Document:

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                                                                   EXHIBIT 10.30

                              EMPLOYMENT AGREEMENT

          THIS IS AN EMPLOYMENT AGREEMENT (the "Agreement") between MILLER
EXPLORATION COMPANY, a Delaware corporation ("Company") and Michael L. Calhoun
("Employee").  The parties agree as follows:

     1.   Effective Date and Term.  This Agreement will take effect as of
February 9, 1998. The initial term of this Agreement will be three (3) years
following its effective date.  If the Employment terminates at any time before
expiration of this Agreement, then notwithstanding such expiration the parties
will remain obligated to comply with their respective obligations under
Paragraph 6.  The Employee's obligations and the Company's rights under
Paragraphs 8, 9 and 10 shall survive expiration of this Agreement, and shall
continue in full force and effect.

     2.   Employment.  The Employee will serve as Vice President of
Operations of the Company, or in other positions assigned by the Company (the
"Employment").  The Employee's duties will be those assigned by the Company's
Board of Directors or the President or Chief Executive Officer, as the case may
be.  The Employment will be full time, and the Employee's entire business time
and best efforts will be devoted to the performance of Employee's duties for the
Company during the term of the Employment, provided that, except as otherwise
provided in this Agreement, nothing in this Paragraph shall prevent the Employee
from engaging in additional activities in connection with personal investments
and community affairs that do not compromise the Company's assets and are not
inconsistent with the Employee's duties under this Agreement. Employee will
comply with the Company's employment policies.

     3.   Termination of Employment.  During the term of this Agreement, the
Employment may be terminated as provided in Paragraph 5.  After expiration of
this Agreement, either party may terminate the Employment at will.

     4.   Compensation.  The Employee will be compensated during the Employment
as follows:

          a.  Salary.  The Employee will be paid an initial annual salary
     of at least $135,000, subject to adjustment as provided below, which will
     be payable in equal periodic installments according to the Company's
     customary payroll practices, but no less frequently than monthly.  The
     Employee's salary will be reviewed by the Company's Compensation Committee
     not less frequently than annually, and may be adjusted upward or downward
     in the sole discretion of the Board of Directors, but in no event will the
     salary be less than $108,000 per year, except upon approval of employee.

          b.  Stock Options.  Employee has been granted options to purchase
     25,000 shares of the Company's common stock at the initial public offering
     price of $8.00 per share.  The options will have a 10-year term and will
     vest in cumulative annual increments of one-fifth of the total number of
     shares subject to the options,
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     beginning on the first anniversary of the date of grant (February 4, 1999).
     The options have been granted pursuant to a separate stock option agreement
     between the Company and Employee, and the options will be subject to any
     restrictions and other terms set forth in that agreement and in any plan
     under which the options may be granted, including the Company's Stock
     Option and Restricted Stock Plan of 1997. In addition, the stock and other
     stock options granted in the future, will vest upon a Change in Control of
     the Company, as defined in Paragraph 15, (which definition shall modify and
     supersede any definition of a "Change in Control" or comparable term in the
     stock option plan or the agreement referenced in the preceding sentence.)
     Employee may participate in future option programs as determined by the
     Board of Directors.

          c.  Restricted Stock.  Employee has been issued 2,000 shares of
     restricted common stock that will vest in cumulative annual increments of
     one-half of the total number of restricted shares granted, beginning on the
     first anniversary of the date of grant.  In addition, the stock and other
     restricted stock granted in the future, will vest upon a change in control
     of the Company, as referenced in Paragraph 15, (which definition shall
     modify and supersede any definition of a "Change in Control" or comparable
     term in the restricted stock plan or the agreement referenced in the
     following sentence.)  The restricted stock has been granted pursuant to the
     Company's Stock Option and Restricted Stock Plan of 1997 agreement between
     the Company and Employee, and the restricted stock will be subject to any
     restrictions and other terms set forth in that agreement and in any plan
     under which the restricted stock may be granted, including the Company's
     Stock Option and Restricted Stock Plan of 1997.  Employee may participate
     in future restricted stock programs as determined by the Board of
     Directors.

          d.  Bonus.  The Employee will be eligible to participate in any
     bonus program covering the position in which the Employee serves, on the
     terms set forth in such bonus program.  The terms of any present or future
     bonus programs are subject to revision from time to time in the Company's
     discretion.

          e.  Benefits. The Employee will, during the term of Employment,
     be permitted to participate in such pension, 401(k), profit sharing, life
     insurance, health insurance, and other employee benefit plans of the
     Company that may be in effect from time to time, to the extent the Employee
     is eligible under the terms of those plans (collectively, the "Benefits").
     In addition, Employee will be eligible to receive twenty (20) days of
     vacation.

          f.  Business Expenses.  The Company will reimburse the Employee
     for reasonable ordinary and necessary business expenses incurred in the
     performance of duties on behalf of the Company, subject to Employee's
     prompt submission of proper

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     documentation for tax and accounting purposes and, if applicable, subject
     to the approval of the respective Supervisor.

          g.  Plan Terms and Changes.  The terms of applicable insurance
     policies and benefit plans in effect from time to time will govern with
     regard to specific issues of coverage and benefit eligibility.  It is
     understood that all benefit programs are subject to change or cancellation
     in the discretion of the Company.

     5.   Termination of Employment.  During the term of this Agreement,
Employee's Employment may be terminated in the following circumstances:

          a.  Death.  The Employment will terminate automatically in the
     event of Employee's death.

          b.  Disability.  If Employee becomes "disabled", the Company may
     elect to terminate Employee's Employment due to such disability.  For the
     purposes of this Agreement, the Employee will be deemed to be "disabled" if
     the Employee is unable to perform the essential functions of the Employee's
     duties under this Agreement, due to physical or mental illness, for 120
     consecutive days, or 180 days during any twelve-month period, as determined
     in accordance with this Paragraph. The disability of the Employee will be
     determined by a medical doctor selected by written agreement of the Company
     and the Employee upon the request of either party by notice to the other.
     If the Company and the Employee cannot agree on the selection of a medical
     doctor, each of them will select a medical doctor and the two medical
     doctors will select a third medical doctor who will determine whether the
     Employee is disabled.   The determination of the medical doctor selected
     under this Paragraph will be binding on both parties.

          c.   Termination by Company for Cause.  The Company may terminate
     the Employment immediately for Cause, defined as Employee's: (i) material
     breach of this Agreement, including but not limited to, continued poor
     performance of duties after warning and reasonable opportunity to correct
     performance deficiencies; (ii) willful failure to substantially perform
     properly assigned job duties; (iii) misappropriation of Company property,
     intentional damage to Company property, activities in aid of a competitor,
     insubordination, conviction of a crime involving moral turpitude, or
     performance of any act (including any dishonest or fraudulent act or
     statement) that is willfully detrimental to the interests of the Company.

          d.  Termination by Employee for Good Reason.  Employee may
     terminate the Employment for Good Reason if:

             (i)  Either

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                 (A) the Company materially breaches its
                     obligations to Employee under this Agreement; or
                 (B) the Company fails to assign or a Successor
                     fails to assume this Agreement as provided in Paragraph 14;
                     or the Successor reduces Employee's salary, reduces
                     Employee's bonus opportunity, or materially reduces the
                     overall value of Employee's fringe benefits.

             (ii)  Employee notifies the Board of Directors in writing,
          within 60 days after the act or omission in question, asserting that
          the act or omission in question constitutes Good Reason and explaining
          why such act or omission constitutes a material breach; and

             (iii) the Company fails, within 30 days after such
          notification, to take all steps necessary to cure the breach; and

             (iv)  Employee resigns by written notice within 30 days after
          expiration of the 30 day period under (iii) above.

          If Employee terminates the Employment for Good Reason, Employee
     will be paid Severance Pay as provided in Paragraph 6.  Employee's failure
     to object to a material breach as provided above will not waive Employee's
     right to resign with Good Reason after following the above procedure with
     regard to any future material breach.

          e.  Discretionary Termination by Employee.  Employee may
     terminate the Employment at will, with at least 45 days advance written
     notice, and Employee agrees not to leave the Employment with Company
     without giving such notice.

          f.  Discretionary Termination by Company.  Company may terminate
     the Employee's Employment at will, but if it does so it will pay Employee
     Severance Pay as provided in Paragraph 6.

          Employee agrees to cooperate during the 90-day period following any
termination of the Employment by consulting upon request to assist in
transition of Employee's duties and knowledge about the Company's business, such
consulting to be performed at Employee's reasonable convenience by telephone,
and the Company agrees to pay a consulting fee computed as Employee's weekly
salary divided by 40 for each hour of consultation (unless Employee is receiving
Severance Pay under Paragraph 6).

     6.   Payments After Termination of Employment.

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          a.  Upon termination of Employee's Employment, Employee shall not
     be entitled to any further compensation from Company or any Affiliate,
     except: (i) unpaid salary installments through the end of the week in which
     the Employment terminates; and (ii) any vested benefits accrued prior to
     the date the Employment terminates under the terms of any written Company
     benefit plan that expressly calls for payments or rights after termination
     of employment;  (iii) COBRA continuation coverage at Employee's expense, if
     Employee is eligible under applicable law; and (iv) Severance Pay (if any)
     becoming due under Paragraph 6 or Paragraph 15.

          b.  The Company will pay Employee the Severance Pay described in
     this Paragraph if the Company terminates the Employee's Employment during
     the term of this Agreement other than as permitted under Paragraph 5(b)
     ("Disability") or 5(c) ("Cause"), except that no Severance Pay will be
     owing from the Company by reason of the sale of the Company's business, if
     this Agreement is assigned to and assumed by a Successor Company, as
     provided in Paragraph 14.  A purported termination of the Employment under
     Paragraph 5(c) ("Termination by Company for Cause") or Paragraph 5(b)
     ("Disability") that is ultimately found to have been improper under such
     paragraph shall be deemed to have been a termination under Paragraph 5(f)
     ("Discretionary Termination by Company").  The Company will also pay
     Employee the Severance Pay described in this Paragraph if the Employee
     terminates his Employment during the term of this Agreement for Good
     Reason, as provided in Paragraph 5(d) ("Termination by Employee for Good
     Reason").

          c.  Amount and Duration of Severance Pay.  Subject to the other
     provisions of this Paragraph 6, the Severance Pay will consist of:

              (i)   continuation of Employee's initial weekly salary (or
          current salary, whichever is greater) for 52 weeks;

              (ii)  continuation during the Severance Pay Period, at
          Company's expense, of Employee's existing benefits employee and
          dependent health, dental and prescription drug coverage, life
          insurance if possible under the policy for the remaining term of this
          Agreement (without affecting Employee's right to elect COBRA
          continuation coverage beginning on the expiration date of this
          Agreement), subject to Employee's continuing payment of the normal
          employee contribution; and

              (iii) if Employee dies during Severance Pay period,
          Severance Pay will continue for the benefit of the Employee's
          designated beneficiary.

          In addition, upon Employee's becoming entitled to Severance Pay,
     all options and restricted stock previously granted to Employee will vest.

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          d.  Conditions to Severance Pay.  In order to be eligible for the
     Severance Pay, Employee must meet the following conditions:

              (i)   Employee must comply with Employee's obligations under
          Paragraphs 8, 9 and 10 of this Agreement;

              (ii)  Employee must not claim unemployment compensation for
          any week for which Employee receives Severance Pay;

              (iii) Employee must promptly sign and continue to honor a
          general release form acceptable to the Company and Employee of any and
          all claims against Company and its affiliates (defined for purposes of
          this Agreement as entities having an ownership interest in the
          Company, and subsidiaries and other entities in which the Company has
          an ownership interest), and all of their officers, directors,
          employees and agents.  The release will not waive the Employee's right
          to any payments due under this Paragraph 6 or Employee's rights to any
          vested benefits accrued prior to the date of termination of Employment
          under the terms of the applicable written benefit plans of the
          Company, or any right of Employee to indemnification or liability
          insurance coverage or Employee's rights to previously granted stock
          options and/or restricted stock.  If Employee ever seeks to make a
          claim against the Company contrary to the general release, it is
          understood that Employee must return the severance pay to company
          before doing so. If the company successfully enforces the general
          release, the Severance Pay will be returned to the Employee less the
          Company's cost of enforcement.

              (iv)  Employee must resign, upon written request by Company,
          from all positions with or representing Company or any Affiliate,
          including but not limited to membership on boards of directors; and

              (v)   Employee must provide the Company during the Severance
          Pay Period (without additional compensation) with consulting services
          regarding matters within the scope of Employee's former duties, upon
          request by the Board of Directors, provided that Employee will only be
          required to provide such services by telephone at Employee's
          reasonable convenience, and not for more than forty (40) hours in any
          month.

          e.  Offsets to Severance Pay.  The Severance Pay due to Employee
     for any week will be reduced by any disability benefits received by
     Employee for the same period under any Workmen's Compensation law, or under
     the Federal Social Security act Disability Benefits Provisions, or under
     any disability insurance policy provided to Employee by Company as a fringe
     benefit.

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     7.   Conflicts of Interest.  During the Employment, the Employee will
not acquire, directly or indirectly, any financial interest in, accept gifts or
favors from, or establish any relationship other than on behalf of the Company
with, any customer, supplier, distributor, or other person who does or seeks to
do business with the Company, unless Employee has disclosed the financial
interest, gift, favor, or relationship to the Company's Board of Directors, in
writing, and has received the written approval of the Board of Directors for
such activity or transaction. The Employee is not otherwise precluded from
participating in the management of personal or family holdings, even though they
may offset the Company's operations.

     8.   Loyalty and Confidentiality; Company Property.  The Employee will
be loyal to the Company during the Employment and will forever hold in strictest
confidence and will not use or disclose any information regarding the Company's
techniques, processes, developmental or experimental work, prospects, trade
secrets, customer or prospect names or information, or proprietary or
confidential information relating to the current or planned  areas of activity,
prospects, areas of interest, services, sales, employees or business of the
Company, except as such disclosure or use may be required in connection with the
Employee's work for the Company. Upon termination of the Employment, the
Employee will deliver to the Company any and all materials relating to the
Company's business, including without limitation all customer lists and
information, keys, financial information, business notes, business plans,
Company provided autos or other equipment, credit cards, memoranda, prospects,
seismic information, specifications and documents, except as reasonably
necessary to ensure and verify the Company's compliance with this Agreement.
All Company property will be returned promptly and in good condition except for
normal wear.  The Employee agrees not to retain any copies, reproductions or
summaries of any such materials.  This covenant will continue in effect after
termination of the Employment and shall survive expiration of this Agreement.

     9.   Ideas, Concepts and Inventions Relating to Company's Business.
All business ideas and concepts and all inventions, improvements and
developments made or conceived by the Employee, either solely or in
collaboration with others, during the Employment, whether or not during working
hours, and relating to the Company's business or any aspect thereof, or to any
business, product, prospect, areas of activity or areas of interest the Company
is considering en  tering or developing, shall become and remain the exclusive
property of the Company, its succes  sors and assigns.  The Employee shall
disclose promptly in writing to the Company all such inventions, improvements
and developments, and will cooperate in confirming, protecting and obtaining
legal protection of the Company's ownership rights, and leasehold interest.
This provision shall continue in effect after termination of the Employment and
shall survive expiration of this Agreement as to ideas, concepts, inventions,
improvements,  developments, and prospects made or conceived in whole or in part
prior to the date the Employment terminates.

          The Employee understands and agrees that the ideas, concepts,
prospects, production, areas of activity, areas of interest, inventions,
improvements,  developments which the Employee invented, conceived or
participated in prior to becoming employed by the Company, and to which the
Employee, or any assignee of the Employee, now claims title, are available for
development,

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exploration, and can be capitalized upon, utilized by the Company for its own
gain. Any exceptions are completely described on an exhibit signed by the
parties and attached to this Agreement. If no such exhibit is attached, then
Employee represents and warrants that there are no such inventions,
improvements, developments or prospects to which the Company would be
restricted.

     10.  Covenant Not to Compete.  During the Employment, and for one (1)
year after termination of the Employment, the Employee will not compete directly
with the Company. Competing directly with the Company shall be defined as
purchasing leases in an area defined by the Company as a Prospect for purposes
of buying leases, or divulging proprietary information about said area.  It is
expressly understood and agreed that Employee shall in no way be restricted from
acting as a consultant or consulting in such areas as long as Employee does not
use proprietary information in such activity.  Should the Company enter into
operations directly affecting the Employee's previously existing interests,
immediate family, relatives, or otherwise, the Employee will abstain from making
decisions or recommendations that materially adversely affect Company
operations.  In the event that the Company should sell a working interest,
leasehold interest, any other such interest to the Employee, or his or her
immediate family, relatives, or otherwise, either corporately or individually,
the Employee will have the full rights and liberties associated to represent
said sale.

     11.  Entire Agreement.  No agreements or representations, oral or
otherwise, express or implied, with respect to the Employee's Employment with
the Company or any of the subjects covered by this Agreement have been made by
either party which are not set forth expressly in this Agreement, and this
Agreement supersedes any pre-existing employment agreements and any other
agreements on the subjects covered by this Agreement.  Other Company policies
and practices not addressed in this Agreement may be addressed in the Company's
Employee Manual, as may be modified from time to time.

     12.  Amendment and Waiver; Authority.   No provisions of this
Agreement may be amended, modified, waived or discharged, and no additional
obligations may be imposed on the Company or the Employee, unless such waiver,
modification, discharge or obligation is (a) agreed to in a written agreement
signed by an officer of the Company authorized by the Board of Directors and the
Employee and (b) the terms of such written agreement are expressly approved by
the Board of Directors.  No waiver by either party at any time of any breach or
non-performance of this Agreement by the other party shall be deemed a waiver of
any prior or subsequent breach or non-performance.  No employee, officer or
agent of the Company other than the Board of Directors has any authority to
offer employment other than employment terminable at will by the Company, or to
limit the Company's right to terminate employment at will in any way.

     13.  Severability.  The invalidity or unenforceability of any
provision of this Agreement will not affect the validity or enforceability of
any other provision of this Agreement, which will remain in full force and
effect.  If a court of competent jurisdiction ever determines that any provision
of this Agreement (including but not limited to all or any part of the
non-competition covenant in Paragraph 10) is unenforceable as written, it is the
intent of the parties that such

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provision shall be deemed narrowed or revised in such jurisdiction (as to
geographic scope, duration, or any other matter) to the extent necessary to
allow its enforcement. Such revision shall thereafter govern in such
jurisdiction, subject only to any allowable appeals of such court decision.

     14.  Assignability.  This Agreement contemplates personal services by
the Employee, and Employee may not transfer or assign Employee's rights or
obligations under this Agreement, except that Employee may designate
beneficiaries for Severance Pay in the event of Employee's death during the
Severance Pay Period, and may designate beneficiaries for benefits as allowed by
the Company's benefit programs.  This Agreement may be assigned by the Company
to any subsidiary or parent corporation or a division of such corporation;
(however, the Company must obtain final approval by the Employee for such an
assignment of said Agreement, which will not be unreasonably withheld), or to
any entity which succeeds to all or substantially all of the Company's
businesses ("Successor Company").

     15.  Provisions Relating to Change in Control.  For purposes of this
Agreement, the following definitions shall apply:

                    1.   Definition

          (a)       "Change in Control" shall mean (i) the failure of the
     Continuing Directors at any time to constitute at least a majority of the
     members of the Corporation's Board of Directors; (ii) the acquisition by
     any Person (as defined in Section 13(d) and 14(d)(2) of the Securities
     Exchange Act of 1934 (the "Act")) other than an Excluded Holder of
     beneficial ownership (within the meaning of Rule 13d-3 promulgated under
     the Act) of twenty percent (20%) or more of the outstanding Common Stock or
     the combined voting power of the Corporation's outstanding securities
     entitled to vote generally in the election of directors; (iii) the approval
     by the stockholders of the Corporation of a reorganization, merger or
     consolidation, unless with or into a Permitted Successor; or (iv) the
     approval by the stockholders of the Corporation of a complete liquidation
     or dissolution of the Corporation or the sale or disposition of all or
     substantially all of the assets of the Corporation other than to a
     Permitted Successor.

          (b)       "Continuing Directors" mean the individuals constituting the
     Corporation's Board of Directors as of the date of this Agreement and any
     subsequent directors whose election or nomination for election by the
     Corporation's stockholders was approved by a vote of two-thirds (2/3) of
     the individuals who are then Continuing Directors, but specifically
     excluding any individual whose initial assumption of office occurs as a
     result of either an actual or threatened election contest (as the term is
     used in Rule 14a-11 of Regulation 14A promulgated under the Act) or other
     actual or threatened solicitation of proxies or consents by or on behalf of
     a Person other than the Corporation's Board of Directors.

          (c)       "Excluded Holder" means the Corporation, a Subsidiary, any
     employee benefit plan (i.e., any plan or program established by the
     Corporation or a Subsidiary for the

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     compensation or benefit of employees of the Corporation or any of its
     Subsidiaries) of the Corporation or a Subsidiary or any trust holding
     Common Stock or other securities pursuant to the terms of an employee
     benefit plan, or any member of the Miller Group.

          (d)       "Miller Group" means (i) C.E. Miller, Kelly E. Miller, David
     A. Miller, Daniel R. Miller, Sue Ellen Bell and their respective spouses,
     lineal descendants and spouses of such descendants (collectively, the
     "Miller Family"), (ii) the estate of any member of the Miller Family, (iii)
     any trust established for the benefit of any member of the Miller Family,
     (iv) any trust of which the power to vote, dispose or direct the voting or
     disposition of any Common Stock of the Corporation included in the corpus
     of such trust is controlled by one or more members of the Miller Family,
     (v) without limiting the generality of the preceding clauses (iii) and
     (iv), the Kelly E. Miller Retained Annuity Trust #1, the David A. Miller
     Retained Annuity Trust #1, the Daniel R. Miller Retained Annuity Trust #1,
     the Sue Ellen Bell Retained Annuity Trust #1, the Kelly E. Miller Trust,
     the David A. Miller Trust, the Daniel R. Miller Trust and the Sue E. Bell
     Trust, (vi) any corporation of which a majority of the outstanding shares
     of capital stock entitled to vote generally for directors is beneficially
     owned by, or a partnership of which a majority of the partnership interests
     with voting rights are beneficially owned by, or a limited liability
     company of which a majority of the membership interests with voting rights
     are beneficially owned by, any of the individuals or entities identified in
     clauses (i) through (v) above, including without limitation Eagle
     Investments, Inc., Eagle International, Inc., Oak Shores Investments, Inc.,
     Double Diamond Enterprises, Inc., and Frontier Investments, Inc.

          (e)       "Permitted Successor" means a corporation which, immediately
     following the consummation of a transaction specified in clauses (iii) and
     (iv) of the definition of "Change in Control" above, satisfies each of the
     following criteria:  (A) sixty percent (60%) or more of the outstanding
     common stock of the corporation and the combined voting power of the
     outstanding securities of the corporation entitled to vote generally in the
     election of directors (in each case determined immediately following the
     consummation of the applicable transaction) is beneficially owned, directly
     or indirectly, by all or substantially all of the Persons who were the
     beneficial owners of the Corporation's outstanding Common Stock and
     outstanding securities entitled to vote generally in the election of
     directors (respectively) immediately prior to the applicable transaction,
     (B) no Person other than an Excluded Holder beneficially owns, directly or
     indirectly, twenty per  cent (20%) or more of the outstanding common stock
     of the corporation or the combined voting power of the outstanding
     securities of the corporation entitled to vote generally in the election of
     directors (for these purposes the term Excluded Holder shall include the
     corporation, any Subsidiary of the corporation and any employee benefit
     plan of the corporation or any such Subsidiary or any trust holding common
     stock or other securities of the corporation pursuant to the terms of any
     such employee benefit plan), and (C) at least a majority of the Board of
     Directors is comprised of Continuing Directors.

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          (f)       "Person" means any individual, corporation (including any
     non-profit corporation), general or limited partnership, limited liability
     company, joint venture, estate, trust, association, organization or other
     entity or governmental body.

          (g)       "Subsidiary" means any corporation or other entity of which
     fifty percent (50%) or more of the outstanding voting stock or voting
     ownership interest is directly or indirectly owned or controlled by the
     Corporation or by one or more Subsidiaries of the Corporation.

                    2.   Effect of Change in Control

          If there is a Change in Control of the Company, or the Employee
     terminates the employment for Good Reason as permitted under Paragraph
     5(d), then the Employee shall receive the Lump Sum Payment described in the
     Severance Pay provided under Paragraph 6, and in addition all unvested
     stock options and restricted stock described in Paragraphs 4(b) and 4(c)
     above will vest immediately.

                    3.   Special Tax Provision

          If any payment or payments to be made to the Employee by the
     Company following the termination of the Employee's employment, whether
     such payments are to be made under this Agreement or otherwise, would
     result in Employee incurring any excess parachute payment excise tax under
     IRC Sections 280G and 4999, then those payments that are to be made to
     Employee under this Agreement and that constitute "parachute payments" (as
     that term is defined under IRC Section 280G) shall be reduced or delayed to
     the extent necessary to eliminate any "excess parachute payments" (as that
     term is defined under IRC Section 280G) to Employee; provided, however,
     that  such reductions or delays shall be made if, and only if (A), below,
     is greater than (B), below, where: (A) equals  the present value as of the
     date of termination of Employee's employment of the total payments to be
     made to the Employee after such reductions or delays; and (B) equals the
     present value as of the date of termination of the Employee's employment of
     the  total payments to be made to  the Employee in the absence of such
     reduction and after application of the 20% excise tax on excess parachute
     payments. If such reductions or delays are to be made, the Employee shall
     determine which payments shall be reduced or delayed. Employee's
     determination as to whether reductions or delays are called for under this
     Paragraph shall be final and binding, if reasonable. If the Company  fails
     to accept any reasonable determination of Employee under this Paragraph,
     the Company shall reimburse Employee for all expenses and losses (including
     but not limited to attorney fees and any  additional taxes or interest or
     penalties on unpaid taxes) incurred by Employee as a result of the
     Company's failure to accept such determinations.

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     16.  Notices.  Notices to a party under this Agreement must be
personally delivered First Class mail, Facsimile, or sent by certified mail
(return receipt requested) and will be deemed given upon post office delivery or
attempted delivery to the recipient's last known address.  Notices to the
Company must be sent to the attention of the Company's Board of Directors.

     17.  Headings.  The Paragraph and other headings in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

     18.  Arbitration. The Company and the Employee agree that the sole and
exclusive method for resolving any dispute between them regarding this Agreement
or its interpretation application or its termination shall be arbitration under
the procedures set forth in this Paragraph; provided, however, that nothing in
this Paragraph prohibits a party from seeking preliminary or permanent
injunctive relief from a court of competent jurisdiction, or from seeking
judicial enforcement of the arbitration award.  If either party demands
arbitration of a dispute covered by this Paragraph, an arbitrator shall be
selected, and the arbitrator shall hold a hearing at which both parties may
appear, with or without counsel, and present evidence and argument.  Pre-hearing
discovery shall be allowed in the discretion of and to the extent deemed
appropriate by the arbitrator, and the arbitrator shall have subpoena power.
The procedural rules for an arbitration hearing under this Paragraph, and the
selection of the arbitrator shall be pursuant to the rules of the American
Arbitration Association for Commercial Arbitration Hearings and such rules as
the arbitrator may determine. The hearing shall be held in Houston, Texas.  The
award of the arbitrator(s) shall be final and binding and may be enforced by and
certified as a judgment of any court of competent jurisdiction.  The fees and
expenses of the arbitrator shall be paid equally by the Company and the
Employee.  The attorney fees and expenses incurred by the parties shall be paid
by the losing party.

     19.  Governing Law.  The validity, interpretation, and construction of
this Agreement are to be governed by the laws of the State of Texas, without
regard to principles of conflicts of law.

                     *     *     *     *     *     *     *

                                   12 of 13
<PAGE>

     The parties have signed this Agreement as of the date and year first
above written.

                               /s/ Michael L. Calhoun
                              ---------------------------------------------
                              Michael L. Calhoun
                                                                "Employee"

                              MILLER EXPLORATION COMPANY

                              By  /s/ Kelly E. Miller
                                -------------------------------------------
                              Its     President
                                 ------------------------------------------

                                                                "Company"

                                   13 of 13<PAGE>

                                                                   EXHIBIT 10.31

Grantee:   Lew P. Murray               Grant Date:   Jan. 1, 2000
        ------------------------                   -----------------------
Number of Shares:   60,000             Expiration Date:    Jan. 1, 2010
                 ---------------                        ------------------
Exercise Price Per Share: $ 0.01       Option Number:  057
                         -------                     ---------------------

                           MILLER EXPLORATION COMPANY
                 STOCK OPTION AND RESTRICTED STOCK PLAN OF 1997

                             STOCK OPTION AGREEMENT

          This Stock Option Agreement (the "AGREEMENT") is made as of the Grant
Date set forth above between MILLER EXPLORATION COMPANY, a Delaware corporation
(the "COMPANY"), and the grantee named above ("GRANTEE").

          The Miller Exploration Company Stock Option and Restricted Stock Plan
of 1997 (the "PLAN") is administered by the Stock Plan Committee of the
Company's Board of Directors or such other committee (the "COMMITTEE") as the
Board of Directors shall designate to administer the Plan, which shall consist
of at least two members of the Board, all of who are Non-Employee Directors, as
defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT").  The Committee has determined that Grantee is eligible to
participate in the Plan. The Committee has granted stock options to Grantee,
subject to the terms and conditions contained in this Agreement and in the Plan.

          Grantee acknowledges receipt of a copy of the Plan and accepts these
options subject to all of the terms, conditions, and provisions of this
Agreement and the Plan.

     1.   GRANT.  The Company grants to Grantee an option to purchase shares of
the Company's Common Stock, $.01 par value ("COMMON STOCK"), as set forth above,
to be issued upon exercise of this option in accordance with the terms and
conditions set forth in this Agreement.  This option is NOT an incentive stock
option as defined in Section 422(b) of the Internal Revenue Code of 1986, as
amended.

     2.   TERM AND DELAYED VESTING.  Grantee's conditional right to exercise
this option shall vest and be exercisable when the normal trading average of the
stock on the market remains above the designated values for a period of five
consecutive trading days as follows:
<PAGE>

   Five Day Daily Average Target       Percentage Vested

             $2.00                              40%
             $2.75                              30%
             $3.50                              30%

In each case appropriately rounded to the closest whole share except that the
total shall be as set forth above.  The Committee may, in its sole discretion,
accelerate the vesting of the option at any time before full vesting.  If the
Company's headquarters are moved from Traverse City, Michigan, Grantee's delayed
vesting shall be accelerated and to the extent not previously terminated,
Grantee may thereafter exercise all of this outstanding unexercised option.
Grantee's right to exercise this option shall terminate on the Expiration Date
set forth above, unless earlier terminated as set forth in the Plan or this
Agreement.

     3.   PAYMENT BY GRANTEE. The Exercise Price per share shall be the amount
set forth above, subject to adjustment as provided in the Plan and this
Agreement.  Grantee may pay the purchase price in cash or, if the Committee
consents, in shares of the Company's Common Stock (including Common Stock to be
received upon a simultaneous exercise). With Grantee's consent, the Committee
may amend the time and terms of payment before or after the exercise of the
option, but any such amendment shall not reduce the option price.  The Committee
may authorize payment of all or a portion of the option price in the form of a
promissory note or installments according to such terms as the Committee may
approve.  The Board of Directors may restrict or suspend the power of the
Committee to permit such loans and may require that adequate security be
provided.

     4.  REGISTRATION AND LISTING.  The stock options granted under this
Agreement are conditional upon the effective registration or exemption of the
Plan and the options granted under the Plan and the stock to be received upon
exercise of options pursuant to the Plan under the Securities Act of 1933, as
amended (the "SECURITIES ACT") and applicable state or foreign securities laws.

     5.   EXERCISE OF OPTION.  Grantee may exercise this option by giving the
Company written notice of the exercise of this option.  The notice shall set
forth the number of shares to be purchased, and shall be effective when received
by the corporate Secretary at the Company's main office, accompanied by full
payment of the option price.  The Company will deliver to Grantee a certificate
or certificates for such shares out of previously authorized but unissued shares
or reacquired shares of its Common Stock, as it may elect; provided, however,
that the time of delivery shall be postponed for such period as may be required
for the Company with reasonable diligence to comply with any registration
requirements under the Securities Act, the Exchange Act, and any requirements
under any other law, regulation, or agreement applicable to the issuance,
listing, or transfer of such shares. If Grantee fails to accept delivery of and
pay for all or any part of the number of shares specified in the notice upon
tender or delivery of the shares, Grantee's right to exercise the option with
respect to such undelivered shares shall terminate.  In such event, Grantee's
remaining options not yet exercised or terminated shall continue in force.

                                      -2-
<PAGE>

     6.   TERMINATION OF EMPLOYEE STATUS.

          (a) TERMINATION FOR GOOD REASON.  If Grantee's employment is
     terminated by the Company or a subsidiary for any reason other than
     disability, death or cause, Grantee may exercise the option for a period of
     90 days after the date Grantee ceases to be an employee, but only to the
     extent that Grantee was entitled to exercise the option on the date Grantee
     ceased to be an employee unless the Committee otherwise consents.  If
     Grantee terminates employment with the Company for good reason (as defined
     in any agreement between Grantee and the Company), all of Grantee's
     unvested options will be deemed to have vested on the day immediately
     preceding such termination.

          (b) DISABILITY OR DEATH.  If Grantee dies or becomes disabled, Grantee
     or his or her personal representative may exercise the option for a period
     of one year after the date Grantee ceases to be an employee, but only to
     the extent that Grantee was entitled to exercise the option on the date
     Grantee ceased to be an employee unless the Committee otherwise consents.

          (c) TERMINATION FOR CAUSE.  If Grantee is terminated for cause,
     Grantee's right to exercise this option shall terminate.  If the Committee
     determines that Grantee has entered into competition with the Company or
     any of its subsidiaries, Grantee's right to exercise any outstanding
     options shall terminate as of the date of entry into competition.  The
     Committee shall have sole discretion in making such determination, and may
     prevent exercise of the option during any period of determination of the
     facts of the matter.

     7.   ADJUSTMENT PROVISIONS.  If the number of shares of Common Stock
outstanding changes by reason of any stock dividend, stock split,
recapitalization, merger, consolidation, combination, exchange of shares, or any
other change in the corporate structure or shares of the Company, the aggregate
number and class of shares available under this Agreement and subject to each
option, together with the exercise price, shall be adjusted appropriately by the
Committee.  No fractional shares shall be issued pursuant to the Plan, and any
fractional shares resulting from adjustments shall be eliminated from the
respective option award, with an appropriate cash adjustment for the value of
any option eliminated.  If an option is canceled, surrendered, modified,
expired, or terminated during the term of the Plan but prior to the exercise or
vesting of the option in full, the shares subject to but not delivered under the
option shall be available for other option awards.

     8.   STOCKHOLDER RIGHTS.  Grantee shall have no rights as a stockholder
with respect to any shares covered by this option until exercise of the option
and payment for such shares.  Grantee shall have no claim to be granted any
stock option, and there is no obligation of uniformity of treatment among
Grantees or holders or beneficiaries of options.

     9.   TRANSFERABILITY. Unless the Committee otherwise consents, no option
granted under the Plan and this Agreement may be sold, transferred, pledged,
assigned, or otherwise alienated or

                                      -3-
<PAGE>

hypothecated, other than by will or by the laws of descent and distribution. All
options granted to Grantee during Grantee's lifetime shall be exercisable during
Grantee's lifetime only by such Grantee, his or her guardian, or legal
representative. The Committee may impose such other restrictions on any shares
acquired pursuant to this option as it may deem advisable, including, without
limitation, restrictions under applicable federal and state securities laws.

     10.  CERTIFICATIONS.  Grantee hereby represents and warrants that Grantee
is acquiring the option granted under this Agreement for Grantee's own account
and investment and without any intent to resell or distribute the shares upon
exercise of the option.  Grantee shall not resell or distribute the shares
received upon exercise of the option except in compliance with such conditions
as the Company reasonably may specify to ensure compliance with federal and
state securities laws.

     11.  EFFECTIVE DATE.  This option shall be effective as of the Grant Date
set forth above.

     12.  WITHHOLDING.  Grantee consents to any applicable tax withholding
required by reason of this agreement or the vesting of the options hereunder,
and shall make appropriate provision for the same.

     13.  BINDING EFFECT; AMENDMENT.  This Agreement shall be binding upon, and
shall inure to the benefit of, the parties to this Agreement and their
respective heirs, successors, and permitted assigns.  This option shall not be
modified except in a writing executed by the parties to this Agreement.

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

     15.  PLAN CONTROLS.  The Plan is incorporated by reference into this
Agreement. Capitalized terms not defined in this Agreement shall have those
meanings provided in the Plan.  In the event of any conflict between the terms
of this Agreement and the terms of the Plan, the provisions of the Plan shall
control.

                              MILLER EXPLORATION COMPANY

                              By  /s/ Kelly E. Miller
                                 -------------------------

                                 Its   President
                                    ---------------------

                                      -4-
<PAGE>

          I have received a copy of the Stock Option Agreement concerning the
grant of 60,000 shares on January 1, 2000 and agree to receive stock options
according to the terms of such agreement.

                                   /s/ Lew P. Murray
                                  ---------------------------------
                                  Signature

                                       Lew P. Murray
                                  ---------------------------------
                                  Print name

     (Please detach this page after signing and return to Miller Exploration
Company)

                                      -5-

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