CRESTED CORP
ROCKY MT. GAS/QUANTUM AGREEMENT
<DOCUMENT>
<TYPE>EX-10.60
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>ROCKY MT. GAS/QUANTUM AGREEMENT
<TEXT>


                                                                   EXHIBIT 10.60


                                    AGREEMENT

                                       FOR

                           PURCHASE AND SALE OF ASSETS



                                     between



                             QUANTUM ENERGY, L.L.C.

                                       and

                            ROCKY MOUNTAIN GAS, INC.





                                   dated as of

                                 JANUARY 3, 2000


                                       76

<PAGE>

                                TABLE OF CONTENTS

BACKGROUND.....................................................................4

ARTICLE I
         PURCHASE AND SALE OF ASSETS...........................................4
         1.1      Transfer of Certain Assets...................................4
         1.2      Payment for Purchase.........................................4
         1.3      Payment of Recording and Filing Fees.........................6
         1.4      Purchase Price Adjustment....................................6

ARTICLE II
         BUYER'S DUE DILIGENCE.............................................7, 12
         2.1      Due Diligence Period.........................................7
         2.2      Title........................................................7
         2.3      Inspection of the Acquired Assets............................7

ARTICLE III
         THE CLOSING...........................................................7
         3.1      Closing Date.................................................7
         3.2      Deliveries by Seller.........................................7
         3.3      Deliveries by Buyer..........................................7

ARTICLE IV
         REPRESENTATIONS AND WARRANTIES OF SELLER.............................10
         4.1      Organization and Qualification..............................10
         4.2      Authority to Transfer.......................................11
         4.3      Title to Acquired Assets....................................11
         4.4      Agreement Not in Breach of Other Instruments................11

ARTICLE V
         REPRESENTATIONS AND WARRANTIES OF BUYER..............................11
         5.1      Organization and Qualifications.............................11
         5.2      Authority to Purchase.......................................11

ARTICLE VI
         TERMINATION..........................................................12
         6.1      Termination.................................................12

                                       77

<PAGE>

ARTICLE VII
         GENERAL PROVISIONS....................................................?
         7.1      Notices.....................................................12
         7.2      Survival of Representations, Warranties,
                    Covenants and Agreements..................................13
         7.3      Further Assurances..........................................13
         7.4      Entire Agreement............................................13
         7.5      Binding Upon Heirs and Successors...........................13
         7.6      Signatures in a Representative Capacity.....................13
         7.7      Governing Law...............................................13
         7.8      Severability................................................13
         7.9      Expenses....................................................13
         7.10     Counterparts................................................13

SCHEDULE 1.1....................................................................

SCHEDULE 3.4(C).................................................................

                                       78

<PAGE>

                                  AGREEMENT FOR
                           PURCHASE AND SALE OF ASSETS

     THIS AGREEMENT FOR PURCHASE AND SALE OF ASSETS (this  "Agreement")  is made
and entered into effective as of January 3, 2000, by and between QUANTUM ENERGY,
L.L.C.,  an Oklahoma limited liability  company  ("Seller"),  and ROCKY MOUNTAIN
GAS, INC., a Wyoming Corporation ("Buyer").

                                   BACKGROUND

     WHEREAS,  Seller is engaged in the acquisition,  exploration and production
of coalbed methane gas located in the Powder River Basin in Montana; and

     WHEREAS,  Seller desires to transfer to Buyer, and Buyer desires to acquire
from Seller, an undivided fifty percent (50%) working interest and forty percent
(40%) net revenue  interest in those certain coalbed methane leases,  properties
and rights of Seller described herein, and on the terms and conditions  outlined
below.

     NOW,  THEREFORE,  in  consideration  of the mutual  covenants,  agreements,
representations and warranties contained herein, and for other good and valuable
consideration,  the receipt and  sufficiency of which is hereby  acknowledged by
the parties, the parties hereto agree as follows:

                                    ARTICLE I
                           PURCHASE AND SALE OF ASSETS

     1.1 Transfer of Certain Assets. Subject to the terms and conditions hereof,
Seller  hereby sells,  conveys,  transfers,  assigns and delivers to Buyer,  and
Buyer  purchases,  acquires and accepts from Seller,  an undivided fifty percent
(50%) working  interest and forty  percent  (40%) net revenue  interest in those
certain  coalbed  methane  leases of Seller  listed in Schedule  1.1 hereto (the
"Acquired  Assets").  The  Acquired  Assets  shall be acquired by Buyer free and
clear  of  all  mortgages,  pledges,  liens,  charges,  security  interests  and
encumbrances.

     1.2 Payment for Purchase.  As consideration for the Acquired Assets,  Buyer
will pay a purchase  price of Five  Million and Five  Hundred  Thousand  Dollars
($5,500,000.00) (the "Purchase Price"),  increased or decreased, as the case may
be, by the Purchase Price Adjustment  determined in accordance with Section 1.4.
The purchase price shall be paid as follows:

         (a)      Buyer shall pay $5,500,000.00, as adjusted by Section 1.4, for
                  an undivided  fifty percent  (50%) working  interest and forty
                  percent (40%) net revenue  interest in the Acquired  Assets as
                  provided  herein.  Buyer has delivered into escrow pursuant to
                  the Letter of Intent,  the sum of  $160,000.00  with the First
                  Interstate Bank of Casper, Wyoming ("Escrow Agent").

         (b)      Buyer shall pay at Closing to Seller the sum of  $3,200,000.00
                  in  certified  funds  by  wire  transfer  in  accordance  with
                  instructions from Seller representing 29% of the undivided 50%
                  of the working interest in the Acquired Assets.

         (c)      Buyer  shall  pay  to  Seller,  or  use  to  drill,  construct
                  infrastructure  or the  acquisition  of additional  acreage on
                  behalf of Seller,  in  Seller's  sole  discretion,  the sum of
                  $1,000,000.00  on or before  may 1,  2000.  In the event  that
                  Buyer  fails to pay or use for the  benefit of Seller,  in the
                  Seller's  sole  discretion,  the  sum of  $1,000,000.00  on or
                  before  May  1,  2000,  then  Buyer  shall  assign  9% of  its
                  undivided  50%  working  interest  in the  Acquired  Assets to
                  Seller.


                                       79

<PAGE>

     (d) Buyer shall pay to Seller, or use to drill, construct infrastructure or
the  acquisition  of  additional  acreage on behalf of Seller,  in Seller's sole
discretion,  the sum of  $1,300,000.00  on or before  December 31, 2000.  In the
event that Buyer fails to pay or use for the benefit of Seller, in Seller's sole
discretion,  the sum of $1,300,000.00 on or before December 31, 2000, then Buyer
shall assign 12% of its undivided 50% working interest in the Acquired Assets to
Seller.  At the sole  option of Seller,  Buyer may pay  $1,300,000  in cash,  or
provide  services of equivalent  value to drill wells,  and in the latter event,
the Seller would  receive  $1,300,000  in revenues  from all of the net revenues
from the wells so drilled, at which point in time the Buyer would then own a 50%
working interest (40% net revenue interest in such wells.

         (e)      Buyer shall spend the sum of $2,500,000.00 to be used to drill
                  and  complete  a minimum  of 25 wells on the  Acquired  Assets
                  between  January 1, 2000 and  November  30,  2000,  subject to
                  force  majeure.  Buyer and Seller shall each own and undivided
                  50%  interest in the wells  drilled  subject to  reduction  as
                  provided  herein.  In the  event  that the  costs to drill and
                  complete  a minimum  of 25 wells  exceeds  $2,500,000.00,  the
                  Buyer and Seller agree that they shall each pay fifty  percent
                  (50%) of the actual costs in excess of  $2,500,000.00 to drill
                  and complete the 25 wells.

                  In the event that  Buyer  shall fail to spend the total sum of
                  $2,500,000.00  to drill  and  complete  the wells on or before
                  November 30, 2000; and in the event that on or before November
                  30, 2000,  Quantum or its affiliate  spends part or all of the
                  sum of  $2,500,000.00  to  drill  and  complete  wells  on the
                  Acquired Assets, Buyer shall have the right to acquire its pro
                  rata share of the  working  interest  in the wells  drilled by
                  Quantum or its  affiliate  by paying the sum of  $2,500,000.00
                  plus the cost of funds incurred by Quantum or its affiliate to
                  drill and complete  the wells.  In  additions,  Quantum or its
                  affiliate  shall receive 60% of the pro rata net revenues from
                  the wells drilled with the  $2,500,000.00  for a period of two
                  (2) years  from the date  Buyer  pays the  $2,500,000.00  plus
                  Quantum's  cost of  funds.  After  the  two  year  period  has
                  expired,  Buyer shall be entitled to its pro rata share of the
                  net revenue from the wells based on this Agreement. This right
                  to acquire the  interest in the wells shall expire on November
                  30, 2002. Prior to the time that buyer exercises its right and
                  purchases its pro rata share of the working interest,  Quantum
                  or its affiliate shall be entitled to 100% of the revenue from
                  the wells.

                  In the event that Quantum or its  affiliate  pays in excess of
                  $2,500,000.00  prior to November  30, 2000 or pays 100% of the
                  cost of any  well(s)  after  November  30,  2000;  Buyer shall
                  back-in to its pro rata share of the  working  interest in the
                  well(s) after Seller has recovered its costs in the wells plus
                  300%. In the event,  that Rocky Mountain Gas spends funds on a
                  project  and  Quantum  does not  elect to match  those  funds,
                  Quantum shall back-in to its 50% interest in the project after
                  Rocky Mountain Gas has recovered its costs in the project plus
                  300%.

     1.3  Payment of  Recording  and Filing  Fees.  Buyer  shall pay all Montana
recording  and  filing  fees,  if  any,  due as a  result  of  the  transactions
contemplated by this Agreement.

     1.4 Purchase  Price  Adjustment.  At Closing,  the  Purchase  Price will be
adjusted  by  increasing  or  decreasing  the  amount  thereof  pursuant  to the
following provisions utilizing the procedures and methodology set forth herein:

         (a)      On the net acres in excess of 185,000  listed in Schedule 1.1,
                  Buyer  shall have the option to pay to Seller  $59.46 per acre
                  for a fifty percent  (50%) working  interest and forty percent
                  (40%) net revenue  interest in the acreage.  This sum shall be
                  $427,160.64,  and shall be paid to Seller or spent on Seller's
                  behalf, in Seller's sole discretion, on or before May 1, 2000.

                                       80

<PAGE>

         (b)      On any lease acres acquired by Buyer prior to Closing,  Seller
                  shall  have a right of  first  refusal  to pay to Buyer  fifty
                  percent (50%) of the actual land acquisition  costs plus fifty
                  percent (50%) of all professional  fees to acquire the leases,
                  for an undivided  fifty percent (50%) working  interest in the
                  leases. This payment shall be made on or before May 1, 2000.

         (c)      Seller and Buyer shall agree to pay their pro rat share of any
                  rental fees on the  Acquired  Assets on or before the due date
                  of the lease rental.  In the event that one party fails to pay
                  its pro rata share of the lease rentals,  then the other party
                  may pay the  defaulting  party's  pro rata  share of the delay
                  rentals.  The defaulting  party must pay its pro rata share of
                  the lease  rentals plus a 300% penalty in order to continue to
                  own its pro rata share of the lease. This payment must be made
                  within  twelve (12) months of the payment of the lease  rental
                  by the non-defaulting party.

         (d)      Buyer and Seller  mutually  agree to devise a budget  directed
                  toward  acquisition  of  leases in the AMI  whereby  costs are
                  shared equally on a 50/50 basis.

                                   ARTICLE II
                              BUYER'S DUE DILIGENCE

     2.1 Due  Diligence  Period.  Buyer shall have a period  which ended at 5:00
p.m.  Mountain  Standard Time of November 12, 1999 (the  "Diligence  Period") in
which to complete its review of the Acquired Assets.

     2.2 Title.  Buyer shall have reviewed all information  required in its sole
discretion and approved,  within the time period,  the documentation  supporting
the legal ownership of the coalbed  methane leases in Quantum Energy,  L.L.C. as
set out in Schedule 1.1.

     2.3 Inspection of the Acquired Assets.  During the Due Diligence Period and
up to the  date of  Closing,  buyer  may  independently  inspect  or cause to be
inspected by other  qualified  persons,  at Buyer's  sole cost and expense,  all
aspects of the Acquired Assets which Buyer determines in its sole discretion are
relevant or material to Buyer's  decision to purchase an undivided fifty percent
(50%) working interest in the Acquired Assets.

                                   ARTICLE III
                                   THE CLOSING

     3.1 Closing Date.  The transfer of an undivided  fifty percent (50%) of the
Acquired  Assets by Seller to Buyer and all other  transactions  contemplated by
this Agreement (the "Closing")  shall take place at 1:00 p.m.  Pacific  Standard
time  effective on Monday,  January 3, 2000, as the parties  shall agree,  or at
such  other  time or other  place as Seller  and Buyer may  mutually  agree (the
"Closing Date").

     3.2  Deliveries  by  Seller.  At the  Closing,  Seller  shall  deliver  the
following to Buyer, the receipt of which shall be a condition to Closing:

         (a)      The duly executed  Assignments in recordable form transferring
                  an undivided  fifty percent  (50%) working  interest and forty
                  percent (40%) net revenue  interest in the Acquired  Assets to
                  Buyer.

         (b)      Articles of Organization and Operating Agreement of
                  Powder River Gas, L.L.C.

         (c)      Such other  documents as are  reasonably  requested by Buyer
                  or its counsel.

                                       81

<PAGE>

3.3 Deliveries by Buyer. At the Closing, Buyer shall deliver the following,  the
receipt of which shall be a condition to Closing:

         (a)      The  sum  of  $3,200,000.00  in  certified  funds  to be  wire
                  transferred  to Seller's bank account as directed by Seller on
                  or before Closing.

         (b)      The duly executed  Assignments in recordable form transferring
                  an undivided  9% and 12%  interest in the  Acquired  Assets to
                  Seller.  These  assignments  shall be held by  Seller.  In the
                  event that Buyer fails to make the payments  under Section 1.2
                  or  1.2(a)  then   Seller   shall  be  entitled  to  file  the
                  appropriate Assignments of Record.

         (c) Such other  documents as are reasonably  requested by Seller or its
counsel.

         3.4      Conditions to Closing.

         (a)      Seller  and  Buyer  shall  commit  to drill  and  complete  an
                  additional 100 wells between January 1, 2000, and December 31,
                  2000,  subject to force majeure.  Each party shall pay its pro
                  rata share of the actual  costs to drill and  complete the 100
                  wells during the year 2000. In the event that either Seller or
                  Buyer shall elect not to drill a well (s) under this paragraph
                  (a) during  the year  2000,  the party who elects to drill the
                  well(s)  shall  recover  its costs to drill and  complete  the
                  well(s) plus a 300% penalty prior to the  nonconsenting  party
                  backing in for its pro rata share of the  working  interest in
                  the well(s).  This penalty  provision  shall also apply to all
                  future years between the parties.

(b) Seller has drilled three (3) wells on the Acquired Assets.  Buyer shall have
the option,  which must be exercised by January 3, 2000,  or it shall lapse,  to
participate as a working interest owner in the three (3) wells drilled by Seller
on the Acquired  Assets prior to Closing as set out on Schedule  3.4(c)  hereof.
With respect to the wells drilled prior to the Closing of this Agreement,  Buyer
agrees to pay fifty  percent  (50%) of the cost to drill and  complete the wells
for its 50% working interest in the wells. All information with respect to these
wells will remain confidential by Buyer. Buyer shall pay its 50% of the costs to
drill  and  complete  the  wells  or  agree  to  provide  services  equal to the
obligation under this paragraph, in the Seller's sole discretion at Closing.

         (c)      The parties  shall form a joint  operating  company to develop
                  the  Acquired  Assets  and shall  negotiate  in good faith the
                  terms and  conditions  of the  joint  operating  company.  The
                  parties  have agreed on the  following  issues with respect to
                  the joint operating company:

                  (i)      The  joint  operating  company  shall  be  a  limited
                           liability  company formed in the state of Wyoming and
                           qualified to do business in the state of Montana. The
                           legal name of the limited  liability company shall be
                           Powder  River Gas,  L.L.C.  Seller and Buyer or their
                           affiliates shall each own 50% of the membership units
                           in Powder River Gas, L.L.C.

                  (ii)     The Managers shall be as follows:

                           Paul Mysyk
                           Harrison Schumacher
                           Pete Schoonmaker
                           Keith Larsen

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<PAGE>

                           Additionally,  Roger  TeSelle,  Jim  Factor,  Mark J.
                           Larsen and John L. Larsen shall be on the  management
                           committee. There shall be required to be at least two
                           (2) members from each  membership  group present at a
                           meeting to constitute a quorum.

                  (iii)    Buyer and Seller shall each contribute $100,000.00 as
                           its  original  capital  contribution  to Powder River
                           Gas, L.L.C.  The Management  Committee shall agree on
                           an annual budget to operate Powder River Gas,  L.L.C.
                           If additional  capital is required,  each party shall
                           contribute   its  50%  share  of  the  capital.   The
                           Management  Committee shall select a bank to hold the
                           funds.  Two (2) signatures,  one from each membership
                           group,  shall  be  required  on all  bank  documents,
                           including checks.

                  (iv)     The attorney  and  accountant  for the parties  shall
                           investigate and report to the Management Committee on
                           the creation of an accounting system for Powder River
                           Gas,  L.L.C.  There will be an annual audit performed
                           on Powder River Gas, L.L.C. by an outside independent
                           accounting firm.

                  (v)      The   Management   Committee  has   authorized   Pete
                           Schoonmaker and Jim Factor to obtain office space and
                           office equipment,  not to exceed $5,000, in Sheridan,
                           Wyoming.  In  addition,   the  Management   Committee
                           authorized   the   hiring  of  a   receptionist   and
                           accounting clerk.

                  (vi)     The  Management   Committee   authorized  hiring  the
                           following as independent contractors on the following
                           basis:

                           Pete Schoonmaker                   $400/per day
                           Jim Factor                         $400/per day

                           Quantum   and  Rocky   Mountain   Gas  will  pay  all
                           out-of-pocket expenses plus an automobile for Jim and
                           Pete  respectively.  Jim and Pete shall keep track of
                           their  time  spent  on  Powder   River  Gas,   L.L.C.
                           projects.

     (vii) The  Management  Committee  shall  develop a  drilling  program  with
respect to the Acquired Assets to develop the acreage. U.S. Energy Corp./Crested
Corp.,  d/b/a USECC shall be entitled to drill the first  twenty-five (25) wells
on the leases based on a competitive  drilling rate in the surrounding area. The
Management  Committee  shall  review  the  results  and the costs and then shall
negotiate  competitive  drilling  contracts  for future  drilling on the leases.
USECC shall be allowed to submit bids for the  drilling of the leases.  Prior to
the start of drilling of the leases, the Scientific Committee,  appointed by the
Management  Committee,  shall  make  recommendations  on the areas to be drilled
first,  taking into  consideration  the  marketing  of gas through  existing and
proposed pipelines.

                           The   Scientific   Committee   shall  report  to  the
Management Committee on the following:

                           o         USA Well - Lipscomb Creek
                                    Review Burlington Railroad Acreage

                           o         Pawnee Well
                                    Test water and gas

                                       83

<PAGE>



                           o         Custer Forest #1   36-41-1
                                    Test Coals for water and gas

                  (viii)   The  Management  Committee  shall review all drilling
                           contracts to determine that they are competitive.

                           The Management Committee shall investigate whether to
                           build or contract out the  building of the  gathering
                           system.

                           The Management  Committee will begin negotiating with
                           pipeline  companies to transport the coalbed  methane
                           gas.

                  (ix)     Roger TeSelle has defined the AMI, which does include
                           the two (2) Indian Reservations, Tongue River, Custer
                           Forest and the Northern AMI.

                                   ARTICLE IV
                    REPRESENTATIONS AND WARRANTIES OF SELLER

     The Seller represents and warrants to Buyer as follows:

     4.1 Organization and  Qualification.  Seller is a limited liability company
duly  organized,  validly  existing and in good  standing  under the laws of the
State of Oklahoma,  and has all  requisite  power to own its  properties  and to
carry on its business as now owned and  operated by Seller.  Seller is qualified
to do  business,  is in good  standing,  and has all  appropriate  or  necessary
licenses in each  jurisdiction  or place in which the nature of its  business or
the character of its properties requires such registration.

     4.2 Authority to Transfer.  Seller has the right, power, legal capacity and
authority to enter into this Agreement, to perform its obligations hereunder and
to  consummate  the  transactions   contemplated   hereby,   and  no  approvals,
authorizations  or consents of any person  other than  Seller are  necessary  in
connection with Seller's execution,  performance and delivery of this Agreement.
This Agreement  constitutes the legal,  valid and binding  obligation of Seller,
enforceable  against Seller in accordance with its terms,  except as enforcement
may be limited by bankruptcy, insolvency, reorganization,  moratorium or similar
laws  or  equitable   principles  relating  to  or  limiting  creditor's  rights
generally.

     4.3 Title to  Acquired  Assets.  Seller  has  title to all of the  Acquired
Assets and holds a 100% working  interest and an 80% net revenue interest in the
Acquired  Assets,  except for 2223 acres in the Tongue River that have a 79% net
revenue interest.

     4.4  Agreement  Not in  Breach  of Other  Instruments.  The  execution  and
delivery of this Agreement and the other  documents to be executed and delivered
in connection  herewith and the  consummation of the  transactions  contemplated
hereby and thereby will not result in or constitute any of the following:  (a) a
default  or event  that,  with the  giving of notice or lapse of time,  or both,
would be a default,  breach or violation of the certificate of limited liability
company  or  operating  agreement  of Seller  or any  agreement,  instrument  or
arrangement  to which  Seller  is a party or by which  Seller  or any  assets or
property  of  Seller is  bound;  (b) an event  that  would  permit  any party to
terminate any contract or other agreement;  or (c) the creation or imposition of
any lien, charge, or encumbrance on any of the Acquired Assets.

                                       84

<PAGE>

                                    ARTICLE V
                     REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as follows:

     5.1 Organization and Qualification.  Buyer is a corporation duly organized,
validly  existing and in good  standing  under the laws of the State of Wyoming,
and has all corporate  power to own its  properties and to carry on its business
as now owned and operated by Buyer.  Buyer is  qualified  to do business,  is in
good  standing,   and  has  all  appropriate  or  necessary   licenses  in  each
jurisdiction  or place in which the nature of its  business or the  character of
its properties requires such registration.

     5.2 Authority to Purchase.  Buyer has the right,  power, legal capacity and
authority to enter into this Agreement, to perform its obligations hereunder and
to  consummate  the  transactions   contemplated   hereby,   and  no  approvals,
authorizations  or  consents  of any person  other than  Buyer is  necessary  in
connection with Buyer's  execution,  performance and delivery of this Agreement.
This Agreement  constitutes  the legal,  valid and binding  obligation of Buyer,
enforceable  against Buyer in accordance  with its terms,  except as enforcement
may be limited by bankruptcy, insolvency, reorganization,  moratorium or similar
laws  or  equitable   principles  relating  to  or  limiting  creditor's  rights
generally.

                                   ARTICLE VI
                                   TERMINATION

     6.1  Termination.  This  Agreement  may only be  terminated  by the  mutual
consent of both Seller and Buyer.  In the event that Buyer fails to close on the
date of  Closing,  Buyer  shall  forfeit the funds held in escrow and the Escrow
Agent shall deliver the $160,000.00  held in escrow to the Seller.  In the event
that Seller  fails to close on the date of  Closing,  Buyer shall be entitled to
the return of its funds held in escrow and no further  penalty or  damages.  The
$160,000.00  is  liquidated   damages  and  shall  represent  the  only  damages
recoverable by Seller in the event Buyer fails to close.

                                   ARTICLE VII
                               GENERAL PROVISIONS

     7.1 Notices.  All notices and other  communications  hereunder  ("Notices")
shall be in writing and shall be deemed given upon personal delivery,  facsimile
transmission (with written or facsimile confirmation of receipt), or delivery by
a reputable overnight commercial delivery service (delivery,  postage or freight
charges  prepaid),  or on the fourth day following  deposit in the United States
mail (if  sent by  registered  or  certified  mail,  return  receipt  requested,
delivery,  postage or freight charges prepaid),  addressed to the parties at the
following  addresses (or at such other address for a party as shall be specified
by like Notice):

         If to Seller:              QUANTUM ENERGY, L.L.C.
                                    4481 Topanga Canyon Boulevard
                                    Suite 202
                                    Woodland Hills, CA 91364
                                    Fax:  (818) 704-9599
                                    Attn:   Paul Mysyk
                                            Harrison Schumacher

           with a copy to:          Robert O.  O'Bannon, Esq.
                                    Phillips McFall McCaffrey

                                       85

<PAGE>

                                    McVay & Murrah, P.C.
                                    Twelfth Floor
                                    One Leadership Square
                                    211 N.  Robinson
                                    Oklahoma City, OK 73102
                                    Fax:  (405) 235-4133

If to Buyer:                        ROCKY MOUNTAIN GAS, INC.
                                    877 N.  8th West
                                    Riverton, WY 82501
                                    Fax:  (307) 857-3050
                                    Attn:  John L.  Larsen, Chairman

  with a copy to:                   Mike Svilar, Esq.
                                    ROCKY MOUNTAIN GAS, INC.
                                    877 N.  8th West
                                    Riverton, WY 82501
                                    Fax:  (307) 857-3050

     7.2 Survival of  Representations,  Warranties,  Covenants  and  Agreements.
Except as otherwise expressly provided herein, all representations,  warranties,
covenants,  and agreements of the parties  contained in this Agreement or in any
schedule, document, certificate or other instrument delivered by or on behalf of
the parties  pursuant to this Agreement,  shall survive the Closing for a period
of one (1) year.

     7.3 Further  Assurances.  The parities hereto agree to do such further acts
and to execute and deliver such  additional  agreements  including the Operating
Agreement  of Powder River Gas,  L.L.C.  and  instruments  as may be required to
consummate,  evidence or confirm the  transactions  and agreements  contained in
this Agreement.

     7.4 Entire Agreement,  Amendment,  Waivers. This Agreement and any exhibits
delivered by the parties hereto contemporaneously herewith constitute the entire
agreement between the parties  pertaining to the subject matter contained herein
and supersede all prior agreements,  representations  and  understandings of the
parties hereto. No supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by all of the parties hereto.

     7.5 Binding Upon Heirs and Successors. This Agreement shall be binding upon
and inure to the  benefit  of the  respective  successors,  heirs,  assigns  and
personal representatives of the parties hereto.

     7.6 Signatures in a Representative  Capacity. Each party whose signature is
affixed hereto in a representative  capacity  represents and warrants that he is
authorized  to  execute  this  Agreement  on behalf of and to bind the entity on
whose behalf his signature is affixed.

     7.7 Governing Law. This Agreement shall be construed in accordance with and
be governed by the laws of the State of Montana.

     7.8  Severability.  In the event any provision of this  Agreement  shall be
held to be void,  voidable or  unenforceable,  the  remaining  provisions  shall
remain in full force and effect.

     7.9 Expenses.  Each party to this Agreement  shall bear its own expenses in
connection with this Agreement and the transactions contemplated hereby.

                                       86

<PAGE>

     7.10  Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  each of which when executed and  delivered  shall be an original,
and all of which when executed shall constitute one and the same instrument.

     IN WITNESS WHEREOF,  the parties have executed this Agreement as of the day
and year first above written.

         SELLER:                            QUANTUM ENERGY, L.L.C. an Oklahoma
                                             limited liability company


                                       By:  /s/   Paul Mysyk
                                            ------------------------------------
                                            Paul Mysyk, Managing Member



                                       By:  /s/    Harrison Schumacher
                                            ------------------------------------
                                            Harrison Schumacher, Managing Member



         BUYER:                             ROCKY MOUNTAIN GAS, INC.


                                       By:  /s/   Keith Larsen
                                            ------------------------------------
                                            Keith Larsen, CEO



                                       87


</TEXT>
</DOCUMENT>
