Agreement shall be given and the
receipt  thereof shall be determined in accordance with the Notice provision set
forth  in  the  JOA.

<PAGE>

11. LAWS. This Agreement and all exhibits subject hereto shall be interpreted in
accordance  with  laws  of  the State of Texas, and the Parties agree that venue
shall  be  the  State  of  Texas.

12.  BINDING  EFFECT.  This  agreement  shall  be  binding upon and inure to the
benefit  of  the  Parties,  their respective affiliates, successors and assigns.
Specifically,  an  affiliate  of a Party hereto acquiring an interest in the AMI
area shall be bound by the provisions of paragraph 1, and pursuant thereto shall
offer  to  the  non-affiliated  Party  the  right to participate in the interest
acquired. For the purposes of this agreement, an affiliate shall mean any person
or  entity  controlling, controlled by or under common control with any Party to
this  Agreement.

13. EXHIBITS.   All Exhibits attached to this Agreement are by this reference
incorporated herein for all purposes.

IN WITNESS WHEREOF, the Parties have entered into this agreement on the date
above written.

CLAYTON  WILLIAMS  ENERGY,  INC,

/sig/

KNOX MISS PARTNERS, L.P.

/sig/

<PAGE>

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