MISSION RESOURCES CORP
1ST AMEND.TO WAIVER OF 2ND AMENDED CREDIT AGMT
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>3
<FILENAME>h10423exv10w3.txt
<DESCRIPTION>1ST AMEND.TO WAIVER OF 2ND AMENDED CREDIT AGMT
<TEXT>
<PAGE>

                                                                    Exhibit 10.3


                                 FIRST AMENDMENT
                                TO AND WAIVER OF
                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT


                        THIS FIRST AMENDMENT TO AND WAIVER OF SECOND AMENDED AND
RESTATED CREDIT AGREEMENT (this "Amendment"), dated as of June 25, 2003, among
MISSION RESOURCES CORPORATION, a corporation formed under the laws of the State
of Delaware (the "Borrower"), the several banks and other financial institutions
or entities from time to time parties to this Amendment (the "Lenders"),
FARALLON ENERGY LENDING, L.L.C., as sole advisor, sole lead arranger and sole
bookrunner (in such capacity, the "Arranger"), and WELLS FARGO FOOTHILL, INC.,
as the administrative agent (in such capacity, the "Administrative Agent"). All
defined terms not defined herein shall have the same meaning as set forth in the
Second Amended and Restated Credit Agreement, dated as of June 5, 2003 (the
"Credit Agreement").

I.          BACKGROUND

                        WHEREAS, the Borrower, certain lenders party thereto,
the Arranger, the Syndication Agent and the Administrative Agent entered into
the Credit Agreement, which amended and restated the Amended and Restated Credit
Agreement, dated as of March 28, 2003, as amended, by and among the Borrower,
the financial institutions party thereto, Wells Fargo Foothill, Inc., as
administrative agent, Jefferies & Company, Inc., as syndication agent;

                        WHEREAS, pursuant to the Credit Agreement and the other
Loan Documents, each Loan Party granted a lien on and security interest in
certain of its assets, including, without limitation, a substantial portion of
its Oil and Gas Properties, to secure its Obligations to the Lenders, the
Administrative Agent and any affiliate of the Administrative Agent providing
Bank Products to the Borrower or any of its subsidiaries;

                        WHEREAS, the Borrower now believes that its interest in
the Oil and Gas Properties in the Backridge Field, Cameron Parish, Louisiana
(the "Backridge Field") referred to as Henry 28-2 and 28-3, more fully described
on Exhibit A hereto, represents a much higher drilling risk than previously
anticipated and has determined not to drill on either property (the "Henry
Interests");

                        WHEREAS, the Borrower has determined to convey title to
the Henry Interests to Milam Energy L.P. ("Milam") in exchange for Milam's
interest in the Oil and Gas Properties in the Backridge Field referred to as the
Davis 26-3 acreage, more fully described in Exhibit A hereto (the "Davis
Interest") pursuant to the terms of that certain agreement, dated ______, 2003
(the "Swap Agreement" and the exchange of the properties contemplated by such
agreement referred to herein as the "Swap");

                        WHEREAS, the Lenders party hereto have agreed to permit
the consummation of the Swap, subject to the terms and provisions hereof;


<PAGE>

                        NOW THEREFORE, in consideration of the mutual covenants
and agreements herein contained, the parties hereto agree to amend and
restate the Credit Agreement as follows:

II.         WAIVERS

                        (a) The Lenders party hereto, constituting the Majority
Lenders, do hereby consent and agree, pursuant to Section 9.1 of the Credit
Agreement, to permit the consummation of the Swap pursuant to the terms of the
Swap Agreement, and do hereby waive the requirements of Sections 6.4(l) and
2.7(b) of the Credit Agreement with respect thereto; provided, however, that for
purposes of determining the aggregate amount of Net Cash Proceeds of Asset Sales
and Recovery Events which may be excluded from the requirement to make
prepayments of Loans pursuant to clauses (i), (ii) and (iii) of Section 2.7(b),
the Borrower shall be deemed to have received seven million five hundred
thousand dollars ($7,500,000.00) in Net Cash Proceeds in connection with the
Swap.

III.        AMENDMENT

                        Section 5.7 of the Credit Agreement is hereby amended to
read in its entirety as follows:

                        Notices. Promptly, and in any event within five Business
Days after knowledge thereof, give notice to the Administrative Agent and each
Lender of:

                        (a) the occurrence of any Default or Event of Default;

                        (b) any (i) default or event of default under any
Contractual Obligation of the Loan Parties or any of their respective
Subsidiaries or (ii) litigation, investigation or proceeding which may exist at
any time between any Loan Party or any of their respective Subsidiaries and any
Governmental Authority, that in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a Material
Adverse Effect;

                        (c) any litigation or proceeding affecting any Loan
Party or any of their respective Subsidiaries in which the amount involved is
$500,000 or more and not covered by insurance or in which injunctive or similar
relief is sought;

                        (d) the occurrence of any Casualty Event to the
Mortgaged Property or the commencement of any action or proceeding for the
taking of any material portion of the Mortgaged Property or any part thereof or
interest therein under power of eminent domain or by condemnation,
nationalization or similar proceeding;

                        (e) the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know thereof: (i)
the occurrence of any Reportable Event with respect to any Plan, a failure to
make any material required contribution to a Plan, the creation of any Lien in
favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution
of proceedings or the taking of any other action by the PBGC


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or any Loan Party or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan; and

                        (f) as soon as possible, and in any event within 5 days
after the Borrower knows or has reason to know of the occurrence of any event,
action, circumstance or proceeding which has adversely affected or could
adversely affect the value of any of the Oil and Gas Properties constituting
Collateral in a material amount;

                        Each notice pursuant to this Section 5.7 shall be
accompanied by a statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the Borrower or the
relevant Subsidiary proposes to take with respect thereto.

IV.         AMENDMENT OF MORTGAGE

                        Simultaneously with the consummation of the Swap and in
accordance with the Credit Agreement and the other Loan Documents, the Company
and the Administrative Agent shall cause an amendment to the Mortgage, in proper
form for execution and filing in Cameron Parish, Louisiana, and otherwise on
terms and conditions satisfactory to the Administrative Agent, to be duly
executed and delivered to the Administrative Agent (i) releasing the Henry
Interests from the Mortgage and (ii) adding the Davis Interest as Collateral
securing the Obligations.

V.          EXERCISE OF REMEDIES.

                        The Lenders hereby waive their rights to exercise their
remedies under the agreement based solely upon the consummation of the Swap
as contemplated and described herein and subject to the terms and provisions
hereof. Except with respect to matters expressly waived hereby, nothing herein
shall be construed to be a waiver of any Defaults or Events of Default as they
exist now or at any time in the future.

VI.         MISCELLANEOUS.

                        (a) The execution and delivery of this Amendment shall
constitute a representation and warranty by the Borrower that the
representations and warranties contained in the Credit Agreement are true and
correct as of the date hereof and that no event which, but for the giving of
notice or passage of time or both, would constitute an Event of Default, or
Event of Default, exists as of the date hereof.

                        (b) Except as herein expressly amended, the Credit
Agreement, the Loan Documents, and any other documents or instruments executed
in connection therewith are and shall be unchanged, and shall continue to be in
full force and effect. All the terms, covenants, provisions and conditions of
the Credit Agreement are incorporated herein by reference.


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<PAGE>
                        (c) This Amendment may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, but in
making proof of this Amendment it shall not be necessary to produce or account
for more than one such counterpart.

                        IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the day and year first above written.



                                     MISSION RESOURCES CORPORATION, as Borrower

                                                By: /s/ RICHARD W. PIACENTI
                                                    ----------------------------
                                                    Name: Richard W. Piacenti
                                                          ----------------------
                                                    Title: Executive Vice
                                                           ---------------------
                                                           President & CFO
                                                           ---------------------

                                     FARALLON ENERGY LENDING, L.L.C.,
                                     as Arranger and as a Lender

                                                By: /s/ WILLIAM MELLIN
                                                    ----------------------------
                                                    Name: William Mellin
                                                          ----------------------
                                                    Title: Managing Member
                                                           ---------------------

                                     WELLS FARGO FOOTHILL, INC.,
                                     as Administrative Agent and as a Lender

                                                By: /s/ THOMAS SHUGHRUE
                                                    ----------------------------
                                                    Name: Thomas Shughrue
                                                          ----------------------
                                                    Title: Vice President
                                                           ---------------------

                                     ABLECO FINANCE LLC, as a Lender, for
                                     itself and on behalf of affiliate assignees

                                                By: /s/ KEVIN GENDA
                                                    ----------------------------
                                                    Name: Kevin Genda
                                                          ----------------------
                                                    Title: Sr. VP/Chief Credit
                                                           ---------------------
                                                           Officer
                                                           ---------------------

                                     HIGHBRIDGE/ZWIRN SPECIAL OPPORTUNITIES
                                     FUND, L.P., as a Lender

                                     By:  Highbridge/Zwirn Capital Management,
                                          LLC

                                                By: /s/ DANIEL B. ZWIRN
                                                    ----------------------------
                                                    Name: Daniel B. Zwirn
                                                          ----------------------
                                                    Title: Managing Principal
                                                           ---------------------


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<PAGE>

                                     ARES Leveraged Investment Fund II, L.P.

                                     By:  ARES Management II, L.P.
                                     Its:   General Partner

                                                By: /s/ SETH J. BRUFSKY
                                                    ----------------------------
                                                    Name: Seth J. Brufsky
                                                          ----------------------
                                                    Title: Vice President
                                                           ---------------------

                                     TRS THEBE LLC, as Lender

                                                By: /s/ DEBORAH O'KEEFFE
                                                    ----------------------------
                                                    Name: Deborah O'Keeffe
                                                          ----------------------
                                                    Title: Vice President
                                                           ---------------------


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<PAGE>

                                    EXHIBIT A

                                 Henry Interests


Oil, Gas and Mineral Lease dated March 25, 2002 between Sheryl Lebleu Swift, et
al and Mission Resources Corporation, recorded in Book 953, Entry No. 276939 and
Book 948, Entry No. 275634; Ratification thereof recorded March 11, 2003 in Book
962, File No. 279772, Cameron Parish, Louisiana, covering certain lands
described as follows:

            That certain tract or parcel of land containing 240.0 acres, more or
            less, being described as the North Half of the Southwest Quarter
            (N/2 SW/4) of Section 28 and the Southeast Quarter (SE/4) of Section
            29, Township 14 South, Range 9 West, Cameron Parish, Louisiana.

            LESS AND EXCEPT: That portion of the above described property
            situated within the confines of the P-2 Strg. RA SUA, established by
            Office of Conservation Order No. 248-G-2, effective December 1,
            1962; the P-2-A RA SUA, established by Office of Conservation Order
            No. 248-K, effective July 1, 1964; and the CAM. P-3 RA SU,
            established by Office of Conservation Order No. 248-E-2, effective
            March 1, 1965.

            Leaving a balance of 115.0 acres, more or less.

Oil, Gas and Mineral Lease dated March 25, 2002 between The Ardoin Limited
Partnership and Mission Resources Corporation, recorded in Book 948, Entry No.
275633, Cameron Parish, Louisiana, covering certain lands described as follows:

            That certain tract or parcel of land containing 240.0 acres, more or
            less, being described as the North Half of the Southwest Quarter
            (N/2 SW/4) of Section 28 and the Southeast Quarter (SE/4) of Section
            29, Township 14 South, Range 9 West, Cameron Parish, Louisiana.

            LESS AND EXCEPT: That portion of the above described property
            situated within the confines of the P-2 Strg. RA SUA, established by
            Office of Conservation Order No. 248-G-2, effective December 1,
            1962; the P-2-A RA SUA, established by Office of Conservation Order
            No. 248-K, effective July 1, 1964; and the CAM. P-3 RA SU,
            established by Office of Conservation Order No. 248-E-2, effective
            March 1, 1965.

            Leaving a balance of 115.0 acres, more or less.

Oil, Gas and Mineral Lease effective November 1, 1993 between John Henry Lebleu,
et al, and Louisiana Oil and Gas, Inc. recorded in Book 790, Entry No. 235710,
amended in Book 803, Entry No. 237864; Ratification thereof recorded March 11,
2003 in Book 962, File No. 279773, Cameron Parish, Louisiana, covering certain
lands described as follows:


<PAGE>

            730.79 acres, more or less, situated in Cameron Parish, Louisiana,
            in Sections 20, 21, 28, 29 and 30, T14S-R9W, INSOFAR AND ONLY
            INSOFAR as said lease covers S/2 NW/4 and S/2 N/2 NW/4 of Section 28
            and S/2 NE/4 of Section 29.

Oil, Gas and Mineral Lease effective November 1, 1993 between Scott Henry
Lebleu, a minor, represented by Susan Kuntz, and Louisiana Oil and Gas, Inc.,
recorded in Book 790, Entry No. 235711, amended in Book 803, Entry No. 237865;
Ratification thereof recorded March 11, 2003 in Book 962, File No. 279773,
Cameron Parish, Louisiana, covering certain lands described as follows:

            730.79 acres, more or less, situated in Cameron Parish, Louisiana,
            in Sections 20, 21, 28, 29 and 30, T14S-R9W, INSOFAR AND ONLY
            INSOFAR as said lease covers S/2 NW/4 and S/2 N/2 NW/4 of Section 28
            and S/2 NE/4 of Section 29.

Oil, Gas and Mineral Lease effective November 1, 1993 between Cameron Wayne
Lebleu, a minor, represented by Paige Roberson Lebleu , and Louisiana Oil and
Gas, Inc., recorded in Book 790, Entry No. 235712, amended in Book 803, Entry
No. 237866; Ratification thereof recorded March 11, 2003 in Book 962, File No.
279773, Cameron Parish, Louisiana, covering certain lands described as follows:

            730.79 acres, more or less, situated in Cameron Parish, Louisiana,
            in Sections 20, 21, 28, 29 and 30, T14S-R9W, INSOFAR AND ONLY
            INSOFAR as said lease covers S/2 NW/4 and S/2 N/2 NW/4 of Section 28
            and S/2 NE/4 of Section 29.

Oil, Gas and Mineral Lease effective November 1, 1993 between Hilda Peloquin
Henry, et al and Louisiana Oil and Gas, Inc., recorded in Book 790, Entry No.
235713, amended in Book 803, Entry No. 237867; Ratification thereof recorded
March 11, 2003 in Book 962, File No. 279773, of the records of Cameron Parish,
Louisiana, covering certain lands described as follows:

            730.79 acres, more or less, situated in Cameron Parish, Louisiana,
            in Sections 20, 21, 28, 29 and 30, T14S-R9W, INSOFAR AND ONLY
            INSOFAR as said lease covers S/2 NW/4 and S/2 N/2 NW/4 of Section 28
            and S/2 NE/4 of Section 29.

                                 Davis Interests

Oil, Gas and Mineral Lease dated March 25, 2002 between The James Austin and
Martha Davis Trust for Lonnie A. Davis, et al and Mission Resources Corporation,
recorded in Book 948, Entry No. 275632, Cameron Parish, Louisiana, covering
certain lands described as follows:

            Township 14 South, Range 9 West

            Section 22: SE/4 SE/4
            Section 26: SW/4 NE/4; NW/4 and S/2
            Section 27: E/2 NE/4


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<PAGE>

            LESS AND EXCEPT: That portion of the above described property
            included within the confines of the ABB 2 RB SUA, created by State
            of Louisiana, Office of Conservation Order No. 1249-B-1, effective
            September 23, 1997 and;

            LESS AND EXCEPT: That portion of the SW/4 NE/4 lying north of the
            confines of the ABB 2 RB SUA, created by State of Louisiana, Office
            of Conservation Order No. 1249-B-1, effective September 23, 1997 as
            situated in Section 26, described above.

            Leaving a balance of 500.00 acres, more or less


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