PURCHASE AND SALE AGREEMENT

 

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                          PURCHASE AND SALE AGREEMENT

                                    between

                                  HSRTW, INC.

                                      and

                           WESTTIDE INVESTMENTS, LLC

                             Dated: August 9, 1996

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                               TABLE OF CONTENTS
                                                                            Page

1.        Purchase and Sale ...........................................        1

2.        The Assets ..................................................        1
          2.1   Leases and Wells ......................................        1
          2.2   Incidental Rights .....................................        2

3.        Effective Date ..............................................        2

4.        Purchase Payments ...........................................        2
          4.1   Purchase Price ........................................        2
          4.2   Credit Payment Amount .................................        2

5.        Apportionment of Production, Revenues, Taxes
          and other Expenses ..........................................        3

6.        Buyer's Representations and Warranties ......................        4
          6.1   Existence .............................................        4
          6.2   Power and Authority ...................................        4
          6.3   Authorization .........................................        4
          6.4   Execution and Delivery ................................        4
          6.5   Securities Laws .......................................        4
          6.6   Brokers' Fees .........................................        5

7.        Seller's Representations and Warranties .....................        5
          7.1   Existence .............................................        5
          7.2   Power and Authority ...................................        5
          7.3   Authorization .........................................        5
          7.4   Execution and Delivery ................................        5
          7.5   Brokers' Fees .........................................        6
          7.6   Reserve Report ........................................        6
          7.7   Liens .................................................        6
          7.8   Title .................................................        8
          7.9   Preferential Purchase Rights and Consents .............        8
          7.10  No Prepayments ........................................        9
          7.11  Gas Balancing .........................................        9
          7.12  Leases ................................................        9
          7.13  Operations in Progress ................................        9
          7.14  Hydrocarbon Sales Contracts ...........................        9
          7.15  Proceeds of Production ................................       10
          7.16  Material Contracts ....................................       10
          7.17  Bills in the Ordinary Course ..........................       10
          7.18  Legal Proceedings .....................................       10
          7.19  Compliance with Laws ..................................       10
          7.20  Environmental Matters .................................       10
          7.21  Payment of Taxes ......................................       11
          7.22  Tax Partnerships ......................................       11
          7.23  Other Tax Matters .....................................       12

8.        Certain Tax Matters .........................................       13
          8.1   Opinion of Tax Counsel, Right to Request Ruling .......       13
          8.2   Tax Status ............................................       14
          8.3   Escrow in the Event of Tax Audit ......................       14
          8.4   Settlements Resulting from a Tax Audit ................       16

9.        Covenants ...................................................       17
          9.1   Cooperation and Access ................................       17
          9.2   Insurance .............................................       17
                                                                           
10.       Closing Conditions ..........................................       17
          10.1  Seller's Closing Conditions ...........................       17
          10.2  Buyer's Closing Conditions ............................       17
                                                                           
11.       Closing .....................................................       18
          11.1  Payment of Purchase Price .............................       18
          11.2  Section 15.2 Payment ..................................       18
          11.3  Notice of Preferential Rights and Consents ............       18
          11.4  Assignment; Option ....................................       19
          11.5  Non-Foreign Ownership Affidavit .......................       19
          11.6  Evidence of Insurance .................................       19
          11.7  Contribution Agreement ................................       19
          11.8  Guaranty Agreement ....................................       19
          11.9  Seller's Officer's Certificate ........................       19
          11.10 Opinion on Behalf of Seller ...........................       19
          11.11 Buyer's Manager's Certificate .........................       19
          11.12 Opinions on Behalf of Buyer ...........................       19
          11.13 Management Agreement ..................................       20
          11.14 Performance Power of Attorney .........................       20
          11.15 Tax Opinion ...........................................       20
          11.16 Additional Instruments ................................       20
                                                                           
12.       Post-Closing Matters ........................................       20
          12.1  Files and Records .....................................       20
          12.2  Sales Taxes and Recording Fees ........................       20
          12.3  Purchase Price Rebates for Defective Interests ........       20
          12.4  Purchase Price and Other Rebates for Exercised                  
                Preferential Purchase Rights, Failure to                        
                Obtain Consents .......................................       21
          12.5  Reconveyance of Excluded Assets .......................       21
          12.6  Allocation of Commingled Production and Costs .........       22
          12.7  Performance of Buyer ..................................       22
          12.8  Overpayments ..........................................       22
          12.9  Verification of Formation Qualification; Reconveyance .       25
                                                                           
13.       Apportionment of Liabilities and Obligations.................       25
          13.1  Buyer .................................................       25
          13.2  Seller ................................................       25
                                                                           
14.       Indemnification .............................................       25
          14.1  Buyer's Indemnification of Selle ......................       26
          14.2  Seller's Indemnification of Buye ......................       26
          14.3  Third Party Claims ....................................       26
          14.4  HS Guarantee ..........................................       27
                                                                           
15.       Miscellaneous ...............................................       28
          15.1  Further Assurances ....................................       28
          15.2  Expenses ..............................................       28
          15.3  Notices ...............................................       29

                                     (ii)

        15.4    Survival ..............................................       29
        15.5    Confidentiality .......................................       30
        15.6    Announcements .........................................       30
        15.7    Assignment ............................................       30
        15.8    Binding Effect ........................................       30
        15.9    Complete Agreement ....................................       31
        15.10   Knowledge .............................................       31
        15.11   Governing Law .........................................       31
        15.12   Counterparts ..........................................       31
                                  

                                    (iii)

                                   EXHIBITS

Exhibit  A      Leases (Oklahoma, Louisiana)

Exhibit  B      Wells (showing WI, NRI, qualifying formations)

Exhibit  C      Form of Wellbore Assignment of Oil and Gas Leases with
                Reservation of Production Payment

Exhibit  D      Form of Option to Purchase Oil and Gas Interests

Exhibit  E      Reserve Report

Exhibit  F      Preferential Purchase Rights and Consents

Exhibit  G      Prepayments

Exhibit  H      Gas Imbalances

Exhibit  I      Operations in Progress

Exhibit  J      Hydrocarbon Sales Contracts

Exhibit  K      Legal Proceedings

Exhibit  L      Tax Partnerships

Exhibit  M      Well List - No NGPA Application Filed

Exhibit  N      Form of Non-Foreign Ownership Affidavits

Exhibit  O      Form of Contribution Agreement and Form of Guaranty Agreement

Exhibit  P      Form of Seller's Officer's Certificate

Exhibit  Q      Form of Opinion on Behalf of Seller

Exhibit  R      Form of Buyer's Manager's Certificate

Exhibit  S      Form of Opinions on Behalf of Buyer

Exhibit  T      Form of Management Agreement

Exhibit  U      Form of Escrow Agreement

Exhibit  V      Form of Limited Power of Attorney

                                     (iv)

                          PURCHASE AND SALE AGREEMENT

     This Purchase and Sale Agreement ("Agreement"), dated August 9, 1996, is
between HSRTW, Inc., a Delaware corporation ("Seller" or "HSRTW") and WestTide
Investments, LLC, a Delaware limited liability company ("Buyer" or
"WestTide").

                                   RECITALS

     A.   Seller is the owner of certain oil and gas leasehold interests in
Oklahoma and Louisiana, as more specifically described below in Section 2 (the
"Assets").

     B.   Seller desires to sell and Buyer desires to purchase the Assets
pursuant  to  the  terms  and  conditions  of  this  Agreement.

                                   AGREEMENT

     IN CONSIDERATION of the Purchase Price set forth below in Section 4.1,
the Credit Payment Amounts set forth below in Section 4.2, the reservation of
the "Production Payment" (defined below) and the grant of the "Option"
(defined below), and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Buyer agree as
follows:

     1.   Purchase and Sale. Seller agrees to convey the Assets to Buyer and
Buyer agrees to purchase the Assets from Seller, all pursuant to the terms and
conditions of this Agreement. Seller will convey the Assets subject to (i) a
production payment (the "Production Payment"), a reversionary interest (the
"Reversion Interest") and other reservations and obligations as specifically
set forth in the Wellbore Assignment of Oil and Gas Leases With Reservation of
Production Payment in a form substantially similar to Exhibit C (the
"Assignment"), and (ii) the Option To Purchase Oil and Gas Interests to be
granted to Seller in a form substantially similar to Exhibit D (the "Option").

     2.   The  Assets.  The "Assets" shall be all of the following:

          2.1  Leases and Wells. Seller's right, title and interest in and to
the oil and gas leases and mineral interests described in Exhibit A, including
any and all overriding royalty interests owned by Seller in such leases, but
insofar and only insofar as said leases cover the right to produce the wells
described in Exhibit B from the intervals referenced in Section 7.23 and
identified in Exhibit B in such wells as of the Effective Date (the above
described interest in such leases being herein called the "Leases" and the
above described interest in such wells being herein called the "Wells"), and
subject to any

restrictions, exceptions, reservations, conditions, limitations, burdens,
contracts, agreements and other matters applicable to such Leases and Wells.

          2.2  Incidental Rights.  All of Seller's right, title and
interest  in  and  to  the  following  insofar  and  only  insofar as same are
attributable  to  the  Leases  and  the  Wells:

               (a) Unitization and Pooling Agreements. All presently existing
    and valid oil, gas or mineral unitization, pooling, operating and
    communitization agreements, declarations and orders affecting the Leases
    and Wells, and in and to the properties covered and the units created
    thereby;

               (b) Personal Property. The personal property and fixtures that
    are appurtenant to the Wells, including all wells, casing, tubing, pumps, 
    separators, tanks, lines and other personal property and oil field
    equipment appurtenant to such Wells;

               (c) Agreements. All presently existing and valid oil and gas
    sales, purchase, production swap, gathering and processing contracts and 
    operating agreements, joint venture agreements, partnership agreements,
    rights-of-way, easements, permits, surface leases and other contracts,
    agreements and instruments, but specifically excluding any management
    agreements.

Seller shall remain co-owner of any "Agreements," "Personal Property" and
"Unitization and Pooling Agreements" to the extent they pertain to any
property or formation owned by Seller that is not exclusively part of the
Wells.

     3.   Effective Date.  The purchase and sale of the Assets shall be
effective, for all purposes, including allocation of revenue, expenses and
taxes,  as of August 1, 1996 at 7:00 a.m. local time at the site of the Assets
(the  "Effective  Date").

     4.   Purchase Payments. Buyer shall pay to Seller the Purchase Price
defined in Section 4.1 and the Credit Payment Amounts defined in Section 4.2.

          4.1  Purchase Price. The purchase price for the Assets shall be 
$240,000 (the "Purchase Price"). Buyer shall pay the Purchase Price to Seller
in immediately available funds at Closing.

          4.2  Credit Payment Amount. "Credit Payment Amount" shall mean, for
any Payment Period, an amount equal to $0.70 of each dollar of tax credits
(the "Tax Credits") available to Buyer under 29 of the Internal Revenue Code
of 1986, as amended (the "IRC"), as a result of the sale of Subject 
Hydrocarbons by or on behalf of Buyer, to the extent that such 

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Subject Hydrocarbons (i) constitute "qualified fuels" within the meaning of IRC
29(c), (ii) meet the requirements of IRC 29(d)(1), 29(d)(4) and 29(f), during
(x) such Payment Period and (y) any earlier Payment Period to the extent the
dollar amount of Tax Credits attributable thereto was not taken into account in
a Credit Payment Amount for a previous Payment Period, and (iii) are produced
from the Wells. For purposes of the preceding sentence, Tax Credits available
to Buyer under IRC 29 shall be determined after taking into account any
phase-out of Tax Credits under IRC 29(b)(1) and any applicable inflation
adjustment under IRC 29(b)(2), but shall be determined without regard to
limitations on Buyer's or its affiliate's use of Tax Credits imposed by IRC
29(b)(6) and without regard to whether Buyer or its affiliates actually utilize
such Tax Credits. The Credit Payment Amount for any given Payment Period shall
initially be based on estimated Subject Hydrocarbon production and sales data
available at the time of the calculation of such amount and later corrected
when actual data is available. The Credit Payment Amount shall be determined on
the assumption that (i) the Production Payment is treated as a production
payment for federal income tax purposes, and (ii) Buyer is treated as owning
the economic interest in minerals in place in the Assets. Credit Payment
Amounts shall be calculated and, unless otherwise provided, will be due and
payable with respect to gas produced and sold from August 1, 1996 until the
earlier of (x) the aggregate of all Credit Payment Amounts paid pursuant to
this Agreement equals $950,000 (subject to the provisions of Paragraph
1.a.(vii) of the Option), (y) December 31, 2002, or (z) the first day on which
Tax Credits are no longer permitted for gas attributable to the Subject
Hydrocarbons and produced and sold from the Wells. The Credit Payment Amount
shall include, without limitation, payments for Tax Credits attributable to
natural gas liquids produced from the Subject Hydrocarbons, subject to the
provisions of Sections 7.23 and 12.8. If for any reason the Tax Credits are
repealed by Congressional statute or resulting regulation, no Credit Payment
Amount shall be due with respect to Subject Hydrocarbons subject to such
repeal. If for any reason the amount of Tax Credits contemplated under this
Agreement are reduced by Congressional statute or resulting regulation, the
Credit Payment Amounts due under this Agreement shall be reduced commensurate
with such reduction in Tax Credits. For purposes of the foregoing, the term
"Subject Hydrocarbons" shall have the meaning set forth in the Assignment.

     5. Apportionment of Production, Revenues, Taxes and other Expenses. Buyer
shall be entitled to revenue from the sale of hydrocarbons produced from the
Wells on or after the Effective Date, subject to the Production Payment,
Reversion Interest and the Option. Buyer shall pay for costs and expenses
incurred with respect to the Assets on or after the Effective Date. Seller
shall be entitled to revenue from the sale of hydrocarbons produced from the
Wells before the Effective Date, and shall pay for costs and expenses incurred
with respect to the Assets prior to the Effective Date. Taxes relating to the
Assets, including

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ad valorem, property, production, severance and other taxes (other than income
taxes) shall be allocated in the same manner as other expenses. Taxes that are
measured by or that relate to production shall be treated as expenses in
connection with such production regardless of the period for which such taxes
are assessed.

     6.   Buyer's Representations and Warranties.  Buyer makes the following
representations and warranties as of the date of execution of this Agreement:

          6.1  Existence. Buyer is a limited liability company, duly organized,
validly existing and formed under the law of the State of Delaware, and Buyer
is duly qualified to carry on its business, and is duly qualified and in good
standing, in each of the states in which the nature of its business and
activities requires it to be so qualified.

          6.2  Power and Authority. Buyer has all requisite power and authority
to carry on its business as presently conducted, to enter into this Agreement
and each of the documents contemplated to be executed by Buyer at Closing, and
to perform its obligations under this Agreement and under such documents. The
consummation of the transactions contemplated by this Agreement and each of
the documents contemplated to be executed by Buyer at Closing will not
violate, nor be in conflict with, (i) any provision of Buyer's organizational
or governing documents, (ii) any material agreement or instrument to which
Buyer is a party or is bound, or (iii) any judgment, decree, order, statute,
rule or regulation applicable to Buyer.

          6.3  Authorization. The execution, delivery and performance of this
Agreement and each of the documents contemplated to be executed by Buyer at
Closing and the transactions contemplated hereby and thereby have been duly
and validly authorized by all requisite action on the part of Buyer.

          6.4  Execution and Delivery. This Agreement has been duly executed
and delivered on behalf of Buyer, and at the Closing all documents,
instruments and schedules required hereunder to be executed and delivered by
Buyer shall have been duly executed and delivered. This Agreement does, and
such documents and instruments shall, constitute legal, valid and binding
obligations of Buyer enforceable in accordance with their terms, subject to
(i) applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws of general application with respect to creditors, (ii) general
principles of equity and (iii) the power of a court to deny enforcement of
remedies generally based upon public policy.

          6.5  Securities Laws. Buyer is purchasing the Assets for Buyer's own
account, not for public distribution thereof, and Buyer shall not sell or
transfer all or any part of, or any interest in, the Assets in violation of
the Securities Act 

                                     -4-

of 1933, as amended, and the rules and regulations thereunder, or the
securities laws of any state.

          6.6  Brokers' Fees. Buyer has incurred no liability, contingent or
otherwise, for brokers' or finders' fees relating to the transactions
contemplated by this Agreement for which Seller shall have any responsibility
whatsoever.

     7.   Seller's Representations and Warranties.  Seller makes the
following representations and warranties as of the date of this Agreement:

          7.1  Existence. Seller is a corporation duly organized and validly
existing under the law of the State of Delaware, and Seller is duly qualified
to carry on its business, and is in good standing in the States of Delaware,
Oklahoma and Louisiana.

          7.2  Power and Authority. Seller has all requisite authority to carry
on its business as presently conducted, to enter into this Agreement and each
of the documents contemplated to be executed by Seller at Closing, and to
perform its obligations under this Agreement and under such documents. The
consummation of the transactions contemplated by this Agreement and each of
the documents contemplated to be executed by Seller at Closing will not
violate, nor be in conflict with, (i) any provision of Seller's Certificate of
Incorporation, bylaws or other governing documents, (ii) any material
agreement or instrument to which Seller is a party or is bound, or (iii) any
judgment, decree, order, statute, rule or regulation applicable to Seller;
provided that, the representations and warranties contained in clauses (ii)
and (iii) of this Section 7.2 are subject to (a) consents of or filings with
the United States Department of Interior or the applicable state agencies or
authorities in connection with the assignment of any federal or state leases
or any interest therein to the extent such consents are typically received or
filings typically made subsequent to such assignment ("Governmental
Consents"), (b) preferential rights to purchase all or any portion of the
Assets and consent to or notices of assignment necessary to convey all or any
portion of the Assets which are not Governmental Consents, and (c) any
violation of any maintenance of uniform interest provision in any applicable
operating agreement.

          7.3  Authorization.  The execution, delivery and performance
of this Agreement and each of the documents contemplated to be executed by
Seller at Closing and the transactions contemplated hereby and thereby have
been duly and validly authorized by all requisite corporate action on the part
of Seller.

          7.4  Execution and Delivery. This Agreement has been duly executed
and delivered on behalf of Seller, and at the 

                                     -5-

Closing all documents, instruments and schedules required hereunder to be
executed and delivered by Seller will be duly executed and delivered. This
Agreement does, and such documents and instruments shall, constitute legal,
valid and binding obligations of Seller enforceable in accordance with their
terms, subject to (i) applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general application with respect to
creditors, (ii) general principles of equity and (iii) the power of a court to
deny enforcement of remedies generally based upon public policy.

          7.5  Brokers' Fees. Seller has incurred no liability, contingent or
otherwise, for brokers' or finders' fees relating to the transactions
contemplated by this Agreement for which Buyer shall have any responsibility
whatsoever.

          7.6  Reserve Report. The term "Reserve Report" shall mean the reserve
report prepared by Seller and dated as of June 1, 1996, which is based on
reserves as of December 31, 1995, as adjusted by estimated production from
January 1, 1996 through August 1, 1996, and attached hereto as Exhibit E. To
Seller's best knowledge, the average price for sales of hydrocarbons (based on
contract prices for existing effective contracts and estimates of regional
spot prices adjusted for regional transportation costs), historical costs of
operations, production volumes, and payout data used by Seller in the
preparation of the Reserve Report were, on the dates so used, accurate in all
material respects.

          7.7  Liens. Except for the burdens and obligations created by or
arising under the Leases and except for Permitted Encumbrances, the Assets are
free and clear of all Encumbrances. As used herein, the term "Encumbrances"
shall mean all royalties, overriding royalties, production payments, debts,
liens, mortgages, security interests, and encumbrances. As used herein, the
term "Permitted Encumbrances" shall mean the following:

                    (i) the burdens, encumbrances and obligations created by or 
          arising under the Wells and other agreements affecting the
          Assets, and all royalties, overriding royalties, net profits
          interests, carried interests, reversionary interests, back-in rights
          and other burdens taken into account in computing the net revenue
          interests ("NRI") and working interests ("WI") set forth on Exhibit
          B for the Wells;

                    (ii) all rights to consent by, required notices to, filings
          with, or other actions by governmental entities in connection with
          the sale or conveyance of the Assets if the same are customarily
          obtained subsequent to such sale or conveyance;

                                     -6-

                    (iii) rights of reassignment upon surrender of the
          Leases held by predecessors in interest to Seller;

                    (iv) easements, rights-of-way, servitudes, permits, 
          licenses, surface leases and other rights in respect of surface
          use to the extent these do not materially interfere with operations
          or production on or from the Assets;

                    (v) rights and regulatory powers reserved to or vested in 
          any municipality or governmental, statutory or public authority;

                    (vi) all Material Contracts to the extent same do not 
          reduce Seller's interest in the production from the Wells to less 
          than the NRI set forth on Exhibit B;

                    (vii) any (a) undetermined or inchoate liens or charges
          constituting or securing the payment of expenses which were incurred
          incidental to maintenance, development, production or operation of
          the Assets or for the purpose of developing, producing or processing
          oil, gas or other hydrocarbons therefrom or therein and (b)
          materialman's, mechanics', repairman's, employees', contractors',
          operators' or other similar liens, security interests or charges for
          liquidated amounts arising in the ordinary course of business
          incidental to construction, maintenance, development, production or
          operation of the Assets or the production or processing of oil, gas
          or other hydrocarbons therefrom, that are not delinquent and that
          will be paid in the ordinary course of business or, if delinquent,
          that are being contested in good faith;

                    (viii) any liens for taxes not yet delinquent or, if
          delinquent, that are being contested in good faith in the ordinary
          course of business;

                    (ix) any liens or security interests created by law or 
          reserved in Leases for royalty, bonus or rental or for compliance 
          with the terms of the Leases;

                    (x) any prohibitions or restrictions similar to the 
          Maintenance of Uniform Interest Provisions contained in Article
          VIII.D. of the A.A.P.L. Form 610-1982 Model Form Operating Agreement
          and any contribution obligations under provisions similar to Article
          VII.B of such Model Form Operating Agreement;

                    (xi) all preferential rights to purchase all or any portion
          of the Assets and consents to or notices of assignment necessary to
          convey all or any portion 

                                     -7-

          of the Assets which are not described in item (ii) of this
          definition of Permitted Encumbrances;

                    (xii) all agreements and obligations relating to imbalances
          with respect to the production, transportation or processing of gas
          or calls or purchase options on oil or gas production;

                    (xiii) all agreements and obligations relating to 
          gathering, transportation or processing of gas or oil production;

                    (xiv) all treating, processing, sales or marketing 
          agreements which have a fee which is based on a percentage of
          proceeds or an obligation to transfer certain volumes of gas or oil
          production in-kind;

                    (xv) all obligations by virtue of a prepayment, advance
          payment or similar arrangement under any contract for the sale
          of gas production, including by virtue of "take or pay" or similar
          provisions, to deliver gas produced from or attributable to the
          Wells after the Effective Date without then or thereafter being
          entitled to receive full payment therefor;

                   (xvi) all liens, charges, encumbrances, contracts, 
          agreements, instruments, obligations, defects, irregularities
          and other matters affecting any Asset which individually or in the
          aggregate will not interfere materially with the operation, value or
          use of such Asset;

                   (xvii) the burdens, encumbrances and obligations created by 
          or arising under this Agreement, the Assignment, Option or
          Management Agreement.

          7.8  Title. Seller has Defensible Title to the Assets. The term
"Defensible Title" means such title of Seller in the Leases that, subject to
and except for the Permitted Encumbrances, entitles Seller to receive an
interest in production from the Wells not less than the respective NRIs in the
Wells as set forth on Exhibit B, and entitles Seller to own the respective WIs
in the Wells as set forth on Exhibit B under applicable state law and for
federal income tax purposes. Any Well or Lease for which Seller has less than
Defensible Title as of the date of this Agreement shall be called a "Defective
Interest." Buyer's exclusive remedy for Seller's breach of this representation
and warranty is set forth in Section 12.3. Buyer and Seller shall cooperate 
fully and consult in good faith with each other in the litigation of any
matter identified in this Section 7.8

          7.9  Preferential Purchase Rights and Consents. To Seller's best
knowledge, except as set forth in Exhibit F, there do not exist any
preferential rights to purchase all or any 

                                     -8-

portion of the Assets. To Seller's best knowledge, except for Governmental
Consents and other matters as set forth in Exhibit F, there are no consents or
waivers necessary to convey any material portion of the Assets pursuant to
this Agreement. Buyer's exclusive remedy for Seller's breach of this
representation and warranty is set forth in Section 12.4.

          7.10 No Prepayments. To Seller's best knowledge, except as set forth
in Exhibit G, Seller is not obligated, by virtue of a prepayment arrangement,
a "take or pay" arrangement, a production payment, hedging or any other
arrangement, to deliver any material portion of hydrocarbons produced from the
Wells at some future time without then or thereafter receiving full payment
therefor.

          7.11 Gas Balancing. To Seller's best knowledge, except as set forth
in Exhibit H, no material portion of hydrocarbons produced from the Wells are
subject to a gas imbalance or other arrangement requiring delivery of
hydrocarbons after the Effective Date without receiving full payment therefor.

          7.12 Leases. To Seller's best knowledge, all royalties, rentals and
other payments due by Seller under the Leases have been properly and timely
paid except where the failure to pay same will not have a material adverse
effect on the value of the particular Asset. To Seller's best knowledge, all
Leases are presently in full force and effect. To Seller's best knowledge,
Seller has not received a written notice of material default under any Lease
that could result in cancellation of the Lease. Any Lease which is not
presently in full force and effect, or for which Seller has not paid all
royalties, rentals or other payments due by Seller, or for which Seller is in
material default as of the date of this Agreement shall be treated as a
Defective Interest. Buyer's exclusive remedy for Seller's breach of this
representation and warranty is set forth in Section 12.3.

          7.13 Operations in Progress. Except for operations disclosed on
Exhibit I and normal daily operating expenses, as of the date of this
Agreement there are no operations in progress with respect to the Assets which
are reasonably expected to exceed $35,000 in cost net to Seller's interest and
which shall be payable in whole or in part on or after the Effective Date.

          7.14 Hydrocarbon Sales Contracts. Except as specifically indicated
in Exhibit J and for calls on production, options to purchase or similar
rights with respect to production from the Wells, no material portion of the
hydrocarbons produced from the Wells is subject to a sales contract or other
agreement relating to the production, gathering, transporting, processing,
treating or marketing of hydrocarbons except those which can be terminated by
Seller upon not more than three months notice.

                                     -9-

          7.15 Proceeds of Production. To Seller's best knowledge, Seller is
currently receiving from all purchasers of production from the Wells at least
the NRI set forth in Exhibit B without suspense or any indemnity other than
the normal division order warranty of title, except where the failure to
receive same would not have a material adverse effect on the value of the
Assets.

          7.16 Material Contracts. To Seller's best knowledge, and subject to
the execution of new contracts in the ordinary course of business if a
contract has expired or has been terminated, all contracts material to the
Assets are in full force and effect (the "Material Contracts"). Seller has not
received written notices of material default under the Material Contracts that
remain uncured, or that Seller has not made provisions for so that such event
of default will not have a material adverse effect on the Assets.

          7.17 Bills in the Ordinary Course. In the ordinary course of
business and to Seller's best knowledge, Seller is current on its payments for
all costs and expenses pertaining to the Assets, except where such payments
are being contested with good faith or except where the failure to make such
payments would not have a material adverse effect on the Assets.

          7.18 Legal Proceedings. Except as set forth on Exhibit K, no suit,
action or other proceeding is pending against Seller or, to Seller's best
knowledge, threatened in writing against Seller before any court, governmental
agency, arbitrator or other panel that relates to the Assets or the
transaction contemplated by this Agreement that might (i) impair Seller's
ability to consummate the transaction contemplated by this Agreement or (ii)
cause the impairment or loss of Seller's title to any material portion of the
Assets or the value thereof or (iii) hinder or impede the operation or
enjoyment of the Leases in any material respect insofar as they relate to the
Assets.

          7.19 Compliance with Laws. To Seller's best knowledge, all laws,
rules, regulations, ordinances and orders (of all governmental and regulatory
bodies having authority over the Assets) material to the operation of the
Assets have been complied with in all material respects.

          7.20 Environmental Matters. To Seller's best knowledge, no
conditions exist on the Assets that would subject Seller or Buyer to any
damages, remedial action, injunctive relief or other liability under any
Environmental Laws, including without limitation, all costs associated
directly or indirectly with cleanup, removal, closure or other response
actions; provided that Seller or Buyer may be subject to such matters which
are (i) routine in the operation of the Assets and (ii) in the aggregate not
material to the value of the Assets as a whole. Seller and its predecessors
have obtained and are in material 

                                     -10-

compliance with all material permits, licenses and approvals affecting the
Assets and required under Environmental Laws.

          As used herein, the term "Environmental Laws" shall mean any and all
existing laws (common or statutory), rules, regulations, codes, or ordinances
issued or promulgated by any federal, state or local governmental entity
relating to the management and disposal of waste materials, the protection of
public or employee health and safety, the cleanup, remediation or prevention
of pollution, or the protection of the environment.

          7.21 Payment of Taxes. To Seller's best knowledge, all ad valorem,
property, production, severance, excise and similar taxes and assessments
based on or measured by the ownership of property or the production of
hydrocarbons or the receipt of proceeds therefrom on the Assets which are
currently due and payable have been properly and timely paid, except to the
extent such taxes are being contested in good faith in the ordinary course of
business.

          7.22 Tax Partnerships. Except as set forth in Exhibit L, no portion
of the Assets (i) has been contributed to and is currently owned by a tax
partnership; (ii) is subject to any form of agreement (whether formal or
informal, written or oral) deemed by any state or federal tax statute, rule or
regulation to be or to have created a tax partnership; or (iii) otherwise
constitutes "partnership property" (as that term is used throughout Subchapter
K of Chapter 1 of Subtitle A of the IRC) of a tax partnership. Seller retains
all liability and responsibility, if any, to make all payments to appropriate
parties under the tax partnerships identified on Exhibit L. In addition to all
other remedies available to Buyer, Seller agrees to indemnify Buyer for all
costs, losses, damages, penalties or expenses incurred by Buyer as a result of
any of the Assets having been contributed to or currently owned by a tax
partnership, and Buyer may elect, with a proportionate rebate in the Purchase
Price in accordance with the procedures of Section 12.3 and the provisions of
Section 12.4, to reassign such Assets to Seller. For purposes of this Section
7.22, a "tax partnership" is any entity, organization or group deemed to be a
partnership within the meaning of IRC 761 or any similar state or federal
statute, rule or regulation, and that is not excluded from the application of
the partnership provisions of IRC Subchapter K of Chapter 1 of Subtitle A and 
of all similar provisions of state tax statutes or regulations by reason of
elections made, pursuant to IRC 761(a) and all such similar state or federal
statutes, rules and regulations, to be excluded from the application of all
such partnership provisions. With respect to any tax partnership identified on
Exhibit L, Seller and Buyer have the power to elect a basis adjustment under
IRC 754 in connection with the transaction contemplated by this Agreement, and
the consummation of the transaction contemplated by this Agreement will not
(i) result in a termination of such tax partnership, nor (ii) result in the
reduction of any "Tax

                                     -11-

Credits" (as that term is defined in the definition of "Credit Payment
Amount" in the Assignment) attributable to the Assets.

          7.23  Other Tax Matters.

               (a)  NGPA Determination.

                    (i) Applications. Except for the Wells listed on Exhibit M,
          Seller or its predecessor in interest has filed or caused to be
          filed with the applicable state and federal agencies "Applications"
          for well determination(s) for each Well under the Natural Gas Policy
          Act of 1978, as amended (the "NGPA") and the rules and regulations
          of the Federal Energy Regulatory Commission (the "FERC") under such
          act (the "NGPA Regulations") requesting a determination that all or
          a quantifiable portion of the gas produced from a particular Well is
          "natural gas produced from designated tight formations" as defined
          in 18 C.F.R. 274.205(e). Each such application has been approved by
          the indicated state and federal agency and by the FERC and has been
          finally approved under and in accordance with Section 503 of the
          NGPA. Such applications comply with the requirements of the NGPA and
          the NGPA Regulations and do not (1) contain any untrue statement of
          material fact or (2) omit any statement of material fact necessary
          to make the statements therein not misleading. No further
          applications are required under the NGPA and the NGPA Regulations to
          allow the legal sale of all gas produced from the Wells at a price
          equal to the price for such gas currently being received.

                    (ii) Wells For Which Applications Were Not Filed. With 
          respect to the Wells listed on Exhibit M, Seller, its predecessor in
          interest, or the operator of such Wells has not to Seller's
          knowledge filed or caused to be filed with the applicable state and
          federal agencies "Applications" for well determinations under the
          NGPA and the rules and regulations of the FERC. With respect to the
          Wells listed on Exhibit M, and except as provided in Section 12.9,
          (a) all such Wells were (x) drilled (or recompleted in accordance
          with private letter rulings issued by the Internal Revenue Service
          ("IRS") to third parties, or will be recompleted in an uphole 
          formation in accordance with Situation 1 of Revenue Ruling 93-54)
          into a "qualifying formation" (tight formation or other qualifying 
          formation) within the time frames set forth in subsection (b)
          below or (y) drilled within the time frames set forth in subsection
          (b) below but no certificate was obtained from either the state
          agency or the FERC or both stating that the Well is qualified and
          but for the absence of such certificate the Well is qualified under
          IRC 29, and as to both (x) and (y) the hydrocarbons produced and
          sold from such Wells qualify for the Tax Credit, or (b) Seller has a
          reasonable basis to believe that either (x) or (y) is true.

                                     -12-

                    (iii) Wells Where Commingling With Non-Qualified Production
          Is Conducted. For Wells, if any, where production from a qualifying
          formation and production from a non-qualifying formation are
          commingled, the production has been allocated to each producing
          formation on a reasonable basis, consistent with industry standards
          and in accordance with procedures, if any, that have been approved
          by appropriate state and federal agencies.

               (b) Wells. Each Well (1) has been timely drilled under IRC
     29(f)(1)(A) (drilled after December 31, 1979 but before January 1, 1993),
     or administrative interpretations thereof, and (2) has been timely
     drilled under IRC 29(c)(2)(B)(ii) or administrative interpretations
     thereof, or was committed to interstate commerce (as defined in Section
     2(18) of the Natural Gas Policy Act of 1978, as in effect on November 5,
     1990) as of April 20, 1977.

               (c) No Qualified Production prior to January 1, 1980. Prior to
     January 1, 1980, there was no production of oil or gas from, nor were any
     wells drilled or completed on, the "property" (within the meaning of IRC
     29) on which any Well is located nor was any portion of any such
     "property" included within a unit from which oil or gas was produced or
     in which any wells were drilled or completed prior to such date.

               (d) No Enhanced Oil Recovery Credit. No oil or gas produced from
     the Wells qualifies or has qualified for (i) the enhanced oil recovery 
     credit or any other credit under IRC 43 and none has been claimed or
     taken on such oil or gas, or (ii) the credit allowed under IRC 38 by
     reason of the energy percentage with respect to property used in the
     project.

               (e) No Government Financing. No portion of any drilling, 
     equipping, seismic or other development costs of the Assets paid by
     Seller were financed by any state, local or federal agency, directly or
     indirectly, including by way of grant, loan, expenditure or loan
     guaranty.

               (f) Seller Status. Seller is not a non-resident alien, foreign
     corporation, foreign partnership, foreign trust or foreign estate (as 
     those terms are defined in the IRC and the rules and regulations
     promulgated thereunder), and Seller shall deliver to Buyer an affidavit
     of non-foreign ownership in the form of Exhibit N.

     8.   Certain Tax Matters.

          8.1 Opinion of Tax Counsel, Right to Request Ruling . At Closing,
Buyer at its sole cost, shall provide Seller a copy of the opinion which Buyer
has requested from Arthur Andersen LLP ("AA") regarding the tax consequences
of the transaction contemplated by this Agreement (the "Tax Opinion").

                                     -13-

Notwithstanding the Tax Opinion, Buyer shall have the right, but not the
obligation, to request a "private letter ruling" from the IRS to the effect
that (i) Buyer's interest in the Assets constitutes an economic interest in
minerals in place, and (ii) the Production Payment will be treated as a
mortgage loan under IRC 636 (a "Ruling"). Should Buyer elect to request a
Ruling, Buyer shall have no right to terminate or rescind this Agreement if
the Ruling is not acceptable to Buyer. Seller shall, in good faith, amend this
Agreement and the documents contemplated hereunder in order that Buyer may
obtain a favorable Ruling, if, in Seller's sole and reasonable discretion,
such amendments will not have a material adverse effect on Seller.

          8.2 Tax Status. Seller and Buyer intend that, for tax purposes only,
the Production Payment will be treated as a mortgage loan and not as an
"economic interest" in the Assets. Buyer shall have no recourse against Seller
in the event that the Production Payment is not so treated until the
commencement of a Tax Audit, in which event the provisions of Section 8.3
shall control.

          8.3 Escrow in the Event of Tax Audit. Promptly following the earlier 
to occur of (1) the date which is 90 days following receipt by a member of Buyer
of a notice from the IRS of the commencement of an administrative proceeding at
the partnership level pursuant to IRC 6223(a)(1) (a "Tax Audit"), or (2) the
date of issuance by the IRS of either (i) a notice of proposed adjustment with
respect to any audit proceedings or (ii) a so-called "60 day letter" (such
earlier date, the "Escrow Commencement Date"), Seller and Buyer shall enter into
an Escrow Agreement with an escrow agent, substantially in the form of Exhibit
U; provided, however, that Buyer may waive its rights to enter into such an
Escrow Agreement, in which event the provisions of Sections 8.3(a) through
8.3(e) shall not apply. If Buyer does not waive its rights to an Escrow
Agreement, the Escrow Agreement and the funds in the "Escrow Account"
established pursuant thereto shall be administered in accordance with the
following provisions:

               (a) Beginning with the Payment Period (as that term is defined 
     in the Assignment) in which the Escrow Commencement Date occurs and
     continuing for each Payment Period until the "Conclusion of a Tax Audit"
     (as that term is defined below, with such period of time being the
     "Escrow Period"), Buyer shall deposit into the Escrow Account the Credit
     Payment Amount for each Payment Period (the "Escrow Amount" and the sum
     of all Escrow Amounts being the "Escrowed Funds"). The Escrowed Funds
     shall not include any funds which were due from Buyer to Seller prior to
     the Escrow Commencement Date, but which were not paid to Seller. During
     the Escrow Period, Buyer and Seller agree that Gross Proceeds plus Other
     Income (as contemplated in the Assignment) will be sufficient to perform
     all of the Services under the Management Agreement. For tax purposes

                                     -14-

     only, Buyer shall be treated as the owner of the Escrowed Funds.

               (b) A Tax Audit will be deemed to have concluded upon the 
     earliest to occur of the following events: (i) the receipt by Buyer
     of written notice from the IRS that it will not assert any adjustments
     with respect to the transactions contemplated by this Agreement; (ii)
     Buyer entering into a settlement agreement with the IRS which resolves
     the open federal income tax issues in connection with such transactions;
     (iii) a judgment of a court of law or a decision in an administrative
     proceeding becoming non-appealable with respect to the federal income tax
     issues in connection with such transactions; or (iv) the expiration of
     the applicable period of limitations for making assessments with respect
     to the years under examination in the Tax Audit if the IRS has made no
     assessments within such period with respect to such transactions (such
     earliest event being deemed the "Conclusion of a Tax Audit").

               (c) At the Conclusion of a Tax Audit, Buyer and Seller agree to
     recalculate, pursuant to the provisions of the second paragraph of this
     Section 8.3(c), any amounts due Buyer and Seller pursuant to the terms of
     this Agreement for the Escrow Period, taking into account the reduction,
     if any, in the Credit Payment Amounts due for each Payment Period during
     the Escrow Period resulting from the Tax Audit (including any settlement
     described in Section 8.4). Buyer shall receive from the Escrowed Funds an
     amount equal to 70% of the total dollar amount of any reduction in Tax
     Credits available to Buyer with respect to hydrocarbon production from
     the Wells as a result of the application of the preceding sentence, or
     Sections 8.3(d) and (e) as applicable, including interest thereon, for
     the periods on or after the Escrow Commencement Date. Seller shall
     receive all remaining Escrowed Funds, including interest thereon. Except
     for such adjustment, there is no other obligation of Seller to make any 
     other payment to Buyer with respect to the Tax Audit, subject to Section 
     12.8 below.

     If, at the Conclusion of a Tax Audit, payments have been made into
     the Escrow Account with respect to any Open Period, distributions from
     the Escrow Account with respect to the Open Period (whether or not
     another Tax Audit has commenced and remains outstanding with respect to
     such period) shall, subject to Section 8.3(e), be shared under this
     Section 8.3(c) in accordance with the principles of any "no-change
     letter," binding settlement or final court decision or administrative
     determination with respect to the Tax Audit or, if the statute of
     limitations with respect to the Tax Audit expired without an IRS
     adjustment having been imposed, in accordance with the terms of this
     Agreement (in either case, the "Audit Terms"). An "Open Period" shall

                                     -15-

     mean any period not covered by a Tax Audit if there has been a Conclusion
     of such Tax Audit.

     Credit Payment Amounts which are credited or paid to Seller other
     than from Escrowed Funds with respect to Open Periods shall, subject to
     the second paragraph of Section 8.3(e), be computed in accordance with
     the Audit Terms.

               (d) If a new Tax Audit (the "New Tax Audit") is commenced with
     respect to an Open Period before the expiration of the applicable statute
     of limitations and after the Conclusion of a Tax Audit, then a new Escrow
     Account shall not be established in accordance with Section 8.3(a) with
     respect to such New Tax Audit, and Credit Payment Amounts for the Open
     Period shall, subject to Section 8.3(e), continue to be computed in
     accordance with the applicable Audit Terms.

               (e) Upon the Conclusion of a New Tax Audit with respect to an 
     Open Period, the Credit Payment Amounts with respect to the Open Period 
     shall be recomputed in accordance with any no-change letter, binding 
     settlement or final court or administrative decision resulting from the 
     New Tax Audit.

     If the statute of limitations for any Open Period expires without an IRS 
     adjustment having been imposed for such Open Period, the Credit Payment 
     Amounts with respect to such Open Period shall be recomputed in
     accordance with the terms of this Agreement without regard to the result
     of any Tax Audit, provided that such treatment is consistent with Buyer's
     federal income tax returns (as amended) for such Open Period. Buyer shall
     make reasonable efforts to claim all the Tax Credits arising from the
     sale of production from the Assets during each Open Period.

     Promptly following a recomputation of Credit Payment Amounts pursuant to 
     the first two paragraphs of this Section 8.3(e), Buyer shall pay to Seller
     (or Seller shall pay to Buyer) any amount to which Seller (or Buyer) is 
     entitled under such recomputation.

          8.4 Settlements Resulting from a Tax Audit . If Buyer elects to
enter into a negotiated settlement with the IRS of any Tax Audit adjustments,
Buyer shall, in good faith, consult with Seller regarding the suggested terms
of such settlement; provided, however, that Buyer shall be under no obligation
to comply with any suggestion of Seller. Buyer shall provide to Seller copies
of all correspondence or pleadings between Buyer and the IRS regarding any Tax
Audit. Seller shall be entitled to monitor all hearings and meetings with the
IRS associated with such settlement negotiations. Notwithstanding the
foregoing, Section 12.8 shall govern Seller's rights to monitor or control
whether Tax Credits are available for natural gas liquids.

                                     -16-

     9.   Covenants.

          9.1 Cooperation and Access. Seller shall fully cooperate with
Buyer's post-Closing due diligence efforts, both at Seller's offices and at
the site of the Assets.

          9.2 Insurance. At or prior to the Closing, Seller shall cause Buyer
to be named as an additional insured on all insurance policies Seller has that
pertain in any way to the ownership and operation of the Assets. At Closing,
Seller will provide Buyer with Certificates of Insurance naming Buyer as an
additional insured, or other evidence, satisfactory to Buyer, of compliance
with this Section 9.2.

     10.  Closing  Conditions.

          10.1   Seller's Closing Conditions.  The obligation of Seller
to consummate the transactions contemplated hereby is subject, at the option
of Seller, to the satisfaction on or prior to the Closing Date of all of the
following  conditions:

               (a) Representations, Warranties and Covenants. The (1)
     representations and warranties of Buyer contained in this Agreement shall
     be true and correct in all respects on and as of the Closing Date, and
     (2) covenants and agreements of Buyer to be performed on or before the
     Closing Date in accordance with this Agreement shall have been duly
     performed in all respects.

               (b) Closing Documents. Buyer shall have executed and delivered 
     the documents which are contemplated to be executed and delivered by it
     pursuant to Section 11 hereof prior to or on the Closing Date.

               (c) No Action. On the Closing Date, no suit, action or other
     proceeding (excluding any such matter initiated by Seller or any of its
     affiliates) shall be pending or threatened before any court or
     governmental agency or body of competent jurisdiction seeking to enjoin
     or restrain the consummation of this Agreement or recover damages from
     Seller resulting therefrom.

          10.2  Buyer's Closing Conditions.  The obligation of Buyer to
consummate the transactions contemplated hereby is subject, at the option of
Buyer, to the satisfaction on or prior to the Closing Date of all of the
following conditions:

               (a) Representations, Warranties and Covenants. The (1)
     representations and warranties of Seller contained in this Agreement
     shall be true and correct in all respects on and as of the Closing Date,
     and (2) covenants and agreements of Seller to be performed on or before
     the 

                                     -17-

     Closing Date in accordance with this Agreement shall have been duly
     performed in all respects.

               (b) Closing Documents. Seller shall have executed and delivered
     the documents which are contemplated to be executed and delivered by it
     pursuant to Section 11 hereof prior to or on the Closing Date.

               (c) No Action. On the Closing Date, no suit, action or other
     proceeding (excluding any such matter initiated by Buyer or any of its
     affiliates) shall be pending or threatened before any court or
     governmental agency or body of competent jurisdiction seeking to enjoin
     or restrain the consummation of this Agreement or recover damages from
     Buyer resulting therefrom.

               (d) Engineering Confirmation. Williamson Petroleum Consultants,
     Inc., using the same cost and pricing assumptions as used in the Reserve
     Report, shall confirm that Seller's estimates of the amount of reserves
     and estimated annual production rates with respect to the Assets are, in
     the aggregate, reasonable.

               (e) Tax Opinion. On or before the Closing Date, Buyer shall have
     received the Tax Opinion described in Section 8.1.

     11.  Closing. The consummation of the transactions contemplated hereby
(the "Closing") shall occur, either in person or by facsimile, at the offices
of Davis, Graham & Stubbs LLP on the date of this Agreement (the "Closing
Date") or at such other time and place as the parties may agree to in writing.
At Closing, the following events shall occur, each being a condition precedent
to the others and each being deemed to have occurred simultaneously  with  the 
others (except where the documents involved indicate otherwise):

          11.1 Payment of Purchase Price. Buyer shall deliver the Purchase
Price by wire transfer to Seller's account in accordance with written
instructions supplied by Seller at least three days prior to the Closing Date.

          11.2 Section 15.2 Payment. Seller and Buyer shall pay to the other,
in cash or its equivalent, the amount due pursuant to Section 15.2, if any, as
reimbursement for the expenses incurred in connection with this transaction.

          11.3 Notice of Preferential Rights and Consents. Seller shall
deliver to Buyer a copy of the notices sent to and any responses received from
third parties regarding preferential rights to purchase and consents affecting
the Assets with respect to the transactions contemplated by this Agreement.

                                     -18-

          11.4 Assignment; Option. Seller and Buyer shall execute and deliver
the Assignment and the Option. In addition, Seller shall prepare and Seller
and Buyer shall execute such other conveyances on official forms and related
documentation necessary to transfer the Assets to Buyer in accordance with
requirements of governmental regulations; provided, however, that any such
separate or additional conveyances required pursuant to this Section 11.4 or
pursuant to Section 15.1 (i) shall evidence the conveyance and assignment of
the Assets made or intended to be made in the Assignment, (ii) shall not
modify or be deemed to modify any of the terms, reservations, covenants and
conditions set forth in the Assignment, and (iii) shall be deemed to contain
all of the terms, reservations and provisions of the Assignment, as though the
same were set forth at length in such separate or additional conveyance.

          11.5 Non-Foreign Ownership Affidavit. Seller shall deliver to Buyer
the affidavit of non-foreign ownership substantially in the form of Exhibit N
one stating that Seller is a non-foreign entity for federal income tax
purposes.

          11.6 Evidence of Insurance. Seller shall provide Buyer with
certificates from Seller's insurers or other evidence that Buyer has been
named an additional insured on Seller's policies affecting the Assets.

          11.7 Contribution Agreement.  Buyer shall deliver to Seller
the Contribution Agreement by and among Fontenelle, Inc. and Bald Prairie,
Inc. as members of Buyer, Buyer and Seller (as a third party beneficiary),
substantially in the form set forth in Exhibit O.

          11.8 Guaranty Agreement. Buyer shall deliver to Seller the Guaranty
Agreement from FMR Corp. in favor of Buyer as beneficiary and Seller as third
party beneficiary, substantially in the form set forth in Exhibit O.

          11.9 Seller's Officer's Certificate.  Seller shall execute and
deliver to Buyer the Officer's Certificate, substantially in the form attached
as Exhibit P.

          11.10 Opinion on Behalf of Seller. Seller shall deliver to Buyer
the opinion substantially in the form set forth in Exhibit Q.

          11.11 Buyer's  Manager's Certificate.  Buyer shall execute and
deliver to Seller the Manager's Certificate substantially in the form attached
as Exhibit R.

          11.12 Opinions on Behalf of Buyer. Buyer shall deliver to Seller
the opinions of Morris, Nichols, Arsht & Tunnell, and of Davis, Graham &
Stubbs LLP, substantially in the forms set forth in Exhibit S.

                                     -19-

          11.13 Management Agreement.  Seller shall cause HS to execute
and deliver to Buyer and Buyer shall execute and deliver to Seller the
Management Agreement (the "Management Agreement") and Memorandum of Management
Agreement and Power of Attorney substantially in the forms set forth in
Exhibit T.

          11.14 Performance Power of Attorney.  Buyer shall execute and
deliver to Seller counterparts of a Limited Power of Attorney, substantially
in the form of Exhibit V.

          11.15 Tax Opinion. Buyer shall deliver to Seller a copy of
the Tax Opinion of AA.

          11.16 Additional Instruments.   Seller and Buyer shall execute, 
acknowledge and deliver to each other such additional instruments as are
reasonable and customary to accomplish the purposes of this Agreement.

     12.  Post-Closing  Matters.

          12.1 Files and Records. Following Closing, Seller shall retain
physical possession of all lease files, land files, division order files,
production marketing files and production records in Seller's possession
relating to the Assets (the "Records"). However, except to the extent that
Buyer's inspection thereof would violate legal constraints or legal
obligations, Buyer shall have the right to inspect the Records in Seller's
offices at any reasonable time. At Buyer's request in writing (which written
request may be delivered by facsimile), to the extent that Seller's delivery
thereof would not violate legal constraints or legal obligations, Seller shall
make copies of the Records or materials in the Records at Seller's expense and
shall deliver said copies to Buyer at Seller's expense, provided that Seller
may charge Buyer the actual costs for such copies and delivery if such costs
exceed $250 per request. If Buyer requires copies of the Records for its own
account, Seller will permit Buyer, at Buyer's own expense, to make copies of
pertinent material contained in the Records to the extent such action would
not violate legal constraints or legal obligations.

          12.2 Sales Taxes and Recording Fees. Seller shall be responsible for
making the payment to the proper authorities of all taxes and fees occasioned
by the sale of the Assets, including without limitation, any transfer fees and
sales taxes (which are to be apportioned one-half to Seller and one-half to
Buyer), and any documentary, filing and recording fees required in connection
with the filing and recording of any assignments or conveyances delivered
hereunder in the appropriate county, federal and/or state records.

          12.3 Purchase Price Rebates for Defective Interests. In addition to
the remedy provisions of Section 12.8, Buyer shall be entitled to the
following rebate if Seller does not have Defensible Title to the Assets. At
any time and from 

                                     -20-

time to time if Buyer discovers that Seller breached the representation and
warranty set forth in Section 7.8 or 7.12, Buyer may give Seller a Notice of
Defective Interests, which notice shall describe the Defective Interest and
the basis for the Defective Interest. Buyer shall be entitled to a rebate in
the Purchase Price for a Defective Interest which shall equal the difference
between the Purchase Price and the product of the Purchase Price multiplied by
a fraction, the numerator of which is the volume of reserves (net to Buyer)
allocated to the Wells not affected by the Defective Interest and the
denominator of which is the total volume of reserves (net to Buyer) allocated
to all of the Wells in the Reserve Report; provided, however, that if the
Defective Interest does not remain in effect during the entire productive life
of the subject Well, such fact shall be taken into account in determining the
amount of the rebate in the Purchase Price.

          The rebate of the Purchase Price calculated above shall be paid from
Seller to Buyer if and only if the aggregate amount to be rebated with respect
to all Defective Interests exceeds a threshold of $35,000, and if such amount
is exceeded, the rebate shall be made for all Defective Interests. In addition
to rebating a portion of the Purchase Price on account of Defective Interests,
Buyer and Seller agree that all other express dollar amounts, numbers or
volumes set forth in this Agreement, the Assignment and Option, shall each be
decreased, as appropriate, by multiplying such amount or number, as the case
may be, by a fraction, the numerator of which is the aggregate volume of
reserves associated with the Assets without such Defective Interest and the 
denominator of which is the total volume of reserves allocated to all of the 
Assets.

          12.4 Purchase Price and Other Rebates for Exercised Preferential
Purchase Rights, Failure to Obtain Consents. If the holder of any preferential
purchase right exercises such right and Seller cannot validly convey the
affected Asset to Buyer, or if a required consent (except for Governmental
Consents) to assign is not obtained or deemed obtained within 45 days
following Closing and the affected Asset cannot be validly conveyed to Buyer,
a portion of the Purchase Price shall be rebated for the value of such
affected Asset and such affected Asset shall be excluded from the Assets
conveyed to Buyer pursuant to the terms hereof (collectively the "Excluded
Assets"). The amount of the rebate in the Purchase Price for an Excluded Asset
shall be determined in accordance with the provisions of Section 12.3. In
addition to rebating a portion of the Purchase Price on account of Excluded
Assets, Buyer and Seller agree that all other express dollar amounts, numbers
or volumes set forth in this Agreement, the Assignment and Option, shall each
be decreased, as appropriate, for the Excluded Assets in accordance with the
provisions of Section 12.3.

          12.5 Reconveyance of Excluded Assets. Seller shall provide to Buyer,
within 45 days following Closing, copies 

                                     -21-

of all responses from third parties regarding the notices sent to such third
parties pursuant to Section 11.3. Upon written request from Seller, Buyer
shall reconvey to Seller all Excluded Assets, free and clear of any burdens,
liens and encumbrances created by, through or under Buyer.

          12.6 Allocation of Commingled Production and Costs. Seller may have
interests in the lands covered by the Leases that are not part of the Assets
("Seller's Interests"), which are producing hydrocarbons into a Well and such
hydrocarbons are commingled with the hydrocarbons produced from the Assets.
Seller shall use reasonable efforts to ensure that hydrocarbon production from
the Wells is allocated between Seller's Interests and the Assets on a
reasonable basis, consistent with industry standards and in accordance with
procedures, if any, that have been approved by appropriate state and federal
agencies. Costs and expenses shall be allocated between the Seller's Interests
and the Assets in accordance with the allocation of production between the
Seller's Interests and the Assets; provided that costs and expenses directly
attributable to Seller's Interests shall be allocated to such Seller's
Interests, and costs and expenses directly attributable to the Assets shall be
allocated to and debited against the Net Profits Account under the Assignment.

          12.7  Performance of Buyer.  Seller shall be entitled to the
remedy of specific performance of Buyer's obligations under this Agreement in
order to be assured of the benefits contemplated under this Agreement, the 
Assignment, Option or Management Agreement. Should Buyer fail to perform any
obligation under this Agreement, the Assignment, Option or Management
Agreement, which if unremedied would have a material adverse effect on Seller,
then Seller may give written notice to Buyer of such failure to perform. If
Seller gives such notice and Buyer does not remedy such failure within 60 days
of receipt of such notice, in addition to the remedy of specific performance,
Seller shall have the right to cause the attorney-in-fact of Buyer identified
in the Limited Power of Attorney to execute an Assignment, Bill of Sale and
Conveyance in a form substantially similar to that set forth in Exhibit V
covering any or all of the Assets which are adversely affected by such
failure. Seller and Buyer expressly waive any and all claims against the
attorney-in-fact named in the Limited Power of Attorney and any right to
enjoin such attorney-in-fact.

          12.8 Overpayments. For purposes of this Section 12.8, the term
"Payment Period" shall have the meaning given it in the Assignment.

                   (i) If at any time Buyer is determined to have paid Seller 
          more than the amount then due with respect to any Credit Payment 
          Amount as a result of a breach by Seller of its representations and 
          warranties in Section 7, then as Buyer's exclusive remedy, Seller 
          shall be obligated to

                                     -22-

          return any such overpayment, limited to amounts actually paid
          to Seller by Buyer, after Buyer notifies Seller of the amount of
          such overpayment and provides Seller substantiation thereof.
          Alternatively, Buyer may elect to offset the amount of any such
          overpayment against future Credit Payment Amounts.

                    (ii) The Credit Payment Amount shall include payments for
          credits attributable to natural gas liquids produced from the
          Subject Hydrocarbons until Buyer provides Seller with (a) a copy of
          a published or private ruling, court decision or other authority
          which supports the position that IRC 29 credits are not available
          for such natural gas liquids (the "IRS Position"), and (b) an
          opinion reasonably satisfactory to Seller from a "big-six"
          accounting firm (or other accounting or law firm acceptable to both
          Seller and Buyer) that, in its view, there is not "substantial
          authority" under IRC 6662 for taking a position that is contrary to
          the IRS Position.

                    (iii) After Buyer provides Seller with an authority and an
          opinion in accordance with Section 12.8(ii), the Credit Payment
          Amount shall no longer include payments for Tax Credits which are
          inconsistent with the IRS Position until Seller provides Buyer with
          (a) a copy of a published or private ruling, court decision or other
          authority which is contrary to the IRS Position, and (b) an opinion
          reasonably satisfactory to Buyer from a "big-six" accounting firm
          (or other accounting or law firm acceptable to both Seller and
          Buyer) that, in its view, there is "substantial authority" under IRC
          6662 for taking a position that is contrary to the IRS Position.

                    (iv) After Seller provides Buyer with a copy of an 
          authority and an opinion in accordance with Section 12.8(iii),
          (a) the Credit Payment Amount shall thereafter include payments for
          Tax Credits based upon the position of such opinion (unless and
          until Buyer again provides Seller with a copy of an authority and an
          opinion in accordance with Section 12.8(ii) with respect to such
          position), and (b) the Credit Payment Amount for the first Payment
          Period following the receipt of such opinion shall include an amount
          equal to the increase in prior Credit Payment Amounts that would
          result from recomputing the prior Credit Payment Amounts in
          accordance with the position of such opinion.

                    (v) If the IRS asserts in a Tax Audit that IRC 29 credits 
          are not available for portions of production (the "Disputed
          Production") from the Subject Hydrocarbons on the ground that IRC 29
          credits are not available for natural gas liquids, then (a) the
          computation of the Credit Payment Amount shall continue to include
          Tax Credits from the sale of natural gas liquids subject to Sections
          12.8(ii) and (iii) above; (b) Credit Payment Amounts attributable to

                                     -23-

          the production from the Subject Hydrocarbons shall be escrowed and 
          distributed as required by, and in accordance with, the provisions of
          Section 8.3 (if Buyer has not waived its rights to have such amounts 
          escrowed pursuant to Section 8.3); and (c) Seller shall have the 
          right to participate, in accordance with the provisions of Section 
          12.8(vii), in challenging the IRS Position that natural gas liquids 
          do not qualify for IRC 29 credits.

                    (vi) Should Buyer receive either a 90-day letter or final
          partnership administrative adjustment (either, an "Adjustment")
          holding that Tax Credits are not available for Disputed Production,
          then Seller shall pay Buyer within 60 days of the receipt by Seller
          of a copy of the Adjustment, an amount equal to 70% of the amount of
          all IRC 29 credits with respect to Disputed Production prior to the
          applicable Escrow Commencement Date which were disallowed in the
          Adjustment, such payment not to exceed the Credit Payment Amount
          previously paid by Buyer with respect to such Disputed Production.
          Upon the Conclusion of the applicable Tax Audit, Buyer shall repay
          to Seller any portion of the amount paid pursuant to the preceding
          sentence that would not have been payable if the Adjustment had
          conformed to the determinations reached in the Conclusion of the Tax
          Audit.

                    (vii) Buyer agrees to keep Seller fully and promptly 
          informed of all administrative and court proceedings with respect to 
          the qualification of natural gas liquids for IRC 29 credits. Upon the
          commencement of any such proceeding, Seller shall have the right to 
          participate, at its own expense, in challenging the IRS Position that 
          natural gas liquids do not qualify for IRC 29 credits. Buyer shall 
          fully cooperate in any such challenge, including without limitation 
          the execution of protests, petitions and complaints if requested by 
          Seller in the course of such challenge, and the determination of the 
          nature, method, timing, forum, strategy, issuances of and response to
          settlement proposals, counsel and issues in connection with such 
          challenge shall be at the discretion of Seller. Seller shall
          indemnify and hold harmless Buyer with respect to any liability
          incurred in connection with providing such cooperation, and shall
          reimburse Buyer for all costs incurred (as incurred and in no event
          less frequently than quarterly) in doing so, including reimbursement
          for a reasonable amount of internal overhead, and reasonable
          attorneys' and accountants' fees. If, in connection with requests
          for cooperation with respect to such a challenge, Buyer determines
          that it is likely to incur an expense to a third party other than
          its own attorneys and accountants, then, before incurring the
          expense, Buyer shall promptly give notice to Seller. If Seller
          declines to reimburse Buyer for the actual amount to be expended in
          complying with such request, then Buyer shall be excused from
          complying with such request.

                                     -24-

          12.9 Verification of Formation Qualification; Reconveyance. Buyer
and Seller acknowledge that they have been unable to conclusively verify that
certain of the Wells are producing or producible from a "qualifying formation"
as defined in IRC 29. Buyer and Seller agree to cooperate with each other in
determining such matter no later than October 31, 1996, and on or before such
date taking the following actions:

               (a) Reconveyance. With respect to Wells that Seller has not been
     able to verify are producing or producible from a qualifying formation,
     Buyer, upon written request of Seller, made on or before October 31,
     1996, shall, on or before November 30, 1996, reconvey all of the interest
     acquired by Buyer hereunder in such Wells to Seller by assignment in
     recordable form, reasonably acceptable to Seller, with a special warranty
     of title as to liens, encumbrances and defects arising by, through or
     under Buyer.

               (b) Amendment of Warranty. With respect to the remaining Wells,
     Seller shall, as of November 1, 1996, be deemed to have made the warranty
     set forth in Section 7.23(a)(ii)(a); and Section 7.23(a)(ii)(b) shall
     thereafter be deemed deleted from this Agreement.

     13.  Apportionment of Liabilities and Obligations.

          13.1 Buyer. Upon Closing, Buyer shall assume and pay for all costs,
expenses, liabilities and obligations accruing or relating to the owning,
operating or maintaining of the Assets or the producing, transporting and
marketing of hydrocarbons from the Assets, relating to periods on and after
the Effective Date, including without limitation, environmental obligations
and liabilities, off-site liabilities associated with the Assets, the
obligation to plug and abandon all Wells and reclaim all Well sites and all
obligations arising under agreements covering or relating to the Assets
(collectively, the "Post-Effective Date Liabilities").

          13.2 Seller. Upon Closing, Seller shall retain, assume and pay for
all costs, expenses, liabilities and obligations accruing or relating to the
owning, operating or maintaining of the Assets or the producing, transporting
and marketing of hydrocarbons from the Assets, relating to periods before the
Effective Date, including without limitation, environmental obligations and
liabilities, the obligation to plug and abandon wells (to the extent relating
to periods prior to the Effective Date), off site liabilities associated with
the Assets, and all obligations arising under agreements covering or relating
to the Assets (collectively, the "Pre-Effective Date Liabilities").

     14.  Indemnification. For the purposes of this Agreement, "Losses" shall
mean any actual loss, cost and expense 

                                     -25-

(including reasonable fees and expenses of attorneys, technical experts and
expert witnesses), liability, and damage (including those arising out of
demands, suits, sanctions of every kind and character); provided, however,
that in no event shall "Losses" be deemed to include consequential damages of
a party to this Agreement.

          14.1 Buyer's Indemnification of Seller. Subject to the terms of and
the indemnification obligations contained in the Management Agreement, Buyer
shall indemnify and hold harmless Seller, its officers, directors,
shareholders, employees, representatives, agents, successors and assigns,
forever, from and against all Losses and interest thereon which arise from or
in connection with (i) the Post-Effective Date Liabilities, and (ii) Buyer's
breach of its representations, warranties and covenants in this Agreement.

          14.2 Seller's Indemnification of Buyer. Subject to the terms of and
the indemnification obligations contained in the Management Agreement, Seller
shall indemnify and hold harmless Buyer; its officers; directors; members;
employees; representatives; agents; successors and assigns; and the employees,
representatives, agents, successors and assigns of such members forever, from
and against all Losses and interest thereon which arise from or in connection
with (i) the Pre-Effective Date Liabilities, and (ii) Seller's breach of its
representations, warranties and covenants in this Agreement regardless of
Seller's knowledge if such representations or warranties are knowledge
qualified, provided that the matters contemplated in this clause (ii) shall
not apply to the representations set forth in Section 7.6. Buyer and Seller
shall cooperate fully and consult in good faith with each other in the
litigation of any matter identified in this Section 14.2.

     Notwithstanding any of the foregoing provisions of this Section 14.2,
Buyer shall be entitled to payment for matters indemnified under this Section
14.2 only after a court of competent jurisdiction makes a final determination
regarding the matter litigated; provided that such payment shall cover only
Losses incurred by Buyer which have not been remedied by Seller under the
escrow provisions of Section 8.3 above and/or the overpayment provisions of
Section 12.8 above.

          14.3 Third Party Claims. If a claim by a third party is made against
Seller or Buyer (an "Indemnified Party"), and if such party intends to seek
indemnity with respect thereto under this Section 14, such Indemnified Party
shall promptly notify Buyer or Seller, as the case may be (the "Indemnitor"),
of such claim. The Indemnitor shall have 30 days after receipt of such notice
to undertake, conduct and control, through counsel of its own choosing and at
its own expense, the settlement or defense thereof, and the Indemnified Party
shall cooperate with it in connection therewith; provided that the Indemnitor
shall permit the Indemnified Party to participate in such settlement or

                                     -26-

defense through counsel chosen by such Indemnified Party, however, the fees
and expenses of such counsel shall be borne by such Indemnified Party. So long
as the Indemnitor, at its cost and expense, (1) has undertaken the defense of,
and assumed full responsibility for all Losses with respect to, such claim,
and (2) is reasonably contesting such claim in good faith, by appropriate
proceedings, the Indemnified Party shall not pay or settle any such claim.
Notwithstanding compliance by the Indemnitor with the preceding sentence, the
Indemnified Party shall have the right to pay or settle any such claim,
provided that in such event it shall waive any right to indemnity therefor by
the Indemnitor for such claim. If, within 30 days after the receipt of the
Indemnified Party's notice of a claim of indemnity hereunder, the Indemnitor
does not notify the Indemnified Party that it elects, at Indemnitor's cost and
expense, to undertake the defense thereof and assume full responsibility for
all Losses with respect thereto, or gives such notice and thereafter fails to
contest such claim in good faith, the Indemnified Party shall have the right
to contest, settle or compromise the claim but shall not thereby waive any
right to indemnity therefor pursuant to this Agreement.

          14.4 HS Guarantee. Seller is a wholly-owned subsidiary of HS
Resources, Inc., a Delaware corporation ("HS"). HS hereby unconditionally
guarantees the punctual payment and performance by Seller of all obligations
due Buyer under this Agreement and under all instruments contemplated
hereunder to which Seller is a party, and agrees to pay all costs, expenses
(including reasonable attorneys' fees and expenses associated with claims made
by Buyer against HS, but not against Seller), liabilities and obligations
incurred by Buyer in enforcing any rights under this Agreement and the
instruments contemplated hereby with respect to owning, operating or
maintaining the Assets or producing, transporting and marketing of
hydrocarbons from the Assets (all such obligations being referred to herein as
the "Obligations"). Without limiting the generality of the foregoing, HS'
liability hereunder shall extend to all amounts which constitute part of the
Obligations and would be owed by Seller under this Agreement or the
instruments contemplated hereunder but for the fact that they are
unenforceable or limited due to the existence of a bankruptcy, reorganization
or similar proceeding involving Seller.

               (a) Guarantee Absolute. HS guarantees that the Obligations will
     be paid or performed, as appropriate, strictly in accordance with the 
     terms of this Agreement and any instrument contemplated hereby to which 
     Seller is a party, and any law, regulation or order now or hereafter in 
     effect in any jurisdiction affecting any of such terms or the rights of 
     Buyer with respect thereto. The obligations of HS under this guarantee
     are independent of the Obligations, and a separate action or actions may
     be brought and prosecuted against HS to enforce this guarantee,
     irrespective of whether any action is brought against Seller or whether
     Seller is joined in any action or actions.

                                     -27-

               (b) Notice. HS hereby waives promptness, diligence, notice of
     acceptance and any other notice with respect to any of the Obligations
     and this guarantee and any requirement that Buyer exhaust any right or
     take any action against Seller or any other person.

               (c) Representation and Warranties. HS hereby represents and
     warrants as follows:

                    (i) There are no conditions precedent to the effectiveness
          of this guarantee that have not been satisfied or waived.

                    (ii) HS is a corporation duly organized and in good 
          standing under the law of the State of Delaware.

                    (iii) This guarantee has been duly authorized by all 
          necessary corporate action; is binding upon and enforceable
          against HS in accordance with its terms; and will not violate or
          constitute a default under its Certificate of Incorporation or
          by-laws, or any agreements or indentures to which HS is a party or
          by which HS or its properties are bound.

               (d) Amendments, Consents. No amendment or waiver of any 
     provision of this guarantee, and no consent to any departure by HS
     herefrom, shall in any event be effective unless the same shall be in
     writing and signed by Buyer, and then such waiver or consent shall be
     effective only in the specific instance and for the specific purpose for
     which given.

               (e) Continuing Guarantee. This guarantee by HS is a continuing
     guarantee and shall (1) remain in full force and effect until the later
     of (i) the payment or performance in full of the Obligations, and (ii)
     the termination of both this Agreement and the Management Agreement
     contemplated hereunder; (2) be binding upon HS, its successors and
     assigns; and (3) inure to the benefit of, and be enforceable by, Buyer
     and its successors and assigns.

     15.  Miscellaneous.

          15.1 Further Assurances. After 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 the purposes and intents of this Agreement
and any document, certificate or other instrument delivered pursuant hereto.

          15.2 Expenses. Seller and Buyer each agree to pay one-half of the
reasonable costs and expenses of Williamson Petroleum Consultants, Inc.,
Arthur Andersen LLP and Davis, Graham & Stubbs LLP incurred in connection with
this transaction, 

                                     -28-

subject to receipt of evidence and substantiation thereof. Such costs and
expenses shall not include any costs or expenses associated with the Tax
Opinion. Seller and Buyer shall pay their respective amount of taxes and fees,
apportioned to each under Section 12.2.

          15.3 Notices. All notices under this Agreement shall be in writing
and addressed as set forth below. Any communication or delivery hereunder
shall be deemed to have been duly made and the receiving party charged with
notice (i) if personally delivered or telecopied, when received, (ii) if
mailed, three business days after mailing, certified mail, return receipt
requested, or (iii) if sent by overnight courier, one day after sending. All
notices shall be addressed as follows:

          If to Seller:

          HSRTW, Inc.
          1999 Broadway, Suite 3600
          Denver, Colorado  80202
          Attn:    General Counsel
          Telephone:  (303)  296-3600
          Fax:        (303)  296-3601

          If to Buyer:

          WestTide Investments, LLC
          c/o FMR Corp.
          82 Devonshire Street, R22C
          Boston,  Massachusetts  02109
          Attention:  Roger D. Tullberg
          Telephone:  (617)  563-4791
          Fax:        (617)  476-6248

          with a copy to:

          Sullivan & Worcester
          One  Post Office Square
          Boston, Massachusetts 02109
          Attention:  Christopher C. Curtis, Esq.
          Telephone:  (617) 338-2839
          Fax:        (617) 338-2880

Any party may, by written notice so delivered to the other party, change the
address or individual to which delivery shall thereafter be made.

          15.4 Survival. The representations, warranties, covenants, agreements
and indemnities included or provided in this Agreement shall survive the
Closing. The doctrine of merger shall not cause any representation, warranty,
covenant, agreement or indemnity under this Agreement to terminate as a result
of Buyer and Seller entering into the Assignment, Option or any other instrument
contemplated hereunder.

                                     -29-

          15.5 Confidentiality. Buyer and Seller shall keep this Agreement
confidential except to the extent each may be required to disclose the
contents hereof by recording the Assignment, Option, and Memorandum of
Management Agreement and Power of Attorney in the real property records in the
counties where the Assets are located or filing the official forms of
conveyances covering the Assets with appropriate governmental authorities, the
IRS or to the extent required in the operation of the Assets, pursuant to the
Management Agreement, by law, regulation or order, in connection with
obtaining third party consents and waivers of preferential purchase rights and
other matters, or in connection with any public announcement issued in
accordance with Section 15.6 hereof.

          15.6 Announcements. Seller and Buyer shall consult with each other
regarding all press releases and other public announcements issued at, prior
to or following Closing concerning this Agreement or the transactions
contemplated hereby and except as may be required by applicable laws or the
applicable rules and regulations of any governmental agency or stock exchange.
Neither Buyer nor Seller shall issue any such press release or other public
announcement without the prior written consent of the other party, which
consent will not be unreasonably withheld. In all such press releases and
other public announcements, Seller shall refer to Buyer as being affiliated
with large east coast financial institutions.

          15.7 Assignment. Neither Buyer nor Seller may assign its rights or
delegate its duties or obligations under the terms of this Agreement without
the prior written consent of the other party, provided that either Buyer or
Seller may assign its rights, but not its obligations under this Agreement, to
any party (including any affiliated or nonaffiliated party) as long as such
assignment does not relieve the assigning party of its obligations to the
other party hereto, and provided further that Buyer may not cause or permit an
assignment, transfer, sale, alienation or other disposition of all or any
portion of the Assets which would result in the transferred Assets becoming
"plan assets" under the Employee Retirement Income Security Act of 1974, as
amended. Notwithstanding the foregoing provisions of this Section 15.7, Seller
shall be entitled without prior consent, but upon written notice within a
reasonable time thereafter, to assign or otherwise convey to HS all or any
portion of the Production Payment, Reversion Interest or Seller's obligations
to Buyer under this Agreement, the Assignment or the Option. Such an
assignment or conveyance of obligations to HS shall serve to release Seller
from any such obligations and to substitute HS as the obligor under such
obligations.

          15.8  Binding Effect.  This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their successors and,
subject to Section 15.7 hereof, their assigns.

                                     -30-

          15.9 Complete Agreement. When executed by the authorized
representative of Seller and Buyer, this Agreement, the Exhibits hereto and
the documents to be delivered pursuant hereto shall constitute the complete
agreement between the parties. This Agreement may be amended only by a writing
signed by both parties.

          15.10 Knowledge. As used in this Agreement, the term "knowledge,"
"best knowledge" or any variations thereof shall mean the actual knowledge of
any fact, circumstance or condition by the officers or employees at a manager
or higher level of the party involved as such knowledge has been obtained in
the performance of their duties in the ordinary course of business after
making reasonable and appropriate inquiries.

          15.11 Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF COLORADO WITHOUT
REFERENCE TO THE CONFLICT OF LAW PROVISIONS THEREOF.

          15.12 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each
party and delivered to the other party.

     EXECUTED as of the date first above mentioned.

                                        BUYER:

                                        WESTTIDE INVESTMENTS, LLC
                                        By:  Its Manager, Fontenelle, Inc.

                                        By:
                                           --------------------------------
                                           Gary L. Greenstein
                                           Vice President

                                        SELLER:

                                        HSRTW, INC.
  

Attest:                                 By:
                                           --------------------------------
                                           James M. Piccone
                                           Vice President
- ----------------------------
Name:    Ronald B. Jacobs
Title:   Assistant Secretary

                                     -31-

HS Resources, Inc., a Delaware corporation, is a signatory to this Agreement
for the purpose of confirming its obligations under Section 14.4 above.

                                        HS  RESOURCES,  INC.

[CORPORATE  SEAL]
Attest:                                 By:
                                           -------------------------------- 
                                           James  M.  Piccone
- ----------------------------               Vice  President
Name:   Ronald  B. Jacobs
Title:  Assistant Secretary

                                     -32-

STATE OF COLORADO      )
   CITY AND            )  ss.
COUNTY OF DENVER       )

     The foregoing instrument was acknowledged before me this 8th day of
August, 1996, by James M. Piccone, Vice President of HSRTW, Inc., a Delaware
corporation, on behalf of such corporation.

     Witness my hand and official seal.

                        -----------------------------------
                        Notary Public

                        My commission expires:
                                              --------------------------
(SEAL)

STATE OF COLORADO      )
   CITY AND            )  ss.
COUNTY OF DENVER       )

     The foregoing instrument was acknowledged before me this 8th day of
August, 1996, by James M. Piccone, Vice President of HS Resources, Inc., a
Delaware corporation, on behalf of such corporation.

     Witness my hand and official seal.

                        -----------------------------------
                        Notary  Public

                        My  commission  expires:
                                              --------------------------

(SEAL)

COMMONWEALTH OF MASSACHUSETTS    )
                                 )  ss.
COUNTY OF SUFFOLK                )

     The foregoing instrument was acknowledged before me this 9th day of
August, 1996 by Gary L. Greenstein, Vice President of Fontenelle, Inc., a
Delaware corporation, Manager of WestTide Investments, LLC, a Delaware limited
liability company on behalf of the company.

     Witness my hand and official seal.

                        -----------------------------------
                        Notary Public

                        My commission expires:    
                                              --------------------------
(SEAL)

                                     -33- 

Basic Info X:

Name: PURCHASE AND SALE AGREEMENT
Type: Purchase and Sale Agreement
Date: Nov. 8, 1996
Company: HS RESOURCES INC
State: Delaware

Other info:

Date:

  • August 9 , 1996
  • December 31 , 2002
  • June 1 , 1996
  • December 31 , 1995
  • January 1 , 1996
  • August 1 , 1996
  • December 31 , 1979
  • January 1 , 1993
  • November 5 , 1990
  • April 20 , 1977
  • January 1 , 1980
  • October 31 , 1996
  • November 30 , 1996
  • November 1 , 1996
  • 1999 Broadway
  • 8th day of August , 1996
  • 9th day of August , 1996

Organization:

  • 11.3 Notice of Preferential Rights
  • 14.3 Third Party Claims
  • Reservation of Production Payment Exhibit D Form of Option
  • Form of Guaranty Agreement Exhibit P Form of Seller
  • Certificate Exhibit Q Form of Opinion on Behalf of Seller Exhibit R Form of Buyer 's Manager 's Certificate Exhibit S Form of Opinions on Behalf of Buyer Exhibit T Form of Management Agreement Exhibit U Form of Escrow Agreement Exhibit V Form of Limited Power of Attorney
  • Gas Leases With Reservation of Production Payment
  • Credit Payment Amounts
  • United States Department of Interior
  • Maintenance of Uniform Interest Provisions
  • Federal Energy Regulatory Commission
  • Wells For Which Applications Were Not Filed
  • Internal Revenue Service
  • the Escrow Commencement Date
  • Certificates of Insurance
  • b Closing Documents
  • Evidence of Insurance
  • Bald Prairie , Inc.
  • Nichols , Arsht & Tunnell
  • Davis , Graham & Stubbs LLP
  • Performance Power of Attorney
  • Tax Opinion of AA
  • Notice of Defective Interests
  • the Purchase Price
  • Reconveyance of Excluded Assets
  • Seller 's Interests
  • Bill of Sale
  • vi Should Buyer
  • the State of Delaware
  • e Continuing Guarantee
  • Williamson Petroleum Consultants , Inc.
  • Arthur Andersen LLP
  • Sullivan & Worcester One Post Office Square Boston
  • Memorandum of Management Agreement and Power of Attorney
  • Reversion Interest or Seller
  • HSRTW , Inc.
  • HS Resources , Inc.
  • Vice President of Fontenelle , Inc.

Location:

  • States of Delaware
  • Oklahoma
  • Louisiana
  • Wells
  • Boston
  • Esq
  • COLORADO
  • DENVER
  • MASSACHUSETTS

Money:

  • $ 240,000
  • $ 0.70
  • $ 950,000
  • $ 250
  • $ 35,000

Person:

  • Arthur Andersen
  • Wells
  • Davis
  • Roger D. Tullberg
  • Christopher C. Curtis
  • Ronald B. Jacobs
  • James M. Piccone
  • Gary L. Greenstein

Time:

  • 7:00 a.m. local time

Percent:

  • 70 %