AMENDMENT NO. 1
                                     TO THE
                             CAIRN ENERGY USA, INC.
                                     BYLAWS


         The  Board  of  Directors  of  Cairn  Energy  USA,   Inc.,  a  Delaware
corporation  (the  "Corporation"),  amended as of January  10,  1996,  the Cairn
Energy USA, Inc. Bylaws in the following respects only:

                  Section 7.5 of the Bylaws was amended and  restated to read in
         its entirely as follows:

                           SECTION 7.5. Advance of Expenses.  Expenses  incurred
                  in defending a civil or criminal  action,  suit or  proceeding
                  shall be paid by the  corporation  on  behalf  of a  director,
                  officer, employee or agent in advance of the final disposition
                  of such action,  suit or proceeding as authorized by the board
                  of  directors  in  the  specific   case  upon  receipt  of  an
                  undertaking by or on behalf of the director, officer, employee
                  or agent to repay such amount  unless it shall  ultimately  be
                  determined  that such person is entitled to be  indemnified by
                  the corporation as authorized in this ARTICLE 7.

  The foregoing amendment to the Bylaws was effective as of January 10, 1996.

                                                  CAIRN ENERGY USA, INC.


                                               By:/s/ Susan H. Rader
                                                  -------------------------
                                                  Susan H. Rader, Secretary

CORPDAL:62435.1  15467-00006