
                       PROPERTY OPTION PURCHASE AGREEMENT

     This  agreement  entered  into as of the date set  forth  below is  between
Cotton Valley Energy Corporation,  a Nevada Corporation (hereinafter referred to
as "Purchaser"), with its address at 5232 Forest Lane, Suite 120, Dallas, Texas,
75244 and South Alabama Exploration Limited Partnership (hereinafter referred to
as "Seller"),  represented by its general partner,  Hibernia Management Company,
located at 2707 Hibernia St., Suite 301, Dallas, Texas 75204

                               W I T N E S S E T H

     WHEREAS, Seller represents that it owns an unrecorded option (the "Option")
to purchase a 25% working  interest in 640 acres of Oil, Gas, and Mineral leases
owned by Decker  Exploration,  Inc. and Leeman Energy Corporation (the "Owners")
within the boundaries of the Movico Field,  Mobile County,  Alabama, as outlined
in Exhibit A attached hereto (the "Property"), and to participate in the area of
mutual interest with the Owners as outlined on Exhibit B attached hereto; and

     WHEREAS, Seller is willing to sell, assign and transfer to Purchaser all of
its rights, title and interest in the Option, and have Purchaser  substituted in
its place and stead;

     NOW  THEREFORE,  for  and in  consideration  of  the  delivery  of  certain
securities  of  Purchaser  as set  forth  below  and  other  good  and  valuable
consideration,  the sufficiency of which is hereby  acknowledged,  Seller hereby
grants,  sells,  assigns  and  transfers  to  Purchaser  all its right title and
interest in the Option according to the following terms and conditions:

     1.   The securities  (which shall be delivered to Seller on or before March
          15, 1995) shall consist of: (a)  1,558,560  shares of the Common Stock
          of Purchaser,  $0.001 par value (the "Common Stock"); (b) a warrant to
          purchase  389,640  shares of Common  Stock at Three  Canadian  Dollars
          (C$3.00) per share on or before March 15, 1996 (the "C$3.00 Warrant");
          (c) a warrant  to  purchase  389,640  shares  of Common  Stock at Four
          Canadian  Dollars  (C$4.00) per share on or before March 15, 1997 (the
          "C$4.00  Warrant");  and (d) a warrant to purchase  389,640  shares of
          Common Stock at Five Canadian  Dollars (C$5.00) per share on or before
          March  15,  1998  (the  "C$5.00  Warrant").  Seller  shall  execute  a
          securities  acquisition agreement with respect to the securities being
          acquired in the form of Exhibit C attached hereto.  The warrants to be
          delivered shall be in the form of Exhibit D attached hereto.

     2.   On the date Purchaser acquires title to the Property,  Purchaser shall
          pay Seller $117,500 in immediately available funds.

     3.   In the event Purchaser  acquires less than 25% working interest in the
          640 acres (160 net acres) having good and merchantable  title,  Seller
          shall return to Purchaser  shares of Common  Stock,  C$3.00  Warrants,
          C$4.00 Warrants and C$5.00 Warrants  proportional to the amount of net
          acres not so  acquired.  In the event  Purchase  does not exercise any
          portion of its option hereunder,  for any reason, Seller, upon written
          demand,  shall return 50% of amounts it previously  received of Common
          Stock, C$3.00 Warrants,  C$4.00 Warrants and C$5.00 Warrants.  3. This
          agreement shall be governed by the laws of the State of Texas.

     4.   Should any additional instruments need to be executed,  certified,  or
          delivered  by one Party to the other,  to any third party and/or filed
          with or  delivered  to any  public  officer  in order to carry our the
          purpose  and intent of this  Agreement,  each Party  hereto  agrees to
          promptly execute and deliver



Property Option Agreement........Page 1

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          any and all such  instruments  reasonable  necessary  to carry out the
          purpose and intent of this Agreement.

          5.   This Agreement may be executed in multiple counterparts,  each of
               which shall be deemed an original  and each of which  alone,  and
               all  of  which  together,  shall  constitute  one  and  the  same
               instrument.  It is agreed to that a facsimile transmission signed
               copy of  this  Agreement  shall  be  treated  and  considered  an
               original for all intended purposes.

          6.   It is expressly  agreed that this  Agreement  embodies the entire
               agreement  of the  parties  with  regard  to the  subject  matter
               herein,  and that there is no other oral or written  agreement or
               understanding  between  the  parties  at the  time  of  execution
               hereunder. In addition, this Agreement may be amended or modified
               only by written agreement signed by all of the parties hereto.

          7.   The terms and  provisions  hereof shall be binding upon and inure
               to the  benefit  of the  parties  hereto  and  their  successors,
               transferees, sub-licensees and assigns.

Executed as of this ____ Day of February, 1995.


COTTON VALLEY ENERGY CORPORATION


By______________________Title:___________

SOUTH ALABAMA EXPLORATION LIMITED PARTNERSHIP
HIBERNIA MANAGEMENT COMPANY, General Partner


By: ______________________Title__________






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