
            C O T T O N V A L L E Y E N E R G Y C O R P O R A T I O N
                5232 FOREST LANE, SUITE 120, DALLAS, TEXAS 75244
                       ph: 214-363-1990 FAX: 214-363-1070
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February __, 1995

Decker Exploration, Inc.
921 Main St., Suite 1518
Houston, Texas 77002

Attn: Mr. Mark Decker

Re:      Letter Agreement
         Movico Prospect
         Mobile County, Alabama

Dear Mark:

Pursuant to our  conversations and agreement,  Cotton Valley Energy  Corporation
("CVE") agrees to purchase from Decker Exploration, Inc. and Leeman Energy Corp.
(hereinafter  "Sellers"),  and  Sellers  agree  to sell to  CVE,  a 25%  working
interest in the Movico Prospect subject to the following terms and conditions:

     1.   CVE will pay 25% of  $450,000 to Sellers  for  leasehold,  geology and
          geophysical expenses ("Prospect Costs").

     2.   CVE will own a 25% working interest in the prospect and pay 25% of the
          initial well costs.

     3.   Sellers will deliver an Assignment of 25% working  interest in the Oil
          and Gas Leases  described in Exhibit A hereto with a minimum  weighted
          net revenue interest of 77% of 25%. Sellers will retain a reversionary
          working  interest of 15% of 8/8ths after payout of all prospect  costs
          and well costs ("Project Payout").

     4.   CVE will have the right of review and  approval of all  leases,  lease
          options and title.

     5.   The parties will  negotiate  and attempt in good faith to enter into a
          mutually  acceptable   Participation  Agreement  and  Joint  Operating
          Agreement  within  30  days  of  Sellers  receiving  letter  agreement
          commitments for 100% of the working  interest,  however,  CVE may, for
          any  reason,  determine  that  the  proposed  Participation  or  Joint
          Operating  Agreements or operator are  unacceptable  and withdraw from
          this letter of intent without any  obligation to Sellers.  Sellers may
          terminate  this  letter  agreement  in  the  event  CVE  fails  to pay
          compensation,  fails to execute agreement, or perform any of the above
          after the remaining 75% working  interest has been  committed by third
          parties.


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Decker Exploration, Inc.
February ___, 1995
Page 2

     6.   An area of  mutual  interest  (AMI)  will be  established  around  the
          prospect,  as shown in  Exhibit  B hereto,  such  that any  additional
          interest  delivered  to or acquired by the  working  interest  parties
          within the AMI will be subject to the reversionary working interest in
          paragraph 3 and to a 3% of 8/8ths  overriding  royalty  interest  that
          will be assigned to Sellers.

     7.   Within  90 days  of  executing  a  mutually  acceptable  Participation
          Agreement and Joint Operating  Agreement (but in no event earlier than
          September 1, 1995),  the working interest  participants  will at their
          own cost and expense  commence  the  drilling of the initial well at a
          mutually  acceptable  location  to test  the  Smackover  and  Norphlet
          formations.


If you are in agreement  with the above terms and  conditions,  please  indicate
your  acceptance  in the space  provided  below and  return a copy to me at your
earliest convenience.

Yours very truly,

COTTON VALLEY ENERGY CORPORATION


By:________________________________
         Title:

AGREED TO AND ACCEPTED as of this ___ Day  of February

DECKER EXPLORATION, INC.


By:_________________________________
         Title:


LEEMAN ENERGY CORP.


By:_________________________________
         Title:


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