SUBORDINATED PROMISSORY NOTE

                                                              New York, New York
US $1,500,000.00                                              June 23, 2005

      FOR VALUE RECEIVED, Dune Energy, Inc. (the "Company") hereby promises to
pay to the order of Itera Holdings B.V. (the "Lender") at its address at 9995
Gate Parkway, Jacksonville, FL 32246 the principal amount of ONE MILLION FIVE
HUNDRED THOUSAND UNITED STATES DOLLARS ($1,500,000), in the aggregate (the
"Loan"), on June 23, 2008 or at such earlier time as may be required in
accordance with Section 2(e) hereof.

1. DEFINITIONS. As used in this Note, the following terms have the following
meanings (such meanings to be applicable to the singular and plural forms of
such terms):

      "Net Operating Profit for Voyager Interests" means gross revenues actually
received by the Company from oil and gas production, less applicable state and
local taxes (paid or accrued) and operating expenses (paid or accrued) by the
Company with respect to its Voyager Ownership Interests.

      "Prime Rate" means the rate per annum publicly announced by JP Morgan
Chase, NA (and in the absence of such a rate announced by JP Morgan Chase, that
announced by Citibank, NA) at its principal office in New York City as its
"Prime Rate" for lending to substantial commercial borrowers in the Untied
States, which rate shall change when and as such announced "prime rate" shall
change.

      "Senior Debt" has the meaning provided in Section 2(d) hereof.

      "Voyager" means Voyager Partners, Ltd.

      "Voyager Acquisition" means the acquisition by the Company of certain
rights of Voyager in certain leases owned by Voyager, as contemplated by an
Asset Purchase and Sale Agreement dated June 13, 2005 (the "Agreement").

      "Voyager Ownership Interests" means the sum of the Company's "Allocable
Acreage" resulting from the Company making "Advances" under the Agreement and
the Letter of Intent described therein.

2. INTEREST AND PAYMENT OF PRINCIPAL; SUBORDINATION.

      (a) Interest on the Loan. The unpaid principal amount of the Loan shall
bear interest prior to maturity at a rate per annum equal to Prime Rate plus 4%
per annum (the "Interest Rate"). Accrued interest on the Loan shall be payable
upon any prepayment of principal and at maturity.



      (b) Interest After Maturity. Subject to Section 2(d) hereof, the Company
shall pay to the Lender interest on any amount of principal of the Loan which is
not paid on the maturity date or upon acceleration of the Loan pursuant to
Section 6, accruing from and including the date of maturity or such
acceleration, as applicable, to (but not including) the date of payment thereof
in full at a rate per annum equal to the Interest Rate plus 2%. Interest after
maturity shall be payable on demand.

      (c) Method of Calculating Interest. Interest on the Loan shall be computed
on the basis of a year consisting of 365/366 days and paid for actual days
elapsed.

      (d) Subordination. The indebtedness evidenced hereby, including principal
and interest on the Loan, shall be subordinate and junior to the extent set
forth herein in right of payment to all principal and interest on indebtedness
of the Company for borrowed money from a traditional lending institution (except
indebtedness of the Company other than this Subordinated Promissory Note and
except indebtedness which is expressly pari passu herewith or subordinate and
junior hereto) outstanding on the date hereof. Such indebtedness to which the
indebtedness evidenced hereby is subordinate and junior is hereinafter referred
to as "Senior Debt". Notwithstanding the foregoing, prior to the occurrence of a
default in payment of principal or interest on Senior Debt, the Company may pay
principal and interest in accordance with the terms hereof. Upon the default by
the Company in making any payment of principal or interest on Senior Debt, all
payments hereunder shall be suspended until such time as any such default is
cured or waived, provided interest shall continue to accrue hereunder during any
such period at the rate set forth in 2(a) hereof. In the event of any
insolvency, bankruptcy, liquidation, reorganization or other similar
proceedings, or any receivership or proceedings in connection therewith,
relative to the Company or its property and in the event of any proceedings for
voluntary liquidation, dissolution or other winding up of the Company, whether
or not involving insolvency or bankruptcy proceedings, then all principal and
interest on all Senior Debt shall first be paid in full, or such payment shall
have been provided for, before any payment on account of principal or interest
in payable with respect to the principal and interest of the Loan evidenced
hereby.

      (e) Mandatory Prepayments of Principal.

            (i) Five (5) New York City business days following either (x) the
      consummation and financing of the Voyager Acquisition or (y) the Company
      securing a loan in excess of $10,000,000 from a financial institution, all
      outstanding principal and accrued interest evidenced hereby shall be due
      and payable without notice or demand of any kind.

            (ii) In the event the Voyager Acquisition is not consummated on or
      before July 30, 2005, then the Company hereby agrees to make mandatory
      principal prepayments no later than sixty (60) days following the last day
      of each quarter commencing July 30, 2005, in an amount equal to 70% of the
      Net Operating Profit for the Voyager Ownership Interests attributable to
      such quarter.


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      All prepayments shall be endorsed by the Lender on the reverse hereof.

3. PAYMENTS. The Company will pay all amounts payable hereunder, without
deduction, set off or counterclaim, to the Lender's account referred to above
and otherwise according to the instructions provided by the Lender to the
Company, prior to 3:00 p.m. in New York time on the day due. Any payment
received after such time shall be deemed received on the next banking day.

4. REPRESENTATIONS. The Company represents and warrants to the Lender that:

      (a) It is a corporation duly organized and in good standing under the laws
of the State of Delaware and duly qualified to do business in each jurisdiction
where such qualification is necessary.

      (b) The execution and delivery of this Note and the performance by the
Company of its obligations hereunder are within the Company's powers and have
been duly authorized by all necessary action on the Company's part, and do not
and will not contravene or conflict with the Company's organizational documents
or violate or constitute a default under any law, any presently existing
requirement or restriction imposed by judicial, arbitral or other governmental
instrumentality or any agreement, instrument or indenture by which the Company
is bound.

      (c) This Note is the Company's legal, valid and binding obligation,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles.

5. COVENANTS.

      (a) The Company will:

            (i) maintain its corporate existence;

            (ii) maintain insurance at least at levels currently in effect;

            (iii) duly pay and discharge all taxes and other claims which might
      become a lien upon its property except to the extent such items are being
      contested in good faith;

            (iv) maintain and preserve its properties in good repair, working
      order and condition, make all reasonable repairs, replacements, additions,
      betterments and improvements thereto;

            (v) conduct its business in substantially the same manner as such
      business is now carried on and conducted; and


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            (vi) permit the Lender to make or cause to be made, at the Lender's
      expense, inspections and audits of any books, records, and papers of the
      Company and to make extracts therefrom at all such reasonable times and as
      often as the Lender may reasonably request.

      (b) The Company will use the proceeds hereof (i) to purchase the Voyager
Ownership Interests as described in the Agreement; (ii) to complete and frac the
Vaquero #1 Well; (iii) to complete the Vaquero #2 Well; and (iv) for general
operating expenses.

6. EVENTS OF DEFAULT. Each of the following events shall constitute an "Event of
Default" hereunder:

      (a) The Company fails to pay when due any principal of the Loan or fails
to pay within two (2) banking days of being due any interest on the Loan; or

      (b) Any representation or warranty of the Company made hereunder, or in
any other writing or certificate furnished by or on behalf of the Company to the
Bank for the purposes of or in connection with this Note, is determined to be
incorrect in any material respect as of the date such representation or warranty
is made; or

      (c) The Company or any Subsidiary shall default in the payment when due
(subject to any applicable grace period) in an amount in excess of $200,000,
whether by acceleration or otherwise, of any indebtedness of the Company or any
Subsidiary, or a default shall occur in the performance or observance of any
obligation or condition with respect to such indebtedness if the effect of such
default is to accelerate the maturity of any such indebtedness in an amount in
excess of $200,000 or to permit the holder or holders of such indebtedness, or
any trustee or agent for such holders, to cause such indebtedness to become due
and payable prior to its expressed maturity; or

      (d) Any judgment or order for the payment in an amount in excess of
$200,000 shall be rendered against the Company or any Subsidiary and such
judgment or order shall not have been vacated, discharged, stayed or bonded
pending appeal within 60 days from the entry thereof; or

      (e) The Company shall

            (i) become insolvent or generally fail to pay, or admit in writing
      its inability or unwillingness to pay, debts as they become due;

            (ii) apply for, consent to or acquiesce in the appointment of a
      trustee, receiver, sequestrator or other custodian for the Company or any
      property thereof, or make a general assignment for the benefit of
      creditors;

            (iii) in the absence of such application, consent or acquiescence,
      permit or suffer to exist the appointment of a trustee, receiver,
      sequestrator or other custodian for the Company or for a substantial part
      of the property thereof, and such trustee, receiver, sequestrator or other
      custodian shall not be discharged within 60 days;


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            (iv) permit or suffer to exist the commencement of any bankruptcy,
      reorganization, debt arrangement or other case or proceeding under any
      bankruptcy or insolvency law or similar law of any jurisdiction, or any
      dissolution, winding up or liquidation proceeding, in respect of the
      Company and, if any such case or proceeding is not commenced by the
      Company, such case or proceeding shall be consented to or acquiesced in by
      the Company or shall result in the entry of an order for relief or shall
      remain for 60 days undismissed; or

            (v) take any action authorizing, or in furtherance of, any of the
      foregoing; or

      Upon the occurrence of an Event of Default, the Lender may declare this
      Note and the principal of and accrued interest on each Loan, and all other
      amounts payable hereunder, to be forthwith due and payable in full,
      subject to the prior payment in full of all Senior Debt then outstanding;
      provided, that upon the occurrence of an event described in clause (e)
      above, this Note and the principal of and accrued interest on the Loan,
      and all other amounts payable hereunder, shall immediately become due and
      payable in full, subject to the prior payment in full of all Senior Debt
      then outstanding.

7. GENERAL.

      (a) Payments of principal and interest on the Loan shall be made in
immediately available funds in United States Dollars.

      (b) The Company hereby waives presentment, demand, notice of dishonor,
protest and all other demands and notices in connection with this Note. No act
of omission or commission of the Lender, including specifically any failure to
exercise any right or remedy, shall be deemed to be a waiver or release of the
same. Such waiver or release shall be made only in writing.

      (c) The Company shall pay all reasonable and documented costs of the
Lender of enforcement or collection of every kind, including but not limited to
all reasonable attorneys' fees, court costs and expenses incurred by the Lender
in connection with collection, protection or enforcement of any rights hereunder
whether or not any lawsuit is ever filed.

      (d) ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER OR THE COMPANY
MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF TEXAS OR IN THE
UNITED STATES DISTRICT COURT FOR THE CITY OF HOUSTON. THE COMPANY HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF HOUSTON AND OF THE UNITED STATES DISTRICT COURT FOR THE CITY OF HOUSTON FOR
THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY CONSENTS


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TO PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF HOUSTON. THE COMPANY AND THE
LENDER HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH EITHER MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

      (e) THE COMPANY WAIVES AND, BY ACCEPTING THIS NOTE, THE LENDER SHALL BE
DEEMED TO WAIVE, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS NOTE, AND THE COMPANY AGREES, AND, BY
ACCEPTING THIS NOTE, THE LENDER SHALL BE DEEMED TO AGREE THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.

      (f) This Note shall be governed by the laws of the State of Texas
applicable to contracts made and to be performed entirely within such State.

                                              DUNE ENERGY, INC.


                                              By: /s/ Amiel David
                                                  ------------------------------
                                                  Name:  Amiel David
                                                  Title: Chief Operating Officer


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