Warrant

Neither This Warrant Nor the Securities Received Upon Exercise of This

by National Energy Group
September 12th, 1996

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                                                                   EXHIBIT 10.29



     NEITHER THIS WARRANT NOR THE SECURITIES RECEIVED UPON EXERCISE OF THIS
WARRANT HAS BEEN REGISTERED OR QUALIFIED UNDER THE UNITED STATES SECURITIES ACT
OF 1933 OR ANY APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, THIS WARRANT
AND THE SECURITIES RECEIVED UPON EXERCISE OF THIS WARRANT MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED OR QUALIFIED UNDER SAID ACT AND ALL APPLICABLE STATE SECURITIES LAWS
OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
OF THESE WARRANTS AND THE SECURITIES RECEIVED UPON EXERCISE OF THIS WARRANT, AN
EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE AND SUCH OFFER,
SALE, TRANSFER, PLEDGE OR HYPOTHECATION DOES NOT VIOLATE THE PROVISIONS OF THE
ACT OR APPLICABLE LAWS.

                          NATIONAL ENERGY GROUP, INC.

                              Warrant to Purchase
                               100,000 Shares of
                          National Energy Group, Inc.
                                  Common Stock

         This Warrant (the "Warrant") is issued to Prudential Securities
Incorporated ("Holder") and Holder agrees by acceptance of this Warrant that
this Warrant is subject to the terms and conditions of this Warrant.

         This Warrant is a warrant to purchase 100,000 shares of Common Stock,
$0.01 par value (the "Common Stock") of National Energy Group, Inc. (the
"Company") at a price of $4.09 per share (the "Exercise Price").

         This Warrant shall expire on August 29, 2001 ("Expiration Date").
This Warrant shall be void and all rights of Holder under this Warrant shall
cease if this Warrant shall not have been duly exercised on or prior to the
Expiration Date.

         This Warrant shall not entitle Holder to any rights other than as set
forth herein, and Holder will not have any of the rights, privileges or
liabilities of a stockholder of the Company prior to the exercise of this
Warrant.

         The number of shares of Common Stock as to which this Warrant may be
exercised and the Exercise Price from time to time in effect shall be adjusted
from time to time as follows:

         (A)     In case the Company shall (i) subdivide its shares of
outstanding Common Stock into a larger number of shares of Common Stock, (ii)
combine shares of its outstanding Common Stock into a smaller number of shares
of Common Stock or (iii) issue stock as a dividend on its
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Common Stock; then Holder, after the close of business on the effective date of
such subdivision, combination or stock dividend, as the case may be (the close
of business times being hereinafter in this subparagraph (A) referred to as
"such record date"), shall be entitled to receive, upon actual exercise of this
Warrant, the aggregate number and kind of shares of capital stock of the
Company which, if this Warrant had been exercised immediately prior to such
record date at the Exercise Price then in effect, it would have been entitled
to receive by virtue of such subdivision, combination or stock dividend; and
the Exercise Price shall be deemed to have been adjusted after such record date
to apply to such aggregate number and kind of shares.  Such adjustment shall be
made whenever any of the events listed above shall occur.

         (B)     No notification to Holder of any adjustment in the exercise
price otherwise required by this subparagraph (B) to be made must be made, if
such adjustment (plus any other adjustments not heretofore made) would not
require any increase or decrease of 5% or more in the Exercise Price; provided,
however, that upon exercise of this Warrant, all adjustments shall be made in
calculating the exercise rights of Holder.  Whenever the Exercise Price is
adjusted by 5% or more, as herein provided, the Company shall promptly mail to
Holder a notice setting forth the Exercise Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment.  Such
notice prepared in good faith shall be conclusive evidence of the correctness
of such adjustment absent manifest error.

         (C)     In the event that at any time, as a result of an adjustment,
Holder shall become entitled to receive any shares of capital stock of the
Company other than shares of Common Stock, the number of such other shares so
receivable upon exercise of this Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the shares of Common Stock contained in
subparagraphs (A) and (B), above, and the other provisions of this subparagraph
(C) with respect to the shares of Common Stock shall apply on like terms to any
such other shares.

         (D)     In case of any reclassification of the Common Stock (other
than a change in par value, or from par value to no par value, or from no par
value to par value), any consolidation of the Company with, or merger of the
Company into, any other person, any merger of any person into the Company
(other than a merger that does not result in any reclassification of, or change
in the outstanding shares of Common Stock), any sale or transfer of all or
substantially all of the assets of the Company (other than a sale-lease back,
collateral assignment, mortgage or other similar financing transaction), or any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or other properties, then Holder shall have the right
thereafter, during the period this Warrant shall be exercisable, to exercise
this Warrant for the kind and amount of securities, cash or other property
receivable upon such reclassification, consolidation, merger, sale, transfer or
share exchange by a holder of the number of shares of Common Stock into which
this Warrant might have been exercised immediately prior to such
reclassification, consolidation, merger, sale, transfer or share exchange.




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         (E)     In case the Company at any time while this Warrant is
outstanding shall issue shares of Common Stock, warrants or rights to acquire
Common Stock or securities convertible into Common Stock (excluding options or
shares of Common Stock or other common stock issued to officers, employees or
directors) (i) at a price per Common Stock share purchased, purchasable, or
issuable upon conversion that is less than the Exercise Price, if such Common
Stock shares are the subject of a registered public offering or are subject to
registration rights exercisable within one year, or (ii) at a price per share
that is 10% lower than the Exercise Price, if such shares of Common Stock are
the subject of a private offering and are restricted and are not entitled to
registration rights until after the expiration of one year, or (iii) at a price
per share that is 20% lower than the Exercise Price, if such shares of Common
Stock are the subject of a private offering and are restricted and are not
entitled to registration rights until after the expiration of two years, then
the Exercise Price at which each share of Common Stock at which this Warrant
shall thereafter be exercisable shall be reduced by multiplying the Exercise
Price in effect on the date of issuance of such shares, warrants, rights or
convertible securities by a fraction, of which the denominator shall be the
number of shares of Common Stock (excluding treasury shares, if any)
outstanding on the date of issuance of such shares, warrants, rights or
convertible securities plus the number of additional shares of Common Stock
issued, offered for subscription or purchase or issuable upon conversion, and
of which the numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding on the date of issuance of such shares,
warrants, rights or convertible securities plus the number of shares of Common
Stock that the aggregate offering price of the total number of shares so
offered, issued, or issuable, or, with respect to convertible securities, the
aggregate consideration received by the Company for the convertible securities,
would purchase at the prior Exercise Price.  Such adjustment shall be made
whenever shares, warrants, rights or convertible securities are issued, and
shall become effective immediately after such issuance date.  However, upon the
expiration of any warrant, right or conversion right to purchase Common Stock,
the issuance of which resulted in an adjustment in the Exercise Price of this
Warrant pursuant to this subparagraph (E), if any such warrant, right or
convertible rights shall expire and shall not have been exercised, the Exercise
Price per share of Common Stock at which this Warrant shall thereafter be
exercisable shall immediately upon such expiration be recomputed and effective
immediately upon such expiration be increased to the price which it would have
been (but reflecting any other adjustments in the Exercise Price made pursuant
to the provisions of this subparagraph (E) after the issuance of such warrants,
rights or convertible securities) had the adjustment of the Exercise Price made
upon the issuance of such warrants, rights or convertible securities been made
on the basis of offering for subscription or purchase only that number of
shares of Common Stock actually purchased upon the exercise of the warrants or
rights actually exercised or the conversion of the convertible securities
actually converted.  For purposes of this subparagraph (E), the term Common
Stock shall include (i) any common equity security into which the Common Stock
is reclassified or for which it is exchanged, or (ii) any common equity
security of the Company that has equal or superior voting rights with the
Common Stock.

         (F)     In case the Company, at any time while this Warrant is
outstanding, shall distribute to all holders of Common Stock evidences of its
indebtedness or assets (excluding cash dividends or cash distributions paid out
of earned surplus) or rights to subscribe (excluding those referred to in
subparagraph (E) above) then in each such case the Exercise Price per share of





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Common Stock at which this Warrant shall thereafter be exercisable shall be
determined by multiplying the Exercise Price in effect prior to the record date
fixed for determination for stockholders entitled to receive such distribution
by a fraction, of which the denominator shall be the Closing Price of a share
of Common Stock determined as of the record date mentioned above, and of which
the numerator shall be such Closing Price of a share of Common Stock, less the
then fair market value per share (as determined by the Board of Directors of
the Company in good faith, whose determination shall be conclusive if made in
good faith and shall be described in a statement provided to Holder) of the
portion of assets or evidences of indebtedness so distributed or of such
subscription rights.  Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the record
date mentioned above.

         (G)     In case:

                 1.       the Company shall declare a dividend (or any other
                          distribution) on the Common Stock payable otherwise
                          than in cash out of its earned surplus; or

                 2.       the Company shall declare a special nonrecurring cash
                          dividend on or a redemption of its Common Stock; or

                 3.       the Company shall authorize the granting to the
                          holders of the Common Stock of rights or warrants to
                          subscribe for or purchase any shares of capital stock
                          of any class or of any other rights; or

                 4.       the approval of any stockholders of the Company shall
                          be required in connection with any reclassification
                          of the Common Stock of the Company (other than a
                          subdivision or combination of the outstanding shares
                          of Common Stock), any consolidation or merger to
                          which the Company is party or any sale or transfer of
                          all or substantially all of the assets of the
                          Company; or

                 5.       of the voluntary or involuntary dissolution,
                          liquidation or winding up of the affairs of the
                          Company;

then the Company shall, at least 10 days prior to the applicable record date
hereinafter specified, contact by telephone and cause to be mailed to Holder at
its last address as it shall appear upon the stock books of the Company, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution, redemption, rights or warrants, or, if a record is
not to be taken, the date as of which the holders of Common Stock of record to
be entitled to such dividend, distribution, redemption, rights or warrants are
to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock





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for securities or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.

         (H)     In case at any time conditions shall arise by reason of action
taken by the Company, which, in the opinion of the holder or Board of Directors
of the Company, are not adequately covered by the other provisions hereof and
which might materially and adversely affect the rights of Holder, or in case at
any time any such conditions are expected to arise by reason of any action
contemplated by the Company, the holder and the Board of Directors of the
Company shall appoint a mutually acceptable firm of independent certified
public accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Company), who shall give their opinion
as to the adjustment, if any (not inconsistent with the standards herein), of
the Exercise Price (including, if necessary, any adjustment as to the
securities to be received thereafter upon exercise of this Warrant) which is or
would be required to preserve without dilution the rights of Holder.  The Board
of Directors of the Company will make the adjustment recommended upon the
receipt of such opinion; provided, however, that no adjustment pursuant to this
subparagraph (H) of the Exercise Price shall be made which in the opinion of
the accountant or firm of accountants giving the aforesaid opinion would result
in an increase of the Exercise Price to more than the Exercise Price then in
effect.

         As used above, the term "Closing Price" on any day shall mean the
higher of (i) the reported closing sales price per share of Common Stock on the
principal national securities exchange or the Nasdaq National Market on which
the shares of Common Stock are at the time listed or traded on such day or (ii)
the average of the closing sales prices for the twenty Trading Days prior to
such day.  In case no such sale takes place on a day, the Closing Price shall
be the average of the reported closing bid and asked prices, or, if the shares
of Common Stock shall not be so listed, the average of the high bid and low ask
prices in the over-the-counter market as reported by the National Association
of Securities Dealers' Automated Quotation System, or, if not so reported, as
reported by the National Quotation Bureau, Incorporated, or any successor
thereof, or, if not so reported, the average of the closing bid and asked
prices as furnished by any member of the National Association of Securities
Dealers, Inc. selected from time to time by the Company for that purpose.  The
term "Trading Day" shall mean a day on which the principal national securities
exchange or the Nasdaq National Market on which the shares of Common Stock are
listed or admitted to trading is open for the transaction of business or, if
the shares of Common Stock are not listed or admitted to, trading on any
national securities exchange or the Nasdaq National Market, a Monday, Tuesday,
Wednesday, Thursday, or Friday on which banking institutions in the City of
Dallas, State of Texas, are not authorized or obligated by law or executive
order to close.

         The Company shall at all times after August 29, 1996, reserve and keep
available, free from preemptive rights, out of its authorized but unissued
shares of Common Stock solely for the purpose of issuance upon the exercise of
this Warrant the full number of shares of Common Stock then deliverable upon
the exercise of this Warrant.  The Company covenants and agrees that all shares
which may be issued upon the exercise of this Warrant will, upon issuance, be
legally and validly issued, fully paid and nonassessable and free from all
taxes, liens and charges of any nature whatsoever.





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         This Warrant may be exercised by filling out and signing the Warrant
Exercise Notice and mailing or delivering the Warrant Exercise Notice to the
Company in time to reach the Company by the Expiration Date, accompanied by
payment of the full applicable Exercise Price.  Payment of the Exercise Price
must be made in United States funds (by certified check) payable to the order
of the Company.  Common Stock certificates will be issued as soon as
practicable after exercise and payment of the Exercise Price for the shares of
Common Stock so purchased.  If the Warrant Exercise Notice is mailed by first
class mail, registered or certified, postage prepaid, and properly addressed to
National Energy Group, Inc., 4925 Greenville Ave., Ste. 1400, Dallas, TX 75206,
or, to such other address as the Company may have specified in a notice duly
given to Holder, then the Warrant Exercise Notice will be presumed to be
received by the Company three business days after the date so mailed.

         Subject to the provisions of the legend on the first page of this
Warrant, this Warrant is transferable by Holder, in whole or in part (provided
that any partial transfer shall be for a whole number of shares of Common
Stock), and upon delivery of this Warrant to the Company with evidence of such
transfer by Holder reasonably satisfactory to the Company, the Company shall
issue a replacement Warrant in a form similar to this Warrant, in the name of
such transferee (and in the case of such partial transfer, the Company shall
issue a new Warrant to Holder to purchase the balance of the shares of Common
Stock that is not the subject of transfer).  Holder shall indemnify the Company
against any loss, claim or damages arising from or related to such transfer and
shall sign a written instrument of indemnity in a form acceptable to the
Company.

         This Warrant shall be deemed to be a contract made under the laws of
the State of Texas and shall for all purposes be governed by and construed in
accordance with the laws of such State.

Dated:  August 29, 1996

                                        NATIONAL ENERGY GROUP, INC.


                                        By:  /s/ Miles D. Bender 
                                            ------------------------------------
                                                Miles D. Bender, President and
                                                Chief Executive Officer





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                                   EXHIBIT 1

                            WARRANT EXERCISE NOTICE

                                  INSTRUCTIONS

           IN ORDER FOR WARRANTS TO BE EXERCISED THIS NOTICE MUST BE
                   RECEIVED BY THE COMPANY ON OR PRIOR TO THE
                   EXPIRATION DATE SPECIFIED IN THE WARRANT.


         This Warrant Exercise Notice, dated ____________________________ (the
"Notice"), relates to this Warrant, dated August 29, 1996 (the "Warrant"),
issued by National Energy Group, Inc., a Delaware corporation whose address is
4925 Greenville Ave., Ste. 1400, Dallas, TX 75206 (the "Company"), to the
undersigned.  This Warrant initially represented the right to purchase the
aggregate number of shares as indicated in this Warrant, which number will be
reduced by this Warrant Exercise Notice and by any prior or future Warrant
Exercise Notices.

         The undersigned hereby exercises the portion of this Warrant to
purchase, and hereby purchases, ________ shares of the Company's Common Stock,
at a price of $_______ per share, which is the price indicated in this Warrant.
The undersigned acknowledges that the number of shares of Common Stock must be
divisible by 100 for an effective exercise of any portion which is less than
all of this Warrant.  The full amount of $__________ in United States funds, by
certified check payable to the order of the Company is attached hereto.





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         The undersigned acknowledges that a certificate for the shares of
Common Stock purchased by the undersigned through the exercise of this Warrant
pursuant to this Notice will be delivered to the undersigned, at the address
indicated below (unless the Company has received written notice of a different
address) as soon as practicable after receipt of this notice and the full
payment of the applicable purchase price.

Dated:
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                                        Holder:
                                               ---------------------------------

                                        By:
                                           -------------------------------------

                                        Title:
                                              ----------------------------------

                                        Address:
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Social Security or
Taxpayer Identification Number:         ----------------------------------------


Business Phone Number:
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Home Phone Number:
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