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                                                                    EXHIBIT 99.1

                          MEMORANDUM OF UNDERSTANDING



         THIS Memorandum of Understanding is entered into this 29th day of
November, 1994 by and between Texaco Exploration and Production Inc. ("Seller")
and Apache Corporation ("Buyer").  Seller and Buyer are sometimes collectively
referred to as the "Parties."  This Memorandum of Understanding sets forth the
understandings and agreements of the Parties with respect to the purchase of
certain assets of Texaco:

         1.      THE PROPOSED TERMS OF SALE.  The Parties agree that it is
their mutual intent to complete negotiations on and to enter into a definitive
Purchase and Sale Agreement (the "Agreement"), substantially in the form
attached hereto as Exhibit "A" and to negotiate and agree upon all Schedules
and Exhibits to the Agreement.  For purpose of the Memorandum of Understanding,
except as otherwise expressly provided herein, the capitalized terms in the
Memorandum of Understanding shall have the same meaning assigned to them in the
Agreement.

         2.      DEFINITIVE AGREEMENT.  The Parties agree to use their best
efforts to negotiate diligently and in good faith to reach a final, definitive
agreement to be signed on or before December 22, 1994, if all corporate
approvals as counsel may deem reasonably necessary to enter into the Agreement
and if approval by executive management of each Party shall have been received.

         3.      NON-BINDING OBLIGATION.  Except for Paragraphs 4, 5, 6, 7, 8,
and 9 hereof, neither this Memorandum of Understanding nor any oral or written
communication between the Parties pertaining to the subject matter hereof shall
constitute a legally binding obligation.  The Parties shall not be bound until
the execution and delivery by the Parties of a final and definitive Agreement
pursuant to Paragraph 2 hereof.

         4.      TERM.  This Memorandum of Understanding shall expire without
further action of the Parties at 5:00 p.m. Houston time December 22, 1994
unless earlier terminated upon the occurrence of any of the following:  (a)
execution of the Agreement as contemplated by Paragraph 3 hereof; or (b) by
mutual written agreement of the Parties.  In the event that this Memorandum of
Understanding expires or terminates, all agreements between the Parties shall
terminate (except for the Confidentially Agreement) and Buyer shall take no
action that would indicate that Buyer has any right to claim any interest in
the Assets.

         5.      GOVERNING LAW.  This Memorandum of Understanding shall be
governed by and construed in accordance with the laws of the State of New York,
without reference to the conflicts of law principles thereof.  Any disputes
shall be resolved by binding arbitration in accordance with the rules of
commercial arbitration of the American Arbitration Association.
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         6.      EXCLUSIVE DEALING.  Until the execution of the Agreement,
except (i) as otherwise consented to by Buyer in writing, (ii) in connection
with the communications required to comply with preferential purchase rights,
or (iii) the termination of dealings with other parties with whom Seller has
previously communicated regarding the purchase of the Assets; Seller shall not
either directly or indirectly through a representative (a) provide information
to any Person or representative of such Person, which would assist such Person
in evaluating the prospects of purchasing the Assets, (b) initiate, encourage,
solicit, analyze or respond to any inquiries, offers, proposals, bids or other
investigations by any Person to acquire all or any of the Assets (other than to
indicate that the Assets are not for sale), (c) enter into or agree to enter
into any transactions, the result of which would interfere, hinder, delay or
materially change the effect of the transaction contemplated by the Agreement,
or (d) negotiate with any Person with respect to any such transaction.

         7.      CONFIDENTIALITY.  This Memorandum of Understanding shall be
subject to and governed by that certain confidentiality agreement between
Seller and Buyer dated September 2, 1994, as amended ("Confidentiality
Agreement").

         8.      PRESS RELEASE.  No Party will make any press release or public
announcement respecting the Memorandum of Understanding without the consent of
the other Party, unless the Party refuses to consent and the Parity desiring to
make the release or other announcement is required to comply with any statute,
law or regulation.

         9.      COSTS AND EXPENSES.  The Parties shall each pay their
respective expenses in connection with the transactions contemplated by this
Memorandum of Understanding.


         IN WITNESS WHEREOF, the Parties hereto have executed this Memorandum
of Understanding the day and date first above written.

                                           TEXACO EXPLORATION AND
                                           PRODUCTION, INC.


                                           /s/ Clarence P. Cazalot
                                           Clarence P. Cazalot
                                           President


                                           APACHE CORPORATION


                                           /s/ G. Steven Farris
                                           G. Steven Farris
                                           President and Chief Operating Officer