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                                EXHIBIT 10.4

                              SEVENTH AMENDMENT TO
                     SEAGULL EMPLOYEE STOCK OWNERSHIP PLAN



         WHEREAS, SEAGULL ENERGY CORPORATION (the "Company") has heretofore
adopted and maintains the SEAGULL EMPLOYEE STOCK OWNERSHIP PLAN (the "Plan")
for the benefit of its eligible employees; and

         WHEREAS, the Company desires to amend the Plan;

         NOW, THEREFORE, the Plan is hereby amended as follows, effective as of
January 1, 1989:

         1.  The following shall be added at the beginning of Section 10.04(e)
             of the Plan:

         "Financed Stock allocated to a Member's Stock Account may be forfeited
         pursuant to Paragraphs (a), (c) or (d) above only after assets other
         than Financed Stock allocated to the Member's Account have been
         forfeited.  Further, if Financed Stock allocated to a Member's Stock
         Account is forfeited pursuant to Paragraphs (a), (c) or (d) above and
         if such Financed Stock includes more than one class of Company Stock,
         such Member must be treated as forfeiting the same proportion of each
         such class of Company Stock."

         2.  As amended hereby, the Plan is specifically ratified and
             reaffirmed.

         EXECUTED this 28th day of September, 1995.

                                 SEAGULL ENERGY CORPORATION


                                          /s/  ROBERT W. SHOWER
                                 By ______________________________________
                                               Robert W. Shower