Agreement of Sale and Purchase - Yellowhouse Project Co. and Harken Energy West Texas Inc.


                           AGREEMENT OF SALE AND PURCHASE


         THIS AGREEMENT OF SALE AND PURCHASE (this 'AGREEMENT') dated October
5, 1995, is made by and between Yellowhouse Project Co., a Delaware corporation
(hereinafter called 'SELLER'), and Harken Energy West Texas, Inc., a Delaware
corporation (hereinafter called 'BUYER');

                              W I T N E S S E T H:

         1.      PROPERTY TO BE SOLD AND PURCHASED.  Seller agrees to sell and
Buyer agrees to purchase, for the consideration hereinafter set forth, and
subject to the terms and provisions herein contained, the following described
properties, rights and interests:

                 (a)  All right, title and interest of Seller in and to the
         oil, gas and/or mineral leases described on Exhibit A hereto (and any
         ratifications and/or amendments to such leases, whether or not such
         ratifications or amendments are described on Exhibit A); and

                 (b)  Without limitation of the foregoing, all other right,
         title and interest (of whatever kind or character, whether legal or
         equitable, and whether vested or contingent) of Seller in and to the
         lands described on Exhibit A hereto or described in any of the leases
         described on Exhibit A (including, without limitation, interests in
         oil, gas and/or mineral leases, overriding royalties, production
         payments, net profits interests, fee mineral interests, fee royalty
         interests and other interests insofar as they cover such lands); and

                 (c)  All rights, titles and interests of Seller in and to, or
         otherwise derived from, (i) all oil, gas and/or mineral unitization,
         pooling, and/or communitization agreements, declarations and/or
         orders, (ii) to the extent the same create rights among the parties
         thereto to share in production from the contract areas covered
         thereby, operating and similar agreements, and (iii) all amendments or
         modifications of the foregoing, which relate to the properties
         described in subsections (a) and (b) above; and

                 (d)  All rights, titles and interests of Seller in and to all
         presently existing and valid production sales contracts, operating
         agreements, rights of way, and other agreements and contracts which
         relate to any of the properties described in subsections (a), (b) and
         (c) above, to the extent, and only to the extent, such rights, titles
         and interests are attributable to the properties described in
         subsections (a), (b) and (c) above; and

                 (e)  All rights, titles and interests of Seller in and to all
         materials, supplies, machinery, equipment, improvements and other
         personal property and fixtures (including, but not by way of
         limitation, all wells, wellhead equipment, pumping units, flowlines,
         tanks, buildings, injection facilities, saltwater disposal

         facilities, compression facilities, gathering systems, and other
         equipment) located on the properties described in subsections (a), (b)
         and (c) above and used in connection with the exploration,
         development, operation or maintenance thereof.

The properties and interests specified in the foregoing subsections (a), (b)
and (c) are herein sometimes collectively called the 'OIL AND GAS PROPERTIES,'
and the properties and interests specified in the foregoing subsections (a),
(b), (c), (d) and (e) are herein sometimes collectively called the
'PROPERTIES'.

         2.      ASSUMPTION OF INDEBTEDNESS.  Buyer agrees to assume the
indebtedness evidenced by those certain promissory notes (the 'NOTES') dated
October 5, 1995, from Seller to Internationale Nederlanden (U.S.) Capital
Corporation ('ING'), New England Mutual Life Insurance Company ('NEW ENGLAND')
and EnCap 1989-I Limited Partnership ('ELP') in the aggregate principal amount
of $750,000 (the 'ASSUMED DEBT').  The Assumed Debt will be assumed by Buyer in
accordance with certain documents executed at Closing as hereinafter provided.

         3.      REPRESENTATIONS OF SELLER.  Seller represents to Buyer that:

                 (a)      ORGANIZATION AND QUALIFICATION.  Seller is a
         corporation duly organized, validly existing and in good standing
         under the laws of the State of Delaware, and is qualified to do
         business and in good standing in the State of Texas.

                 (b)      DUE AUTHORIZATION.  Seller has full power to enter
         into and perform its obligations under this Agreement and has taken
         all proper action to authorize entering into this Agreement and the
         performance of its obligations hereunder.

                 (c)      APPROVALS.  Except for approvals ('ROUTINE
         GOVERNMENTAL APPROVALS') required to be obtained from governmental
         entities who are lessors under leases forming a part of the Oil and
         Gas Properties (or who administer such leases on behalf of such
         lessors) which are customarily obtained post-closing and which Seller
         has no reason to believe cannot be obtained, neither the execution and
         delivery of this Agreement, nor the consummation of the transactions
         contemplated hereby, nor the compliance with the terms hereof, will
         result in any default under any agreement or instrument to which
         Seller is a party or by which the Oil and Gas Properties are bound, or
         violate any order, writ, injunction, decree, statute, rule or
         regulation applicable to Seller or to the Oil and Gas Properties.

                 (d)      VALID, BINDING AND ENFORCEABLE.  This Agreement
         constitutes (and the Conveyance will, when executed and delivered,
         constitute) the legal, valid and binding obligation of Seller,
         enforceable in accordance with their respective terms, except as
         limited by bankruptcy or other laws applicable generally to creditor's
         rights and as limited by general equitable principles.





                                      -2-

                 (e)      LITIGATION.  There are no pending suits, actions, or
         other proceedings in which Seller is a party and has been served with
         process (or, to the best of Seller's knowledge, which have been
         threatened to be instituted against Seller) which affect the Oil and
         Gas Properties in any material respect (including, without limitation,
         any actions challenging or pertaining to Seller's title to any of the
         Oil and Gas Properties), or affecting the execution and delivery of
         this Agreement or the consummation of the transactions contemplated
         hereby.

                 (f)      SPECIAL TITLE WARRANTY.  Seller hereby binds itself
         to warrant and forever defend all and singular title to the Oil and
         Gas Properties unto Buyer, its successors and assigns, against every
         person lawfully claiming or to claim the same or any part thereof, by,
         through and under Seller, but not otherwise.

         4.      REPRESENTATIONS OF BUYER.  Buyer represents to Seller that:

                 (a)      ORGANIZATION AND QUALIFICATION.  Buyer is a
         corporation duly organized, validly existing and in good standing
         under the laws of the State of Delaware, and is qualified to do
         business and in good standing in the State of Texas.

                 (b)      DUE AUTHORIZATION.  Buyer has full power to enter
         into and perform its obligations under this Agreement and has taken
         all proper action to authorize entering into this Agreement and the
         performance of its obligations hereunder.

                 (c)      APPROVALS.  Except for Routine Governmental
         Approvals, neither the execution and delivery of this Agreement, nor
         the consummation of the transactions contemplated hereby, nor the
         compliance with the terms hereof, will result in any default under any
         agreement or instrument to which Buyer is a party, or violate any
         order, writ, injunction, decree, statute, rule or regulation
         applicable to Buyer.

                 (d)      VALID, BINDING AND ENFORCEABLE.  This Agreement
         constitutes the legal, valid and binding obligation of Buyer,
         enforceable in accordance with its terms, except as limited by
         bankruptcy or other laws applicable generally to creditor's rights and
         as limited by general equitable principles.

                 (e)      NO LITIGATION.  There are no pending suits, actions,
         or other proceedings in which Buyer is a party and has been served
         with process (or, to Buyer's knowledge, which have been threatened to
         be instituted against Buyer) which affect the execution and delivery
         of this Agreement or the consummation of the transactions contemplated
         hereby.

                 (f)      KNOWLEDGEABLE BUYER, NO DISTRIBUTION.  Buyer is a
         knowledgeable purchaser, owner and operator of oil and gas properties,
         has the ability to evaluate (and in fact has evaluated) the Oil and
         Gas Properties for purchase, and is acquiring the Oil and Gas
         Properties for its own account and not with the intent to make a
         distribution in





                                      -3-

         violation of the Securities Act of 1933, as amended (and the rules and
         regulations pertaining thereto) or in violation of any other
         applicable securities laws, rules or regulations.

         5.      CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER.  The
obligations of Buyer under this Agreement are subject to each of the following
conditions being met:

                 (a)      REPRESENTATIONS TRUE AND CORRECT.  Each and every
         representation of Seller under this Agreement shall be true and
         accurate in all material respects as of the date when made and shall
         be deemed to have been made again at and as of the time of Closing and
         shall at and as of such time of Closing be true and accurate in all
         material respects except as to changes specifically contemplated by
         this Agreement or consented to by Buyer.

                 (b)      COMPLIANCE WITH COVENANTS AND AGREEMENTS.  Seller
         shall have performed and complied in all material respects with (or
         compliance therewith shall have been waived by Buyer) each and every
         covenant and agreement required by this Agreement to be performed or
         complied with by Seller prior to or at the Closing.

                 (c)      EXECUTION OF JOA.  The current operator of the Oil
         and Gas Properties shall have executed and delivered a new operating
         agreement or agreements for the Oil and Gas Properties in a form
         satisfactory to Buyer (the 'JOA').

                 (d)      EXECUTION OF RELATED AGREEMENTS.  The Restructuring
         Agreement (P&P) by and among Seller, Parker & Parsley Petroleum
         Company, ING, New England and ELP, and all other documents and
         instruments contemplated thereby, shall have been executed and
         delivered by the parties thereto. The Restructuring and Sale Agreement
         (Harken) by and among Harken Energy Corporation, Buyer, ING, New
         England and ELP, and all other documents and instruments contemplated
         thereby, shall have been executed and delivered by the parties
         thereto.  The agreements, documents and other instruments described in
         this subsection (d) shall be herein called the 'RELATED DOCUMENTS'.

                 (e)      LITIGATION.  No suit, action or other proceedings
         shall, on the date of Closing, be pending or threatened before any
         court or governmental agency seeking to restrain, prohibit, or obtain
         damages or other relief in connection with the consummation of the
         transactions contemplated by this Agreement.

If any such condition on the obligations of Buyer under this Agreement is not
met as of the Closing Date and Buyer is not in breach of its obligations
hereunder in the absence of Seller being in material breach of its obligations
hereunder, this Agreement may, at the option of Buyer, be terminated.  In the
event such a termination by Buyer occurs the parties shall have no further
obligations to one another hereunder (other than the obligations under Section
11 hereof, which will survive such termination).





                                      -4-

         6.      CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER.  The
obligations of Seller under this Agreement are subject to each of the following
conditions being met:

                 (a)      REPRESENTATIONS TRUE AND CORRECT.  Each and every
         representation of Buyer under this Agreement shall be true and
         accurate in all material respects as of the date when made and shall
         be deemed to have been made again at and as of the time of Closing and
         shall at and as of such time of Closing be true and accurate in all
         material respects except as to changes specifically contemplated by
         this Agreement or consented to by Seller.

                 (b)      COMPLIANCE WITH COVENANTS AND AGREEMENTS.  Buyer
         shall have performed and complied in all material respects with (or
         compliance therewith shall have been waived by Seller) each and every
         covenant and agreement required by this Agreement to be performed or
         complied with by Buyer prior to or at the Closing.

                 (c)      EXECUTION OF JOA.  The current operator of the oil
         and gas properties shall have executed and delivered the JOA.

                 (d)      EXECUTION OF RELATED AGREEMENTS.  The Related
         Agreements shall have been executed and delivered by the parties
         thereto.

                 (e)      LITIGATION.  No suit, action or other proceedings
         shall, on the date of Closing, be pending or threatened before any
         court or governmental agency seeking to restrain, prohibit, or obtain
         damages or other relief in connection with the consummation of the
         transactions contemplated by this Agreement.

If any such condition on the obligations of Seller under this Agreement is not
met as of the Closing Date and Seller is not in breach of its obligations
hereunder in the absence of Buyer being in material breach of its obligations
hereunder, this Agreement may, at the option of Seller, be terminated, in which
case the parties shall have no further obligations to one another hereunder
(other than the obligations under Section 11 hereof, which will survive such
termination).

         7.      CLOSING.  The closing (herein called the 'CLOSING') of the
transaction contemplated hereby shall take place in the offices of Thompson & Knight, P.C., at 1700 Pacific, Dallas, Texas, on October 5, 1995, at 11:00 a.m.
local time, or at such other date and time as the Buyer and Seller may mutually
agree upon (such date and time being herein called the 'CLOSING DATE').  At the
Closing:

                 (a)      DELIVERY OF CONVEYANCE.  Seller shall execute,
         acknowledge and deliver to Buyer (i) the 'CONVEYANCE' (as herein
         called), in the form attached hereto as Schedule I (and with Exhibit A
         hereto being attached thereto), effective as to runs of oil and
         deliveries of gas and for all other purposes as of 7:00 a.m., local
         time at the locations of the Oil and Gas Properties, respectively, on
         April 1, 1995 (herein called





                                      -5-
 :  PAGE>   6
         the 'EFFECTIVE DATE'), and (ii) the 'MINERAL DEED' (as herein called),
         in the form attached hereto as Schedule II, effective as of 7:00 a.m.,
         local time, on the Effective Date.

                 (b)      NON-FOREIGN STATUS AFFIDAVIT.  If Buyer so requests,
         Seller will execute and deliver to Buyer an affidavit or other
         certification (as permitted by such code) that Seller is not a
         'foreign person' within the meaning of Section 1445 (or similar
         provisions) of the Internal Revenue Code of 1986, as amended (i.e.,
         Seller is not a non-resident alien, foreign corporation, foreign
         partnership, foreign trust or foreign estate as those terms are
         defined in such code and regulations promulgated thereunder).

                 (c)      LETTERS IN LIEU.  If Buyer so requests, Seller shall
         execute and deliver letters in lieu of transfer orders (or similar
         documentation), in form reasonably acceptable to both parties.

                 (d)      PAYMENT.  Seller will wire transfer, or will cause to
         be wire transferred, to Buyer cash in the amount of $200,000.

At the Closing, Seller will also deliver to Buyer all of Seller's lease files,
abstracts and title opinions, division order files, production records, well
files, and other similar files and records which relate to the Oil and Gas
Properties, other than those which Seller cannot provide to Buyer without, in
its opinion, breaching, or risking a breach of, confidentiality agreements with
other parties.  As soon as reasonably practicable after the Closing and, in any
event, within 30 days after the Closing Date, Seller will deliver to Buyer all
accounting records (but not including any general financial records or tax
accounting records) of Seller which relate to the Oil and Gas Properties.

         8.      CERTAIN ACCOUNTING ADJUSTMENTS.

         (a) Appropriate adjustments shall be made between Buyer and Seller so
that (i) all expenses (including, without limitation, all drilling costs, all
capital expenditures and all overhead charges under applicable operating
agreements) which are incurred in the operation of the Oil and Gas Properties
before the Effective Date will be borne by Seller and all proceeds (net of
applicable production, severance, and similar taxes) from sales of oil, gas
and/or other minerals which are produced from (or attributable to) the Oil and
Gas Properties before the Effective Date will be received by Seller, and (ii)
all expenses (including, without limitation, all drilling costs, all capital
expenditures and all overhead charges under applicable operating agreements)
which are incurred in the operation of the Oil and Gas Properties after the
Effective Date will be borne by Buyer and all proceeds (net of applicable
production, severance, and similar taxes) from the sale of oil, gas and/or
other minerals which were produced from (or attributable to) the Oil and Gas
Properties after the Effective Date will be received by Buyer.  It is agreed
that, in making such adjustments: (A) oil which was produced from the Oil and
Gas Properties and which was, on the Effective Date, stored in tanks located on
the Oil and Gas Properties and above pipeline connections shall be deemed to
have been





                                      -6-

produced before the Effective Date to the extent that written records indicate
such tanks were gauged on such date; otherwise oil shall be deemed to have been
produced prior to the Effective Date to the extent of the latest written record
of oil produced prior to the Effective Date, whether it be a prior tank
reading, run ticket or other record of physical measurement; (B) ad valorem and
similar taxes assessed with respect to a period which the Effective Date splits
shall be prorated based on the number of days in such period which fall on each
side of the Effective Date (with the day on which the Effective Date falls
being counted in the period after the Effective Date); and (C) no consideration
shall be given to the local, state or federal income tax liabilities of any
party.

         (b) Three days prior to, and for the purposes of, the Closing, the
parties shall determine, based upon billings and payments received to that
point, the amount of the adjustments provided for above.  If, based on the
foregoing, it is determined that an amount is owed to Buyer, Seller shall
tender to Buyer at Closing an amount equal to 100% of such amount less any
portion thereof that has been previously tendered to ING, New England and ELP
as payment on those certain promissory notes dated May 22, 1992, executed by
Seller in favor of ING, New England and ELP in an aggregate principal amount
equal to $12,000,000.  If, based on the foregoing, it is determined that an
amount is owed to Seller, Buyer shall tender to Seller at Closing an amount
equal to 100% of such amount.  On or before 90 days after Closing, Buyer and
Seller shall review any additional information which may then be available
pertaining to the adjustments provided for above, shall determine if any
additional adjustments (whether the same be made to account for expenses or
revenues not considered in making the adjustments made at Closing, or to
correct errors made in such adjustments) should be made beyond those made at
Closing, and shall make any such adjustments by appropriate payments from
Seller to Buyer or from Buyer to Seller.  Following such final adjustment, no
further such adjustments shall be made pursuant to this Section.

      9.    INDEMNIFICATION. Buyer shall agree (and, upon the delivery to Buyer
of the documents and cash referenced in Section 7, shall be deemed to have
agreed), (a) to assume, and to timely pay and perform, all duties, obligations
and liabilities relating to (i) the Assumed Debt or (ii) the ownership and/or
operation of the Oil and Gas Properties, whether arising before, on or after
the Closing Date (including, without limitation, those arising under the
contracts and agreements related to the Oil and Gas Properties), and (b) to
indemnify and hold Seller, its affiliates, and its and their directors,
officers, employees, attorneys and agents harmless from and against any and all
claims, actions, causes of action, liabilities, damages, losses, costs or
expenses (including, without limitation, court costs and attorneys' fees) of
any kind or character arising out of or otherwise relating to (i) the Assumed
Debt or (ii) the ownership and/or operation of the Oil and Gas Properties,
whether arising before, on or after the Closing Date. THE FOREGOING ASSUMPTIONS
AND INDEMNIFICATIONS BY BUYER SHALL APPLY WHETHER OR NOT SUCH DUTIES,
OBLIGATIONS OR LIABILITIES, OR SUCH CLAIMS, ACTIONS, CAUSES OF ACTION,
LIABILITIES, DAMAGES, LOSSES, COSTS OR EXPENSES ARISE OUT OF (A) NEGLIGENCE
(INCLUDING SOLE NEGLIGENCE, SINGLE NEGLIGENCE, CONCURRENT NEGLIGENCE, ACTIVE OR
PASSIVE NEGLIGENCE, BUT EXPRESSLY NOT





                                      -7-

INCLUDING GROSS NEGLIGENCE) OF SELLER OR ANY OTHER INDEMNIFIED PARTY, OR (B)
STRICT LIABILITY.  Seller and Buyer agree that Buyer shall be subrogated to any
and all claims, defenses, rights of setoff and other rights that Seller may
have arising in connection with the ownership and/or operation of the Oil and
Gas Properties on or before the Closing Date.

      10.   NO COMMISSIONS OWED.  Seller agrees to indemnify and hold harmless
Buyer (and its affiliates, and its and their respective officers, directors,
employees, attorneys, contractors and agents) from and against any and all
claims, actions, causes of action, liabilities, damages, losses, costs or
expenses (including, without limitation, court costs and attorneys fees) of any
kind or character arising out of or resulting from any agreement, arrangement
or understanding alleged to have been made by, or on behalf of, Seller with any
broker or finder in connection with this Agreement or the transaction
contemplated hereby.  Buyer agrees to indemnify and hold harmless Seller (and
its affiliates and its and their respective officers, directors, employees,
attorneys, contractors and agents) from and against any and all claims,
actions, causes of action, liabilities, damages, losses, costs or expenses
(including, without limitation, court costs and attorneys fees) of any kind or
character arising out of or resulting from any agreement, arrangement or
understanding alleged to have been made by, or on behalf of, Buyer with any
broker or finder in connection with this Agreement or the transaction
contemplated hereby.

      11.   NOTICES.  All notices and other communications required under this
Agreement shall (unless otherwise specifically provided herein) be in writing
and be delivered personally, by recognized commercial courier or delivery
service which provides a receipt, by telecopier (with receipt acknowledged), or
by registered or certified mail (postage prepaid), at the following addresses:

      If to Buyer:             Harken West Texas, Inc.
                               5605 N. MacArthur, Suite 400
                               Irving, Texas  75038
                               Telecopier No.: (214) 753-6955
                               Attention:  Mikel D. Faulkner, Chairman

                               with a copy to:
                               Larry E. Cummings, General Counsel

      If to Seller:            Yellowhouse Project Co.
                               303 West Wall Avenue, Suite 101
                               Midland, Texas  79701
                               Attention: T.A. Leach, Vice President
                               Telecopier No.: (915) 571-5050

and shall be considered delivered on the date of receipt.  Either Buyer or
Seller may specify as its proper address any other post office address within
the continental limits of the United





                                      -8-

States by giving notice to the other party, in the manner provided in this
Section, at least ten (10) days prior to the effective date of such change of
address.

         12.     SURVIVAL OF PROVISIONS.  All representations and warranties
made herein by Buyer and Seller shall be continuing and shall be true and
correct on and as of the date of Closing with the same force and effect as if
made at that time (and shall inure to the benefit of the respective successors
and assigns of Buyer and Seller), and all of such representations and
warranties shall survive the Closing and the delivery of the Conveyance.  The
obligations of the parties under Section 7 (to the extent the same are, by
mutual agreement, not performed at Closing), and Sections 8, 9, 10, 11, 12 and
13 shall (subject to any limitations set forth therein) also survive the
Closing and the delivery of the Conveyance and the Mineral Deed.

         13.     MISCELLANEOUS MATTERS.

                 (a)      FURTHER ASSURANCES.  After the Closing, Seller and
         Buyer shall execute and deliver, and shall otherwise cause to be
         executed and delivered, from time to time, such further instruments,
         notices, division orders, transfer orders and other documents, and do
         such other and further acts and things, as may be reasonably necessary
         to more fully and effectively accomplish the intent and purpose of
         this Agreement, including (without limitation) the grant, conveyance
         and assignment of the Properties to Buyer.

                 (b)      DECEPTIVE TRADE PRACTICES WAIVER.  To the extent
         applicable to the transaction contemplated hereby or any portion
         thereof, Buyer waives the provisions of the Texas Deceptive Trade
         Practices Act (Sections 17.41 through 17.63, inclusive of the Texas
         Business and Commerce Code, other than Section 17.555 which is not
         waived.  In connection with such waiver, Buyer hereby represents
         warrants to Seller that Buyer (i) is in the business of seeking or
         acquiring by purchase or lease, goods, or services, for commercial or
         business use, (ii) has knowledge and experience in financial and
         business matters that enable it to evaluate the merits and risks of
         the transaction contemplated hereby, (iii) is not in a significantly
         disparate bargaining position and (iv) has assets of $5,000,000 or
         more according to its most recent financial statement.

                 (c)      PARTIES BEAR OWN EXPENSES.  Each party shall bear and
         pay all expenses (including, without limitation, legal fees) incurred
         by it in connection with the transaction contemplated by this
         Agreement.

                 (d)      ENTIRE AGREEMENT.  This Agreement contains the entire
         understanding of the parties hereto with respect to the subject matter
         hereof and supersedes all prior agreements, understandings,
         negotiations, and discussions among the parties with respect to such
         subject matter; provided that any Confidentiality Agreement executed
         by Buyer and Seller in connection with the transaction contemplated
         hereby remains in full force and effect and is not superseded or
         modified by this Agreement.





                                      -9-

                 (e)      AMENDMENTS, WAIVERS.  This Agreement may be amended,
         modified, supplemented, restated or discharged (and provisions hereof
         may be waived) only by an instrument in writing signed by the party
         against whom enforcement of the amendment, modification, supplement,
         restatement or discharge (or waiver) is sought.

                 (f)      CHOICE OF LAW.  Without regard to principles of
         conflicts of law, this Agreement shall be construed and enforced in
         accordance with and governed by the laws of the State of Texas
         applicable to contracts made and to be performed entirely within such
         state and the laws of the United States of America.

                 (g)      HEADINGS, TIME OF ESSENCE, ETC.  The descriptive
         headings contained in this Agreement are for convenience only and
         shall not control or affect the meaning or construction of any
         provision of this Agreement.  Within this Agreement words of any
         gender shall be held and construed to cover any other gender, and
         words in the singular shall be held and construed to cover the plural,
         unless the context otherwise requires.  Time is of the essence in this
         Agreement.

                 (h)      NO ASSIGNMENT.  Neither party shall have the right to
         assign its rights under this Agreement, without the prior written
         consent of the other parties first having been obtained.

                 (i)      SUCCESSORS AND ASSIGNS.  Subject to the limitation on
         assignment contained in subsection (h) above, the Agreement shall be
         binding on and inure to the benefit of the parties hereto and their
         respective successors and assigns.

                 (j)      CONSENT OF LENDERS.  By joining in the execution of
         this Agreement, ING, New England and ELP hereby evidence their consent
         to the purchase and sale contemplated hereby, as required by the terms
         of that certain Loan Agreement dated May 22, 1995, by and among
         Seller, ING, New England and ELP, as amended.

                 (k)      COUNTERPART EXECUTION.  This Agreement may be
         executed in counterparts, all of which are identical and all of which
         constitute one and the same instrument.  It shall not be necessary for
         Buyer and Seller to sign the same counterpart.

                 (l)      TO THE BEST OF KNOWLEDGE.  The phrase 'to the best
         knowledge of Seller' and other terms of similar import used in this
         Agreement shall mean only Seller's existing actual knowledge and are
         not intended to imply that Seller in fact has actual knowledge of the
         subject matter to which such terms apply; accordingly, except as may
         be otherwise noted herein, Seller has not made any independent
         verification of or inquiry with respect to any facts relevant to such
         matter.





                                      -10-

         IN WITNESS WHEREOF, this Agreement is executed by the parties hereto
on the date set forth above.

                                        YELLOWHOUSE PROJECT CO.
                                        
                                        
                                        By: /s/   David W. Copeland
                                            ----------------------------------
                                        Name:  David W. Copeland
                                        Title:  Vice President
                                        
                                        HARKEN ENERGY WEST TEXAS, INC.
                                        
                                        
                                        By: /s/ Larry E. Cummings
                                            ----------------------------------
                                        Name: Larry E. Cummings
                                        Title: Vice President and Secretary
                                        
                                        INTERNATIONALE NEDERLANDEN (U.S.) 
                                        CAPITAL CORPORATION
                                        
                                        
                                        By: /s/  Barry Borak
                                            ----------------------------------
                                        Name: Barry Borak
                                        Title: Vice President
                                        
                                        NEW ENGLAND MUTUAL LIFE 
                                        INSURANCE COMPANY
                                        
                                        
                                        By: /s/ Michael T. Zonghetti
                                            ----------------------------------
                                        Name: Michael T. Zonghetti
                                        Title: Investment Officer
                                        
                                        ENCAP 1989-I LIMITED PARTNERSHIP
                                        
                                        
                                        By: /s/ Robert L. Zorich
                                            ----------------------------------
                                        Name: Robert L. Zorich
                                        Title: Managing Director