Document:

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                                                                    EXHIBIT 10.1

                           PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement is made and entered into on this the 24th day
of November, 1999, by and between LARIO OIL & GAS COMPANY, a Delaware
corporation ("hereinafter referred to as Seller"); and TOREADOR EXPLORATION &
PRODUCTION INC., a Texas corporation, and (hereinafter referred to as "Buyer").

1.       SALE AND PURCHASE OF THE PROPERTIES. Subject to the terms and
conditions herein set forth, Seller agrees to sell, assign, convey and deliver
to Buyer and Buyer agrees to purchase and acquire from Seller at the Closing
(defined in Article 11 below) but effective as of 7:00 a.m., Central Time, on
October 1, 1999 (the Effective Date), an undivided fifty percent (50.00%) of
Seller's right, title and interest in each property as set forth on Exhibit A
(Wells), Exhibit B (Leases, Rights-of-Way and Easements), all other interest, if
any, owned by Seller, in, to and under the Units, Wells, Leases, Rights-of-Way
and Easements and all contracts relating thereto; and as of the Closing Date, an
undivided fifty percent (50.00%) of Seller's right, title and interest as set
forth on Exhibit "A" in the equipment located on or appurtenant to a Lease and
used exclusively in connection with the operation of a Well, as well as the
items listed on Exhibit C (Pipelines and Other Personal Property) (collectively,
"the Properties"). Buyer understands and acknowledges that is the intent of this
Agreement that Buyer acquire an undivided fifty percent (50.00%) of the interest
acquired by Seller in those Wells, Leases, Royalty Interests, Rights-of-Way,
Easements, and other properties set forth on the attached Exhibits acquired by
Seller under that certain Purchase and Sale Agreement dated August 13, 1998 by
and between Sonat Exploration Company, as Seller, and McCoy Petroleum
Corporation and Lario Oil & Gas Company, as Buyers, insofar as said interests
are described on the attached Exhibits.

2.       PURCHASE PRICE. The purchase price for the Properties shall be Five
Million and Five Hundred Thousand Dollars ($5,500,000.00) ("Purchase Price"),
subject to any applicable adjustments as are hereinafter provided. Such Purchase
Price shall be payable as follows:

     (a) At closing, Buyer shall pay to Seller an amount of Five Million Dollars
         ($5,000,000.00) in cash. The remaining Five Hundred Thousand Dollars
         ($500,000.00) shall be paid to Seller as follows:

         i)       Toreador shall pay to Lario the sum of Two Hundred Fifty
                  Thousand Dollars ($250,000.00) plus interest at prime plus 1%,
                  amortized over 13 months, all payments to be made on a monthly
                  basis; plus

         ii)      Toreador shall pay to Lario the sum of Two Hundred Fifty
                  Thousand Dollars ($250,000.00) plus interest at prime plus 1%
                  on a date 13 months from the date of closing. The Interest on
                  such sum shall be payable quarterly.

All payments shall be made by Certified Check or by wire transfer.

As evidence of good faith, with the signing of this Agreement, Buyer has
deposited ten percent (10%) of the Purchase Price in cash with Seller
("Performance Deposit"). The Performance Deposit will not bear interest and is
not refundable, except as specifically provided in this Agreement. Any
forfeiture of the Performance Deposit as provided in this Agreement will be in
addition to, and not in lieu of, any right or remedies that Seller has under law
or in equity for Buyer's failure to perform under this Agreement.

3.       ADJUSTMENTS TO PURCHASE PRICE; FINAL PURCHASE PRICE. The Purchase Price
shall be adjusted as follows and the resulting amount shall be referred to
herein as the Final Purchase Price.

         3.1 INCREASES IN PURCHASE PRICE. The Purchase Price shall be increased
         by an amount equal to the sum of Buyer's share of the following
         amounts:

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                  3.1.1             The amount of costs and expenses, including,
                                    without limitation, such capital
                                    expenditures as are permitted by Section
                                    6.1.1. below, incurred by Seller in the
                                    ordinary course of Seller's business and
                                    overhead charges as provided in Exhibit "E",
                                    related to the Properties from the Effective
                                    Date to the Closing Date.

                  3.1.2             The amount of all prepaid expenses,
                                    including, without limitation, ad valorem,
                                    property and similar taxes and assessments
                                    based upon or measured by ownership of the
                                    Properties and attributable to periods of
                                    time after the Effective Date.

                  3.1.3             As to Wells in which Seller's Net Revenue
                                    Interest (as defined in Article 10.1.2
                                    below) is determined to be greater than the
                                    decimal interest noted in Exhibit A, an
                                    amount determined by multiplying the
                                    Allocated Value (as hereinafter defined) for
                                    Buyer's share of the interest in the Well in
                                    question by a fraction, the numerator of
                                    which shall be the decimal increase in
                                    Seller's Net Revenue Interest in such Well
                                    from the percentage shown for such Well in
                                    Exhibit A and the denominator of which shall
                                    be the Net Revenue Interest shown for such
                                    Well on such Exhibit.

         3.2 DECREASES IN PURCHASE PRICE. The Purchase Price shall be decreased
         by an amount equal to the sum of Buyer's share of the following
         amounts:

                  3.2.1             The amount of all proceeds received by
                                    Seller, net of all applicable taxes and
                                    royalties attributable to production from
                                    the Properties for periods of time after the
                                    Effective Date, excluding, however, proceeds
                                    from all production prior to the Effective
                                    Date, which proceeds shall be for the
                                    account of Seller.

                  3.2.2             An amount equal to all ad valorem, property,
                                    and similar taxes and assessments based upon
                                    or measured by Seller's ownership of the
                                    Properties that are unpaid as of the Closing
                                    Date and attributable to periods of time
                                    prior to the Effective Date.

                  3.2.3             Any amount determined in connection with
                                    uncured Title Defects as provided for in
                                    Article 10 below.

                  3.2.4             Any amount determined in connection with
                                    Adverse Environmental Conditions as provided
                                    for in Article 18 below.

4.       REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Buyer that:

         4.1 ORGANIZATION. Seller is a corporation duly organized, validly
         existing and in good standing under the laws of the State of Delaware
         and is qualified to do business in and in good standing under the laws
         of the state of Kansas where the Properties are located.

         4.2 AUTHORITY. Seller has full power and authority and has taken all
         requisite action, corporate or otherwise, to authorize it to carry on
         its business as currently conducted, to enter into this Agreement and
         to perform its obligations under this Agreement.

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         4.3 ENFORCEABILITY. This Agreement has been duly executed and delivered
         on behalf of Seller and constitutes the legal, valid and binding
         obligation of Seller enforceable in accordance with its terms. At the
         Closing, all documents required hereunder to be executed and delivered
         by Seller shall be duly authorized, executed and delivered and shall
         constitute legal, valid and binding obligations of Seller enforceable
         in accordance with their respective terms.

         4.4 CONTRACTS. To the best of Seller's knowledge, all material leases,
         operating agreements, production sales contracts, farmout agreements
         and other contracts or agreements respecting the Properties are
         reflected in Exhibit D and can be found either of record in the
         counties in which the Properties are located or are reflected or
         referenced in Seller's files.

         4.5 PREFERENTIAL PURCHASE RIGHTS/CONSENTS. To the best of Seller's
         knowledge, Exhibit F sets forth all consents and approvals required to
         be obtained for, and all preferential purchase rights exercisable in
         connection with, the assignment of the Properties to Buyer.

         4.6 LITIGATION AND CLAIMS. To the best of Seller's knowledge, except as
         set forth in Exhibit F, no claim, demand, filing, cause of action,
         administrative proceeding, lawsuit or other litigation is pending or
         threatened that could now or hereafter materially and adversely affect
         Buyers ownership, operation or value of any of the Properties.

5.       REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants
to Seller that:

         5.1 ORGANIZATION. Buyer is a corporation duly organized, validly
         existing and in good standing under the laws of the State of Texas and
         is qualified to do business in and in good standing under the laws of
         the state of Kansas where the Properties are located.

         5.2 AUTHORITY. Buyer has full power and authority and has taken all
         requisite action, corporate or otherwise, to authorize it to carry on
         its business as currently conducted, to enter into this Agreement, to
         purchase the Properties on the terms described in this Agreement and to
         perform its other obligations under this Agreement.

         5.3 ENFORCEABILITY. This Agreement has been duly executed and delivered
         on behalf of Buyer, and constitutes the legal, valid and binding
         obligation of Buyer enforceable in accordance with its terms. At the
         Closing, all documents required hereunder to be executed and delivered
         by Buyer shall be duly authorized, executed and delivered and shall
         constitute legal, valid and binding obligations of Buyer enforceable in
         accordance with their respective terms.

         5.4 DUE DILIGENCE. Buyer represents that it has performed, or will
         perform before Closing, sufficient review and due diligence with
         respect to the Properties, including, without limitation, reviewing
         well data and other files and performing all on site and other
         necessary evaluations, assessments and other tasks relating to the
         Properties, so as to enable Buyer to acquire the Properties under the
         terms of this Agreement.

         5.5 BASIS OF BUYER'S DECISION. Buyer represents that by reason of its
         knowledge and experience in the evaluation, acquisition, and operation
         of oil and gas properties, Buyer has evaluated the merits and risks of
         purchasing the Properties from Seller and has formed an opinion based
         solely on Buyer's knowledge and experience and not on any
         representations or warranties by Seller. ANY AND ALL INFORMATION, DATA
         OR OTHER MATERIALS FURNISHED TO BUYER BY SELLER CONCERNING THE
         PROPERTIES, AND THE OPERATIONS THEREOF, HAS BEEN OR SHALL BE FURNISHED
         SOLELY FOR BUYER'S CONVENIENCE, AND SHALL NOT CONSTITUTE A
         REPRESENTATION OR

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         WARRANTY OF ANY KIND BY SELLER. ANY RELIANCE ON OR USE OF SUCH
         INFORMATION, DATA OR OTHER MATERIALS SHALL BE AT BUYER'S SOLE RISK.

6.       COVENANTS OF SELLER.

         6.1 CONDUCT OF BUSINESS PENDING CLOSING. Seller covenants that from the
         date hereof to the Closing Date, except (a) as provided herein, (b) as
         required by any obligation, agreement, lease, contract, or instrument
         referred to in any exhibit hereto, or (c) as otherwise consented to in
         writing by Buyer, Seller will:

                  6.1.1             Not (a) act in any manner with respect to
                                    the Properties other than in the normal,
                                    usual and customary manner, consistent with
                                    prior practice; (b) dispose of, encumber or
                                    relinquish any of the Properties (other than
                                    relinquishments resulting from the
                                    expiration of leases that Seller has no
                                    right or option to renew); (c) conduct
                                    capital or workover projects with respect to
                                    the Properties in excess of $25,000.00,
                                    except those previously discussed with and
                                    approved in a separate writing by Buyer or
                                    when required by an emergency and except as
                                    may be required to meet Seller's contractual
                                    obligations.

                  6.1.2             Use its best efforts to preserve
                                    relationships with all third parties having
                                    business dealings with respect to the
                                    Properties.

                  6.1.3             Notify Buyer of the discovery by Seller that
                                    any representation or warranty of Seller
                                    contained in this Agreement is or becomes
                                    materially untrue or will be materially
                                    untrue on the Closing Date.

         6.2 ACCESS. Seller shall afford to Buyer and its authorized
         representatives reasonable access, at Buyer's sole risk and expense and
         during normal business hours, from the date hereof until the Closing
         Date, to (a) the Properties operated by Seller; PROVIDED, HOWEVER, THAT
         BUYER SHALL RELEASE, DEFEND, INDEMNIFY AND HOLD HARMLESS SELLER FROM
         AND AGAINST ANY AND ALL LOSSES, COSTS, DAMAGES, OBLIGATIONS, CLAIMS,
         LIABILITIES, EXPENSES AND CAUSES OF ACTION ARISING FROM BUYER'S
         INSPECTION OF THE PROPERTIES, INCLUDING, WITHOUT LIMITATION, CLAIMS FOR
         PERSONAL INJURIES OR DEATH, PROPERTY DAMAGE, COURT COSTS AND REASONABLE
         ATTORNEYS' FEES, and (b) Seller's operating, accounting, contract,
         corporate and legal files, records, materials, data and information
         regarding the Properties ("Data"); provided, however, that Data shall
         not include (a) any legal materials the disclosure of which Seller
         determines would jeopardize the assertion of a privilege in ongoing or
         anticipated litigation with third parties, (b) information not included
         in files specifically identified to the Properties in accordance with
         Seller's existing filing and data management system, or (c)
         information, the disclosure of which would violate any confidentiality
         agreement to which Seller is bound.

         6.3 RELEASE OF GEOLOGIC AND GEOPHYSICAL INFORMATION. Prior to and
         following Closing, Buyer shall be allowed to review and copy geologic
         and geophysical information, maps, and data in Seller's files
         attributable to the Properties to the extent Seller may disclose to
         Buyer such materials without violating any confidentiality agreements
         or licenses. Buyer agrees that it will obtain and use such materials at
         its own risk and expense, and further, Buyer releases Seller from any
         and all liability and agrees to release, defend, indemnify and hold
         harmless Seller from all claims, demands, judgments, costs, and
         expenses (including courts costs and reasonable attorneys'

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         fees) brought by Buyer and/or all other parties arising from the use,
         possession or transfer of such information without limit as to time.

         6.4 CLOSING CONDITIONS. Seller shall cause all the representations and
         warranties of Seller contained in this Agreement to be true and correct
         in all material respects on and as of the Closing Date. To the extent
         the conditions precedent to the obligations of Buyer are within the
         control of Seller, Seller shall cause such conditions to be satisfied
         on or prior to the Closing Date and, to the extent the conditions
         precedent to the obligations of Buyer are not within the control of
         Seller, Seller shall use commercially reasonable efforts to cause such
         conditions to be satisfied on or prior to the Closing Date.

7.       COVENANTS OF BUYER.

         7.1 CLOSING CONDITIONS. Buyer shall cause all the representations and
         warranties of Buyer contained in this Agreement to be true and correct
         on and as of the Closing Date. To the extent the conditions precedent
         to the obligations of Seller are within the control of Buyer, Buyer
         shall cause such conditions to be satisfied on or prior to the Closing
         Date and, to the extent the conditions precedent to the obligations of
         Seller are not within the control of Buyer, Buyer shall use
         commercially reasonable efforts to cause such conditions to be
         satisfied on or prior to the Closing Date.

8.       CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER. The obligations of
Seller to be performed at Closing are subject to the fulfillment (or waiver by
Seller in its sole discretion) before or at Closing, of each of the following
conditions:

         8.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
         by Buyer set forth in this Agreement shall be true and correct in all
         material respects at and as of the Closing as though made at and as of
         the Closing; and Buyer shall have performed and complied with, in all
         material respects, all covenants and agreements required to be
         performed and satisfied by Buyer at or prior to the Closing. If, at
         Closing, Seller has knowledge that Buyer is in breach of any part of
         this Section 8.1, it shall disclose such to Buyer in order to afford
         Buyer an opportunity to correct same.

         8.2 NO LITIGATION. There shall be no suits, actions or other
         proceedings pending or threatened to enjoin the consummation of the
         transactions contemplated by this Agreement or seeking substantial
         damages against Seller in connection therewith.

         8.3 APPROVALS. All known approvals required to be obtained for the
         assignment of the Properties to Buyer shall have been obtained or
         waived or shall have expired without being exercised, except for those
         approvals which are customarily obtained after closing.

         8.4 CLOSING OBLIGATIONS. Buyer shall contemporaneously perform its
         closing obligations under Section 11.2.

         8.5 ANTITRUST LAWS. Seller and Buyer shall have fully complied with
         Title 11 of the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
         and rules and regulations promulgated pursuant thereto, to the extent
         that said Act, rules and regulations are applicable to the transactions
         contemplated by this Agreement. Any required approvals or
         authorizations pursuant to the Act shall have been received, and any
         required waiting period shall have expired.

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9.       CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER. The obligations of
Buyer to be performed at Closing are subject to the fulfillment (or waiver by
Buyer in its sole discretion) before or at Closing, of each of the following
conditions:

         9.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
         by Seller set forth in this Agreement shall be true and correct in all
         material respects at and as of the Closing as though made at and as of
         the Closing; and Seller shall have performed and complied with, in all
         material respects, all covenants and agreements required to be
         performed and satisfied by Seller at or prior to the Closing. If, at
         Closing, Buyer has knowledge that Seller is in breach of any part of
         this Section 9.1, it shall disclose such to Seller in order to afford
         Seller an opportunity to correct same.

         9.2 NO LITIGATION. There shall be no suits, actions or other
         proceedings pending or threatened to enjoin the consummation of the
         transactions contemplated by this Agreement or seeking substantial
         damages against Buyer in connection therewith.

         9.3 CONSENTS. All known approvals required to be obtained for the
         assignment of the Properties to Buyer shall have been obtained or
         waived or shall have expired without being exercised, except for those
         approvals which are customarily obtained after closing.

         9.4 CLOSING OBLIGATIONS. Seller shall contemporaneously perform its
         closing obligations under Section 11.2.

         9.5 ANTITRUST LAWS. Seller and Buyer shall have fully complied with
         Title 11 of the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
         and rules and regulations promulgated pursuant thereto, to the extent
         that said Act, rules and regulations are applicable to the transactions
         contemplated by this Agreement. Any required approvals or
         authorizations pursuant to the Act shall have been received, and any
         required waiting period shall have expired.

10.      TITLE MATTERS.

         10.1 TITLE ADJUSTMENT. There shall not exist at Closing any uncured
         Title Defects which exceed the Title Basket Value (as defined in
         Section 10.3(b) below) unless adjustments therefor have been made
         pursuant to the further terms of this Agreement or Buyer has elected to
         waive any such Title Defects. Buyer shall notify Seller in writing of
         any claimed Title Defects not less than ten (10) business days prior to
         Closing ("Title Defects Notice"). The Title Defects Notice shall (a)
         set forth in reasonable detail the Well and/or Lease with respect to
         which a claimed Title Defect is made, (b)the nature of such claimed
         Title Defect, and (c) Buyer's proposed calculation of the Defect Value
         of each claimed Title Defect. Any Title Defect that is not identified
         in the Title Defects Notice shall thereafter be deemed a Permitted
         Encumbrance and be forever waived and expressly assumed by Buyer. As
         used in this Agreement, the term:

                  10.1.1            "Title Defect" shall mean, with respect to
                                    Seller's interest in the Leases and Wells as
                                    set forth on the attached Exhibits, any
                                    lien, mortgage, pledge, claim, charge,
                                    option, defect, requirement for consent to
                                    assignment and other encumbrance which would
                                    apply to the transaction contemplated
                                    hereby, other than Permitted Encumbrances,
                                    and entitle the owner thereof to receive a
                                    percentage of all proceeds of production
                                    therefrom less than the Net Revenue Interest
                                    of Seller set forth on Exhibit A for such
                                    Well. For purposes of this Agreement, in
                                    evaluating the significance of a fact,
                                    circumstance or condition to determine
                                    whether the same constitutes a Title Defect,
                                    due consideration shall be given to the
                                    length of time that the

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                                    particular Property has been producing
                                    hydrocarbon substances and whether such
                                    fact, circumstance or condition is of the
                                    type expected to be encountered in the area
                                    involved and is usual and customarily
                                    acceptable to reasonable and prudent
                                    operators, interest owners, and purchasers
                                    engaged in the business of the ownership,
                                    development and operation of oil and gas
                                    properties. The Wells and Leases are subject
                                    to various limitations of depth, formation
                                    and/or hydrocarbon substance which shall not
                                    be considered Title Defects unless such
                                    limitations adversely impact Buyer's
                                    obligation for operating expenses or Buyer's
                                    ability to receive its share of the
                                    percentage of production proceeds depicted
                                    in Exhibit A.

                  10.1.2            "Net Revenue Interest" shall mean Seller's
                                    interest in and to all production of oil,
                                    gas and other minerals saved, produced and
                                    sold from the Leases and Wells noted on
                                    Exhibits A and B after giving effect to all
                                    valid lessor's royalties, overriding
                                    royalties, production payments, carried
                                    interests, liens and other encumbrances or
                                    charges against production therefrom.

                  10.1.3            "Working Interest" shall mean, Seller's
                                    interest in and to the full and entire
                                    leasehold estate created under and by virtue
                                    of the Leases and all rights and obligations
                                    of every kind and character appurtenant
                                    thereto or arising therefrom, without regard
                                    to any valid lessor's royalty, overriding
                                    royalties, production payments, carried
                                    interests, liens, or other encumbrances or
                                    charges against production therefrom insofar
                                    as such interest in said leasehold estate is
                                    burdened with the obligation to bear and pay
                                    costs of operations.

                  10.1.4            "Permitted Encumbrances" shall mean:

                           (a) Lessors' royalties, overriding royalties,
                           reversionary interests and similar burdens if the net
                           cumulative effect of the burdens does not operate to
                           reduce the interest of Seller with respect to all oil
                           and gas produced from any Well below the Net Revenue
                           Interest for such Well set forth in Exhibit A;

                           (b) Division orders and sales contracts terminable
                           without penalty upon no more than six months notice
                           to the purchaser;

                           (c) Preferential rights to purchase and required
                           third party consents to assignment and similar
                           agreements with respect to which waivers or consents
                           are obtained from the appropriate parties, or the
                           appropriate time period for asserting any such right
                           has expired without an exercise of the right;

                           (d) Materialman's, mechanic's, repairman's,
                           employee's, contractor's, operators, tax, and other
                           similar liens or charges arising in the ordinary
                           course of business for obligations that are not
                           delinquent or that will be paid and discharged in the
                           ordinary course of business or if delinquent, that
                           are being contested in good faith by appropriate
                           action of which Buyer is notified in writing before
                           Closing;

                           (e) All rights to consent by, required notices to,
                           filings with, or other actions by governmental
                           entities in connection with the sale or conveyance of
                           oil and gas leases or interests therein if they are
                           routinely obtained subsequent to the sale or
                           conveyance;

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                           (f) Easements, rights-of-way, servitudes, permits,
                           surface leases and other rights in respect of surface
                           operations that do not materially interfere with the
                           oil and gas operations to be conducted on any Well or
                           Lease;

                           (g) All operating agreements, unit agreements, unit
                           operating agreements, pooling agreements and pooling
                           designations affecting the Properties that are set
                           forth in Exhibit D and are either of record in
                           Seller's chain of title or reflected or referenced in
                           Seller's files;

                           (h) Conventional rights of reassignment prior to
                           release or surrender requiting notice to the holders
                           of the rights;

                           (i) All rights reserved to or vested in any
                           governmental, statutory or public authority to
                           control or regulate any of the Properties in any
                           manner, and all applicable laws, rules and orders of
                           governmental authority;

                           (j) The terms and conditions of the Leases, and of
                           all agreements that are set forth in Exhibit D and
                           are of record in Seller's chain of title or reflected
                           or referenced in Seller's files;

                           (k) All other liens, charges, encumbrances,
                           contracts, agreements, instruments, obligations,
                           defects and irregularities affecting the Properties
                           which individually or in the aggregate are not such
                           as to interfere materially with the operation, value
                           or use of any of the Properties, do not prevent Buyer
                           from receiving the proceeds of production from any of
                           the Wells, do not reduce the interest of Seller with
                           respect to all oil and gas produced from any Well
                           below the Net Revenue Interest set forth in Exhibit A
                           for such Well, and/or do not materially increase the
                           portion of the costs and expenses relating to any
                           Well that Seller is obligated to pay above the
                           Working Interest set forth in Exhibit A for such
                           Well;

                           (l) Any Title Defect relating to a Well or Lease that
                           has existed for a period of at least five years
                           immediately prior to the Effective Date (simply by
                           virtue of its existence and not upon the occurrence
                           of a certain event) of giving a third party the right
                           to take any action or assert any claim that could
                           affect Seller's right to receive income or revenues
                           from the Well to which such defect relates, and with
                           respect to which Seller has been receiving income
                           from the affected Well without contest or under
                           notice of adverse claim for a period of at least five
                           years immediately prior to the Effective Date; and

                           (m) Any Title Defects Buyer may have expressly waived
                           in writing or which are deemed to have become
                           Permitted Encumbrances under Section 10.1.

                  10.1.5            "Defect Value" shall mean the amount by
                                    which the Allocated Value of any Well is
                                    reduced as a result of each Title Defect
                                    which is accepted by Seller or determined to
                                    be a Title Defect pursuant to Section 10.2.

                  10.1.6            "Allocated Value" shall mean, with respect
                                    to any Well, the value specified therefor on
                                    Exhibit A attached hereto.

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         10.2 DETERMINATION OF TITLE DEFECTS AND DEFECT VALUES. Within five (5)
         business days after Sellers receipt of the Title Defects Notice, Seller
         shall notify Buyer whether Seller agrees with Buyer's claimed Title
         Defects and/or the proposed Defect Values therefor ("Seller's
         Response"). If Seller does not agree with any claimed Title Defect
         and/or the proposed Defect Value therefor, then the parties shall enter
         into good faith negotiations and shall attempt to agree on such
         matters. If the parties cannot reach agreement concerning either the
         existence of a Title Defect or a Defect Value within ten (10) business
         days after Buyer's receipt of Seller's Response, upon either party's
         request, the parties shall mutually agree on and employ an attorney
         experienced in title examination in the state where the Properties are
         located ("Title Consultant") to resolve all points of disagreement
         relating to Title Defects and Defect Values; provided, however, that if
         at any time the Title Consultant so chosen fails or refuses to perform
         hereunder, a new Title Consultant shall be chosen by the parties. The
         cost of any such Title Consultant shall be borne 50% by Seller and 50%
         by Buyer. Each party shall present a written statement of its position
         on the Title Defect and/or Defect Value in question to the Title
         Consultant within five (5) business days after the Title Consultant is
         selected, and the Title Consultant shall make a determination of all
         points of disagreement in accordance with the terms and conditions of
         this Agreement within ten (10) business days of receipt of such
         position statements. The determination by the Title Consultant shall be
         conclusive and binding on the parties, and shall be enforceable against
         any party in any court of competent jurisdiction. If necessary, the
         Closing Date shall be deferred only as to those Properties affected by
         any unresolved disputes regarding the existence of a Title Defect
         and/or the Defect Value until the consultant has made a determination
         of the disputed issues with respect thereto and all subsequent dates
         and required activities with respect to any such Properties having
         reference to the Closing Date shall be correspondingly deferred;
         provided, however, that, unless Seller and Buyer mutually agree to the
         contrary, the Closing Date shall not be deferred in any event for more
         than sixty (60) days beyond the original Closing Date. All Properties
         as to which no such dispute(s) exist shall be conveyed to Buyer subject
         to the terms of this Agreement at Closing. Once the Title Consultant's
         determination has been expressed to both parties, Seller shall have
         five (5) business days in which to advise Buyer in writing which of the
         options available to Seller under Section 10.3 below Seller elects
         regarding each of the Properties as to which the Title Consultant has
         made a determination.

         10.3 REMEDIES FOR TITLE DEFECT. Seller shall have the right, but not
         the obligation, to cure any Title Defect accepted by Seller or
         determined to be a Title Defect pursuant to Section 10.2 above. With
         respect to any Title Defect that Seller elects not to cure or that
         Seller fails to cure at or prior to the Closing, Seller shall have the
         option to:

                  10.3.1            exclude the Property including pipelines and
                                    other personal property necessary to operate
                                    the particular well(s) subject to the Title
                                    Defect from this Agreement, in which event
                                    the Purchase Price shall be reduced by the
                                    Allocated Value of such Property, or

                  10.3.2            sell the Property subject to such Title
                                    Defect to Buyer and the Purchase Price shall
                                    be reduced by the Defect Value for such
                                    Title Defect. Any deductions shall first
                                    come from the deferred payments

                  10.3.3            No downward adjustment of the Purchase Price
                                    on account of Title Defects shall occur
                                    unless:

                           (a) the Defect Value determined in accordance with
                           this Article 10 of an individual Title Defect exceeds
                           $2,500.00, and

                                        9

<PAGE>   10

                           (b) the aggregate amount of the Defect Values
                           determined in accordance with this Article 10 exceeds
                           three percent (3%) of the Purchase Price ("Title
                           Basket Value").

         The amount of any such downward adjustment shall be the difference
         between the aggregate amount of Defect Values and the Title Basket
         Value. Should the aggregate Defect Values and/or the Allocated Values
         of excluded Properties exceed six percent (6%) of the Purchase Price,
         then Seller or Buyer shall have the option to terminate this Agreement,
         in which case neither party shall have any further liability or
         obligation to the other hereunder except as regards obligations imposed
         by any confidentiality agreement, which shall survive such termination
         and be enforceable in accordance with the terms thereof,'and Seller
         will promptly refund the Performance Deposit.

         10.4 PREFERENTIAL PURCHASE RIGHTS AND CONSENTS TO ASSIGN. Seller shall
         make a good faith effort to insure that all preferential purchase
         rights and consents to assign arising in connection with the assignment
         of the Properties to Buyer shall have been waived or obtained or shall
         have expired before or by the time of Closing; except those which are
         customarily obtained or received after Closing.

11.      CLOSING.

         11.1 THE CLOSING. The sale and purchase of the Properties pursuant to
         this Agreement shall be consummated (the "Closing") in Wichita, Kansas
         at the offices of Lario Oil & Gas Company on or before December 24,
         1999 (the Closing Date).

         11.2 CLOSING OBLIGATIONS. At the Closing, the following events shall
         occur, each event under the control of one party hereto being a
         condition precedent to the events under the control of the other party,
         and each event being deemed to have occurred simultaneously with the
         other events:

                  11.2.1            Seller shall execute and deliver to Buyer
                                    one or more instruments of assignment, in
                                    substantially the form of the Assignment,
                                    Bill of Sale and Conveyance set forth as
                                    Exhibit F hereto. Buyer shall record the
                                    Assignment as soon as reasonably practicable
                                    after the Closing and furnish Seller with a
                                    recorded copy thereof within thirty (30)
                                    days of such recordation.

                  11.2.2            Buyer shall deliver to Seller in immediately
                                    available funds (wire transfer), the
                                    Preliminary Amount. The "Preliminary Amount"
                                    shall be that amount to be determined by
                                    Seller prior to the Closing Date as an
                                    estimate of the final computation of the
                                    Final Purchase Price less the Performance
                                    Deposit. Seller shall provide Buyer a
                                    closing statement reflecting the Preliminary
                                    Amount at least two (2) business days prior
                                    to the Closing.

                  11.2.3            Seller and Buyer shall execute, acknowledge
                                    and deliver division orders, transfer orders
                                    or letters in lieu thereof directing all
                                    payors of the proceeds of production from
                                    the Properties to make payment of proceeds
                                    attributable to such production occurring on
                                    or after the Effective Date to Buyer.

                  11.2.4            Seller shall deliver to the Buyer possession
                                    of the Properties at the Closing.

12.      POST-CLOSING ADJUSTMENTS.

                                       10

<PAGE>   11

         12.1 FINAL SETTLEMENT STATEMENT. After the Closing Date, Seller shall
         prepare, in accordance with this Agreement and with generally accepted
         accounting principles consistently applied, a statement ("Final
         Settlement Statement"), a copy of which shall be delivered by Seller to
         Buyer no later than ninety (90) days after the Closing Date, setting
         forth each adjustment to the Purchase Price necessary to determine the
         Final Purchase Price and showing the calculation of such adjustments in
         accordance with Article 3. Buyer shall have forty-five (45) days after
         receipt of the Final Settlement Statement to review such statement and
         to provide written notice to Seller of Buyer's objection to any item on
         the statement. Buyer's notice shall clearly identify the item(s)
         objected to and the reasons and support for the objection(s). If Buyer
         does not provide written objection(s) within the 45-day period, the
         Final Settlement Statement shall be deemed correct and shall not be
         subject to further adjustment. If Buyer provides written objection(s)
         within the 45-day period, the Final Settlement Statement shall be
         deemed correct with respect to the items not objected to. Buyer and
         Seller shall meet to negotiate and resolve the objections within
         fifteen (15) days of Seller's receipt of Buyer's objections. If Buyer
         and Seller agree on all objections, the adjusted Final Settlement
         Statement shall be deemed correct and shall not be subject to Further
         adjustment. Any items not agreed to at the end of the 15-day period
         may, at either party's request, be resolved by arbitration in
         accordance with Section 12.2 below.

         12.2 ARBITRATION. If Seller and Buyer cannot agree upon the Final
         Settlement Statement, the firm of KPMG Peat Marwick LLP shall act as an
         arbitrator and decide all points of disagreement with respect to the
         Final Settlement Statement. The decision of KPMG Peat Marwick LLP on
         all such points shall be binding upon the parties. The costs and
         expenses of KPMG Peat Marwick LLP shall be borne fifty percent (50%) by
         Seller and fifty percent (50%) by Buyer.

         12.3 PAYMENT OF FINAL PURCHASE PRICE. If the Final Purchase Price is
         more than the Preliminary Amount, Buyer shall pay such difference to
         Seller in immediately available funds within five (5) business days
         after the parties have agreed upon the Final Settlement Statement. If
         the Final Purchase Price is less than the Preliminary Amount, Seller
         shall pay such difference to Buyer in immediately available funds
         within five (5) business days after the parties have agreed upon the
         Final Settlement Statement.

13.      ASSUMPTION OF CERTAIN OBLIGATIONS. Except as provided for in Section
18.6.1(a), at Closing, Buyer shall assume its share of all costs and liabilities
and discharge its share of all obligations of Seller under all leases, operating
agreements, production sales contracts, farmout agreements and other contracts
or agreements respecting the Properties or relating to the ownership or
operation of the Properties from and after the Effective Date.

14.      LIMITATION OF WARRANTIES. Anything in this Agreement to the contrary
notwithstanding, the Properties are being sold by Seller to Buyer without
recourse, Covenant, or warranty of any kind, express, implied, or statutory,
WITHOUT LIMITATION OF THE GENERALITY OF THE IMMEDIATELY PRECEDING SENTENCE,
SELLER CONVEYS THE PROPERTIES AS-IS, WHERE-IS AND WITH ALL FAULTS AND EXPRESSLY
DISCLAIMS AND NEGATES:

         (a)      ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY,

         (b)      ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR
                  PURPOSE, AND

         (c)      ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR
                  SAMPLES OF MATERIALS,

                                       11

<PAGE>   12

SELLER ALSO EXPRESSLY DISCLAIMS AND NEGATES ANY IMPLIED OR EXPRESS WARRANTY AT
COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO THE ACCURACY OF ANY OF THE
INFORMATION FURNISHED WITH RESPECT TO THE EXISTENCE OR EXTENT OF RESERVES OR THE
VALUE OF THE PROPERTIES BASED THEREON OR THE CONDITION OR STATE OF REPAIR OF ANY
OF THE PROPERTIES. THIS DISCLAIMER AND DENIAL OF WARRANTY ALSO EXTENDS TO ANY
EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY AS TO THE VOLUMES AND PRICES BUYER
AND SELLER ARE OR WILL BE ENTITLED TO RECEIVE FROM PRODUCTION OF OIL, GAS OR
OTHER SUBSTANCES FROM THE PROPERTIES, IT BEING UNDERSTOOD THAT ALL RESERVE,
PRICE AND VALUE ESTIMATES UPON WHICH BUYER HAS RELIED OR IS RELYING HAVE BEEN
DERIVED BY INDIVIDUAL EVALUATION OF BUYER.

THE REPRESENTATIONS AND WARRANTIES MADE BY SELLER AND BUYER IN ARTICLES 4 AND 5
SHALL NOT SURVIVE CLOSING. AFTER CLOSING, NEITHER PARTY SHALL HAVE ANY RIGHTS OR
CLAIMS AGAINST THE OTHER PARTY BASED UPON THE BREACH OF ANY SUCH REPRESENTATIONS
OR WARRANTIES.

15.      CROSS-INDEMNIFICATION. Except as expressly limited elsewhere in this
Agreement:

         15.1 Buyer agrees to indemnify and hold Seller harmless from and
         against any and all liability, loss, cost and expense (including,
         without limitation, court costs and reasonable attorneys' fees) that
         are attributable to the interest in the Properties conveyed to Buyer
         and are attributable to periods of time on or after the Effective Date
         or that are attributable to a breach by Buyer of any of its surviving
         representations, warranties or covenants hereunder, and

         15.2 Seller agrees to indemnify and hold Buyer harmless from and
         against any and all liability, loss, cost and expense (including,
         without limitation, court costs and reasonable attorneys' fees) that
         are attributable to the interest in the Properties conveyed to Buyer
         and are attributable to periods of time before the Effective Date or
         that are attributable to a breach by Seller of any of its surviving
         representations, warranties or covenants hereunder.

16.      CASUALTY LOSS. Prior to Closing, Seller shall promptly notify Buyer of
any Casualty Loss of which Seller becomes aware. "Casualty Loss" shall mean,
with respect to all or any material portion of a Property, any destruction by
fire, blowout or other casualty (above or below the ground) or any taking, or
pending or threatened taking, in condemnation or under the right to eminent
domain of any Property or portion thereof occurring between the time this
Agreement is executed and the Closing Date. If any Casualty Loss occurs, Seller
shall transfer to Buyer its interest in such Property notwithstanding such
Casualty Loss and transfer to Buyer its interest in such Property insurance
proceeds, claims, awards and other payments arising out of such Casualty Loss.
Seller shall not voluntarily compromise, settle or adjust any amounts payable by
reason of any Casualty Loss without first obtaining the written consent of
Buyer.

17.      TERMINATION AND REMEDIES.

         17.1 TERMINATION. Without limiting any other legal or equitable
         remedies available to Seller, if the Closing has not occurred on or
         prior to December 24, 1999, and Seller is not responsible for the delay
         in closing, Seller may terminate this Agreement, in which case it shall
         give written notice of the termination to Buyer and Seller shall retain
         the Performance Deposit.

         17.2 SOLE REMEDY OF BUYER PRIOR TO CLOSING. If at any time prior to
         Closing, a material representation or warranty made herein by Seller is
         incorrect or if Seller fails to fully and timely comply with any of
         Seller's obligations as set forth herein or as required by applicable
         law, Buyer's

                                       12

<PAGE>   13

         sole and exclusive remedy against Seller shall be to terminate this
         Agreement (unless an alternative remedy shall be mutually agreed upon
         between Buyer and Seller); provided, however, if such a breach consists
         of Seller intentionally refusing to execute and deliver the documents
         referred to in Section 11.2, Buyer may seek injunctive relief requiring
         Seller to execute and deliver such documents in accordance with the
         terms of this Agreement. In the event this Agreement is terminated in
         accordance with this Section 17.2, Seller will promptly refund the
         Performance Deposit.

18.      ENVIRONMENTAL MATTERS.

         18.1 PRESENCE OF WASTES, NORM, HAZARDOUS SUBSTANCES, AND ASBESTOS.
         Buyer acknowledges that the Properties have been used to explore for,
         develop and produce oil and gas, and that spills of wastes, crude oil,
         produced water, hazardous substances, and other materials may have
         occurred thereon. Additionally, the Properties, including production
         equipment, may contain asbestos, hazardous substances, or Naturally
         Occurring Radioactive Material ("NORM"). NORM may affix or attach
         itself to the inside of wells, materials, and equipment as scale or in
         other forms, and NORM-containing material may have been buried or
         otherwise disposed of on the Properties. Special procedures may be
         required for remediating, removing, transporting, and disposing of
         asbestos, NORM, hazardous substances, and other materials from the
         Property, and Buyer assumes its share of all liability for the
         assessment, remediation, removal, transportation, and disposal of these
         materials and associated activities in accordance with the applicable
         rules, regulations, and requirements of governmental agencies.

         18.2 ADVERSE ENVIRONMENTAL CONDITION. As used in the following
         Sections, "Adverse Environmental Condition" means:

                  (a)      any contamination (exclusive of NORM present in or on
                           any Property) or condition exceeding
                           currently-allowed regulatory limits and not otherwise
                           permanently authorized by permit or law, resulting
                           from any discharge, release, disposal, production,
                           storage, treatment, or any other activities on, in or
                           from any Property, or the migration or transportation
                           from other lands to any Property, prior to the
                           Effective Date, of any wastes, pollutants,
                           contaminants, hazardous materials or other materials
                           or substances subject to regulation relating to the
                           protection of the environment, including, but not
                           limited to, the Clean Air Act, the Comprehensive
                           Environmental Response, Compensation and Liability
                           Act of 1980 ("CERCLA"), the Federal Water Pollution
                           Control Act, the Safe Drinking Water Act, the Toxic
                           Substance Control Act, The Hazardous and Solid Waste
                           Amendments Act of 1954, the Superfund Amendments and
                           Reauthorization Act of 1986, the Hazardous Materials
                           Transportation Act, the Clean Water Act, the National
                           Environmental Policy Act, the Endangered Species Act,
                           the Fish and Wildlife Coordination Act, the National
                           Historic Preservation Act, and the Oil Pollution Act
                           of 1990, as well as any state and local regulation or
                           law governing the same, similar or related matters,
                           and

                  (b)      any such contamination or condition temporarily
                           authorized by permit fee agreement or other
                           arrangement.

         18.3 ENVIRONMENTAL ASSESSMENT. After the execution of this Agreement,
         Buyer shall have the opportunity to conduct at its sole risk and
         expense an environmental assessment of the Properties. Seller will
         provide reasonable access for this purpose to Properties operated by
         Seller; for any Property not operated by Seller, however, Buyer must
         contact the operator of any such non- operated Property directly. Buyer
         or any of its representatives and agents must comply with Seller's

                                       13

<PAGE>   14

         environmental and safety rules and policies while on Seller's
         Properties. Buyer agrees it will not disclose any information obtained
         in its environmental assessment to third parties unless agreed to in
         writing by Seller or unless such disclosure is expressly required by
         applicable law or regulation or is compelled pursuant to legal process
         of any court or governmental authority. Buyer will notify Seller in
         advance of any such disclosure and will furnish Seller copies of all
         materials to be disclosed prior to any disclosure thereof to third
         parties. As soon as possible after Buyer's receipt thereof, Buyer shall
         forward to Seller copies of all reports, data, analysis, test results,
         remediation cost estimates, and recommended remediation procedures or
         other information concerning or derived from Buyer's environmental
         assessment.

         18.4 NOTICE OF ADVERSE ENVIRONMENTAL CONDITIONS. Buyer shall notify
         Seller in writing of any claimed Adverse Environmental Condition not
         less than ten (10) business days prior to Closing ("Environmental
         Defects Notice"). The Environmental Defects Notice shall (a) set forth
         in reasonable detail the Well and/or Lease with respect to which a
         claimed Adverse Environmental Condition is made, (b) the nature of such
         claimed Adverse Environmental Condition, and (c) Buyer's proposed
         calculation of the cost to remediate each claimed Adverse Environmental
         Condition ("Remediation Value") Buyer shall absolutely and forever
         waive its right to assert any claim or liability against Seller arising
         out of or in any way related to any Adverse Environmental Condition not
         set forth in the Environmental Defects Notice.

         18.5 DETERMINATION OF ADVERSE ENVIRONMENTAL CONDITIONS AND REMEDIATION
         VALUES. Within five (5) business days after Seller's receipt of the
         Environmental Defects Notice, Seller shall notify Buyer whether Seller
         agrees with Buyer's claimed Adverse Environmental Conditions and/or the
         Remediation Value ("Seller's Environmental Response"). If Seller does
         not agree with any claimed Adverse Environmental Condition and/or the
         Remediation Value, then the parties shall enter into good faith
         negotiations and shall attempt to agree on such matters. If the parties
         cannot reach agreement concerning either the existence of an Adverse
         Environmental Condition or the Remediation Value within ten (10)
         business days after Buyers receipt of Seller's Environmental Response,
         upon either party's request, the parties shall mutually agree on a
         consultant experienced in environmental matters in the state where the
         Properties are located ("Environmental Consultant") to resolve all
         points of disagreement with respect to such matters. If at any time any
         Environmental Consultant so chosen fails or refuses to perform
         hereunder, a new Environmental Consultant shall be chosen by the
         parties. The cost of any such consultant shall be borne 50% by Seller
         and 50% by Buyer. Each Party shall present a written statement of its
         position on the Adverse Environmental Condition and/or the Remediation
         Value in question to the consultant within five (5) business days after
         the Environmental Consultant is selected, and the Environmental
         Consultant shall make a determination of all points of disagreement in
         accordance with the terms and conditions of this Agreement within ten
         (10) business days of receipt of such position statements. The
         determination by the Environmental Consultant shall be conclusive and
         binding on the parties, and shall be enforceable against any party in
         any court of competent jurisdiction. If necessary, the Closing Date
         shall be deferred only as to those Properties affected by any
         unresolved disputes regarding the existence of a Adverse Environmental
         Condition and/or the Remediation Value until the Environmental
         Consultant has made a determination of the disputed issues with respect
         thereto and all subsequent dates and required activities with respect
         to any such Properties having reference to the Closing Date shall be
         correspondingly deferred; provided, however, that, unless Seller and
         Buyer mutually agree to the contrary, the Closing Date shall not be
         deferred in any event for more than sixty (60) days beyond the original
         Closing Date. All Properties as to which no such dispute(s) exist shall
         be conveyed to Buyer subject to the terms of this Agreement at Closing.
         Once the Environmental Consultant's determination has been expressed to
         both parties, Seller shall have five (5) business days in which to
         advise Buyer in writing which of the options available to Seller under

                                       14

<PAGE>   15

         Section 19.6 below Seller elects regarding each of the Properties as to
         which the consultant has made a determination.

         18.6 REMEDIES FOR ADVERSE ENVIRONMENTAL CONDITIONS.

                  18.6.1            As to any Adverse Environmental Condition
                                    accepted by Seller or determined to be an
                                    Adverse Environmental Condition, Seller
                                    shall have the election to:

                           (a) remediate such Adverse Environmental Condition at
                           Seller's sole cost in accordance with applicable
                           environmental laws, and there shall be no adjustment
                           to the Purchase Price in respect of such Adverse
                           Environmental Condition and the provisions of Section
                           18.7 shall thereafter apply in all respects;

                           (b) reduce the Purchase Price by the applicable
                           remediation Value, which in no event shall exceed the
                           Allocated Value of the Unit and/or Well affected by
                           such Adverse Environmental Condition, in which event
                           Seller shall have no other or further obligation or
                           liability in respect of such Adverse Environmental
                           Condition and the provisions of Section 18.7 shall
                           thereafter apply in all respects; or

                           (c) delete from this Agreement the Property that
                           contains the Adverse Environmental Condition and
                           adjust the Purchase Price by the Allocated Value of
                           such Property.

                  18.6.2            No downward adjustment of the Purchase Price
                                    on account of Adverse Environmental
                                    Conditions shall occur unless:

                           (a) the Remediation Value determined in accordance
                           with this Article 19 of an individual Adverse
                           Environmental Condition exceeds $5,000.00, and

                           (b) unless the aggregate sum of all Remediation
                           Values exceeds three percent (3%) of the Purchase
                           Price (Environmental Basket Value) and the amount of
                           downward adjustment shall be the difference between
                           the aggregate sum of all Remediation Values and the
                           Environmental Basket Value.

                           Should the aggregate sum of the Remediation Values
                           exceed six percent (6%) of the Purchase Price, then
                           Seller or Buyer shall have the option to terminate
                           this Agreement, in which case neither party shall
                           have any further liability or obligation to the other
                           hereunder except as regards obligations imposed by
                           any confidentiality agreement, which shall survive
                           such termination and be enforceable in accordance
                           with the terms thereof, and Seller will promptly
                           refund the Performance Deposit.

                  18.6.3            If Seller elects 18.6.1(a) above, Seller
                                    will exercise all reasonable efforts and
                                    diligence to complete the remediation work
                                    within six (6) months of the Closing Date,
                                    but any failure by Seller to complete such
                                    remediation efforts by such time shall not
                                    relieve Seller of its duty to satisfy its
                                    obligation hereunder. During such
                                    remediation work, Seller shall hold the
                                    Remediation Value in escrow.

         18.7 BUYER'S INDEMNIFICATION OF ADVERSE ENVIRONMENTAL CONDITIONS.
         Notwithstanding anything contained in Article 16, except for the costs
         associated with Seller's

                                       15

<PAGE>   16

         remediation of any Adverse Environmental Conditions pursuant to Section
         18.6.1(a) above, Buyer and Seller, as to their respective interests,
         shall release, defend, indemnify, and hold harmless the other party
         from and against any and all claims, demands, fines/penalties, causes
         of action, liabilities and obligations, and all costs and expenses
         (including, without limitation, reasonable attorneys' fees and court
         costs) associated with all Adverse Environmental Conditions, including,
         without limitation, any such conditions arising out of or relating to
         any discharge, release, disposal, production, storage, treatment or any
         activities on, in or from its interest in the Properties, or the
         migration or transportation from any other lands to the Properties,
         whether before or after the Effective Date, of materials or substances
         that are at present, or become in the future, subject to regulation
         under federal, state or local laws or regulations, whether such laws or
         regulations now exist or are hereafter enacted, INCLUDING, WITHOUT
         LIMITATION, ANY CLAIMS, DEMANDS, CAUSES OF ACTION, LIABILITIES, OR
         OBLIGATIONS ARISING IN WHOLE OR IN PART FROM THE SOLE OR CONCURRENT
         NEGLIGENCE OR STRICT LIABILITY OF SELLER. BUYER HEREBY RELEASES SELLER
         FORM AND AGAINST ANY AND ALL CLAIMS FOR CONTRIBUTION UNDER CERCLA
         AND/OR ANY OTHER ENVIRONMENTAL LAW OR REGULATION.

19. SELLER'S ELECTION TO EFFECT IRC SECTION 1031 EXCHANGE. In the event Seller
so elects, Buyer agrees to accommodate Seller in effecting a tax-deferred
exchange under Internal Revenue code Section 1031, as amended. Seller shall have
the right to elect this tax-deferred exchange, Buyer agrees to execute
additional escrow instructions, documents, agreements, or instruments to effect
the exchange, provided that Buyer shall incur no additional costs, expenses,
fees or liabilities as a result of or connected with the exchange.

20. OPERATING AGREEMENT. Attached hereto as Exhibit "E" is an Operating
Agreement that shall govern and control operations of all Wells listed on
Exhibit "A" that are operated by Seller. This Operating Agreement shall become
effective upon the effective date. Buyer hereby acknowledges this Operating
Agreement and agrees to be bound accordingly.

21. FURTHER ASSURANCES. After the Closing, Seller and Buyer shall execute,
acknowledge, and deliver, or cause to be executed, acknowledged and delivered,
such instruments and take such other action as may be reasonably necessary or
advisable to carry out their obligations under this Agreement and under any
exhibit, document, certificate or other instrument required by or necessary for
the transactions contemplated by this Agreement that are customarily obtained
after Closing, provided that Seller shall not be required to expend any funds to
obtain such approvals and consents.

22. NOTICES. All notices required or permitted under this Agreement shall be in
writing and shall be delivered personally or by telecopier as follows:

         SELLER:           Lario Oil & Gas Company
                           301 South Market Street
                           Wichita, Kansas 67202
                           Telephone: (316) 265-561        Fax: (316) 265-5610
                           Attention:  E. D. Stinson
                           Vice President - Land & Legal

         BUYER:            Toreador Exploration & Production Inc.
                           4809 Cole Avenue, Suite 108
                           Dallas, TX 75205
                           Telephone: (214) 559-3933       Fax:  (214) 559-3945
                           Attention:  Edward C. Marhanka
                           Vice President - Operations

                                       16

<PAGE>   17

or to such other place within the United States of America as either Seller or
Buyer may designate as to themselves by written notice to the other. All notices
given by personal delivery or mail shall be deemed received upon the date of
actual receipt at the appropriate address. Notice given by fax shall be
effective upon actual receipt if received prior to 5 p.m. during normal business
days or at the beginning of the next business day after receipt if received
after 5 p.m. All notices by fax shall be confirmed promptly after transmission,
by certified mail or personal delivery.

23. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Kansas.

24. ASSIGNMENT. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto; it shall not, however, be assignable by Buyer
without Seller's prior written consent.

25. ENTIRE AGREEMENT; AMENDMENTS; WAIVERS. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof,
superseding all prior negotiations, discussions, agreements and understandings,
whether oral or written, relating to such subject matter. This Agreement may not
be amended and no rights hereunder may be waived except by a written document
signed by the party to be charged with such amendment or waiver. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions hereto (whether or not similar) nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.

26. HEADINGS. The headings of the articles and sections of this Agreement and
any listing of its contents are for guidance and convenience of reference only
and shall not limit or otherwise affect any of the terms or provisions of this
Agreement. Where the context so admits, words importing the singular number only
shall include the plural, and likewise words importing a gender shall include
any other gender

27. EXPENSES, FEES AND TAXES. Each of the parties hereto shall pay its own fees
and expenses incident to the negotiation and preparation of this Agreement and
consummation of the transactions contemplated hereby, including broker fees.
Buyer shall be responsible for the cost of all fees for the recording of
transfer documents. All other costs shall be borne by the party incurring them.
Notwithstanding anything to the contrary herein, it is acknowledged and agreed
by and between Seller and Buyer that the Purchase Price excludes any sales taxes
or other taxes in connection with the sale of property pursuant to this
Agreement. If a determination is ever made that a sales tax or other transfer
tax applies, Buyer shall be liable for such tax as well as any applicable
conveyance, transfer and recording fees, and real estate transfer stamps or
taxes imposed on any transfer of property pursuant to this Agreement Buyer shall
release, defend, indemnify and hold harmless Seller with respect to the payment
of any of such taxes, including any interest or penalties assessed thereon.

28. LAWS AND REGULATIONS. From and after the Closing:

         28.1 Buyer shall comply with all applicable laws, ordinances, rules and
         regulations and shall properly obtain and maintain all permits required
         by public authorities with regard to the Properties, and shall provide
         and maintain with all applicable regulatory agencies all required
         bonds, and

         28.2 Buyer shall assume it's share of Seller's obligations with regard
         to abandonment of all existing unplugged wells, whether producing or
         nonproducing, and abandonment of the leasehold property including,
         where applicable, the plugging of wells and the restoration of the
         surface as completely as practicable and/or in compliance with all
         applicable laws, rules, regulations and in

                                       17

<PAGE>   18

         compliance with all leases and other agreements affecting the
         Properties, and shall release, defend, indemnify and hold harmless
         Seller with respect to any and all of these its share of such
         obligations.

     The obligations set forth hereinabove shall survive the Closing and Buyer
     shall remain liable therefor as regards Seller even if Buyer shall assign,
     sell or transfer the Properties to a third party.

32. EXHIBITS. The following Exhibits are incorporated herein and are a part
hereof.

         Exhibit A -       Wells
         Exhibit B -       Leases, Right-of-Way, and Easements
         Exhibit C -       Pipelines and Other Personal Property
         Exhibit D -       Key Contracts
         Exhibit E -       Operating Agreement
         Exhibit F -       Preferential Purchase Rights/Consents
         Exhibit G -       Litigation and Claims
         Exhibit H -       Form of Assignment, Bill of Sale and Conveyance

                                       18

<PAGE>   19

Executed as of the date set forth above.

                                     SELLER

                                     Lario Oil & Gas Company

                                     By: /s/ E.D. STINSON
                                         -----------------------------------
                                         E. D. Stinson
                                         Vice President - Land & Legal

                                     BUYER

                                     Toreador Exploration & Production Inc.

                                     By: /s/ G. T. GRAVES
                                         -----------------------------------
                                         G. T. Graves
                                         President

                                       19

<PAGE>   20

                                EXHIBIT A - WELLS

 Attached to and made a part of that certain Purchase and Sale Agreement dated
               November 24, 1999, By and Between Seller and Buyer

<TABLE>
<CAPTION>
                              KNOWN
         WELL NAME           LIMITS         LOCATION         COUNTY   ST
------------------------     ------   -------------------   -------- -----
<S>                          <C>      <C>   <C>      <C>     <C>     <C>
Baker # 15-6                    4      15    23 S    34 W    Finney   KS
Baker # 15-8                    4      15    23 S    34 W    Finney   KS
Barrett # 1 SWD                 1      20    22 S    34 W    Finney   KS
Barrett # 2-20                  1      20    22 S    34 W    Finney   KS
Barrett # 3-20                 1,3     20    22 S    34 W    Finney   KS
Barrett # 4-20                  1      20    22 S    34 W    Finney   KS
Barrett # 6-20 (PUD)            1      20    22 S    34 W    Finney   KS

Burg # 20-1                    1,6     20    22 S    34 W    Finney   KS
Burg # 20-2                    1,6     20    22 S    34 W    Finney   KS
Burg # 20-3                    1,6     20    22 S    34 W    Finney   KS
Burg # 20-4                    1,6     20    22 S    34 W    Finney   KS
Burg # 20-5                    1,6     20    22 S    34 W    Finney   KS

Burg # 20-6 (PUD)              1,6     20    22 S    34 W    Finney   KS

Burg, KL # 2-20                 2      20    22 S    34 W    Finney   KS
Burg, KL # 1                    2      20    22 S    34 W    Finney   KS
Burg, KL # 3                    2      20    22 S    34 W    Finney   KS
Burg, KL # 4                    2      20    22 S    34 W    Finney   KS
Joss # 2-36                     1      36    23 S    34 W    Finney   KS
Ruby Jean # 1-34               1,5     34    22 S    34 W    Finney   KS
Ruby Jean # 2-34               1,5     34    22 S    34 W    Finney   KS
Ruby Jean # 3-34               1,5           22 S    34 W    Fitiney  KS
Six M Farms # 23-1              1      23    22 S    34 W    Finney   KS
Tate # 1                       1,6     19    22 S    34 W    Finney   KS

<CAPTION>
                                                            WORKING       NET REVENUE    ALLOCATED
      WELL NAME            PRODUCING ZONES                 INTEREST        INTEREST      VALUE (M$)
-------------------- --------------------------- -----    -----------     -----------    ----------
<S>                  <C>                         <C>      <C>             <C>            <C>
Baker # 15-6         Morrow/Mississippi                    0.75000000      0.65625000    $   52.457
Baker # 15-8         Mississippi/Morrow                    1.00000000      0.79687500    $   13.978
Barrett # 1 SWD      Arbuckle                              1.00000000      0.00000000           -0-
Barrett # 2-20       St. Louis/Lansing G                   1.00000000      0.74942717    $  195.883
Barrett # 3-20       Marmalon/Fort Scott                   1.00000000      0.81250000    $  112.407
Barrett # 4-20       St. Louis                             1.00000000      0.74942717    $  429.490
Barrett # 6-20 (PUD)                              BPO      1.00000000      0.80411475    $  407.294
                                                  APO      1.00000000      0.74942717
Burg # 20-1          Lansing G                             1.00000000      0.75255227    $  146.669
Burg # 20-2          Marmalon/Lansing G                    1.00000000      0.75198919    $  537.047
Burg # 20-3          Miss/Marm/Pwn/Ft Sc/Atoka             1.00000000      0.76875000    $  166.003
Burg # 20-4          Marrnalon/Morrow/Fort Scott           1.00000000      0.76875002    $  246.077
Burg # 20-5          Marm/Lnsg H/Pwn/Ft S/Chrk    BPO      1.00000000      0.80608278    $  592.891
                                                  APO      1.00000000      0.75255317
Burg # 20-6 (PUD)                                 BPO      1.00000000      0.80608278    $  161.487
                                                  APO      1.00000000      0.75255317
Burg, KL # 2-20      Marm/Lans D/Lans G                    0.00000000      0.00312500    $     .496
Burg, KL # 1         Marm/Lans H/Lans G                    0.00000000      0.00312500    $     .496
Burg, KL # 3         Lans H/Lans G/Lans D                  0.00000000      0.00312500           -0-
Burg, KL # 4         Marm/KC/Lans H/Lans G                 0.00000000      0.00312500    $     .496
Joss # 2-36          Council Grove                         0.49750000      0.38089844    $   36.720
Ruby Jean # 1-34     St. Louis/Marmaton/Ft Scott           0.40000000      0.30376090    $   67.574
Ruby Jean # 2-34     Lansing                               0.40000000      0.30376093    $   51.737
Ruby Jean # 3-34     St. Louis/Fort Scott/Marm             0.40000000      0.30376093    $   66.006
Six M Farms # 23-1   Morrow                                1.00000000      0.83333333    $    2.018
Tate # 1             Lansing H                             1.00000000      0.75255225    $   57.323
</TABLE>

                                                          EXHIBIT A: PAGE 1 OF 2

<PAGE>   21

<TABLE>
<CAPTION>
                             Known
         Well Name           Limits         Location         County   ST
------------------------    -------    ------------------    ------  ----
<S>                         <C>        <C>   <C>    <C>      <C>     <C>
Tate # 19-2                    1,6     19    22 S   .34 W    Finney   KS
Tate # 19-3                    1,6     19    22 S    34 W    Finney   KS
Tate A # 1                     1,7     19    22 S    34 W    Finney   KS
Tate A # 2                     1,7     19    22 S    34 W    Finney   KS
Tate A # 19-3                  1,7     19    22 S    34 W    Finney   KS
Tate A # 19-4 (PUD)            1,7     19    22 S    34 W    Finney   KS
Turrentine # 19-3               2      19    22 S    34 W    Finney   KS
Turrentine # 19-4               2      19    22 S    34 W    Finney   KS
Webdell #28-1                   1      28    22 S    34 W    Finney   KS

<CAPTION>
                                                            Working       Net Revenue    Allocated
         Well Name          Producing Zones                 Interest        Interest     Value (M$)
---------------------  -------------------------  -----    ----------     -----------    -----------
<S>                    <C>                        <C>      <C>            <C>            <C>
Tate # 19-2            Lansing/Marm/Miss                   1.00000000      0.75255224    $  450.073
Tate # 19-3            Atoka/Lansing D                     1.00000000      0.75255224    $  602.488
Tate A # 1             Lansing/Marm/Miss                   1.00000000      0.76718750    $  145.020
Tate A # 2             Marmaton/Lansing G                  1.00000000      0.76718750    $  237.434
Tate A # 19-3          Lansing D                           1.00000000      0.76718750    $   71.371
Tate A # 19-4 (PUD)    Marmaton/Lansing/KC                 1.00000000      0.76718750    $   68.294
Turrentine # 19-3      Lansing B,D,G, H/St Louis           1.00000000      0.75000000    $  215.902
Turrentine # 19-4      St. Louis/Atoka/Lans                1.00000000      0.75000000    $  358.404
Webdell #28-1          St. Louis/Marmaton           BPO    1.00000000      0.76562500    $    6.465
                                                    APO    1.00000000      0.71093750
</TABLE>

(PUD) = Proved Undeveloped. Subject to fulfillment of obligations under
applicable agreement(s).

Known Limits definitions:

1 = All rights below 3,000 feet only.
2 = Royalty Interest
3 = As to Oil and Casinghead Gas only - all depths.
4 = Below the base of the Heebner Shale to total depth of the Baker # 15-6.
5 = Lario owns additional interest not subject to this sale.
6 = NRI includes Royalty interest of .0031250
7 = NRI includes Royalty interest of .0015625

                                                          EXHIBIT A: PAGE 2 OF 2

<PAGE>   22

                 EXHIBIT B - LEASES, RIGHTS OF WAY AND EASEMENTS

    Attached to and made a part of that certain Purchase and Sale Agreement
            dated November 24, 1999, By and Between Seller and Buyer

<TABLE>
<CAPTION>
               INT
LEASE NUMBER   TYPE    LESSOR/LESSEE                        DESCRIPTION
----------------------------------------------------------------------------------------------------
                                                           ALL IN FINNEY COUNTY, KANSAS
<S>            <C>     <C>                                  <C>      <C>
KS6063-03-A    OG      J R Bosworth & Hettie H Bosworth     22S-34W: Sec 27 - W/2NE/4
                       Ben F Brack

KS6251-01-A    OG      Clara L Cormack & F.D. Cormack       22S-34W: Sec 34 - W/23W/4
                       Champlin Refining Company

KS7949-01-A    OG      Myrtipse Dixit Ltd Partnership       22S-34W: Sec 12 - NW/4
                       Sonat Exploration Company

KS7949-01-B    OG      Diaden Energy Resources              22S-34W: Sec 12 - NW/4
                       Sonat Exploration Company

KS7949-01-C    OG      Eltrude Elliott Hall                 22S-34W: Sec 12 - NW/4
                       Sonat Exploration Company

KS7950-01-A    OG      Janet M Barlow Et Al                 22S-34W: Sec 13 - SE/4
                       J Fred Hambright

KS7951-01-A    OG      William Easton Hutchinson            22S-34W: Sec 19 - W/2SE/4
                       Cities Service Oil Company

KS7951-01-B    OG      William M Turrentine Et Ux           22S-34W: Sec 19 - NW/4SE/4 & SW/4SE/4
                       J Carson Rockhill

KS7951-01-C    OG      Evelyn T Vaughn Et Vir               22S-34W: Sec 19 - NW/4SE/4 & SW/4SE/4
                       J Carson Rockhill

KS7952-01-A    OG      A C Maddux & Christabelle Maddux     22S-34W: Sec 19 - NE/4NE/4
                       J D Long

KS7953-01-A    OG      Lenora V Tate & George H Tate        22S-34W: Sec 19 - SE/4NE/4
                       J D Long

<CAPTION>
                        LEASE           EXPIRATION        RECORDED
LEASE NUMBER            DATE            DATE            BOOK    PAGE
--------------------------------------------------------------------
<S>                     <C>             <C>             <C>     <C>
KS6063-03-A             21-Mar-46       3-Mar-66        15       333

KS6251-01-A             31-Jul-49       1-Jan-54        19       323

KS7949-01-A             29-Jan-97       29-Jan-00       206      108

KS7949-01-B             29-Jan-97       29-Jan-00       206      106

KS7949-01-C             29-Jan-97       29-Jan-00       206      107

KS7950-01-A             20-Jan-97       20-Jan-00       205      96

KS7951-01-A             24-Aug-43       24-Aug-53       12       596

KS7951-01-B             29-Nov-84                       57       472

KS7951-01-C             29-Nov-84                       57       475

KS7952-01-A             24-Feb-44       24-Feb-54       13       138

KS7953-01-A             12-Apr-44       12-Apr-54       13       363
</TABLE>

                                                          EXHIBIT B: PAGE 1 OF 4

<PAGE>   23

<TABLE>
<CAPTION>
                   INT
LEASE NUMBER       TYPE    LESSOR/LESSEE                                 DESCRIPTION
---------------------------------------------------------------------------------------------------------------
<S>                <C>     <C>                                           <C>      <C>
KS7953-02-A        OG      Lenora V Tate & George H Tate                 22S-34W: Sec 19 - E/2SE/4
                           J D Long

KS7955-01-A        OG      Mildred Ardis Cole & Tommy R. Cole            22S-34W: Sec 19 - NW/4
                           Wint Harris

KS7955-01-B        OG      Donald D Eskelund & Patricia A Eskelund       22S-34W: Sec 19 - NW/4
                           Wint Harris

KS7955-01-C        OG      LaRue A Horton & Dick Horton                  22S-34W: Sec 19 - NW/4
                           Wint Harris

KS7956-01-A        OG      George F Burg                                 22S-34W: Sec 20 - E/2NE/4 & E/2NW/4
                           J D Long

KS7957-01-A        OG      Emeline Barrett & James E Barrett             22S-34W: Sec 20 - W/2SW/4
                           R J Rhynalds

KS7958-01-A        OG      Larry M Barrett, Testementary Trust           22S-34W: Sec 20 - E/2SE/4

KS7959-01-A        OG      The Kearney County Farms Irriga               22S-34W: Sec 19 - Lots 3 & 4 of SW/4
                           Wint Harris

KS7960-01-A        OG      Six M Farms Inc                               22S-34W: Sec 22 - W/2NW/4
                           J Fred Hambright

KS7962-01-A        OG      Esther L Nellans                              22S-34W: Sec 22 - SE/4
                           J Fred Hambright

KS7963-01-A        OG      Esther L Nellans                              22S-34W: Sec 22 - NE/4
                           J Fred Hambright

KS7970-01-A        OG      Six M Farms Inc                               22S-34W: Sec 23 - E/2NW/4
                           J Fred Hambright

KS7973-01-A        OG      Mae Anderson                                  22S-34W: Sec 28 - E/2SE/4
                           R J Rhynalds

<CAPTION>
                         LEASE           EXPIRATION        RECORDED
LEASE NUMBER             DATE            DATE            BOOK     PAGE
----------------------------------------------------------------------
<S>                      <C>             <C>             <C>      <C>
KS7953-02-A              12-Apr-44       12-Apr-54       13       363

KS7955-01-A              11-Sep-90       11 -Sep-92      88       656

KS7955-01-B              11-Sep-90       11 -Sep-92      88       655

KS7955-01-C              11-Sep-90       11 -Sep-92      88       654

KS7956-01-A              22-Feb-44       22-Feb-54       13       146

KS7957-01-A              4-Apr-44        4-Apr-54        13       269

KS7958-01-A              17-Feb-96       1 -Mar-97       184      197

KS7959-01-A              13-Oct-90                       88       652

KS7960-01-A              12-Oct-95       12-Oct-98       IT7      362

KS7962-01-A              21-Jan-97       21-Jan-00       204      112

KS7963-01-A              21-Jan-97       21-Jan-00       204      113

KS7970-01-A              12-Oct-95       12-Oct-98       177      370

KS7973-01-A              28-Feb-44       28-Feb-54       13       161
</TABLE>

                                                          EXHIBIT B: PAGE 2 OF 4

<PAGE>   24

<TABLE>
<CAPTION>
                   INT
LEASE NUMBER       TYPE    LESSOR/LESSEE                                 DESCRIPTION
-----------------------------------------------------------------------------------------------------------------
<S>                <C>     <C>                                           <C>      <C>
KS7974-01-A        OG      Mae Anderson                                  22S-34W: Sec 28 - E/2SW/4
                           R J Rhynalds

KS7975-01-A        OG      G H Forney & Carolyn Forney                   22S-34W: Sec 29 - NW/4
                           J D Long

KS7976-01-A        OG      Pauline S Hope & Clifford R Hope Et Al        22S-34W: Sec 33 - E/2SW/4
                           R J Rhynalds

KS7976-01-B        OG      Magnolia Petroleum Co                         22S-34W: Sec 33 - E/2SW/4
                           Warren Petroleum Corporation

KS7977-01-A        OG      Margaret Vollmers Et Al                       22S-34W: Sec 33 - W/2NE/4, W/2NW/4;
                           R J Rhynalds                                  E/2SE/4

KS7979-01-A        OG      The Garden City Company                       23S-34W: Sec 15 - N/2NE/4
                           J E O'Donnell

KS7979-02-A        OG      The Garden City Company                       23S-34W: Sec 15 - E/2NW/4
                           J E O'Donnell

KS7980-01-A        OG      The Garden City Company                       23S-34W: Sec 25 - W/2SE/4; W/2SW/4
                           Cities Service Oil Co

KS7981-01-A        OG      John Burgardt & Barbara Burgardt              23S-34W: Sec 36 - E/2NW/4
                           J E O'Donnell

KS7982-01-A        OG      Nellie Upshaw & J F Upshaw                    23S-34W: Sec 36 - E/2NE/4
                           J E O'Donnell

KS7983-01-A        OG      L E Joss & Izetta H Joss                      23S-34W: Sec 36 - W/2SE/4

KS7984-01-A        OG      Mutual Building and Loan Association          23S-34W: Sec 26 - NW/4SW/4
                           Champlin Refining Co

KS7985-01-A        OG      Lawrence C Halbleib & Maxine Halbleib         23S-34W: Sec 36 - SW/4SW/4
                           Joe E Denham

<CAPTION>
                        LEASE           EXPIRATION        RECORDED
LEASE NUMBER            DATE            DATE            BOOK     PAGE
---------------------------------------------------------------------
<S>                     <C>             <C>           <C>      <C>
KS7974-01-A             28-Feb-44       28-Feb-54       13       160

KS7975-01-A             24-Feb-44       24-Feb-54       13       164

KS7976-01-A             3-Apr-44        3-Apr-54        13       364

KS7976-01-B             15-May-50                       21       111

KS7977-01-A             4-Apr-44                        13       395

KS7979-01-A             23-Sep-41       23-Sep-56       611      382

KS7979-02-A             23-Sep--41      23-Sep-56       611      382

KS7980-01-A             31-Mar-46                       12       167

KS7981-01-A             2-Sep-42        2-Sep-57        11       640

KS7982-01-A             3-Sep-42        3-Sep-57        11       642

KS7983-01-A             12-Sep-42       12-Sep-57       12       21

KS7984-01-A             24-Sep-42       24-Sep-57       12       22

KS7985-01-A             24-Sep-44       24-Sep-54       13       324
</TABLE>

                                                          EXHIBIT B: PAGE 3 OF 4

<PAGE>   25

<TABLE>
<CAPTION>
                   INT
LEASE NUMBER       TYPE    LESSOR/LESSEE                                 DESCRIPTION
--------------------------------------------------------------------------------------------------------------
<S>                <C>     <C>                                           <C>      <C>
ROYALTY INTEREST

KS0087-01-L        OG      Ballou Royalty                                22S-34W: Sec 19 - SE/4NE/4; E/2SE/2
                           Horizon Oil & Gas Co of Texas

KS0090-01-L        OG      Ballou Royalty                                22S-34W: Sec 20 - N/2
                           Horizon Oil & Gas Co of Texas

<CAPTION>
                     LEASE           EXPIRATION        RECORDED
LEASE NUMBER         DATE            DATE            BOOK     PAGE
------------------------------------------------------------------
<S>                 <C>              <C>             <C>      <C>
ROYALTY INTEREST

KS0087-01-L          12-May-72                       56       172

KS0090-01-L          12-May-72                       56       172
</TABLE>

                                                          EXHIBIT B: PAGE 4 OF 4

<PAGE>   26

                                    EXHIBIT C

     Attached to and made part of that certain Purchase and Sale Agreement
            dated November 24, 1999 by and between Seller and Buyer.

                      PIPELINES AND OTHER PERSONAL PROPERTY

BURG 5-20
Pumping unit Lufkin 456
1 pump off controller
1 chemical pump
3 - 300 BBL water tank fiberglass
3 - 300 BBL oil tank steel
1 - 300 BBL oil tank fiberglass
1 - 400 BBL knockout fiberglass gun barrel
1 water pump in horse tank
1 water meter

BURG 3-20
Pumping unit Hercules 160 1212
Pump off controller
Chemical pump

BURG 4-20
Pumping unit Lufkin 228 C33427D319997
Pump off controller
Chemical Pump 1 - 16" x 10' Horizontal gas/fluid separator
1 - 210 BBL steel stock tank

BURG 3-20 & 4-20 COMMON TANK BATTERY
5 - 300 BBL oil tanks steel
1 - 300 BBL water tank steel
1 - 105 BBL knockout steel

TATE 19 A1
Pumping unit Lufkin 114 726U
1 pump off controller

TATE 19 A2
Pumping unit Cabot 80 D801639
1 pump off controller
1 chemical pump

TATE 19 A1 & TATE 19 A2 COMMON TANK BATTERY
2 - 300 BBL oil tanks steel
1 - 210 BBL water tank fiberglass
1 - 105 BBL knockout fiberglass
1 water meter
1 water pump in horse tank

                                                          EXHIBIT C: PAGE 1 OF 4

<PAGE>   27

BARRETT SWD
4 - 400 BBL water tanks fiberglass
1 dog house 8x12
1 water meter

BURG 1-20
Pumping unit Cabot 80 133133
Pump off controller

BURG 2-20
Pumping Unit Lufkin 114 F6901OJ412316
Pump off controller
Chemical Pump

BURG 1-20 & 2-20 COMMON TANK BATTERY
2 - 300 BBL oil tanks steel
1 - 120 BBL water tank fiberglass
1 water meter
1 water pump in horse tank

TATE 1-19
Pumping unit National 160 6584
Chemical pump
Pump off controller
2 - 300 BBL oil tank steel
1 - 300 BBL water tank fiberglass
1 - 105 BBL knockout steel
1 circulating pump (share with Tate 2-19 & Tate 3-19)
1 water meter (share with Tate 2-19 & Tate 3-19)
1 cascade system (share with Tate 2-19 & Tate 3-19)
1 water pump in horse tank (share with Tate 2-19 & Tate 3-19)

TATE 2-19
Pumping unit National 160 17646
Chemical pump
Pump off controller

TATE 19 A-3
Pumping unit Lufkin 320 C39108J-345456
1 Pump off controller
1 chemical pump
1 water meter
1 water pump in horse tank
2 - 300 BBL water tanks fiberglass
2 - 300 BBL oil tanks fiberglass
1 - 200 BBL knockout fiberglass

TATE 2-19 & TATE 3-19 COMMON TANK BATTERY
3 - 300 BBL oil tanks steel
1 - 300 BBL water tank fiberglass
1 - 105 BBL knockout steel

                                                          EXHIBIT C: PAGE 2 OF 4

<PAGE>   28

I circulating pump (shared with Tate 1-19)
1 water meter (shared with Tate 1-19)
1 cascade system (shared with Tate 1-19)
1 water pump in horse tank (shared with Tate 1-19)

TATE 3-19
Pumping unit Lufkin Mark 160 C31378ID316668
Chemical pump
Pump off controller

SIX M FARMS
Pumping Unit American 160 T15F74154040
Chemical Pump Pump off controller
2 - 300 BBL oil tanks fiberglass
1 - 300 BBL water tank
1 - 105 BBL knockout fiberglass

TURRENTINE 3-19
Pumping unit Lufkin 228 033429D14260
Chemical pump
1 pump off controller

TURRENTINE 4-19
Pumping unit Lufkin 640 air balance
Chemical Pump
1 pump off controller

TURRENTINE 3-19 & 4-19 COMMON TANK BATTERY
4 - 300 BBL oil tanks fiberglass
4 - 300 BBL water tanks fiberglass
1 - 180 BBL gun barrel fiberglass
1 - 40 BBL free water knockout steel
1 circulating pump
1 water meter
1 cascade system
1 water pump in horse tank

BAKER 15-6
Pumping unit American 160-173-74
1 chemical pump

BAKER 15-8
Pumping unit American 160 TI7F743A5079
1 chemical pump

BAKER 15-6 & 15-8 COMMON TANK BATTERY
1 pump off controller
2 - 300 BBL oil tanks fiberglass
1 - 300 BBL water tank fiberglass
1 - 200 BBL knockout fiberglass

                                                          EXHIBIT C: PAGE 3 OF 4

<PAGE>   29

WEBDELL 28-1
PUMPING UNIT AMERICAN 160 D 1606617
1 chemical pump
1 pump off controller
1 - 300 BBL oil tank steel
1 - 300 BBL water tank steel
1 - 105 BBL knockout steel

BARRETT 20-3
Pumping unit American 160-173-4
Pumpoff switch
Chemical pump
3 - 300 BBL oil tanks fiberglass
1 - 300 BBL water tank fiberglass
1 - 210 BBL steel heated gun barrel

BARRETT 20-2
Pumping Unit American 160 D160G3598
Pump off controller
Chemical pump

BARRETT 20-4
Pumping Unit American 160 T17F7431824
Pump off controller
Chemical pump

BARRETT 20-2 & 20-4 COMMON BATTERY
4 - 300 BBL oil tanks fiberglass
1 - 300 BBL water tank fiberglass
1 - 6x20 Gun Barrel - fiberglass
1 water meter
1 water pump in horse tank
1 circulating pump

                                                          EXHIBIT C: PAGE 4 OF 4

<PAGE>   30

                                   EXHIBIT D

     Attached to and made part of that certain Purchase and Sale Agreement
            dated November 24, 1999 by and between Seller and Buyer.

                              CERTAIN KEY CONTRACTS

SALT WATER DISPOSAL WELL LEASE AGREEMENT DATED MARCH 6TH, 1997 BY AND BETWEEN
MARY F. BARRETT TRUST AND LARIO OIL & GAS COMPANY (SONAT EXPLORATION)
This Salt Water Disposal Lease is for a term for so long as the lands are used
for the purpose specified. It requires an annual payment of $10,000.

SURFACE USE AGREEMENT DATED (PENDING) BY AND BETWEEN MARY F. BARRETT TRUST AND
LARIO OIL & GAS COMPANY
This proposed Surface Use Agreement extends the surface area under the above
lease that Lario is entitled to use and is for a term of 5 years. It requires an
annual payment of $300.

JOSS WELL
This well is covered by a Declaration of Unitization dated November 8, 1950
(Recorded Volume 21, Page 466)

RUBY JEAN WELLS
These wells are covered by an Option Farmout Agreement covering the E/2SW/4 Sec
34-22S-34W dated August 6, 1991, with an Operating Agreement attached.

BAKER WELLS
These wells are covered by an Exploration and Farmout Agreement covering in part
lands in Sec 15-23S-34W dated April 11, 1997, with an Operating Agreement
attached.

                                                               EXHIBIT D: PAGE 1<PAGE>   1
                                                                    EXHIBIT 10.2

                       FIRST AMENDMENT TO CREDIT AGREEMENT

         This First Amendment to Credit Agreement ("Amendment") is entered into
between Compass Bank, an Alabama state bank ("Lender") and Toreador Royalty
Corporation, a Delaware corporation, Toreador Exploration & Production, Inc., a
Texas corporation, and Tormin, Inc., a Delaware corporation (the "Borrowers")
and Toreador Acquisition Corporation, a Texas corporation (the "Guarantor") and
is dated as of December 17, 1999. Terms defined in the Credit Agreement between
the Lender and the Borrowers and the Guarantor dated September 30, 1999, as
amended (the "Credit Agreement"), are used herein as therein defined, unless
otherwise defined herein or the context otherwise requires.

                                R E C I T A L S:

         WHEREAS, Toreador Exploration & Production, Inc. ("Toreador
Exploration") has entered into a Purchase and Sale Agreement ("Purchase
Agreement") dated November 24, 1999, with Lario Oil & Gas Company ("Lario") for
the purchase by Toreador Exploration of certain oil and gas properties located
in Finney County, Kansas for $5,000,000 in cash at the closing of such purchase
and $500,000 in installments (the "Lario Installment Debt"), as described in the
Purchase Agreement;

         WHEREAS, the Borrowers have requested that the Lender increase the
Borrowing Base under the Credit Agreement to $12,500,000 and provide a term loan
in the amount of $2,000,000, the proceeds of which will be utilized to make such
purchase described in the Purchase Agreement;

         WHEREAS, the Borrowers anticipate repaying the Term Loan (hereinafter
defined) and repaying the Lario Installment Debt from the proceeds of the
Subordinated Debt;

         WHEREAS, the Lender is willing to amend the Credit Agreement to permit
the above described transactions under the terms and conditions set forth
herein;

         NOW, THEREFORE, the Borrowers, the Guarantor and the Lender hereby
agree as follows:

         1. The following definitions are hereby added to Section 1.1 of the
Credit Agreement as follows:

                  "First Amendment to Credit Agreement" means the First
         Amendment to Credit Agreement dated December 17, 1999, between the
         Lenders, the Borrowers and the Guarantor.

                  "Subordinated Debt" shall mean Debt of the Parent evidenced by
         a promissory note or notes issued by the Parent after February 29,
         2000, and before March 1, 2001, in the aggregate principal amount not
         to exceed $15,000,000, which Debt shall be subordinated in payment and
         liquidation to the Note and the Term Loan and shall contain provisions
         and restrictions effecting the following so long as the Note or Term
         Loan remain outstanding: (i)

First Amend. To Credit Agmt.- Toreador, et. al.        1

<PAGE>   2

         No interest or principal payments shall be required or accepted on the
         Subordinated Debt after a Default or if any such payment would cause a
         Default to occur; (ii) upon the occurrence of an Event of Default, the
         holders of the Subordinated Debt shall not be entitled to make demand
         for payment of interest or principal on the Subordinated Debt, to
         accelerate the time for payment of the principal of the Subordinated
         Debt or to take any other collection action against any of the
         Borrowers or the Guarantor for a period of 365 days following such
         Event of Default; (iii) the per annum interest rate payable on the
         Subordinated Debt shall not exceed 7-1/2% without the Lender's prior
         written consent; (iv) the holders of the Subordinated Debt shall not be
         entitled to require the prepayment of the Subordinated Debt prior to
         maturity of the Subordinated Debt or a redemption of the Subordinated
         Debt prior to maturity of the Subordinated Debt; (v) the Subordinated
         Debt shall at all times be and remain unsecured; and (vi) the maturity
         date of Subordinated Debt must be no earlier than March 31, 2010,
         unless the Lender otherwise consents in writing.

                  "Term Loan" shall mean the $2,000,000 term loan being made
         concurrently herewith by the Lender to the Borrowers pursuant to a term
         loan note in the form of Attachment One hereto.

         2. The following definitions contained in Section 1.1 of the Credit
Agreement are hereby amended and restated in their entireties as follows:

                  "Compliance Certificate" means a certificate, substantially in
         the form attached to the First Amendment to Credit Agreement entitled
         "Form of Compliance Certificate", executed by a Responsible Officer of
         the Parent and furnished to the Lender from time to time in accordance
         with Section 7.2(a).

                  "Floating Rate" means the greater of (i) a per annum interest
         rate equal to the difference of the CBIR Rate from time to time in
         effect minus three-fourths of one percent (minus 3/4 of 1.0%), or (ii)
         at any time the outstanding principal of the Note plus the outstanding
         principal of the Term Loan plus the L/C Exposure equals or exceeds 80%
         of the Borrowing Base in effect at such time, a per annum interest rate
         equal to the CBIR Rate from time to time in effect minus one-fourth of
         one percent (minus 1/4 of 1.0%) or (iii) at any time the daily average
         for the prior calendar month of the outstanding principal of the Note
         plus the outstanding principal of the Term Loan plus the L/C Exposure
         equals or exceeds 80% of the daily average for such prior calendar
         month of the Borrowing Base in effect during such month, a per annum
         interest rate equal to the CBIR Rate from time to time in effect minus
         one-fourth of one percent (minus 1/4 of 1.0%); but in no event
         exceeding in any case the Highest Lawful Rate.

                  "Permitted Indebtedness" means (i) the Obligations, (ii)
         unsecured accounts payable incurred in the ordinary course of business,
         which are not unpaid in excess of 120 days beyond the due date thereof
         or are being contested in good faith and as to which such reserve as is
         required by GAAP has been made and on which interest charges are not
         paid or accrued,

First Amend. To Credit Agmt.- Toreador, et. al.        2

<PAGE>   3

         (iii) accrued taxes and unsecured accounts payable owed to insurance
         companies for insurance contracts maintained by Borrower in its
         ordinary course of business, (iv) endorsements of negotiable
         instruments in the ordinary course of business, (v) amounts owed by one
         of the Borrowers or the Guarantor to another Borrower or the Guarantor,
         (vi) the Subordinated Debt and (vii) the Term Loan.

         3. The Borrowing Base shall be $12,500,000 as of December 17, 1999, and
the amount by which the Borrowing Base shall automatically be reduced on the
first day of each month shall be $0.00 per month until January 1, 2000. On
January 1, 2000, and on the first day of each month thereafter, the amount by
which the Borrowing Base shall automatically be reduced shall be $115,000 per
month until redetermined in accordance with the Credit Agreement.

         4. On the date hereof, the Borrowers shall pay to the Lender a facility
fee of $10,000 as required under Section 2.6(c) of the Credit Agreement.

         5. Section 2.8(f) is hereby added to the Credit Agreement as follows:

                  (f) In addition to and notwithstanding the provisions of
Section 2.8(a) above, the Lender shall have the right to redetermine the
Borrowing Base at any time or times that Subordinated Debt is issued by the
Parent exceeding, when aggregated with all Subordinated Debt previously issued,
the amount of $4,000,000, and any such redeterminations of the Borrowing Base
shall be treated as a scheduled or Borrower requested redeterminations of the
Borrowing Base for the purposes of Section 2.6(b).

         6. The Borrowers shall pay to the Lender an engineering fee in the
amount of $7,500 on the date hereof.

         7. Section 7.15(a) of the Credit Agreement is hereby amended and
restated in its entirety as follows:

         (a) EBITDA to Debt Service Ratio. The Borrowers will not permit the
ratio of EBITDA to Debt Service for the Parent determined on a consolidated
basis, to be less than 1.25 to 1.0, determined as of the end of each fiscal
quarter of the Parent ending on or after December 31, 1999.

                  "EBITDA" means, for any fiscal quarter of the Parent, the net
                  income from operations of the Parent and its consolidated
                  subsidiaries for such quarter plus interest, taxes,
                  depreciation, amortization, depletion, and other non-cash
                  expenses of the Parent and its consolidated subsidiaries for
                  such quarter less gains on sales of assets and other non-cash
                  income for such quarter included in the determination of net
                  income from operations of the Parent and its consolidated
                  subsidiaries. EBITDA is a quarter-by-quarter calculation.

                  "Debt Service" means with respect to any fiscal quarter of the
                  Parent, the actual principal and interest payments on the Debt
                  of the Parent and its consolidated

First Amend. To Credit Agmt.- Toreador, et. al.        3

<PAGE>   4

                  subsidiaries during such quarter other than for the Note plus
                  required principal and interest payments on the Note during
                  such quarter.

         8. The proceeds of the Subordinated Debt shall be applied, upon
receipt, as follows and in the following order:

                  (a) to accrued, unpaid interest on the Term Loan,

                  (b) to the outstanding principal of the Term Loan, whether as
a payment or a prepayment, until fully paid,

                  (c) to the Lario Installment Debt, whether as a payment or a
prepayment, until fully paid, and

                  (d) for general corporate purposes, except that such proceeds
shall not be used to pay dividends on the common stock of the Parent.

         9. Title. The Lender shall have no obligation to fund any additional
amounts due to the increase in the Borrowing Base as referred to in the recitals
hereof, or to fund the Term Loan described herein, unless all matters related to
title of the properties being acquired from Lario are satisfactory to the Lender
and its counsel in their sole discretion. In this connection, the review of
title information related to the properties being acquired from Lario has not
been completed by counsel to the Lender as of the date of execution of this
Amendment.

         10. GOVERNING LAW. THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED AND
CONTROLLED BY THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO PRINCIPLES
THEREOF RELATING TO CONFLICTS OF LAW; PROVIDED, HOWEVER, THAT CHAPTER 346 OF THE
FINANCE CODE (WHICH REGULATES CERTAIN CREDIT LOAN ACCOUNTS AND TRIPARTY
ACCOUNTS) SHALL NOT APPLY TO THE NOTE.

         11. JURISDICTION AND VENUE. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO,
ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE LITIGATED, AT THE SOLE
DISCRETION AND ELECTION OF THE LENDER, IN COURTS HAVING SITUS IN DALLAS, DALLAS
COUNTY, TEXAS. EACH BORROWER AND THE GUARANTOR HEREBY SUBMITS TO THE
JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT LOCATED IN DALLAS, DALLAS
COUNTY, TEXAS, AND HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO TRANSFER OR CHANGE
THE JURISDICTION OR VENUE OF ANY LITIGATION BROUGHT AGAINST IT BY THE LENDER IN
ACCORDANCE WITH THIS SECTION.

         12. WAIVER OF RIGHTS TO JURY TRIAL. EACH BORROWER, THE GUARANTOR AND
THE LENDER HEREBY KNOWINGLY, VOLUNTARILY,

First Amend. To Credit Agmt.- Toreador, et. al.        4

<PAGE>   5

INTENTIONALLY, IRREVOCABLY, AND UNCONDITIONALLY WAIVE ALL RIGHTS TO TRIAL BY
JURY IN ANY ACTION, SUIT, PROCEEDING, COUNTERCLAIM, OR OTHER LITIGATION THAT
RELATES TO OR ARISES OUT OF ANY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
THE ACTS OR OMISSIONS OF THE LENDER IN THE ENFORCEMENT OF ANY OF THE TERMS OR
PROVISIONS OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR OTHERWISE WITH
RESPECT THERETO. THE PROVISIONS OF THIS SECTION ARE A MATERIAL INDUCEMENT FOR
THE LENDER ENTERING INTO THIS AGREEMENT.

         13. Counterparts. For the convenience of the parties, this Amendment
may be executed in multiple counterparts, each of which for all purposes shall
be deemed to be an original, and all such counterparts shall together constitute
but one and the same agreement.

         14. Effect. Except as amended hereby, the Credit Agreement shall remain
unchanged and in full force and effect.

         15. ENTIRE AGREEMENT. THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT
BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF. FURTHERMORE, IN
THIS REGARD, THIS AGREEMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT,
COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF SUCH PARTIES.

         THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

First Amend. To Credit Agmt.- Toreador, et. al.        5

<PAGE>   6

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

                                              BORROWERS:

                                              TOREADOR ROYALTY CORPORATION,
                                              TOREADOR EXPLORATION & PRODUCTION,
                                              INC. and TORMIN, INC.
4809 Cole Avenue
Suite 108
Dallas, Texas 75205                           By:    /s/ G. THOMAS GRAVES, III
Telecopy: 214/521-3774                            ------------------------------
                                              Name:  G. Thomas Graves, III
                                              Title: President of each Borrower

                                              GUARANTOR:

                                              TOREADOR ACQUISITION CORPORATION
4809 Cole Avenue
Suite 108
Dallas, Texas 75205                           By:    /s/ G. THOMAS GRAVES, III
Telecopy: 214/521-3774                            ------------------------------
                                              Name:  G. Thomas Graves, III
                                              Title: President

                                              LENDER:

                                              COMPASS BANK
8080 N. Central Expressway
Suite 370
Dallas, Texas 75206                           By:    /s/ CHRIS D. COWAN
Attention: Energy Group                           ------------------------------
Telecopy: 214/706-8054                        Name:  Chris D. Cowan
                                              Title: Assistant Vice President

First Amend. To Credit Agmt.- Toreador, et. al.        6

<PAGE>   7

                                 ATTACHMENT ONE

                                 Term Loan Note

First Amend. To Credit Agmt.- Toreador, et. al.        7

<PAGE>   8

                         FORM OF COMPLIANCE CERTIFICATE

                             _______________,_____

Compass Bank
8080 N. Central Expressway, Suite 370
Dallas, Texas  75206
         Attention:  Energy Group

         Re:      Credit Agreement dated September 30, 1999, by and between
                  Compass Bank (the "Lender") and Toreador Royalty Corporation,
                  Toreador Exploration & Production, Inc. and Tormin, Inc. ( the
                  "Borrowers") and Toreador Acquisition Corporation, as
                  Guarantor (as amended, restated, or supplemented from time to
                  time, the "Credit Agreement")

Ladies and Gentlemen:

         Pursuant to applicable requirements of the Credit Agreement, the
undersigned, as a Responsible Officer of each Borrower hereby certifies to you
the following information as true and correct as of the date hereof or for the
period indicated, as the case may be:

         [1. TO THE BEST OF THE KNOWLEDGE OF THE UNDERSIGNED, NO DEFAULT EXISTS
         AS OF THE DATE HEREOF OR HAS OCCURRED SINCE THE DATE OF OUR PREVIOUS
         CERTIFICATION TO YOU, IF ANY.]

         [1. TO THE BEST OF THE KNOWLEDGE OF THE UNDERSIGNED, THE FOLLOWING
         DEFAULTS EXIST AS OF THE DATE HEREOF OR HAVE OCCURRED SINCE THE DATE OF
         OUR PREVIOUS CERTIFICATION TO YOU, IF ANY, AND THE ACTIONS SET FORTH
         BELOW ARE BEING TAKEN TO REMEDY SUCH CIRCUMSTANCES:]

         2. The compliance of the Borrowers with certain financial covenants of
         the Credit Agreement, as of the close of business on___________ , is
         evidenced by the following:

         (a)   Section 7.15(a): EBITDA to Debt Service.

               Required                                            Actual
              ----------                                          --------

               Not less than 1.25 to 1.00                          _____ to 1.00

         (b)   Section 7.15(b): Current Ratio.

               Required                                            Actual
             -----------                                          --------

               Not less than 1.00 to 1.00                          ____ to 1.00

First Amend. To Credit Agmt.- Toreador, et. al.        8

<PAGE>   9

         3. The financial statements being delivered to the Lender concurrently
         herewith pursuant to the Credit Agreement fairly and accurately reflect
         the financial condition and results of operation of the Borrowers for
         the periods and as of the dates set forth therein, and the undersigned
         has reviewed the terms of the Credit Agreement and the other Loan
         Papers, and has made, or caused to be made under my supervision, a
         review of the transactions and financial condition of the Borrowers
         during the fiscal period covered by such financial statements.

         Each capitalized term used but not defined herein shall have the
meaning assigned to such term in the Credit Agreement.

                             Very truly yours,

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

                             [----------------------------]

                             [_____________] of Toreador Royalty Corporation,

                             Toreador Exploration & Production, Inc. and Tormin,
                             Inc.

First Amend. To Credit Agmt.- Toreador, et. al.        9

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