WHEREAS, the Company intends to enter into one or more agreements

 

                   FRONTIER NATURAL GAS CORPORATION

                     SECTION 351 PLAN OF EXCHANGE

     This Section 351 Plan of Exchange (this "PLAN") has been duly 
adopted by the board of directors of Frontier Natural Gas Corporation, 
an Oklahoma corporation (the "COMPANY"), and the undersigned parties 
hereto for the purpose of describing the general terms and conditions 
of a series of related transactions.

                        W I T N E S S E T H:

     WHEREAS, the Company intends to enter into one or more agreements 
to acquire certain assets and oil and gas interests from various 
parties in exchange for the Company's common stock, par value $.01 per 
share; and

     WHEREAS, following such acquisitions, the Company intends to 
complete an underwritten public offering of its common stock (the 
"PUBLIC OFFERING"); and

     WHEREAS, the Company intends that the asset acquisitions and the 
Public Offering will be completed in a manner consistent with the 
requirements of Section 351 of the Internal Revenue Code of 1986, as 
amended (the "CODE"); and

     WHEREAS, the Company intends that the Public Offering will 
constitute a qualified underwriting transaction within the meaning of 
Section 1.351-1(a)(3) of the Treasury Regulations; and

     WHEREAS, the Company expects (without making any representation 
with respect thereto) that the persons who receive stock of the 
Company as part of the consideration for the asset acquisitions, and 
the persons who invest in the Company through the Public Offering, 
will collectively satisfy the control requirements of Section 368(c) 
of the Code;

     NOW, THEREFORE, the general terms and conditions of this Plan are 
as follows:

     1.  DESCRIPTION OF ACQUISITIONS.  The Company expects that the 
transferors in the asset acquisitions will include the persons 
identified on Exhibit A attached hereto (the "TRANSFERORS"), but does 
not intend for the Transferors to constitute an exclusive list of the 
parties that may participate in the asset acquisitions contemplated by 
this Plan.

     2.  EXCHANGE AGREEMENTS.  Each of the acquisition transactions 
will be effectuated pursuant to an agreement that includes, among 
other things, a recital to the effect that the transaction is intended 
to satisfy the requirements of Section 351 of the Code.

     3.  UNDERWRITING AGREEMENTS.  Each agreement that the Company 
enters into with an underwriter in connection with the Public Offering 
will be structured so that the Public Offering constitutes, to the 
extent possible, a qualified underwriting transaction within the 
meaning of Section 1.351-1(a)(3) of the Treasury Regulations.

     4.  AMENDMENT OF PLAN.  This Plan may be amended from time to 
time by the Board of Directors of the Company.

     The execution of this Plan shall not obligate any party to any 
acquisition to consummate such acquisition other than upon the terms 
and conditions of the definitive agreement to be executed by the 
parties to such acquisition. By the execution of this Plan, each of 
the parties hereto evidences his, her or its agreement with, and 
acknowledgment of, the terms and provisions of this Plan.

                                    FRONTIER NATURAL GAS CORPORATION

                                    By: /s/ David W. Berry
                                        ----------------------------------
                                        David W. Berry, President

                                    ESENJAY PETROLEUM CORPORATION

                                    By: /s/ Michael E. Johnson
                                        ----------------------------------
                                        Michael E. Johnson, President

                                    ASPECT RESOURCES LLC

                                    By: Aspect Management Corporation,
                                        its Manager

                                    By: /s/ Alex Cranberg
                                        ----------------------------------
                                        Alex Cranberg, President

                                    -2- 

Basic Info X:

Name: WHEREAS, the Company intends to enter into one or more agreements
Type: Agreements
Date: May 21, 1998
Company: ESENJAY EXPLORATION INC
State: Oklahoma

Other info:

Organization:

  • Frontier Natural Gas Corporation
  • Board of Directors of the Company
  • Aspect Management Corporation

Location:

  • Oklahoma

Money:

  • $ .01

Person:

  • David W. Berry
  • Michael E. Johnson
  • Alex Cranberg