Form Of Escrow Agreement

SOUTHERN
CALIFORNIA
BANK
ESCROW DIVISION
4100 Newport Place, Suite 130, Newport Beach, CA 92660
FAX: (949) 863-2489


HOLDING ESCROW INSTRUCTIONS ESCROW NO: 12794-GG


Gloria Garriott, CSEO,
ESCROW OFFICER DATE: May 17, 1999 Phone: (949) 863-2485


The undersigned delivers herewith, or will cause to be delivered to SOUTHERN
CALIFORNIA BANK, hereinafter called Escrow Holder, the papers, money or
property hereinafter described to be held and disposed of by Escrow Holder in
accordance with the following instructions and upon the terms and conditions
hereinafter set forth.


A.This escrow is established by BETA OIL & GAS, INC., a Nevada corporation (the "Company").


B.This escrow is established for the purpose of receiving and holding the
funds in escrow from the Offering of a minimum of $4,800,000.00 (800,000
Shares) and a maximum of $9,000,000.00 (1,500,000 Shares) to the terms and
conditions of the Prospectus dated ________________________ (the
"Effective Date") as such prospectus may be amended from time to time
(together with all supplements, the "Prospectus"). The Underwriter has an
option, exercisable within 45 days of the effective date of the
Prospectus, to sell an additional 150,000 shares of the Common Stock at
the public offering price solely for the purpose of covering
overallotments, if any. The Company is offering said shares through its
officers, directors, and selected broker/dealers. An Investor whose funds
are to be deposited in escrow, must send a check or wire funds for the
full amount of the purchase price for the subscribed Shares, with checks
payable to BETA OIL & GAS, INC. ESCROW ACCOUNT #12794-GG.


C. The undersigned hands you herewith or will cause to be handed to you the following:


a) Copy of the Prospectus;

b) A copy of delivery instructions from participating Broker /
Dealers or other evidence of an authorized purchase;

c) W-9 completed by the Company;
d) Subscription purchase funds pursuant to the Prospectus; and e)
Funds to cover transaction costs set forth in Item "F" below.


D.You are instructed to hold all purchase funds received in trust for the
benefit of the respective investors, in an interest bearing money market
account until you have received evidence that the minimum of 800,000
Shares ($4,800,000/the "Minimum") have been accepted, at which time you
are to release funds, along with interest earned on such funds in the
Escrow Account, to the order of Beta Oil & Gas, Inc., net of commissions
and expenses due the selected broker/dealers and "Blue Sky" fees and
expenses due the Company's counsel, if any. Disbursement shall be made
SUBJECT TO ESCROW'S RECEIPT OF COLLECTED FUNDS AND DISBURSEMENT
INSTRUCTIONS FROM THE COMPANY.


(CONTINUED)
Initials ________________ Initials ______________


Date: May 17, 1999 Escrow No. 12794-GG


PAGE 2: Additional Instructions made a part of previous page as if fully incorporated therein.


E.The "Initial Closing Date" shall occur following the acceptance by the
Company of subscriptions for the minimum offered hereby or as soon
thereafter as funds have cleared the banking system in the normal course
of business. The minimum will be offered by the Company on a "best
efforts, minimum / maximum" basis. If the minimum has been subscribed for
by the expiration of 10 business days from the effective date, remaining
shares will be offered and will be issued on one or more closing dates as
you receive evidence that additional subscriptions have been accepted,
until the earlier of the date by which all such shares have been sold or
the expiration of the Offering Period designated to be on or before 90
days from the effective date. The Company may extend this Offering Period
to one hundred and twenty days at its option. If subscription for the
minimum have not been accepted by 10 days from the effective date, none of
the shares will be sold and the Offering shall be terminated and the
Investors shall be fully refunded along with a prorata share of any
interest earned in the Escrow Account.


F.For its ordinary services hereunder, the Escrow Holder shall be entitled
to a NON-REFUNDABLE fee of $1,500.00 plus an additional $1.00 per
$1,000.00 of subscription funds deposited herein in excess of $1,500,000.
The $1,500.00, less the $250.00 prepaid review fee, which is to be deemed
a part of the $1,500.00 initial escrow shall be deposited with the
execution of this instruction. The additional $1.00 per $1,000.00
deposited herein in excess of $1,500,000.00, together with additional
compensation for extra services as set forth under the General Provisions
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