GREAT EASTERN ENERGY & DEVELOPMENT CORP, SC 14D1, 1997-07-11

GREAT EASTERN ENERGY & DEVELOPMENT CORP
SC 14D1, 1997-07-11
CRUDE PETROLEUM & NATURAL GAS

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14D-1

Tender Offer Statement Pursuant to Section 14(d)(1) of the Securities
Exchange Act of 1934

GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION
- -------------------------------------------------------------------------------
(Name of Issuer)

Caprito Gas Corporation
and Kevin O. Butler
- -------------------------------------------------------------------------------
(Bidder)

Common Stock, par value $0.10 per share
Great Eastern Energy and Development Corporation
- -------------------------------------------------------------------------------
(Title of Class of Securities)

390 323-10-3
- -------------------------------------------------------------------------------
(CUSIP Number of Class of Securities)

Kevin O. Butler with a copy to: Dan G. LeRoy
Caprito Gas Corporation Cotton, Bledsoe, Tighe & Dawson
P. O. Box 1171 P. O. Box 2776
Midland, Texas 79702 Midland, Texas 79702-2776
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidder)

CALCULATION OF FILING FEE
- -------------------------------------------------------------------------------
TRANSACTION $4,145,734 (18,844,245 shares sought Amount of filing fee
VALUATION* to be purchased at $0.22 per share) $829
- -------------------------------------------------------------------------------

*Set forth the amount on which the filing fee is calculated and state how it was
determined.

/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.

Amount Previously Paid: $____________

Form or Registration No.: ____________

Filing Party: ____________

Date Filed: ____________

<PAGE>

CUSIP No. 390 323-10-3
-----------------

- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Caprito Gas Corporation TIN: 75-2527546
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a)/X/
(b)/ /
- -------------------------------------------------------------------------------

3 SEC USE ONLY

- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS

BK
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(e) OR 2(f) / /

- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION

Texas
- -------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

0
- -------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
/ /
- -------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)

0
- -------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON

CO
- -------------------------------------------------------------------------------

<PAGE>

CUSIP No. 390 323-10-3
-----------------

- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Kevin O. Butler TIN: _____________
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a)/X/
(b)/ /
- -------------------------------------------------------------------------------
3 SEC USE ONLY

- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS

BK
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(e) OR 2(f) / /

- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION

Texas
- -------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

0
- -------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON

IN
- -------------------------------------------------------------------------------

<PAGE>

Item 1. Security and Subject Company.

(a) Great Eastern Energy and Development Corporation (the "Subject
Company")
5990 Greenwood Plaza Blvd., Suite 127
Greenwood Village, Colorado 80111-4708

(b) The equity securities being sought are the Subject Company's Common
Stock, par value $0.10 per share (the "Shares"), 18,844,245 shares
outstanding as of March 31, 1997. Tender is being made for all of the
Shares at a net price to the tendering shareholders of $0.22 per
share.

(c) See Item 6--"Price Range of Shares; Dividends" in the Offer to
Purchase (the "Offer") filed as Exhibit 11(a) attached hereto and
incorporated herein by reference.

Item 2. Identity and Background.

The persons filing this statement are Caprito Gas Corporation ("Caprito"),
a Texas corporation, and Kevin O. Butler ("Butler"). Caprito currently has no
assets or liabilities other than the loan commitment described under Item 4
hereof. The address of Caprito's principal office is 500 West Texas, Suite 955,
Midland, Texas 79701. Information required by this Item with respect to Butler
is set forth below.

Caprito has not, during the last five years, been convicted in a criminal
proceeding or been a party to a civil proceeding of a judicial or administrative
body and, as a result of such proceeding, been subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.

Set forth below is the information required by (a) through (g) of this Item
2 with respect to each natural person who is an executive officer or director of
Caprito, or who is in control of Caprito, or who is an executive officer or
director of any corporation or other person ultimately in control of Caprito.

1. (a) Kevin O. Butler -- Director, President, and sole shareholder
of Caprito
(b) P. O. Box 1171, Midland, Texas 79702
(c) Oil and gas investor and operator individually and through
Kevin O. Butler & Associates, Inc.
(d) Oil and gas investor and operator individually and through
Kevin O. Butler & Associates, Inc.
(e) No
(f) No
(g) United States citizen

Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.

See Section 7 -- "Background Information About the Company and the
Purchaser in the Offer," which is incorporated herein by reference.

Item 4. Source and Amount of Funds or Other Consideration.

(a) Funds necessary to consummate the tender offer will be borrowed
pursuant to a loan commitment from Texas Commerce Bank, Midland, Texas, a copy
of which is attached hereto as Exhibit 11(b). Said funds are equal to the
maximum aggregate cost of the tender offer, $4,145,734.00, and will be made
available to the depositary for the tender offer as needed. See Section 9 --
"Source and Amount of Funds" in the Offer, which is incorporated herein by
reference.

<PAGE>

(b) All of the funds necessary to consummate the tender offer are being
borrowed by Caprito and Butler from Texas Commerce Bank, Midland, Texas. Some
of the terms of such financing may be summarized as follows: (1) the facility
will consist of two loans, a term loan and a single pay loan, with a maturity of
one year and 120 days, respectively; (2) the term loan will bear interest at the
bank's prime rate plus 1%, and the single pay loan will bear interest at the
bank's prime rate plus 3%; and (3) the collateral for the loans will include (i)
all stock of the Subject Company acquired by Caprito, (ii) all stock of Caprito,
and (iii) following acquisition of 100% of the stock of the Subject Company by
Caprito or an affiliate as described in Item 5 below, a mortgage and pledge of
the Subject Company's properties and gas purchase and sales contracts and of
certain of Mr. Butler's oil and gas interests. Such terms are more fully
described in the loan commitment letter attached hereto as Exhibit 11(b), which
is incorporated herein by reference. Following acquisition of 100% of the stock
of the Subject Company by Caprito or an affiliate as described in Item 5 below,
the loans will be paid from the cash and cash flow of the Subject Company. See
Section 9 -- "Source and Amount of Funds" in the Offer, which is incorporated
herein by reference.

Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.

The purpose of the tender offer is for Caprito to acquire all of the Shares
with the intent of making the Subject Company a private entity. In the event
Caprito does not acquire all of the Shares in the tender offer, Caprito intends
to enter into a merger transaction with the Subject Company following the tender
offer in order to acquire any and all remaining Shares. If such a merger is
necessary, the consideration per share to be paid to holders of the Shares will
be identical to the consideration per share to be paid in this tender offer.
Because the Subject Company's organizational documents require the affirmative
vote of at least 80% of the outstanding Shares in order to approve a merger
involving the Subject Company, this tender offer will be conditioned upon no
less than 80% of the Shares being tendered so that Caprito will have sufficient
votes to approve the subsequent merger, if necessary. The merger would not
require approval of any shareholders other than Caprito. Pursuant to the terms
of such merger, the Shares remaining outstanding after the completion of the
tender offer would be converted into the right to receive cash consideration per
Share equal to the amount per Share to be paid in the tender offer ($0.22 per
Share) and those remaining Shares would no longer represent an equity interest
in the Subject Company. It is anticipated that the other terms of the merger
would be similar to those common to transactions of that type. The merger would
be a going-private transaction under Rule 13e-3 of the Securities Exchange Act
of 1934 (the "Exchange Act"), but would be exempt from the requirements of that
Rule pursuant to the exception provided in Rule 13e-3(g)(1).

Upon successful completion of the tender offer, the current officers and
directors of the Subject Company have agreed to resign after appointing Butler
as the sole director of the Subject Company. Butler, as the sole director, will
then elect officers chosen by him. The information with respect to Mr. Butler
which is required by Rule 14f-1 under the Exchange Act to be provided to the
shareholders of the Subject Company is set forth in Sections 7 and 9 of the
Offer which will be mailed to each such shareholder.

It is anticipated that the tender offer, or the combination of the tender
offer and the merger, will result in the Shares no longer being authorized to be
quoted in an inter-dealer quotation system and will also result in the Subject
Company becoming eligible for termination of registration under the Exchange
Act. Upon acquiring a controlling number of shares, Caprito plans to cause the
Subject Company to take such action as may be necessary, including without
limitation entering into the above-described merger, for Caprito or an affiliate
to become the sole shareholder of the Subject Company and for the Subject
Company to be a privately-held entity.

See Section 8 --"Purpose of the Offer; Certain Effects of the Offer" and
Section 11 --"Effect of the Offer on the Market for Shares; Registration Under
the Exchange Act" in the Offer, both of which are incorporated herein by
reference.

Item 6. Interest in Securities of the Subject Company.

Neither Caprito nor Butler owns any securities of the Subject Company, nor
has Caprito or Butler been involved in a transaction in any securities of the
Subject Company within the last 60 days.

<PAGE>

Item 7. Contracts, Arrangements, Understandings or Relationships with Respect
to the Subject Company's Securities.

An affiliate of Caprito and Butler has entered into a letter agreement with
the Subject Company and its officers, directors and principal shareholders
pursuant to which the Subject Company is prohibited from issuing any securities
or making any distributions or dividends with respect to its securities and the
officers, directors and principal shareholders have agreed to tender their
Shares pursuant to the tender offer. The letter agreement also provides that
the officers and directors of the Subject Company will resign upon closing of
the tender offer after first appointing Butler as the sole director, and that
failure to close the tender offer may result in a break up fee being owed by
the Subject Company or forfeiture of funds escrowed (pursuant to an escrow
agreement) by an affiliate of Caprito and Butler depending upon satisfaction of
specified conditions. A copy of the letter agreement and escrow agreement are
attached hereto as Exhibits 11(c) (1) and (2). For a more detailed discussion
of the letter agreement and escrow agreement, see Section 5 -- "Certain
Conditions of the Offer", Section 7 -- "Background Information About the Company
and the Purchaser", and Section 9 -- "Interest in the Shares; Transactions and
Arrangements Concerning the Shares" in the Offer, which are incorporated herein
by reference.

Pursuant to the loan commitment described in Item 4 (b) hereof, Caprito
will pledge all stock of the Subject Company that it acquires as collateral for
the loan described therein.

Item 8. Persons Retained, Employed or to be Compensated.

No persons have been employed, retained or will be compensated to make
recommendations or solicitations in connection with the tender offer.

Item 9. Financial Statements of Certain Bidders.

Caprito has no assets or liabilities, other than the loan commitment
described in Item 4 hereof. Therefore, its financial condition is not material
to a decision by a shareholder of the Subject Company to tender or hold his or
her Shares.

Item 10. Additional Information

(a) None other than the letter agreement described in Item 7 hereof.

(b) See Section 12--"Certain Legal Matters; Regulatory Approvals," and
Section 15--"Miscellaneous" in the Offer, which are incorporated
herein by reference.

(d) Not applicable.

(e) None.

(f) See the Offer attached hereto and incorporated herein by reference,
except those portions of the Offer which have otherwise been
incorporated herein by reference.

Item 11. Material to be Filed as Exhibits.

(a) Offer to Purchase dated July 11, 1997 and accompanying letter of
transmittal.

(b) Loan Commitment Letter from Texas Commerce Bank, National Association
to Caprito Gas Corporation and Kevin O. Butler dated May 27, 1997.

<PAGE>

(c) (1) Letter Agreement between Kevin O. Butler & Associates, Inc. and
Great Eastern Energy and Development Corporation and its
directors and principal shareholders dated June 26, 1997.

(2) Escrow Agreement between Kevin O. Butler & Associates, Inc.,
Great Eastern Energy and Development Corporation and the Escrow
Agent dated June 26, 1997.

(d) None.

(e) Not applicable.

(f) Not applicable.

SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.

CAPRITO GAS CORPORATION

JULY 11, 1997
- ------------------------------
(Date)

By: /s/ KEVIN O. BUTLER
------------------------------------
(Signature)

Name: KEVIN O. BUTLER
----------------------------------

Title: PRESIDENT
----------------------------------

/s/ KEVIN O. BUTLER
---------------------------------
Kevin O. Butler

<PAGE>

INDEX OF EXHIBITS

99.11(a) The Offer to Purchase dated July 11, 1997 and accompanying letter
of transmittal.

99.11(b) Loan Commitment Letter from Texas Commerce Bank, National
Association to Caprito Gas Corporation and Kevin O. Butler dated
May 27, 1997.

99.11(c)(1) Letter Agreement between Kevin O. Butler & Associates, Inc. and
Great Eastern Energy and Development Corporation and its directors
and principal shareholders dated June 26, 1997.

99.11(c)(2) Escrow Agreement between Kevin O. Butler & Associates, Inc.,
Great Eastern Energy and Development Corporation and the Escrow
Agent dated June 26, 1997.

<PAGE>

EXHIBIT 99.11(a)

Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION
at
$0.22 Net Per Share
by
CAPRITO GAS CORPORATION

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., MIDLAND, TEXAS
TIME, ON August 11, 1997.

_______________________

THE OFFER IS CONDITIONED ON A MINIMUM OF EIGHTY PERCENT (80%) OF THE
OUTSTANDING SHARES BEING TENDERED.
_______________________

IMPORTANT

ANY SHAREHOLDER DESIRING TO TENDER ALL OR ANY PORTION OF HIS SHARES
SHOULD EITHER (1) COMPLETE AND SIGN THE LETTER OF TRANSMITTAL OR A FACSIMILE
COPY THEREOF IN ACCORDANCE WITH THE INSTRUCTIONS IN THE LETTER OF
TRANSMITTAL, MAIL OR DELIVER IT AND ANY OTHER REQUIRED DOCUMENTS TO AMERICAN
SECURITIES TRANSFER & TRUST, INC. (THE "DEPOSITARY"), AND EITHER MAIL OR
DELIVER HIS STOCK CERTIFICATES FOR SUCH SHARES TO THE DEPOSITARY, OR (2)
REQUEST HIS BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE
TO EFFECT THE TRANSACTION FOR HIM. A SHAREHOLDER HAVING SHARES REGISTERED IN
THE NAME OF A BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE
MUST CONTACT THAT BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE IF SUCH SHAREHOLDER DESIRES TO TENDER SUCH SHARES.
_______________________

The shares of Common Stock, par value $.10 per share (the "Shares"), of
Great Eastern Energy and Development Corporation (the "Company") are traded
on the NASD Bulletin Board.

Questions and requests for assistance or for additional copies of this
Offer to Purchase and related documents may be directed to the Depositary at
(303) 234-5300.

July 11, 1997

<PAGE>

THE PURCHASER HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION
ON BEHALF OF THE PURCHASER AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR
REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER. THE PURCHASER HAS NOT
AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
IN CONNECTION WITH THE OFFER ON BEHALF OF THE PURCHASER OTHER THAN THOSE
CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL. DO NOT
RELY ON ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATIONS,
IF GIVEN OR MADE, AS HAVING BEEN AUTHORIZED BY THE PURCHASER.

TABLE OF CONTENTS
SECTION PAGE
- ------- ----

INTRODUCTION.......................................................... 1
1. Number of Shares.................................................. 1
2. Procedure for Tendering Shares.................................... 2
Signature Guarantees.............................................. 2
Guaranteed Delivery............................................... 3
Federal Income Tax Withholding.................................... 3
Determinations of Validity; Rejection of Shares; Waiver of
Defects; No Obligation to Give Notice of Defects................ 3
3. Withdrawal Rights................................................. 4
4. Purchase of Shares and Payment of Purchase Price.................. 4
5. Certain Conditions of the Offer................................... 5
6. Price Range of Shares; Dividends.................................. 6
7. Background Information About the Company and the Purchaser........ 7
8. Purpose of the Offer; Certain Effects of the Offer................ 8
9. Interest in the Shares; Transactions and Arrangements
Concerning the Shares............................................ 9
10. Source and Amount of Funds........................................ 9
11. Effects of the Offer on the Market for Shares; Registration
Under the Exchange Act.......................................... 9
12. Certain Legal Matters; Regulatory Approvals....................... 9
13. Extension of the Offer; Termination; Amendments................... 10
14. Fees and Expenses................................................. 10
15. Miscellaneous..................................................... 10

-ii-

<PAGE>

TO THE OWNERS OF SHARES OF THE COMMON STOCK OF
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION:

INTRODUCTION

Caprito Gas Corporation, a Texas corporation (the "Purchaser"), invites
shareholders of Great Eastern Energy and Development Corporation, a Virginia
corporation (the "Company"), to tender shares of the Company's Common Stock,
par value $.10 per share (the "Shares"), at $0.22 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Letter of Transmittal (which
together constitute the "Offer").

THE OFFER IS CONDITIONED ON A MINIMUM OF EIGHTY PERCENT (80%) OF THE
OUTSTANDING SHARES BEING TENDERED, AND IS ALSO SUBJECT TO CERTAIN OTHER
CONDITIONS. SEE SECTION 5.

If, at the Expiration Time (as defined in Section 1), fewer than eighty
percent (80%) of the Shares are properly tendered, the Purchaser will not
purchase any of the Shares and will return all tendered Shares. Tendering
shareholders will not be obligated to pay brokerage commissions, solicitation
fees or stock transfer taxes on the sale of Shares. The Purchaser will pay
all fees and expenses of American Securities Transfer & Trust, Inc. (the
"Depositary") in connection with the Offer. See Section 14.

The Purchaser is making the offer with the intent to acquire all of the
outstanding Shares, and thereby acquire the Company and its assets. In the
event the Purchaser does not acquire all of the Shares pursuant to the Offer,
the Purchaser intends to enter into a merger transaction with the Company
whereby the Purchaser or its affiliate would acquire the remaining Shares.
The Purchaser plans, through the Offer or the combination of the Offer and
the merger, to make the Company a privately-held entity with the Purchaser or
an affiliate of the Purchaser as the sole shareholder of the Company. Shares
remaining outstanding after the closing of the Offer will entitle the holders
thereof only to the right to receive merger consideration of $0.22 per Share,
the same as the consideration to be paid pursuant to the Offer, and such
Shares will not represent any equity interest in the Company following the
merger. See Sections 8 and 11.

The Purchaser and its sole shareholder, Kevin O. Butler, have filed a
Schedule 14D-1 with the Securities and Exchange Commission (the "Commission")
in connection with this Offer. The Schedule 14D-1 contains additional
information, including exhibits, relating to the Offer, the Purchaser and Mr.
Butler.

The Shares are traded on the NASD Bulletin Board, although the trading
volume of the Shares has historically been limited. See Section 6.

1. NUMBER OF SHARES

Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment (and thereby purchase) all Shares which are properly
tendered on or before the Expiration Time (and not withdrawn in accordance
with Section 3) at a price of $0.22 per Share. The term "Expiration Time"
means 5:00 P.M., Midland, Texas time, on August 11, 1997 (or such other date
to which the Offer may be extended). The Offer will not be extended after
the Expiration Time except as described in the following paragraph and
tenders of Shares received after the Expiration Time will not be accepted.
See Section 13 for a description of the Purchaser's right to delay, terminate
or amend the Offer. See also Section 5 for conditions to closing related to
the Offer.

The offer is subject to, among other things, a minimum of eighty percent
(80%) of the outstanding Shares being tendered. In the event less than 80%
of the Shares are tendered, the Offer will be terminated and no Shares will
be purchased. In such event, the tendered Shares will be returned to the
tendering shareholders at the Purchaser's expense as promptly as practicable
following the Expiration Time. If the number of Shares tendered exceeds the
minimum, the Purchaser will, upon the terms and subject to the conditions of
the Offer, purchase all properly tendered Shares.

<PAGE>

2. PROCEDURE FOR TENDERING SHARES

GENERAL. In order for a holder of Shares to validly tender Shares
pursuant to the Offer, a letter of transmittal (the "Letter of Transmittal")
or facsimile copy thereof, properly completed and duly executed, together
with any other required documents and certificates evidencing tendered Shares
must be received by the Depositary at its address set forth on the front of
this Offer prior to the Expiration Date. In order for a holder of Shares to
validly tender such Shares either (a) the Letter of Transmittal and other
required documents must be delivered as described in the preceding sentence
and (b) in the case of a book-entry transfer, an Agent's Message (as defined
below) and any other requirement documents, must be received by the
Depositary at its address set forth on the front of this Offer, and either
certificates representing such Shares must be received by the Depositary at
such address or be delivered pursuant to the procedures for book-entry
transfer set forth below and confirmation thereof must be received by the
Depositary, in each case prior to the Expiration Date or (c) such holder must
comply with the Guaranteed Delivery Procedures (as defined below).

ANY SHAREHOLDER WHOSE SHARES ARE REGISTERED IN THE NAME OF A BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE MUST CONTACT SUCH
PERSON IF SUCH SHAREHOLDER DESIRES TO TENDER SUCH SHARES.

THE METHOD OF DELIVERY OF ALL REQUIRED DOCUMENTS, INCLUDING DELIVERY
THROUGH ANY BOOK-ENTRY TRANSFER FACILITY (AS DEFINED BELOW), IS AT THE OPTION
AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

If certificates for Shares are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or a facsimile
copy thereof) must accompany each such delivery.

BOOK-ENTRY TRANSFER. The Depositary will establish accounts with
respect to the Shares at the Depositary Trust Company, the Midwest Securities
Trust Company and the Philadelphia Depositary Trust Company and any other
applicable depository holding Shares (each a "Book-Entry Transfer Facility"
and collectively, the "Book-Entry Transfer Facilities") for purposes of the
Offer. Any financial institution that is a participant in the system of any
Book-Entry Transfer Facility may make book-entry transfers of the Shares by
causing such book-entry transfers to be made in accordance with that
Book-Entry Transfer Facility's procedure for such transfer. Although delivery
of the Shares may be effected through book-entry transfer at the Book-Entry
Transfer Facilities, the Letter of Transmittal (or facsimile copy thereof),
properly completed and duly executed, together with any required signature
guarantees and any other required documents and an Agent's Message, must, in
any case, be received by the Depositary at its address set forth on the front
cover this Offer prior to the Expiration Date, or the tendering shareholder
must comply with the Guaranteed Delivery Procedures described below.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.

The confirmation of a book-entry transfer of Shares into the
Depositary's account at a Book-Entry Transfer Facility as described above is
referred to herein as a "Book-Entry Confirmation." The term "Agent's
Message" means a message transmitted by a Book-Entry Transfer Facility to,
and received by, the Depositary and forming a part of a Book-Entry
Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and this Offer
and that the Purchaser may enforce such agreement against the participant.

SIGNATURE GUARANTEES. No signature guarantee is required on Letters of
Transmittal if Shares are tendered (a) by a registered holder of the Shares
that has not completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the
Letter of Transmittal or (b) for the account of financial institutions
(including most commercial banks, savings and loan associations and brokerage
houses) that is a participant in the Securities Transfers Agents Medallion
Program, the New York Stock Exchange, Inc. Medallion Signature Program or the
Stock Exchange Medallion Program (an "Eligible Institution"). In all other
cases, all signatures on the Letter of

-2-
<PAGE>

Transmittal must be guaranteed by an Eligible Institution. See Instructions
VI and VII to the Letter of Transmittal. If the certificates for Shares are
registered in the name of a person other than the signer of the Letter of
Transmittal, or if the certificates for Shares not accepted are to be
returned to, a person other than the registered owner(s) of the Shares so
surrendered, then the certificates for the Shares so tendered must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name (s) of the registered owner(s) appear on the certificates
for the Shares, with the signature(s) on such certificates or stock powers
guaranteed as aforesaid. See Instructions VI and VII to the Letter of
Transmittal.

GUARANTEED DELIVERY. If a holder of Shares desires to tender Shares
pursuant to the Offer and such holder's certificates are not immediately
available, or the procedures for book-entry transfer cannot be completed on a
timely basis, or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such Shares may nevertheless be
tendered, provided all the following conditions are satisfied (the
"Guaranteed Delivery Procedures"):

(a) such tender is made by or through an Eligible Institution;

(b) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Depositary is received by
the Depositary, as provided below, prior to the Expiration Date; and

(c) the certificates for all tendered Shares (or, in the case of
book-entry transfer of any Shares into the Depositary's account at a
Book-Entry Transfer Facility, an Agent's Message and timely Book-Entry
Confirmation as described above), in proper form for transfer, in each case,
together with a Letter of Transmittal (or facsimile copy thereof) properly
completed and duly executed, with any required signature guarantees and any
other required documents, are received by the Depositary within three
business days after the date of execution of such Notice of Guaranteed
Delivery.

The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the
form set forth in such Notice of Guaranteed Delivery.

Notwithstanding any other provision hereof, payment for Shares accepted
for payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of certificates evidencing such Shares (or timely
Book-Entry Confirmation with respect to such Shares), and a Letter of
Transmittal (or facsimile copy thereof) properly completed and duly executed,
together with any required signature guarantees or, in the case of a
book-entry transfer, an Agent's Message and any other required documents.
Accordingly, payment might not be made to all tendering shareholders at the
same time, and will depend upon when certificates for Shares are received by
the Depositary or Book-Entry Confirmations of such Shares are received into
the Depositary's account at a Book-Entry Facility.

The valid tender of Shares pursuant to one of the procedures described
above will constitute a binding agreement between the tendering shareholder
and the Purchaser upon the terms and subject to the conditions of the Offer.

FEDERAL INCOME TAX WITHHOLDING. To prevent backup federal income tax
withholding equal to 31% of the gross payments made pursuant to the Offer,
each shareholder who does not otherwise establish an exemption from such
withholding must notify the Depositary of such shareholder's correct taxpayer
identification number (or certify that such taxpayer is awaiting a taxpayer
identification number) and provide certain other information by completing
the Substitute Form W-9 included in the Letter of Transmittal.

Shareholders are encouraged to contact their own legal and tax
consultants with respect to the tax consequences and other effects of
tendering Shares.

DETERMINATIONS OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the Shares to be
accepted, the price to be paid therefor and the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of
Shares will be determined by the Purchaser, in its sole discretion, which
determination shall be final and binding on all parties. The Purchaser
reserves the absolute right to reject any or

-3-
<PAGE>

all tenders it determines not to be in proper form or with respect to which
the acceptance of, or payment for, may, in the opinion of the Purchaser's
counsel, be unlawful. The Purchaser also reserves the absolute right to
waive any of the conditions of the Offer and any defect or irregularity in
the tender of any particular Shares. No tender of Shares will be deemed to
be properly made until all defects or irregularities have been cured or
waived. Neither the Purchaser nor the Depositary is or will be obligated to
give notice of any defects or irregularities in tenders, and neither of them
will incur any liability for failure to give any such notice.

3. WITHDRAWAL RIGHTS

Except as otherwise provided in this Section 3, a tender of Shares
pursuant to the Offer is irrevocable. Shares tendered pursuant to the Offer
may be withdrawn, subject to the requirements set forth below, at any time
before the Expiration Time, and at any time after September 11, 1997 if the
Shares sought to be withdrawn have not previously been accepted by the
Purchaser prior to the Depositary's receipt of a proper notice of withdrawal.

For a withdrawal to be effective, the Depositary must timely receive a
written and signed notice of withdrawal by mail, overnight delivery, hand
delivery, or telegraphic or facsimile transmission. Such notice of
withdrawal must specify the name of the person having deposited the Shares to
be withdrawn, the number of Shares to be withdrawn and the name of the
registered owner, if different from that of the person who tendered such
Shares. If the certificates have been delivered or otherwise identified to
the Depositary, then, prior to the release of such certificates, the
tendering shareholder must also submit the serial numbers shown on the
particular certificates evidencing the Shares and the signature on the notice
of withdrawal must be guaranteed by an Eligible Institution (except in the
case of Shares tendered by an Eligible Institution). All questions as to the
form and validity (including time of receipt) of notices of withdrawal will
be determined by the Purchaser, in its sole discretion, which determination
shall be final and binding on all parties. Neither the Purchaser nor the
Depositary is or will be obligated to give any notice of any defects or
irregularities in any notice of withdrawal, and neither of them will incur
any liability for failure to give any such notice. Any Shares properly
withdrawn will thereafter be deemed not tendered for purposes of the Offer.
Withdrawn Shares may, however, be re-tendered before the Expiration Time by
again following the procedures described in Section 2.

4. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE

For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment (and therefore purchased) Shares which are validly tendered and
not withdrawn when, as and if it gives oral or written notice to the
Depositary of its acceptance of such Shares for payment pursuant to the Offer.

Upon the terms and subject to the conditions of the Offer, the Purchaser
will purchase and pay the Purchase Price of $0.22 per Share (the "Purchase
Price") for all Shares properly tendered and not withdrawn as permitted in
Section 3, as soon as practicable after the Expiration Time. In all cases,
payment for Shares accepted for payment pursuant to the Offer will be made
promptly but only after timely receipt by the Depositary of certificates for
Shares, a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) and any other required documents.

Payment for Shares purchased pursuant to the Offer will be made by the
Purchaser depositing the aggregate Purchase Price therefor with the
Depositary, which will act as agent for tendering shareholders for the
purpose of receiving payment from the Purchaser and transmitting payment to
the tendering shareholders. Under no circumstances will the Purchaser pay,
or any tendering shareholder be entitled to, interest on the Purchase Price.
The Purchaser will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer.

ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO FULLY COMPLETE
AND SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL MAY BE
SUBJECT TO REQUIRED FEDERAL INCOME TAX WITHHOLDING OF 20% OF THE GROSS
PROCEEDS PAID TO SUCH SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER.

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<PAGE>

5. CERTAIN CONDITIONS OF THE OFFER

Notwithstanding any other provision of the Offer, the Purchaser shall
not be required to accept for payment, purchase or pay for any Shares
tendered, and may terminate or amend the Offer if at any time after June 26,
1997, and at or before the Expiration Time, any of the following events shall
have occurred (as determined by the Purchaser in good faith) which makes it
inadvisable for the Purchaser in its reasonable judgment to proceed with the
Offer or with such purchase or payment:

(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or administrative
agency or authority or tribunal or any other person, domestic or foreign, or
before any court or governmental, regulatory or administrative authority or
agency or tribunal, domestic or foreign, or any judgment, order or injunction
entered, enforced or deemed applicable by any such court, authority, agency
or tribunal, which:

(1) challenges the making of the Offer, the acquisition of Shares
pursuant to the Offer or otherwise related in any manner to the Offer; or

(2) could materially affect the business, condition (financial or
other), income, operations or prospects of the Company, or otherwise
materially impair in any way the contemplated future conduct of the
business of the Company or its subsidiaries; or

(b) there shall have been any action threatened or taken, or approval
withheld, or any statute, rule or regulation proposed, sought, promulgated,
enacted, entered, amended, enforced or deemed to be applicable to the Offer,
the Purchaser or the Company by any government or governmental, regulatory or
administrative authority or agency or tribunal, domestic or foreign, which
would or might directly or indirectly:

(1) make the acceptance for payment of, or payment for, some or all
of the Shares illegal or otherwise restrict or prohibit consummation of the
Offer;

(2) delay or restrict the ability of the Purchaser, or render the
Purchaser unable, to accept for payment or pay for some or all of the
Shares;

(3) materially impair the contemplated benefits of the Offer to the
Purchaser; or

(4) materially affect the business, condition (financial or other),
income, operations or prospects of the Company, or otherwise materially
impair in any way the contemplated future conduct of the business of the
Company or its subsidiaries; or

(c) there shall have occurred the declaration of any banking moratorium
or suspension of payments in respect of banks in the United States; or

(d) any change shall occur or be threatened in the business, condition
(financial or other), income, operations or prospects of the Company which is
or may be material to the Company or its subsidiaries; or

(e) a tender or exchange offer for any or all of the Shares (other than
the Offer), or any merger, business combination or similar transaction with
or involving the Company or any subsidiary, shall have been proposed,
announced or made by any person; or

(f) any entity, "group" (as that terms is used in Section 13(d)(3) of
the Securities Exchange Act of 1934 (the "Exchange Act")) or person (other
than entities, groups or persons, if any, who have filed with the Commission
on or before the Expiration Date a Schedule 13G or a Schedule 13D with
respect to any of the Shares) shall have acquired or proposed to acquire
beneficial ownership of more than 5% of the outstanding Shares; or

-5-
<PAGE>

(g) the officers, directors and ten percent or greater shareholders of
the Company fail to tender their Shares pursuant to the Offer; or

(h) the Company and its board of directors fail to recommend acceptance
of the Offer by the Company's shareholders; or

(i) less than eighty percent (80%) of the outstanding Shares are
properly tendered and accepted pursuant to the Offer; or

(j) the Company conducts its business other than in the ordinary course
or does any of the following without the consent of the Purchaser: (i) make
any material commitments or any material operations changes; (ii) enter into
any material leases; (iii) incur or guarantee any material obligations for
borrowed money; (iv) issue, sell or redeem any capital stock or other
securities; (v) declare or pay any dividends or other distributions in
respect of its outstanding capital stock; (vi) enter into any material
employment or deferred compensation contract or materially increase or
announce any material increase of salaries, wages, incentive compensation,
bonus or other employee benefits or programs for employees or retirees; (vii)
sell or otherwise dispose of, outside the ordinary course of business, any
assets, including its cash, in excess of $10,000; or (viii) prepay any
existing indebtedness; or

(k) the Company or its officers, directors or principal shareholders
solicit or accept any offer to purchase any Shares, to purchase a material
amount of assets of the Company, or to merge or combine with any other person
or entity.

The foregoing conditions are for the Purchaser's sole benefit and may be
asserted by the Purchaser regardless of the circumstances giving rise to any
such condition (including any action or inaction by the Purchaser) or may be
waived by the Purchaser in whole or in part. The Purchaser's failure at any
time to exercise any of the foregoing rights shall not be deemed a waiver of
any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time. Any determination by the
Purchaser concerning the events described in this Section 5 and any related
judgment by the Purchaser regarding the inadvisability of proceeding with the
purchase of or payment for any Shares tendered shall be final and shall be
binding on all parties. The Company is obligated to pay to an affiliate of
the Purchaser the sum of $75,000 as a break up fee if the Offer does not
close because of the occurrence of any of the events described in (a) through
(k) above. See Section 9.

6. PRICE RANGE OF SHARES; DIVIDENDS

During May 1994, the Shares (symbol GREN) were delisted from the Nasdaq
System, Small-Cap Issues. The Shares are traded on the NASD Bulletin Board
under the symbol GREN.U, although the trading volume has historically been
limited. The high and low bid prices during the first quarter of 1997 were
$.16 and $.09, respectively. The high and low bid prices for 1996 and 1995
were as follows:

1996 High Low
---- ---- ----
1st quarter $.06 $.06
2nd quarter .06 .06
3rd quarter .13 .06
4th quarter .13 .03

1995
----
1st quarter .13 .09
2nd quarter .13 .13
3rd quarter .13 .13
4th quarter .13 .06

-6-
<PAGE>

There has historically been only limited trading of the Shares,
according to information provided to the Purchaser by the Company and its
transfer agent. As a result, an isolated trade involving a small volume of
Shares may cause a significant increase or decrease in the reported closing
sales price for the Shares even though that isolated trade may not reflect a
change in the market (bid) price for the Shares and may or may not be
indicative of the underlying value of the Shares or the Company. For
example, the Company has advised the Purchaser that recent trades (made in
June 1997), involving an aggregate of less than one percent of the total
number of outstanding Shares, have been reported with sales prices of $0.21
to $0.25, but the bid price over the same period did not exceed $0.16 per
Share. Notwithstanding such fluctuations based upon isolated, small volume
trades, the historical bid price range described in the table above indicates
that the Purchase Price in this Offer represents a significant premium over
the trading price for the Shares during the past few years.

As of December 31, 1996, there were approximately 1,200 holders of
record of the Shares, with 18,844,245 Shares outstanding.

Since inception, the Company has not paid any cash dividends on its
common stock. The Purchaser has been advised by the Company that any
earnings realized by the Company have been reinvested into the development of
its business and, accordingly, no payment of dividends is anticipated in the
foreseeable future.

7. BACKGROUND INFORMATION ABOUT THE COMPANY AND THE PURCHASER

The Company was incorporated in 1978. From its inception, the Company
has been engaged in the acquisition and exploration of undeveloped leasehold
acreage in potential oil and gas producing areas and, more recently, in the
acquisition and development of more mature oil and gas properties in
established areas of production. In addition, the Company owns and operates
a gas gathering system. Since 1982, the Company has maintained its principal
place of business in Colorado and the address of its principal executive
office is 5990 Greenwood Plaza Blvd., Suite 127, Greenwood Village, Colorado.

The Company's primary area of oil and gas production is in central
Kansas, where the Company began a waterflood project in 1994. The Company is
the operator of the waterflood project and the related oil and gas leases.
The Company's primary exploratory efforts are in northwestern Colorado,
although the Company has not expended its resources in any exploratory
drilling in recent years. The Company's gas gathering business consists of a
gas gathering system in southeastern Kansas.

In addition, prior to 1993, the Company owned and developed methane gas
reserves from coalbeds in southeastern Kansas. The sale of methane gas from
coalbeds generated a tax credit under Section 29 of the Internal Revenue
Code, but the Company could not utilize the benefits of the tax credit due to
its tax position. Therefore, in 1993, the Company sold its interests in the
properties associated with the methane gas reserves to an entity which could
utilize the tax credit, pursuant to the terms of an Asset Purchase Agreement
which provides that the Company will receive monthly payments that are
secured by a mortgage through the year 2002. The Company operates the
properties for a fee.

The Company is subject to the informational reporting requirements of
the Exchange Act, and in accordance therewith files periodic reports, proxy
statements and other information with the Commission. The foregoing
information was extracted from such reports. Additional information
concerning the Company, its business, properties, directors, officers, and
principal shareholders may be obtained from such filings with the Commission.
Such materials can be inspected and copied at the public reference
facilities of the Commission, Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 and may also be obtained by mail from the Commission's Public
Reference Branch, 450 Fifth Street, N.W., Washington, D.C. 20549. In
addition, certain materials filed after May 1996 are available on the
Commission's EDGAR database on the Internet.

The Purchaser is a Texas corporation which has no assets or liabilities
other than the loan commitment described in Section 10 hereof which will be
used to fund the payment of the Purchase Price pursuant to the Offer. The
sole

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<PAGE>

shareholder, director and officer of the Purchaser is Kevin O. Butler, whose
principal occupation is oil and gas investment, individually and by and
through Kevin O. Butler & Associates, Inc. Mr. Butler is a citizen of the
United States. See Section 8 for additional information relating to Mr. Butler.

Mr. Butler and representatives of the Company have negotiated for
several months with respect to an acquisition of the Company and/or its
assets by Mr. Butler or an affiliate. The negotiations ranged from a
proposed asset acquisition to a possible merger to the present transactional
structure. No agreements were made between Mr. Butler or any affiliate and
the Company with respect to any proposed transactional structure other than
the present structure. Kevin O. Butler & Associates, Inc. and the Company
and its officers, directors and principal shareholders have entered into a
letter agreement. The letter agreement requires the Company to conduct its
business in the ordinary course, places certain restrictions on the conduct
of the Company (See subsection (j) of Section 5) and contains certain
agreements by the Company, its officers, directors, and principal
shareholders. The agreement also provides for a break up fee payable to
either the Company or an affiliate of the Purchaser under specified
circumstances in the event the Offer does not close. See Sections 5 and 9
for additional discussion concerning this letter agreement. A copy of the
letter agreement is attached as an exhibit to the Schedule 14D-1 filed with
the Commission by the Purchaser and Mr. Butler.

8. PURPOSE OF OFFER; CERTAIN EFFECTS OF THE OFFER

The purpose of the Offer is for the Purchaser to acquire all of the
Shares with the intent of making the Company a private entity. In the event
Caprito does not acquire all of the Shares in the Offer, Caprito intends to
enter into a merger transaction with the Company following the tender offer
in order to acquire any and all remaining Shares (the "Merger"). If the
Merger is necessary, the consideration per Share to be paid to holders of the
Shares will be identical to the consideration per share to be paid in this
Offer, $0.22 per Share. Because the Company's organizational documents
require the affirmative vote of at least 80% of the outstanding Shares in
order to approve a merger involving the Company, this Offer will be
conditioned upon no less than 80% of the Shares being tendered so that
Caprito will have sufficient votes to approve the Merger, if necessary. The
Merger would not require approval of any shareholders other than Caprito.
Pursuant to the terms of the Merger, the Shares remaining outstanding after
the completion of the tender offer would be converted into the right to
receive cash consideration per share equal to the amount per share to be paid
in the Offer ($0.22 per Share) and those remaining Shares would no longer
represent an equity interest in the Company. It is anticipated that the
other terms of the Merger would be similar to those common to transactions of
that type. The Merger would be a going-private transaction as defined in
Rule 13e-3 under Exchange Act but would be exempt from the requirements of
the Rule pursuant to an exception provided therein.

Upon successful completion of the Offer, the current officers and
directors of the Company have agreed, pursuant to the letter agreement
described in Section 9 hereof, to resign after they first appoint Kevin O.
Butler as the sole director of the Company. Mr. Butler, as the sole
director, will then elect officers chosen by him. Mr. Butler does not own
any securities of the Company, does not currently hold any position with the
Company and has not received any remuneration or benefits from the Company.
He has not had any transactions with the Company other than in connection
with the Offer and negotiations related to an acquisition of the Company
and/or its assets. See Sections 7 and 9. Mr. Butler's current occupation,
which he has had for in excess of the past five years, is a private oil and
gas investor and operator both individually and through Kevin O. Butler &
Associates, Inc.

It is anticipated that the tender offer, or the combination of the
tender offer and the Merger, will result in the Shares no longer being
authorized to be quoted in an inter-dealer quotation system and also result
in the Company becoming eligible for termination of registration under the
Exchange Act. Upon acquiring a controlling number of Shares, Caprito plans
to cause the Company to take such action as may be necessary, including
without limitation entering into the Merger, for Caprito or an affiliate to
become the sole shareholder of the Company and for the Company to be a
privately-held entity.

-8-
<PAGE>

9. INTEREST IN THE SHARES; TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES

Neither the Purchaser nor any affiliate own any of the Shares and none
of them have been involved in any transactions in the Shares within the past
60 days. In addition, neither the Purchaser nor any affiliate has any
contracts, arrangements, understandings or relationships with respect to any
securities of the Company other than (i) a letter agreement between an
affiliate of the Purchaser and the Company and its officers, directors and
principal shareholders pursuant to which the Company is prohibited from
issuing any securities or making any distributions or dividends with respect
to its securities and the officers, directors and principal shareholders have
agreed to tender their Shares pursuant to the offer and to resign from their
positions upon successful completion of the Offer after first appointing
Kevin O. Butler as the sole director of the Company; and (ii) the loan
commitment described in Section 10 hereof, which provides that the Purchaser
will pledge all stock of the Company that it acquires as collateral for the
loan described therein. Pursuant to the above described letter agreement and
an escrow agreement, an affiliate of the Purchaser has placed into escrow
$75,000 to be used as part of the purchase price, or to be paid to the
Company if the Offer is not closed, unless certain conditions to closing are
not met (see Section 5), in which case the funds will be returned to the
affiliate of the Purchaser. A copy of the escrow agreement is attached as an
exhibit to the Schedule 14D-1 filed with the Commission by the Purchaser and
Mr. Butler. The letter agreement also provides that the Company pay to an
affiliate of the Purchaser the sum of $75,000 as a break up fee in the event
the Offer does not close due to the occurance of certain events described in
Section 5 hereof. See Sections 5 and 7 for additional terms of the letter
agreement.

10. SOURCE AND AMOUNT OF FUNDS

Assuming the Purchaser acquires all of the Shares pursuant to the Offer,
the maximum consideration to be paid would be $4,145,734. All of the funds
necessary to consummate the tender offer are being borrowed by the Purchaser
and Kevin O. Butler from Texas Commerce Bank, Midland, Texas. Some of the
terms of such financing may be summarized as follows: (1) the facility will
consist of two loans, a term loan and a single pay loan, with a maturity of
one year and 120 days, respectively; (2) the term loan will bear interest at
the bank's prime rate plus 1%, and the single pay loan will bear interest at
the bank's prime rate plus 3%; and (3) the collateral for the loans will
include (i) all stock of the Company acquired by the Purchaser, (ii) all
stock of the Purchaser and (iii) following acquisition of 100% of the stock
of the Company by the Purchaser or an affiliate as described in Section 8
hereof, a mortgage and pledge of the Company's properties and gas purchase
and sales contracts and of certain of Mr. Butler's oil and gas interests.
Following acquisition of 100% of the stock of the Company by the Purchaser or
an affiliate as described in Section 8 hereof, the loans will be paid from
the cash and cash flow of the Company. A copy of the loan commitment letter
is attached as an exhibit to the Schedule 14D-1 filed with the Commission by
the Purchaser and Mr. Butler.

11. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT

As discussed in Section 8, the Purchaser's intent and purpose in making
the Offer is to acquire all of the Shares, either pursuant to the Offer or a
combination of the Offer and the Merger. Therefore there will be little or
no market for the Shares after the Offer is consummated. In addition, the
Offer may, and the combination of the Offer and the Merger will, result in
the Shares no longer being publicly traded and in the Company being eligible
for deregistration under the Exchange Act.

12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS

The Purchaser is not aware of any license or regulatory permit that
appears to be material to its business that might be adversely affected by
its acquisition of Shares as contemplated in the Offer or of any approval or
other action by any governmental, administrative or regulatory authority or
agency that would be required for the Purchaser's acquisition or ownership of
Shares as contemplated by the Offer. Should any such approval or other
action be required, the Purchaser currently contemplates that it will seek
such approval or other action. The Purchaser cannot predict whether it may
determine that it is required to delay the acceptance for payment of, or
payment for, Shares tendered pursuant to the Offer pending the outcome of any
such matter. There can be no assurance that any such approval or other
action, if needed, would be obtained or would be obtained without substantial
conditions or that the failure to obtain any such

-9-
<PAGE>

approval or other action might not result in adverse consequences to the
Company's business. The Purchaser intends to make all required filings under
the Exchange Act and appropriate state tender offer laws. The Purchaser's
obligations under the Offer to accept for payment and pay for Shares is
subject to certain conditions. See Section 5.

13. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS

Other than as set forth in the following paragraph, the Offer will not
be extended past the Expiration Time. The Purchaser expressly reserves the
right, in its sole discretion, to terminate the Offer and not accept for
payment or pay for any Shares not theretofore accepted for payment or paid
for upon the occurrence at any time prior to the Expiration Time of any of
the conditions specified in Section 5 by giving oral or written notice of
such termination to the Depositary and making a public announcement thereof.
Subject to compliance with applicable law, the Purchaser further reserves the
right to amend the Offer in any respect or to waive the limitation on the
minimum number of Shares to be purchased pursuant to the Offer. Amendments
to the Offer may be made at any time and from time to time effected by public
announcement thereof, such announcement, in the case of an extension, to be
issued no later than 8:00 A.M., Midland, Texas time, on the next business day
after the previously scheduled Expiration Time. Any public announcement made
pursuant to the Offer will be disseminated promptly to shareholders in a
manner reasonably designed to inform shareholders of such change. Without
limiting the manner in which the Purchaser may choose to make a public
announcement, except as required by applicable law, the Company shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release.

If the Purchaser materially changes the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Purchaser will give notice and extend the Offer to the extent
required by Rules 14d-4(c) and 14e-1(b) promulgated under the Exchange Act
and the Commission's rulings interpreting those Rules.

14. FEES AND EXPENSES

The Purchaser has retained American Securities Transfer & Trust, Inc. as
Depositary. The Depositary will receive reasonable and customary
compensation for their services. The Purchaser will also reimburse the
Depositary for out-of-pocket expenses. Neither the Depositary nor any other
person has not been retained to make solicitations or recommendations in
connection with the Offer.

The Purchaser will not pay fees or commissions to any broker, dealer,
commercial bank, trust company or other person for soliciting any Shares
pursuant to the Offer. The Purchaser will, however, on request, reimburse
such persons for customary handling and mailing expenses incurred in
forwarding materials relating to the Offer to the beneficial owners for which
they act as nominees. No such broker, dealer, commercial bank or trust
company has been authorized to act as the Purchaser's agent for purposes of
the Offer. The Purchaser will pay (or cause to be paid) any stock transfer
taxes on its purchase of Shares.

15. MISCELLANEOUS

The Offer is not being made to, nor will the Purchaser accept tenders from,
owners of Shares in any jurisdiction in which the Offer or its acceptance would
not comply with the securities or Blue Sky laws of such jurisdiction.

CAPRITO GAS CORPORATION

July 11, 1997

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<PAGE>

LETTER OF TRANSMITTAL
for
Common Stock, $0.10 Par Value
of

GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION

Tendered Pursuant to the Offer to Purchase
for Cash All Outstanding Shares of Common Stock
of Great Eastern Energy and Development Corporation at $0.22 per Share

CAPRITO GAS CORPORATION

DATED JULY 11, 1997

PLEASE FOLLOW CAREFULLY THE ACCOMPANYING INSTRUCTIONS

(Send this Letter of Transmittal and certificate(s) representing shares of
Great Eastern Energy and Development Corporation Common Stock to American
Securities Transfer & Trust, Inc. as set forth below)

TO: American Securities Transfer & Trust, Inc.
ATTENTION: John Harmann

P. O. Box 1596
Denver, CO 80201

FOR INFORMATION, CALL: 303-234-5300

Delivery of this Letter of Transmittal to an address other than as set forth
above will not constitute a valid delivery.

- -------------------------------------------------------------------------------
DESCRIPTION OF SHARES SURRENDERED
- -------------------------------------------------------------------------------
Name(s) and Address(es) of Great Eastern Energy and Development
Registered Holder(s) Corporation
(Please fill in. If already Common Stock Certificates(s) Surrendered
filled in, please correct any
errors.)
- -------------------------------------------------------------------------------
Certificate Number of Shares
Number(s) Represented by
Certificate(s)
----------------------------------------

----------------------------------------

----------------------------------------
Total Shares
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
(Attach a separate, signed schedule if necessary)

<PAGE>

TERMS AND CONDITIONS

The person on whose behalf the within described tender is made (the
"Tendering Holder") hereby tenders to Caprito Gas Corporation (the
"Purchaser") the Shares of Common Stock, par value $0.10 per share of Great
Eastern Energy and Development Corporation listed herein and on the attached
sheets, if any (the "Tendered Shares"), pursuant to the Purchaser's Offer to
Purchase for Cash all of the outstanding Shares of Common Stock of Great
Eastern Energy and Development Corporation as described in the Offer to
Purchase, dated July 11, 1997, receipt of which is hereby acknowledged, and
in this Letter of Transmittal (which together constitute the "Offer"), in
exchange for a purchase price of $0.22 per Share (the "Purchase Price").

Upon the terms and conditions of the Offer, the Tendering Holder hereby
(i) delivers to the Depositary the Tendered Shares, and (ii) sells, assigns
and transfers to the Purchaser all right, title and interest in and to the
Tendered Shares being tendered hereby. The Tendering Holder represents that
the Tendering Holder has read and agrees to all terms and conditions set
forth in the Offer and herein.

The Tendering Holder hereby represents and warrants that the Tendering
Holder has full power and authority to tender, sell, assign and transfer the
Tendered Shares and that the Purchaser will acquire good and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim when the same are received
by the Purchaser. The Tendering Holder will, upon request of the Purchaser
or the Depositary, execute and deliver any additional documents deemed by the
Depositary or the Purchaser to be necessary or desirable to complete the
sale, assignment and transfer of the Tendered Shares.

All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the Tendering Holder and every obligation of the
Tendering Holder hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the Tendering Holder. This tender
is irrevocable, subject to limited withdrawal rights described in the Offer.

The Tendering Holder understands that acceptance of the Offer will
constitute an agreement between the Tendering Holder and the Purchaser upon
the terms and subject to the conditions of the Offer and risk of loss and
title to the Tendered Shares will pass only when the Shares, this Letter of
Transmittal and any other required documentation are properly completed and
received by the Depositary, all in accordance with the Instructions contained
herein and in the Offer.

Unless otherwise indicated in Box A or Box B below, the Tendering Holder
hereby instructs the Depositary to mail the Purchase Price to the undersigned
at the address specified above.

- -------------------------------------------------------------------------------
BOX A:

SPECIAL PAYMENT INSTRUCTIONS

Fill in ONLY if the check to be issued by the Depositary is to be issued
in a name other than the name appearing on the first page hereof.

Name:
-----------------------------------------------------------
(Please Print)

Address:
--------------------------------------------------------

-----------------------------------------------------------------
(Zip Code)
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
BOX B:

SPECIAL DELIVERY INSTRUCTIONS

Fill in ONLY if the check to be issued by the Depositary is to be sent
to an address OTHER than the address appearing on the first page hereof, or
if Box A is filled in, to an address OTHER than the address appearing therein.

Deliver to:

Address:
--------------------------------------------------------

-----------------------------------------------------------------
(Zip Code)

- -------------------------------------------------------------------------------

Page 2
<PAGE>

SIGN HERE

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(signature(s) of Owner(s))

See Items VI and VII on Page 5 hereof for signature guarantee requirements)

Dated:
-----------------------------------------------------------------------

(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or by person(s) authorized to become registered holder(s) by
certificate(s) and documents transmitted herewith. If signature is by an
officer on behalf of a corporation or by an executor, administrator, trustee,
guardian, attorney-in-fact, agent or other person acting in a fiduciary or
representative capacity, please provide the following information, and see
Item IV on page 4 hereof).

Name(s)
-----------------------------------------------------------------------

- ------------------------------------------------------------------------------
(Print Name(s))

Capacity (full title)
---------------------------------------------------------

- ------------------------------------------------------------------------------

Address
-----------------------------------------------------------------------

- ------------------------------------------------------------------------------
(Print Address, including Zip Code)

Area Code and Telephone Number
-----------------------------------------------

Social Security or Employer Identification Number
----------------------------

(Also complete Substitute Form W-9 on page 7 hereof)

Page 3
<PAGE>

INSTRUCTIONS TO LETTER OF TRANSMITTAL

I. GENERAL.

In accordance with the Offer, each Shareholder of Great Eastern Energy
and Development Corporation is entitled upon surrender of certificate(s)
representing the Tendered shares of Great Eastern Energy and Development
Corporation to receive in exchange therefor a check in the amount equal to
the aggregate of $0.22 per Share hereby surrendered. YOU ARE URGED TO
COMPLETE AND RETURN THIS LETTER OF TRANSMITTAL PROMPTLY. NO CONDITIONAL OR
CONTINGENT SURRENDER OF TENDERED SHARES WILL BE ACCEPTED.

UNTIL YOU HAVE SURRENDERED TO THE DEPOSITARY YOUR CERTIFICATE(S), OR AN
AFFIDAVIT RELATING TO THE LOSS OF THE CERTIFICATE(S), AND A PROPERLY
COMPLETED AND SIGNED LETTER OF TRANSMITTAL, SUBSTITUTE W-9 AND ANY OTHER
REQUIRED DOCUMENTS YOU WILL NOT RECEIVE THE PURCHASE PRICE.

II. EXECUTION AND DELIVERY

This Letter of Transmittal or a facsimile hereof must be properly
completed, dated and signed, and must be mailed with your certificate(s)
representing the Tendered Shares and any other required documents to the
Depositary, at the address set forth on the first page hereof. THE METHOD OF
DELIVERY OF CERTIFICATE(S), LETTERS OF TRANSMITTAL AND ANY OTHER REQUIRED
DOCUMENTS TO THE DEPOSITARY IS AT YOUR OPTION AND RISK. IF MAIL IS USED TO
SEND CERTIFICATE(S), REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS SUGGESTED. An addressed envelope is enclosed for your
convenience. Delivery of your certificate(s) that represent the Tendered
Shares will not be complete until actually received by the Depositary
together with any other required documents.

III. INADEQUATE SPACE

If there is insufficient space to list all your stock certificates being
submitted to the Depositary, please attach a separate signed schedule.

IV. SIGNATURES

The signature (or signatures, in the case of certificate(s) owned by two
or more joint holders where record ownership is not stated in the
alternative) on this Letter of Transmittal or facsimile should correspond
exactly with the name as written on the face of the stock certificate(s)
transmitted, without alteration, enlargement or any change whatsoever, unless
the certificate(s) representing the Tendered Shares described on this Letter
of Transmittal have been transferred or assigned by the registered holder, or
holders, in which event this Letter of Transmittal or facsimile should be
signed in exactly the same form as the name of the last transferee indicated
on the transfers attached to or endorsed on the certificate(s).

If any certificates representing the Tendered Shares are registered in
different names on several certificates, it will be necessary to complete,
sign and submit as many separate Letters of Transmittal as there are
different registrations of certificates.

If this Letter of Transmittal or facsimile or any certificate(s) are
signed by a trustee, executor, administrator, guardian, officer of a
corporation, attorney-in-fact, agent or in any other representative or
fiduciary capacity, the person signing must give such person's full title in
such capacity and appropriate evidence of authority to act in such capacity
must be forwarded with this Letter of Transmittal or facsimile.

V. CHECK PAYABLE TO SAME NAME AS ON CERTIFICATE

If the check to be issued by the Depositary is payable to exactly the
same name that appears on the certificate(s) formerly representing the
Tendered Shares being submitted herewith, you will not be required to endorse
such certificate(s).

Page 4
<PAGE>

VI. CHECK PAYABLE TO DIFFERENT NAME OR ADDRESS

If the check to be issued by the Depositary is payable other than in
exactly the name and address of the registered holder of the certificate(s)
submitted herewith, then the certificate(s) submitted must be properly
endorsed to the person who is to receive such check, or accompanied by
appropriate stock powers, properly executed by such registered holder and the
signature guaranteed by a participant in the Securities Transfers Agents
Medallion Program, the Stock Exchange Medallion Program or the New York Stock
Exchange, Inc. Medallion Signature Program (each of the foregoing being
referred to herein as an "Eligible Institution"). Also, in such case this
Letter of Transmittal or facsimile must be signed by the transferee or by his
agent, and should not be signed by the transferor. The signature of such
transferee or agent must also be guaranteed by the Eligible Institution.

VII. CORRECTION OF OR CHANGE IN NAME

For a correction of name or for a change in name which in either case
does not involve a change of ownership, proceed as follows: (i) for a change
in name, by marriage, etc., the surrendered certificate(s) should be
endorsed, e.g., "Mary Doe, now by marriage Mrs. Mary Jones," with the
signature guaranteed by an Eligible Institution; and (ii) for a correction in
name, the surrendered certificate(s) should be endorsed, e.g., "James E.
Browne, incorrectly inscribed as J.E. Brown," with the signature guaranteed
by an Eligible Institution.

VIII. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES

Any questions and requests for assistance or additional copies of this
Letter of Transmittal and these instructions may be directed to the
Depositary at the address or telephone number set forth on the first page
hereof.

IX. SPECIAL ISSUANCE, PAYMENT AND DELIVERY INSTRUCTIONS

If the check to be issued in exchange for the Tendered Shares is to be
issued in the name of and sent to a person other than the name appearing on
the first page hereof or to an address other than that appearing on the first
page hereof or sent to a person other than the name appearing on the first
page hereof, the appropriate boxes on this Letter of Transmittal or facsimile
should be completed.

X. LOST, STOLEN OR DESTROYED CERTIFICATES

If your certificate representing the tendered Shares has been lost,
stolen or destroyed, so indicate on the front of this Letter of Transmittal.
The Depositary will send you additional documentation that will need to be
completed to effectively surrender such lost, stolen or destroyed certificate.

XI. WAIVER OF CONDITIONS

The Depositary and the Purchaser reserve the absolute right to waive any
of the conditions set forth herein or any defect with respect to the
transmittal of certificate(s) representing Tendered Shares.

XII. MISCELLANEOUS

Neither the Purchaser nor the Depositary is under any duty to give
notification of defects in any Letter of Transmittal or facsimile or in any
other required documents and shall not incur any liability for failure to
give such notification. Any and all Letters of Transmittal or facsimiles
(including any other required documents) not in proper form are subject to
rejection. The Purchaser shall have the absolute right to reject any
surrender of Tendered Shares not in proper form or to waive any defect or
irregularity. Surrender of Tendered Shares will be deemed to have NOT been
made until all defects and irregularities have been cured or waived.

IMPORTANT TAX INFORMATION

Under federal income tax law, a registered holder whose certificate(s) are
surrendered for exchange and payment is required to provide the Purchaser
with such registered holder's correct taxpayer identification number on
Substitute Form W-9 below. If such registered holder is an individual, the
taxpayer identification number is such individual's social security

Page 5
<PAGE>

number. If the Depositary is not provided with the correct taxpayer
identification number, the registered holder may be subject to a $50 penalty
imposed by the Internal Revenue Service. In addition, payments that are made
to such registered holder may be subject to federal income tax backup
withholding.

Certain registered holders (including, among others, all corporations
and certain foreign individuals) are not subject to these backup withholding
and reporting requirements. Nonetheless, exempt registered holders should
complete the Substitute Form W-9 below and so indicate their exempt status by
writing "exempt" across the face of the Substitute Form W-9. In order for a
foreign individual to qualify as an exempt recipient, that registered holder
must submit a statement, signed under penalties of perjury, attesting to that
individual's exempt status. Such statements can be obtained from the
Depositary. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.

If backup withholding applies, the Depositary is required to withhold
31% of any payments made to the registered holder. Backup withholding is not
an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.

PURPOSE OF SUBSTITUTE FORM W-9

To prevent backup withholding payments that are made to a registered
holder, the registered holder is required to notify the Depositary of his
correct taxpayer identification number by completing the form below
certifying that the taxpayer identification number provided on Substitute
Form W-9 is correct (or that such registered holder is awaiting a taxpayer
identification number) and that (1) the registered holder has not been
notified by the Internal Revenue Service that he is subject to backup
withholding as a result of failure to report all interest or dividends or (2)
the Internal Revenue Service has notified the registered holder that he is no
longer subject to backup withholding.

WHAT NUMBER TO GIVE THE DEPOSITARY

The registered holder is required to give the Depositary the social
security number or employer identification number of the registered holder of
the certificate(s). If the certificate(s) are in more than one name or are
not in the name of the actual owner, consult the enclosed guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional guidance on which number to report.

Page 6
<PAGE>

<TABLE>
<S> <C> <C>
PAYOR'S NAME: American Securities Transfer & Trust, Inc.
- -------------------------------------------------------------------------------------------------------------------
Name, as shown on first page hereof (if held in joint account, list first and circle the name of the person or
entity whose number you enter in Part I below.)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Address (if stockholder does not complete, signature in Part 1 below will constitute a certification that the
address on the first page hereof is correct.)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
City, State and ZIP code
===================================================================================================================
Part 1-PLEASE PROVIDE YOUR TIN TIN______________________________
IN THE BOX AT RIGHT AND CERTIFY BY Social Security Number or
SIGNING AND DATING BELOW Employer Identification Number
- -------------------------------------------------------------------------------------------------------------------

SUBSTITUTE
FORM W-9 Part II - Awaiting TIN / /
For Payees exempt from backup withholding, see the enclosed Guidelines for
Department of the Treasury Certification of Taxpayer Number on Substitute Form W-9 and complete as
Internal Revenue Service instructed under "Important Tax Information" above.

Payor's Request for Taxpayer
Identification Number (TIN)
===================================================================================================================
CERTIFICATION. Under penalties of perjury, I certify that:

(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to
be issued to me), and

(2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue
Service ("IRS") that I am subject to backup withholding as a result of a failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to backup withholding.

CERTIFICATION INSTRUCTIONS You must cross out item (2) above if you have been notified by the IRS that you are
subject to backup withholding because of under reporting interest or dividends on your tax return. However, if
after being notified by the IRS that you were subject to backup withholding you received any other notification
from the IRS that you are no longer subject to backup withholding, do not cross out item (2). (Also see the
enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.)

SIGNATURE DATE
----------------------------------------------------------------- -------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

Page 7
<PAGE>

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9

GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.

<TABLE>
- --------------------------------------------------------------------------------------------------------------------------------
For this type of account: Give the SOCIAL For this type of account: Give the EMPLOYER
SECURITY number of IDENTIFICATION number of
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. An individual's account The individual 8. Sole proprietorship The owner
account.

2. Two or more individuals The actual owner of the 9. A valid trust, or The legal entity (do not furnish
(joint account) account or, if combined any pension trust. the identifying number of the
one of the individuals(1) personal representative or
trustee unless the legal entity
3. Husband and wife (joint The actual owner of the itself is not designated in the
account) account or, if joint funds, account title.)(5)
either person(1)
10. Corporate account The corporation
4. Custodian account of a The minor(2)
minor (Uniform Gift) to 11. Religious, charitable, The organization
Minors Act) or educational organization
account.
5. Adult and minor (joint The adult or, if the minor
account) is the only contributor, 12. Partnership account The partnership
the minor(1) held in the name of the
business.
6. Account in the name of The ward, minor, or
guardian or committee incompetent person(3) 13. Association, club,or The organization
for a designated ward, other tax-exempt
minor, or incompetent organization.
person
14. A broker or The broker or nominee
7. a. The usual revocable The grantor-trustee(1) registered nominee
savings trust account
(grantor is also trustee) 15. Account with the The public entity
Department of Agriculture
b. So-called trust in the name of a public
account that is not a The actual owner(1) entity (such as a State or
legal or valid trust local government, school
under State law. district, or prison) that
receives agricultural
program payments
</TABLE>

(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME, THE NUMBER WILL
BE CONSIDERED TO BE THAT OF THE FIRST NAME LISTED.

Page 8

<PAGE>

EXHIBIT 99.11(b)

May 27, 1997

Caprito Gas Corporation
500 West Texas Suite 955
Midland, Texas 79701

ATTN: Kevin O. Butler RE: PROPOSED $4,154,734.00 COMMITMENT
TO KEVIN O. BUTLER AND CAPRITO GAS
CORPORATION WITH REGARD TO THE PURCHASE OF
SHARES OF GREAT EASTERN ENERGY
DEVELOPMENT ("GEED")

Dear Mr. Butler:

Pursuant to our discussions with you regarding the above referenced Commitment,
Texas Commerce Bank is pleased to submit our approved Commitment to you for up
to $4,154,734.00 to be used to finance the purchase of shares of GEED. The
terms and conditions of this Commitment are set forth in the attached Term
Sheet. If these terms are satisfactory, please execute in the space provided
below and return an executed copy to my attention. This Commitment will
terminate unless signed and returned by June 10, 1997.

Very Truly Yours,

/s/ Sidney K. Smith

Sidney K. Smith
Senior Vice President

ACCEPTED BY: /s/ KEVIN O. BUTLER DATE: 5/27/97
---------------------------- -----------------
KEVIN O. BUTLER
INDIVIDUALLY

ACCEPTED BY: /s/ KEVIN O. BUTLER DATE: 5/27/97
---------------------------- -----------------
KEVIN O. BUTLER
PRESIDENT
CAPRITO GAS CORPORATION

<PAGE>

TERM SHEET
CAPRITO GAS CORPORATION AND KEVIN O. BUTLER

OBLIGOR: Caprito Gas Corporation ("Caprito")

CO-MAKER: Kevin O. Butler ("Butler")

FACILITY: Loan 1. Term Loan
Loan 2. Single Pay Loan

AMOUNT: Loan 1. $2,154,734
Loan 2. Up to $2,000,000

PURPOSE: Purchase of up to 100% of outstanding stock in Great Eastern
Energy and Development ("GEED")

INTEREST
RATE: Loan 1. Prime as it changes plus 1%
Loan 2. Prime as it changes plus 3%

MATURITY: Loan 1. One year; $34,848 principal plus interest
Loan 2. 120 Days; principal plus interest at maturity

FEES: 1% of final total commitment

COLLATERAL:
1.) Assignment of GEED stock pruchased under these facilities.

2.) Once 100% of stock is owned, then First Lien Deed of Trust,
Mortgage, Security Agreement, and Assignment of Production on
the properties of GEED and Butler as recently reviewed by
Bank.

3.) All stock of Caprito.

4.) Gas purchase and/or sales contracts related to Kansas
transmission system.

<PAGE>

PAGE 2
CAPRITO GAS CORPORATION
AND KEVIN O. BUTLER
TERM SHEET

AGREEMENTS: Loans 1. and 2.

i.) Commitment subject to approval of all phases of transaction
by Bank counsel.

ii.) Borrower will agree to maintain at least $1.75MM cash or
cash equivalents in GEED and/or Caprito until such time
that Bank is fully repaid under the 120 day loan.

iii.) Purchase 2 year natural gas hedge as appropriate for Kansas
system (approx. 30,000 MMBTU/month )

iv.) No dividends or distributions from Caprito

v.) No material change in GEED financial condition as reflected
in 12/31/96 GEED draft financial statements.

vi.) Semi-annual Borrowing Base determinations.

vii.) Opinion of counsel, acceptable to Bank, provided by
Obligor.

viii.) Fairness opinion, acceptable to Bank, provided by Obligor.

ix.) Quarterly and annual financial statements.

CONDITIONS
PRECEDENT: Satisfactory review and approval of title relating to the
ownership of the mortgaged properties as well as other matters in
the Bank's sole discretion
LEGAL
COSTS: Obligor to pay all costs incurred by Bank in connection with the
preparation of the loan documents including fees and out-of-pocket
expenses of the Bank's counsel regardless of whether the
contemplated transaction is consummated. If the transaction is
consummated, legal fees and expenses of the Bank to the date of
the closing will be paid by the Obligor at the closing with the
balance of such

<PAGE>

fees and expenses to be paid promptly upon the Obligor's receipt
of the invoice for fees due.

<PAGE>

EXHIBIT 99.11(c)(1)

June 26, 1997

Board of Directors
Great Eastern Energy and Development Corporation
5990 Greenwood Plaza Boulevard, Suite 127
Greenwood Village, Colorado 80111-4708

Gentlemen:

The purpose of this letter is to set forth our current intentions with
respect to a proposed acquisition by Kevin O. Butler & Associates, Inc.,
("Butler") of all of the outstanding capital stock of the Great Eastern Energy
and Development Corporation ("GEED").

1. FORM OF TRANSACTION. It is currently contemplated that the acquisition
would be consummated in a two-step process. The first step would be a tender
offer by an affiliate of Butler for no less than 80% of the outstanding shares
of GEED (the "Tender Offer") for a purchase price of $0.22 per share in cash
(the "Consideration"). The second step would be a merger of the affiliated
entity with GEED (the "Merger"), in which each outstanding share of GEED would
be converted into the right to receive the Consideration. The Merger would
take place after the successful completion of the Tender Offer and would involve
only those shareholders, directors, and officers of GEED remaining after the
closing of the Tender Offer.

2. CONSIDERATION. The total consideration would be $4,145,734 (computed by
multiplying the 18,844,245 shares outstanding of GEED times the Consideration)
to be paid in cash.

3. GEED AGREEMENTS. GEED agrees to provide to Butler for use in connection
with the Tender Offer a shareholder list and security position listing as of a
date selected by Butler and to provide such other information to Butler as
Butler may reasonably request in connection with the Tender Offer and
preparation of Tender Offer materials. In addition, the officers, directors,
and ten percent (10%) or greater shareholders of GEED hereby agree, by the
signature of their authorized representative below, to (i) sell his or her
shares pursuant to the Tender Offer, subject to the filing of Tender Offer
materials with the Securities and Exchange Commission (the "SEC") containing the
terms of the Tender Offer substantially similar to those set forth herein, and
(ii) resign as officers and directors upon closing of the Tender Offer and after
appointing Kevin O. Butler as a director of GEED. GEED and its board of
directors also hereby agree to recommend acceptance of the Tender Offer by the
Shareholders of GEED pursuant to applicable securities laws.

4. CONDITIONS TO CLOSING. The obligations of the parties to close the
acquisition would be subject to customary conditions in transactions of this
type, including (i) the Tender Offer resulting in Butler beneficially owning in
excess of eighty percent (80%) of the outstanding capital stock of GEED; (ii)
compliance with and performance of the agreements set forth herein; (iii)
receipt of all required consents; (iv) the absence of a material adverse change
in the business, operations, or affairs of GEED; (v) satisfaction or waiver of
certain curative matters identified in the Escrow Agreement (as hereinafter
defined); and (vi) satisfaction or waiver of the other conditions to be
contained in the Tender Offer materials, which will be substantially similar to
those on Exhibit "A" attached hereto.

<PAGE>

Board of Directors
Great Eastern Energy and Development Corporation
Page Two
June 26, 1997

5. OPERATIONS PRIOR TO CLOSING DATE. From the date of your acceptance of
this letter until closing of the Tender Offer, the business of GEED will be
conducted in the ordinary course, and GEED shall not, without the consent of
Butler; (i) make any material commitments or any material operations changes;
(ii) enter into any material leases; (iii) incur or guarantee any material
obligations for borrowed money; (iv) issue, sell, or redeem any capital stock or
other securities; (v) declare or pay any dividends or other distributions in
respect to its outstanding capital stock; (vi) enter into any material
employment or deferred compensation contract or materially increase or announce
any material increase of salaries, wages, incentive compensation, bonus, or
other employee benefits or programs for employees or retirees; (vii) sell or
otherwise dispose of, outside the ordinary course of business, any assets,
including its cash, in excess of $10,000; or (viii) prepay any existing
indebtedness. Provided, however, that GEED may expend up to a total of $60,000
for a valuation or fairness opinion or assessment in connection with the Tender
Offer and for attorneys fees, filing costs, copying, mailing, and similar
expenses related to the Tender Offer. In addition, GEED will attempt to file of
record in Montgomery County, Kansas, a memorandum, affidavit, or similar notice
regarding the restriction on the transfer of certain properties owned by Great
Lakes Chemical Corporation pursuant to the Asset Purchase Agreement between GEED
and Great Lakes, and/or GEED will, upon Butler's request, file of record that
certain Mortgage and Security Agreement executed by Great Lakes in favor of
GEED.

6. ESCROW FUNDS. Butler shall place $75,000 (the "Escrow Funds") in
escrow pursuant to an escrow agreement between Butler and GEED (the "Escrow
Agreement"). Subject to the terms of the Escrow Agreement, the Escrow Funds (i)
will be paid to GEED in the event the Tender Offer materials are not filed with
the SEC on or before July 11, 1997, with certain exceptions provided in the
Escrow Agreement, or if such materials are filed but the Tender Offer is not
closed for any reason other than those set forth in Sections 4 and 7 hereof;
(ii) will be used to pay a portion of the Consideration, subject to the
satisfaction or waiver of all conditions to closing of the Tender Offer; or
(iii) will be paid to Butler if the Tender Offer materials are filed with the
SEC on or before July 11, 1997, and the Tender Offer is terminated as a result
of a failure to satisfy the conditions described in Section 4 hereof or upon the
occurrence of any event described in Section 7 hereof.

7. LIMITATION ON OTHER OFFERS; BREAK-UP FEE. Until this letter is
terminated in accordance with Section 8 below, you agree that neither you nor
GEED will solicit offers to purchase any shares of the capital stock of GEED, to
purchase a material amount of assets of GEED, or to merge or combine GEED with
any other entity. If (a) the Tender Offer materials have been filed with the
SEC by July 11, 1997, and the Tender Offer has commenced as soon as reasonably
practicable thereafter and is to be consummated on or before forty (40) days
after commencement; and (b) either (i) you fail to recommend that the
shareholders of GEED accept the Tender Offer; (ii) the Tender Offer is not
closed either because fewer than 80% of the outstanding shares of GEED are
tendered or the failure of any condition precedent to the Tender Offer; (iii)
any failure to perform or any breach of the agreements set forth herein, or (iv)
GEED consummates any transaction other than those allowed under Section 5
hereof, including acceptance of another offer, a merger, acquisition,
reorganization, or sale of a substantial part of GEED's assets; then, in any
such event, GEED shall pay Butler $75,000 within ten (10) days of the occurrence
of such event.

8. TERMINATION. If the Tender Offer materials have not been filed with
the SEC on or before July 11, 1997, then either party may, subject to the terms
of the Escrow Agreement, terminate both this letter of intent and any further
acquisition negotiations by written notice to the other party, without incurring
any liability, penalty or obligations.

<PAGE>

Board of Directors
Great Eastern Energy and Development Corporation
Page Three
June 26, 1997

9. CONFIDENTIALITY. No party to this letter or any agent or representative
thereof will make any public announcement or other disclosure of the terms of
this proposed transaction without the approval of the other party. However,
upon acceptance of this letter by you, GEED may make such disclosure if it is
advised by counsel that such disclosure is advisable in light of its prior
disclosure practice or that such disclosure is otherwise advisable in light of
applicable securities laws.

10. EFFECT OF THIS LETTER. This letter is intended by the parties to be
an expression of our current mutual intentions concerning a proposed acquisition
of GEED by Butler. This letter is not to be construed as a contract or an offer
to enter into a contract with respect to the proposed acquisition, and, except
for the provisions of this Section and of Sections 3, 5, 6, 7, 8, and 9 which
the parties expressly declare to be enforceable, it is not intended to be
binding upon the parties or create any legal obligations.

Our willingness to proceed on the basis of the terms of this letter of
intent is contingent upon (i) you having returned a signed copy of this letter
to the undersigned not later than 5:00 p.m., Mountain Time, on June 26, 1997;
and (ii) there having been no disclosure of this letter or any of its terms by
you or on your behalf to anyone else for the purpose of soliciting an offer from
another party to purchase your stock in GEED or the assets of GEED. This letter
of intent may be signed in counterparts so long as each party signs at least one
(1) counterpart and faxed signatures shall be treated as original signatures.

KEVIN O. BUTLER & ASSOCIATES, INC.

By: /s/ KEVIN O. BUTLER
-----------------------------------
Kevin O. Butler, President

ACCEPTED and AGREED to this 26th day of June, 1997.

/s/ DONALD G. JUMPER
-----------------------------------
DONALD G. JUMPER, AS PRESIDENT OF
GEED, AND AUTHORIZED REPRESENTATIVE
OF THE BOARD OF DIRECTORS, OFFICERS
AND TEN PERCENT OR GREATER
SHAREHOLDERS OF GEED

<PAGE>

EXHIBIT "A"
TO LETTER OF INTENT DATED JUNE 26, 1997,
FROM KEVIN O. BUTLER & ASSOCIATES, INC., TO
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION

CERTAIN CONDITIONS OF THE OFFER:

Notwithstanding any other provision of the Offer, Butler shall not be
required to accept for payment, purchase, or pay for any Shares tendered, and
may terminate or amend the Offer if at any time after _______________, and at
or before the Expiration Time, any of the following events shall have occurred
(as determined by Butler in good faith) which makes it inadvisable for Butler,
in its reasonable judgment, to proceed with the Offer or with such purchase or
payment:

(a) There shall have been threatened, instituted or pending any action or
proceeding by any government or governmental, regulatory or administrative
agency or authority or tribunal or any other person, domestic or foreign, or
before any court or governmental, regulatory or administrative authority or
agency or tribunal, domestic or foreign, or any judgment, order, or injunction
entered, enforced or deemed applicable by any such court, authority, agency or
tribunal, which:

(1) challenges the making of the Offer, the acquisition of Shares
pursuant to the Offer or otherwise related in any manner to the
offer; or

(2) could materially affect the business, condition (financial or
other), income, operations or prospects of GEED, or otherwise
materially impair in any way the contemplated future conduct of
the business of GEED; or

(b) There shall have been any action threatened or taken, or approval
withheld, or any statute, rule or regulation proposed, sought, promulgated,
enacted, entered, amended, enforced or deemed to be applicable to the Offer,
Butler or GEED by any government or governmental, regulatory or administrative
authority or agency or tribunal, domestic or foreign, which would or might
directly or indirectly:

(1) make the acceptance for payment of, or payment for, some or all
of the Shares illegal or otherwise restrict or prohibit
consummation of the Offer;

(2) delay or restrict the ability of Butler, or render Butler unable,
to accept for payment or pay for some or all of the Shares;

(3) materially impair the contemplated benefits of the Offer to
Butler; or

(4) materially affect the business, condition (financial or other),
income, operations or prospects of GEED, or otherwise materially
impair in any way the contemplated future conduct of the business
of GEED; or

(c) There shall have occurred the declaration of any banking moratorium or
suspension of payments in respect of banks in the United States; or

(d) Any change shall occur or be threatened in the business, condition
(financial or other), income, operations or prospects of GEED which is or may be
material to GEED; or

(e) A tender or exchange offer for any or all of the Shares (other than
the Offer), or any merger, business combination or similar transaction with or
involving GEED or any subsidiary, shall have been proposed, announced or made by
any person; or

(f) Any entity, "group" (as that term is used in Section 13(d)(3) of the
Exchange Act) or person (other than entities, groups or persons, if any, who
have filed with the Commission on or before _____________, a Schedule 13G or a
Schedule 13D with respect to any of the Shares) shall have acquired or proposed
to acquire beneficial ownership of more than 5% of the outstanding Shares.

The foregoing conditions are for Butler's sole benefit and may be asserted
by Butler regardless of the circumstances giving rise to any such condition
(including any action or inaction by Butler) or may be waived by Butler in whole
or in part. Butler's failure at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which maybe asserted at any time and from time to
time. Any determination by Butler concerning the events described in this
Section and any related judgment by Butler regarding the inadvisability of
proceeding with the purchase of or payment for any Shares tendered shall be
final and shall be binding on all parties.

<PAGE>
EXHIBIT 99.11(c)(2)
ESCROW AGREEMENT

This Escrow Agreement (this "Agreement") is made and entered into on this
the 26th day of June 1997 by and among Kevin O. Butler & Associates, Inc. and
Caprito Gas Corporation (collectively, "Butler") Great Eastern Energy and
Development Corporation ("GEED") and Cotton, Bledsoe, Tighe & Dawson (the
"Escrow Agent"), with reference to the following facts:

A. Butler and GEED have entered into a letter agreement dated June 26,
1997 (the "Letter Agreement") with respect to a proposed tender offer by Butler
for no less than 80% of the outstanding shares of capital stock of GEED (the
"Tender Offer").

B. The Letter Agreement provides, among other things, that Butler will
place into escrow the sum of $75,000.00 (the "Escrow Funds") in consideration
for certain agreements made by GEED and its directors and principal
shareholders.

C. The Escrow Agent has agreed to hold the Escrow Funds pursuant to the
terms set forth herein.

NOW, THEREFORE, FOR AND IN CONSIDERATION of the mutual promises,
covenants, agreements, representations and warranties set forth herein, the
parties hereto agree as follows:

1. DEPOSIT OF ESCROW FUNDS. Upon execution of this Agreement, Butler
will deliver the Escrow Funds to the Escrow Agent, and the Escrow Funds will
be placed in the Escrow Agent's trust account as soon thereafter as
reasonably practicable. Butler shall be entitled to any and all interest
accrued with respect to the Escrow Funds during the period the same are
deposited

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<PAGE>

in the trust account of the Escrow Agent.

2. DISTRIBUTIONS OF THE ESCROW FUNDS. The Escrow Funds will be
distributed upon the Escrow Agent receiving written notice from Butler and
GEED that one of the following has occurred: (i) in the event materials
related to the Tender Offer are not filed with the Securities and Exchange
Commission (the "SEC") on or before July 11, 1997, the Escrow Funds will be
paid to GEED, unless (a) there has been a material adverse change in the
business, operations or affairs of GEED, (b) GEED or its officers or
principal shareholders have failed to perform or breach any of the agreements
set forth in the Letter Agreement, or (c) the curative matters identified in
Section 4 hereof have not been satisfied or waived (collectively, (a), (b)
and (c) are hereinafter referred to as the "Termination Events"); (ii) upon
the occurrence of a Termination Event the Escrow Funds will be paid to
Butler; (iii) in the event the Tender Offer materials are filed with the SEC
on or before July 11, 1997 and the Tender Offer is closed and consummated,
the Escrow Funds will be distributed to Butler or a depository to be used in
paying the Tender Offer consideration; (iv) in the event the Tender Offer
materials are filed with the SEC on or before July 11, 1997 and the Tender
offer is not closed due to a reason other than the failure of a condition to
closing set forth in Section 4 of the Letter Agreement or the occurrence of
an event described in Section 7 of the Letter Agreement, the Escrow Funds
will be distributed to GEED; or (v) in the event the Tender Offer materials
are filed with the SEC on or before July 11, 1997 and the Tender Offer is
terminated or fails to close due to a failure of a condition to closing set
forth in Section 4 of the Letter Agreement or the occurrence of an event
described in Section 7 of the Letter Agreement, the Escrow Funds will be
distributed to Butler.

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<PAGE>

3. CURATIVE MATTERS. The following matters shall be conditions precedent
to Butler's obligation to file Tender Offer materials with the SEC: (i) GEED
shall have terminated its lease of office space in San Antonio, Texas; (ii) GEED
shall have entered into a written severance agreement with Don Jumper, President
of GEED, with respect to certain benefits to be provided to Mr. Jumper upon a
change of control of GEED, as approved by the Board of Directors of GEED; (iii)
GEED and each of its subsidiaries shall be validly existing and in good standing
in their respective states of organization and qualified to do business and in
good standing in each jurisdiction in which such qualification may be necessary
and the failure to so qualify may have a material adverse effect.

4. ESCROW AGENT. The Escrow Agent agrees to hold the Escrow Funds as
provided herein until the Escrow Funds are to be distributed as set forth
above. The parties hereto agree as follows with respect to the rights,
duties, liabilities, privileges and immunities of the Escrow Agent; (1)
Escrow Agent is not a party to, and is not bound by, or charged with, notice
of any agreement out of which this escrow arrangement may arise; (2) the
Escrow Agent is acting as a depository only and is not responsible or liable
in any manner for the sufficiency, correctness, genuiness or validity of the
subject matter of the escrow, or any part thereof, or for the form or
execution thereof, or for the identity or authority of any person executing
this agreement or depositing the Escrow Funds with the Escrow Agent; (3) the
Escrow Agent will be protected when acting upon any written notice, request,
waiver, consent, certificate, receipt, authorization, power of attorney or
other paper or document which the Escrow Agent, in good faith, believes to be
genuine; (4) the Escrow Agent may consult with legal counsel in the event of
any dispute or question as to the construction of any of the provisions
hereof or its duties hereunder, and it shall

3
<PAGE>

incur no liability and shall be fully protected in acting in accordance with
the opinion and instructions of such counsel; (5) the Escrow Agent shall not
be liable for anything it, acting in good faith, may do or refrain from doing
in connection with this Agreement, including errors of judgment unless caused
by its own wilful misconduct. In the event of any disagreement with respect
to the Escrow Funds or the distribution thereof, the Escrow Agent may, at its
option, refuse to comply with any claims or demands made during such
disagreement, and may refuse to deliver the Escrow Funds until such
disagreement is resolved to the satisfaction of the Escrow Agent, and the
Escrow Agent shall not be liable to any party or any other person due to its
failure to comply with any such claims or demands made during such a
disagreement.

EACH OF BUTLER AND GEED, AND THEIR SUCCESSORS AND ASSIGNS, HEREBY AGREES
TO INDEMNIFY AND HOLD HARMLESS THE ESCROW AGENT, ITS SHAREHOLDERS, DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS AND REPRESENTATIVES (THE "INDEMNIFIED PARTIES")
FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, DAMAGES, CAUSES OF ACTION,
SUITS, OBLIGATIONS AND LIABILITIES OF EVERY KIND (INCLUDING, WITHOUT
LIMITATION, ALL EXPENSES OF LITIGATION, COURT COSTS AND ATTORNEYS FEES) (A
"CLAIM") WHICH MAY ARISE FROM OR BE RELATED TO THIS AGREEMENT, THE ESCROW
FUNDS, OR ANY ACTION OR INACTION CONTEMPLATED HEREBY OR ANY AND ALL MATTERS
OR EVENTS RELATED THERETO, WHETHER CAUSED OR ALLEGED TO BE CAUSED, IN WHOLE
OR IN PART, FROM THE SOLE, JOINT, CONCURRENT, COMPARATIVE OR GROSS
NEGLIGENCE, EITHER ACTIVE OR PASSIVE, OF ANY INDEMNIFIED PARTY.

5. RELATIONSHIP OF PARTIES. The parties hereto acknowledge and agree
that neither this

4
<PAGE>

Agreement nor the escrow arrangement contemplated herein establishes any
fiduciary or similar relationship among the parties and that the only duties
of any of the parties hereto are those duties expressly set forth herein,
which do no include any fiduciary or similar duties. Each of Butler and GEED
hereby releases the Escrow Agent and its shareholders, directors, officers,
employees, agent and representatives from any and all claims or causes of
action which either Butler or GEED may now or hereafter have against the
Escrow Agent or its shareholders, directors, officers, employees, agents or
representatives relating to or arising in connection with this Agreement, the
Escrow Funds, any action or inaction related to this Agreement, or any and
all other matters or events related thereto.

6. TERM OF AGREEMENT. This Agreement shall be effective as of June 26,
1997, and shall remain in effect from that date until the Tender Offer is
closed and consummated or until such time as the Escrow Funds are distributed
as provided herein, unless earlier terminated by agreement of the parties.

7. MISCELLANEOUS.

(a) This Agreement shall not be amended or modified except in a written
instrument executed by all of the parties hereto.

(b) This Agreement shall be governed by and construed in accordance with
the laws of the state of Texas, excluding any conflict of laws, rule or
principle that might refer the governance or construction of this Agreement
to the law of any other jurisdiction.

(c) If any provision of this Agreement or the application thereof to any
person or circumstance shall be held invalid or unenforceable to any extent,
the remainder of this Agreement and the application of such provisions to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.

5
<PAGE>

(d) This Agreement contains the entire agreement between the parties and
supersedes any prior understandings or written or oral agreements between the
parties relating to the subject matter of this Agreement.

(e) This Agreement shall be binding upon and enure to the benefit of the
parties to this Agreement and their respective successors and assigns,
provided, however, that neither this Agreement nor any part hereof may be
assigned by any party without the consent of all of the other parties hereto.

(f) The provisions of Sections 4 and 5 of this Agreement shall survive
the expiration of the term of this Agreement.

(g) This Agreement may be signed in any number of counterparts so long
as each party hereto signs at least one such counterpart.

IN WITNESS WHEREOF, the parties hereto have each signed this Agreement on
the date first above written.

KEVIN O. BUTLER & ASSOCIATES, INC.

By: /s/ Kevin O. Butler
-------------------------------
Kevin O. Butler, President

CAPRITO GAS CORPORATION

By: /s/ Kevin O. Butler
-------------------------------
Kevin O. Butler, President

6
<PAGE>

GREAT EASTERN ENERGY AND
DEVELOPMENT CORPORATION

By: /s/ Donald G. Jumper
-------------------------------
Donald G. Jumper, President

ACCEPTED and AGREED in the limited capacity
as Escrow Agent:

COTTON, BLEDSOE, TIGHE & DAWSON

By: /s/ Dan G. LeRoy
-------------------------------
Dan G. LeRoy