Stephen R. and Mary K. Herbel - Page 16

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                  this restriction shall not be construed as                          
                  prohibiting any party from reflecting the                           
                  payments made herein in financial statements                        
                  or in regulatory filings by Buyer.                                  
                  10.                                                                 
                       It is the intent of the parties to include                     
                  all gas sales and purchase agreements between                       
                  Buyer and Seller within the definition of "Con-                     
                  tract," whether or not specifically identified                      
                  on Exhibit A.  To the extent the same may be                        
                  hereafter required, the parties agree to execute                    
                  further instruments to evidence this intent.                        
                  11.                                                                 
                       This Settlement Agreement shall be binding                     
                  upon and inure to the benefit of the parties                        
                  hereto, their respective successors and assigns.                    
                       IN WITNESS WHEREOF, the parties have                           
                  executed this Settlement Agreement, in duplicate                    
                  originals, as of the day and year first                             
                  hereinabove written.                                                

                  Pursuant to paragraph 1 of the Settlement Agreement                 
             quoted above, Arkla and Malibu also entered into the Gas                 
             Purchase Contract Amendment (contract amendment) attached                
             thereto as an exhibit.  The purpose and effect of the                    
             contract amendment was to change the mechanism for                       
             determining the price of gas purchased by Arkla under the                
             Contract, effective May 1, 1988.                                         
                  Pursuant to paragraph 2(d) of the Settlement                        
             Agreement, quoted above, Malibu executed an Assignment of                
             Limited Term Overriding Royalty (Production Payment),                    
             granting Arkla the following interest in the subject wells:              






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