EMPLOYMENT AGREEMENT



         This Employment Agreement (the "Agreement") is made and entered into as

of the 1st day of January, 2003 (the "Effective Date"), by and between Magnum

Hunter Resources, Inc., a Nevada corporation ("Magnum Hunter") and its

affiliates, Gruy Petroleum Management Co., a Texas Corporation and a

wholly-owned subsidiary of Magnum Hunter, (collectively, the "Employer") and

Charles R. Erwin ("Employee").



         WHEREAS, the Board of Directors of the Employer (the "Board")

recognizes that it is important to attract, hire and retain key officers and

management personnel;



         WHEREAS, the Board also recognizes that, in the event of a Change in

Control (as hereinafter defined), significant distractions of its key management

and operations personnel can result because of the uncertainties inherent in

such a situation;



         WHEREAS, the Board has determined that it is essential and in the best

interest of the Employer and its stockholders to retain officers and key

employees in the event of a threat or occurrence of Change in Control and to

ensure their continued dedication and efforts in such event without undue

concern for their personal, financial and employment security; and



         WHEREAS, in order to induce qualified candidates to accept employment

with the Employer and to remain in the employ of the Employer in the event of a

threat or the occurrence of a Change in Control, the Employer desires to enter

into this Agreement with the Employee.



         NOW THEREFORE, for and in consideration of the mutual covenants and

agreements contained herein and for other good and valuable consideration, the

receipt and sufficiency of which is hereby acknowledged, the parties hereto

agree as follows:



         1.    Employment. Employer hereby employs Employee and Employee hereby

         accepts employment with Employer upon the terms and conditions

         hereinafter set forth.



         2.    Duties. Employee shall serve Employer as Sr. Vice President

         Exploration of the Employer with such responsibilities as shall be

         determined from time to time by the President of the Employer and the

         Board; provided, however, that all duties assigned to Employee

         hereunder shall be commensurate with the skill and experience of

         Employee. Employee agrees to devote all of his professional time,

         attention, skills, benefits and best efforts to the performance of his

         duties hereunder and to the promotion of the business and interests of

         Employer.



         3.    Term. This Agreement shall become effective on the Effective

         Date, and shall continue, unless earlier terminated in accordance with

         the terms of this Agreement, for a period of three (3) years commencing

         on the Effective Date. This Agreement shall thereafter be automatically

         renewed for a period of six (6) months, unless earlier terminated as

         provided herein, and unless one party has given written notice to the

         other party of its or his intention not to renew this Agreement at

         least thirty (30) days prior to the expiration of its then current term

         (the "Term").



         4.    Compensation. As compensation for his services rendered under

         this Agreement, Employee shall be entitled to receive the following:



<PAGE>



               (a)    Base Salary. During the Term, Employee shall initially be

               paid an annual salary of One Hundred Eighty Five Thousand and

               No/100 Dollars ($185,000.00) per annum (the "Base Salary")

               payable in equal payments twice a month for a total of

               twenty-four (24) payments per year. The Base Salary may be

               increased or decreased as the Board may determine from time to

               time. The Base Salary may be increased or decreased as the Board

               may determine from time to time. The Base Salary may be increased

               or decreased as the Board may determine from time to time,

               however in no event will the Base Salary be less than One Hundred

               Eighty Five Thousand and No/100 Dollars ($185,000.00);



               (b)    Expenses. Employer shall reimburse Employee for all

               reasonable and necessary out-of-pocket travel and other expenses

               incurred by Employee in rendering services required under the

               terms of this Agreement, promptly after submission, on a monthly

               basis, of a detailed statement of such expenses and reasonable

               documentation.



               (c)    Bonus. Expressly conditioned on the Employee being

               employed on the last day of the fiscal year of the Employer, the

               Employee may receive a bonus in an amount determined solely by

               the unanimous approval of the compensation committee of the

               Employer and the Board, in their sole discretion.



               (d)    Benefits. During the Term, Employee shall be entitled to

               receive such group benefits as Employer may provide to its other

               employees at comparable salaries and responsibilities to those of

               Employee.



               (e)    Automobile. During the Term, Employee may be entitled to

               an automobile allowance to be determined by the Chief Executive

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