EXHIBIT 10.31

CMS NOMECO OIL & GAS CO.

ANNUAL EXECUTIVE INCENTIVE
COMPENSATION PLAN

FEBRUARY, 1996

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CMS NOMECO OIL & GAS CO.
ANNUAL EXECUTIVE INCENTIVE COMPENSATION PLAN

I. PURPOSE

The purpose of the Annual Executive Incentive Compensation Plan
(Plan) of CMS NOMECO Oil & Gas Co. (Company) is to:

A. Provide an equitable and competitive level of compensation that
will permit the Company to attract, retain and motivate highly
competent Officers and key employees.

B. Provide a financial incentive for Officers and key employees to
achieve expected levels of individual performance and thereby
assist in the achievement of Company objectives.

II. EFFECTIVE DATE

The effective date of the Plan is November 1, 1995.

III. ELIGIBILITY

Officers and key employees in Salary Grades 11 and above are eligible
for participation in the Plan.

IV. ADMINISTRATION OF THE PLAN

The Plan will be administered by the President of the Company, under
the general direction of the Executive and Remuneration Committee of
the Board of Directors.

V. PERFORMANCE GOALS

The performance goal for the Plan shall consist of three factors:
(A) the net income of CMS ENERGY Corporation (CMS Energy); (B) the
pre-tax operating income of CMS NOMECO Oil & Gas Co.; and (C) the
finding costs for oil and/or gas. Of these three factors, 35% of the
award will be based on CMS Energy net income, 50% will be based on
CMS NOMECO Oil & Gas Co. pre-tax operating income and 15% will be
based on the finding costs for oil and/or gas. In the event less
than 80% of the CMS Energy income goal is achieved, there will not be
a payout under that portion of the Plan. In the event less than 80%
of the CMS NOMECO Oil & Gas Co. income goal is achieved, there will
not be a payout under that portion of the Plan. In the event less
than 80% of the finding costs goal is achieved, there will not be a
payout for that portion of the Plan.

A. CMS ENERGY NET INCOME AWARD -- An income goal will be set each
year. For each 1% (or fraction thereof) increase achieved in
net income above 80% of goal, there will be a corresponding 2.5%
(or pro rata part) increase in the award up to 100% after which
there will be a corresponding 1% (or pro rata part) increase in
the award for each additional 1% (or fraction thereof) increase
in net income above goal. The maximum award is 120%.

B. CMS NOMECO OIL & GAS CO. PRE-TAX OPERATING INCOME AWARD - An
income goal will be set each year. For each 1% (or fraction
thereof) increase achieved in pre-tax operating income above 80%
of goal, there will be a corresponding 2.5% (or pro rata part)
increase in the award up to 100% after which there will be a
corresponding 1% (or pro rata part) increase in the award for
each additional 1% (or fraction thereof) increase in net income
above goal. The maximum award is 120%.

C. CMS NOMECO OIL & GAS CO. FINDING AWARD -- A finding cost goal
will be established by the Committee to reflect the costs of
adding proved reserves. For each 1% (or fraction thereof)
increase

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in meeting the goal above 80% of goal, there will be a corresponding 2.5%
(or pro rata part) increase in the award until the percent of a standard
award granted equals 100%, after which there will be a corresponding 1%
(or pro rata part) increase in the award for each additional 1% (or
fraction thereof) increase in goal achievement. The maximum award is 120%
of the standard award.

ACTUAL INCOME PERCENT OF
AS A PERCENT OF GOAL AWARD GRANTED
-------------------- -------------

Less Than 80.0% 0
80.0% 50.0%
85.0% 62.5%
90.0% 75.0%
95.0% 87.5%
100.0% 100.0%
105.0% 105.0%
110.0% 110.0%
115.0% 115.0%
120.0% and Above 120.0%

FINDING COSTS PERCENT OF
GOAL ACHIEVED AWARD GRANTED
---------------------- -------------

Less Than 80.0% 0
80.0% 50.0%
85.0% 62.5%
90.0% 75.0%
95.0% 87.5%
100.0% 100.0%
105.0% 105.0%
110.0% 110.0%
115.0% 115.0%
120.0% and Above 120.0%

VI. ANNUAL AWARD FUND

Standard incentive awards for each eligible executive will amount to a
percentage of the midpoint of his/her salary grade in the Performance
Year. The midpoints and salary ranges are determined each year and are
subject to review and approval by the Committee. The percentage will
vary by position level as indicated below:

STANDARD INCENTIVE
SALARY AWARD AS A % OF
POSITION GRADE SALARY GRADE MIDPOINT
------------------------- ------ ---------------------

President E-6 55.0
Executive Vice President/
Senior Vice President E-4 45.0
Vice President E-3 40.0
Vice President E-2 35.0
Vice President/Managers/
Directors and Equivalent E-1 30.0
Managers/Directors 13 25.0
Managers/Directors 12 20.0
Managers/Directors and
Equivalent 11 15.0

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The award for individual participants will be based on three factors: (1)
Company performance as measured by achievements of the net income goals of
CMS Energy Corporation and CMS NOMECO Oil & Gas Co.; (2) Company
performance measured by achievement of the finding costs goals; and (3)
individual performance; ie, performance must be fully effective or better to
be eligible for an award. Assuming a minimum of fully effective
performance, individual awards may be adjusted in a range from 70% to 130%
of the Company performance level in order to take into account individual
performance. Each individual's performance will be measured against
specific, quantifiable objectives for the Performance Year as established
and approved by each participant's immediate supervisor. Accordingly, each
year the levels will be as follows:

115-130% Exceptional
100-115% Exceeds
70-100% Fully Effective
0 Unacceptable

Final individual awards will be calculated as follows:

Individual Standard CMS Net NOMECO Pre-tax FindingCosts Individual
- ---------- = -------- x [.35 x ------------ / .50 x ------------------ / .15 x ------------ ] x --------------
Award Award Income Award Opr Income Award Award Performance

VII. PAYMENT OF AWARDS

CURRENT AWARDS

All awards for the Performance Year will be paid in cash no later
than March of the following year after review and approval by the
Committee. The amounts required by law to be withheld for income tax
and Social Security taxes will be deducted from the award payments.

PAYMENT IN THE EVENT OF DEATH

Participants may name the beneficiary of their choice in the event
they die prior to receipt of either a current or deferred award. In
the event a beneficiary is not named, the payment will be made to the
first surviving class as follows:

1. Widow or Widower
2. Children
3. Parents
4. Brothers and Sisters
5. Executor or Administrator

Participants may change beneficiary at any time and the change will
be effective as of the date the participants complete and sign the
beneficiary form, whether or not they are living at the time the
request is received by the Company. However, the Company will not be
liable for any payments it makes before receiving a written request.

VIII. CHANGE OF STATUS

A. SALARY GRADE CHANGE

Individual awards will be based on the salary grade level in
effect as of the beginning of the Performance Year or such later
date on which an employee becomes a participant in the Plan
except that an eligible employee promoted to a higher eligible
salary position during the award year may be recommended for an
award based upon the percentage of the Performance Year the
employee is in each participating position.

B. NEW HIRE, TRANSFER, PROMOTION

A newly hired employee or an employee promoted during the
Performance Year to a position qualifying for participation may
be recommended for a pro rata award based on the percentage of
the Performance Year the employee is in the participating
position.

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C. DEMOTION

No award will be made to an employee who has been demoted during
the Performance Year because of performance. If the demotion is
due to an organization change, a pro rata award may be made
provided the employee otherwise qualifies for an award.

D. TERMINATION

An employee whose services are terminated during the Performance
Year for reasons of misconduct, failure to perform, or other
performance-related reasons, shall not be considered for an
award. If the termination is due to other reasons such as
reorganization, transfer to a subsidiary, etc, and the
termination is not due to a fault of the employee, the employee
may be considered for a pro rata award.

E. RESIGNATION

An employee who resigns to accept employment elsewhere during or
after a performance year, (including self-employment) will not
be eligible for an award. If the resignation is due to other
reasons; eg, ill health in the immediate family, etc, the
employee may be considered for a pro rata award.

F. DEATH, DISABILITY, RETIREMENT, LEAVE OF ABSENCE

An employee whose status as an active employee is changed during
the Performance Year for any of the reasons cited, may be
considered for a pro rata award.

IX. IMPACT ON BENEFIT PLANS

Payments made under this program will be considered as earnings for the
Supplemental Executive Retirement Plan (Salary Grades E-1 and above)
and for life insurance, but not for purposes of the Employees' Savings
Plan, Pension Plan, or other employee benefit programs.

X. TERMINATION OR AMENDMENT OF THE PLAN

The Company at any time may, in writing, terminate or amend the Plan.