EXHIBIT 10.13

January 2, 1996

Costilla Petroleum Corporation
PO Box 10369
Midland, TX 79702
ATTN: Mr. Michael Grella

RE: FRONTIER CONTRACT NO. 9601-001B
COSTILLA CONTRACT NO. WY-CAM-1-LTR
CONTRACT DATE: January 2, 1996

Gentlemen:

This Agreement is made between FRONTIER OIL AND REFINING COMPANY, herein
referred to as Frontier, and COSTILLA PETROLEUM CORPORATION, herein referred to
as Costilla, whereby Seller agrees to sell and deliver and Buyer agrees to
purchase and receive crude oil or condensate under the terms and conditions set
forth below and in the General Provisions and Exhibit "A", attached hereto and
made a part hereof.

COSTILLA DELIVERS:

QUALITY: Wyoming General Sour type crude oil.

QUANTITY: Volume equal to production (approximately 650 barrels per day) from
the leases listed on attached exhibit. These leases are located in
Campbell and Crook Counties, Wyoming.

DELIVERY: Title shall pass from Seller to Buyer as it leaves Seller's tankage at
the various lease locations into Frontier's designated carriers.

PRICE: Texaco's posted price for Wyoming General Sour type crude oil, gravity
adjusted, plus $3.30 per barrel gathering and handling (equal daily
quantities).

PAYMENT: Made on the 20th of the month following the month of delivery. Buyer
will pay Seller as per signed Division Orders.

TERM: Effective January 1, 1996 for six (6) months and continuing month to
month thereafter unless terminated by either party upon giving thirty
(30) days advance written notice of such termination or cancellation
to the other party. Termination shall not affect rights or
obligations of either party accrued prior to the date of termination.

Costilla Petroleum Corporation
Page Two
January 2, 1996

FRONTIER DELIVERS:

QUALITY: West Texas Intermediate type crude oil.

QUANTITY: Approximately 650 barrels per day.

DELIVERY: Via in-line transfer with the facilities of Arco Pipeline at Cushing,
Oklahoma terminal.

PRICE: Koch's posted price for West Texas Intermediate type crude oil, deemed
40 DEG., plus $1.35 per barrel gathering and handling (equal daily
quantities).

PAYMENT: Made on the 20th of the month following the month of delivery.

INVOICES AND NOTICES:

All invoices and notices given pursuant to this agreement shall be in writing or
by fax and shall be deemed delivered when received by the other party at the
addresses specified below.

Invoices to Frontier shall be mailed or faxed as follows:

Frontier Oil and Refining Company
ATTN: Mary Carpenter
Crude Oil Accounting
5340 South Quebec Street, Suite 20ON
Englewood, CO 80111-1911
FAX: (303) 714-0163
PHONE: (303) 714-0189

Notices and all other correspondence to either Buyer or Seller shall be mailed
or faxed as follows:

Frontier Oil and Refining Company
5340 South Quebec Street, Suite 20ON
Englewood, CO 80111-1911
ATTN: Crude Oil Supply & Trading

PHONE: (303) 714-0144
FAX: (303) 714-0163
Costilla Petroleum Corporation
PO Box 10369
Midland, TX 79702
ATTN: Loretta B. Brown/Valley Gathering Company
PHONE: (915) 683-3092

Costilla Petroleum Corporation
Page Three
January 2, 1996

Please return one fully executed copy of this Agreement to the attention of
Contract Administrator. If you do not respond within twenty (20) days from the
date of receipt of this letter, each term and condition set forth in this
Agreement will be considered accepted and therefore binding.

FRONTIER OIL AND REFINING COMPANY

/S/ MICHAEL R. NOVAK
- -------------------------------------
BY: Michael R. Novak
Manager, Lease Crude Acquisitions

AGREED TO AND ACCEPTED THIS 17TH DAY OF JANUARY, 1996.

COSTILLA ENERGY L.L.C.

BY: /S/ MICHAEL J. GRELLA
----------------------------------
Michael J. Grella
Title: President

Attachments
costilla.con

FRONTIER OIL AND REFINING COMPANY
AND
COSTILLA PETROLEUM CORPORATION

FRONTIER CONTRACT NO. 9601-001B
COSTILLA ENERGY CONTRACT NO. WY-CAM-1-LTR

EXHIBIT "A"

LEASE
WELL NAME NUMBER LOCATION
- --------- ------ --------
Candy Draw Unit WY-079 53N-69W
Campbell County, WY

Schwartz Draw W.I.F. WY-080 Sec. 34-57N-74W
Campbell County, WY

USA Hoffine B #1 WY-081 NE SE Sec. 5-49N-67W
Campbell County, WY

L.H. Robinson F #1 WY-082 SE SE Sec. 5-49N-67W
Crook County, WY

FRONTIER OIL & REFINING COMPANY
GENERAL PROVISIONS

WARRANTY: The party selling and/or delivering warrants title to all crude oil
sold and/or delivered hereunder and warrants that all such oil shall be free
from all liens and encumbrances and that all royalties applicable prior to
delivery shall have been or will be paid. Seller warrants that all crude oil
and, if applicable, lease condensate purchased is virgin material of marketable
quality. The crude oil and lease condensate purchased hereunder shall not
include refined products, natural gasoline, butane, propane, or any combination
thereunder, or any other substances or chemicals not normally associated with
virgin crude oil. Such party further warrants that said crude oil has been
produced, handled and transported to the delivery point hereunder in accordance
with all applicable laws, rules and regulations of all local, state and federal
authorities.

TITLE AND RISK OF LOSS: Title and risk of loss will pass to the party taking
delivery as the crude oil or condensate passes from equipment owned or
controlled by the party making delivery, or owned or controlled by a party
designated to make delivery on behalf of the party making delivery, into
equipment owned or controlled by the party taking delivery, or owned or
controlled by a party designated to take delivery on behalf of the party taking
delivery.

MEASUREMENTS AND TESTS: All measurements hereunder shall represent one
hundred percent (100%) volume, such volume and gravity adjusted to sixty
degrees (60 DEG.) Fahrenheit temperature. Procedures for measuring and
testing, except for deliveries through positive displacement type liquid
meters, shall be according to latest ASTM published methods then in effect.
Procedures for such metered type deliveries shall be according to latest
ASME-API published methods then in effect. The crude oil delivered hereunder
shall be merchantable and acceptable to the carriers involved and full
deduction shall be made for all BS&W content according to the latest ASTM
standard method then in effect. Should either party hereto fail to have a
representative present during such measuring and testing, the measurement and
tests of the other party will be accepted.

CONFIRMATION OF DELIVERY: Confirmation of delivery shall be based on run
tickets evidencing such delivery or allocation statements issued by the carriers
involved.

EQUAL DELIVERIES: For pricing purposes, crude oil or condensate delivered
during any given month hereunder shall be deemed to have been delivered in equal
daily quantities during such month except for deliveries made pursuant to meter
tickets, in which case deliveries shall be deemed to have been delivered in
equal daily quantities during the period covered by such meter ticket, and
deliveries made at lease locations, in which case the date recorded on the run
tickets issued by the carrier shall be used in determining the price.

BALANCING: In the case of exchanges, the parties agree to use their best
efforts to keep exchange quantities in balance pursuant to the terms of this
Agreement. Periodically, and at the end of the term of this Agreement,
imbalances shall be corrected. In case of an underdelivery, the underdelivering
party shall make up his/its underdeliveries, unless another method is mutually
agreed upon.

AUDIT: Each party and its duly authorized representatives shall have access to
the accounting records and other documents maintained by the other party which
relate to materials being delivered to the other party under this Agreement, and
shall have the right to audit such records at any reasonable time or times
within three years after termination of this Agreement.

DIVISION ORDERS: In the event either party signs a division order in favor of
the other party pertaining to the object of this Agreement, the terms of this
Agreement shall supersede the terms of such division order to the extent that
there may be a conflict between the two.

RULES AND REGULATIONS: All the terms and provisions of this Agreement shall be
subject to the applicable orders, rules and regulations of all governmental
authorities.

FINANCIAL RESPONSIBILITY: If either party's payments or deliveries to the other
party shall be in arrears, or the financial responsibility of either party
becomes impaired or unsatisfactory in the opinion of the other party, advance
cash payment or satisfactory security shall be given upon demand, and shipments
may be withheld by said other party until such payment or security is received.
If such payment or security is not received within 15 days from demand therefor,
the said other party demanding such payment or security may terminate this
Agreement. In the event either party makes an assignment or any general
arrangement for the benefit of creditors, or if there are instituted by or
against either party proceedings in bankruptcy or under any insolvency law or
law for reorganization, receivership or dissolution, the other party may
withhold shipments or terminate this Agreement without notice. Either party
shall have the option to terminate this Agreement by providing 10 days written
notice to the other party if a determination affecting this Agreement is made by
any governmental authority which creates a material adverse change in the basic
economics of this Agreement. The exercise by either party of any right reserved
under this section shall be without prejudice to any claim for damages or any
other right under this Agreement or applicable law.

TERMINATION AGREEMENT: The parties agree that any quantity of crude oil or
condensate, due and owing or to become due from one party to the other pursuant
to this Agreement, may be waived or otherwise settled by mutual agreement of the
parties in writing, without further consideration other than that which is set
forth in this Agreement.

ASSIGNMENT: Neither party shall assign this contract without consent of the
other.

FORCE MAJEURE: Neither party shall be liable to the other for failure or delay
in making or accepting delivery hereunder to the extent that such failure or
delay may be due to compliance with acts, orders, regulation or requests of any
federal, state or local civilian or military authority or any other persons
purporting to act therefor; riots; strikes; labor difficulties; action of the
elements; transportation difficulties; or any other cause reasonably beyond the
control of such party, whether similar or not.

WAIVER CLAUSE: No waiver by either party of any breach of any of the covenants
or conditions herein contained to be performed by the other party shall be
construed as a waiver of any succeeding breach of the same or of any other
covenant or condition hereof.

TIMING: References to calendar dates set forth in this Agreement and any
amendments hereto, shall mean 7:00 a.m. of the dates indicated.

ADDRESSES:
- ----------
Exchange Statements, Contracts & Correspondence to: Invoices to:
FRONTIER OIL & REFINING COMPANY FRONTIER OIL & REFINING COMPANY
5340 South Quebec Street, Suite 200N 5340 South Quebec Street. Suite 200N
Englewood, CO 80111-1911 Englewood, CO 80111-1911
ATTN: Crude Oil ATTN: Crude Oil Payables