<PAGE>   1
                                                                   EXHIBIT 10.10


                         AGREEMENT OF PURCHASE AND SALE

                             (Carrot Creek/Tomahawk/
                          Manyberries/Elmsworth Areas)





                                     BETWEEN



                             EQUATORIAL ENERGY INC.
                                   ("Vendor")

                                     - AND -


                               GEOCAN ENERGY INC.
                                  ("Purchaser")














--------------------------------------------------------------------------------
                     DATED AS OF THE 1ST DAY OF MARCH, 2001


<PAGE>   2




                         AGREEMENT OF PURCHASE AND SALE

                             (CARROT CREEK/TOMAHAWK/
                          MANYBERRIES/ELMSWORTH AREAS)

THIS AGREEMENT made as of the 1st day of March, 2001.

BETWEEN:

                  EQUATORIAL ENERGY INC., a body corporate, having an office and
                  carrying on business in the City of Calgary, in the Province
                  of Alberta, ("VENDOR")

                                     - and -

                  GEOCAN ENERGY INC., a body corporate, having an office and
                  carrying on business in the City of Calgary, in the Province
                  of Alberta, ("PURCHASER")


         WHEREAS Vendor has agreed to sell and Purchaser has agreed to purchase
the Assets subject to and in accordance with the terms and conditions hereof;


         NOW THEREFORE in consideration of the premises and mutual covenants and
warranties in this Agreement, the Parties covenant and agree as follows:

                                    ARTICLE 1
                                 INTERPRETATION

1.1 DEFINITIONS

       In this Agreement, including the recitals and schedules to this
Agreement:

         "ASSETS" means the Petroleum and Natural Gas Rights, the Tangibles and
         the Miscellaneous Interests;

         "BUSINESS DAY" means any day of the week except Saturday, Sunday or any
         statutory holiday in Alberta;

         "CERTIFICATE" means a written certification of a matter or matters of
         fact which:



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<PAGE>   3

         (a)      if required from a corporation, shall be made by an officer of
                  the corporation, on behalf of the corporation and not in any
                  personal capacity; and

         (b)      if required from a partnership, shall be made by the general
                  partner or, in the case of a corporate general partner, by an
                  officer of the corporation, on behalf of the corporation and
                  not in any personal capacity;

         "CLOSING" means the closing of the purchase and sale herein provided
         for;

         "CLOSING DATE" means 10:00 a.m. on April 30th, 2001, or such other time
         and date as may be agreed to in writing by the Parties, provided that
         Vendor and Purchaser shall be deemed to have agreed in writing to
         extend the Closing Date, as required, in order to comply with
         Preferential Rights;

         "DOLLAR" or "$" means a Canadian dollar;

         "EFFECTIVE DATE" means 8:00 a.m. on March 1, 2001;

         "PRODUCTION PURCHASE CONTRACTS" means the agreements set out in
         Schedule "C";

         "GST" means the goods and services tax as provided for in the Excise
         Tax Act, R.S.C. 1985, c. E-15, as amended, or any successor or parallel
         provincial or federal legislation that imposes a tax on the recipient
         of goods or services supplied under this Agreement;

         "INTERIM PERIOD" means that period from and including the Effective
         Date, to and excluding the Closing Date; "LANDS" means the lands set
         out in Schedule "A";

         "LEASED SUBSTANCES" means all Petroleum Substances or rights to
         Petroleum Substances which are granted, reserved or otherwise conferred
         by or under the Title Documents;

         "LOSSES" means, in respect of any matter, all claims, actions, demands,
         proceedings, losses, damages, liabilities, deficiencies, costs,
         penalties, fines and expenses (including, without limitation, all legal
         and other professional fees and disbursements, interest, penalties and
         amounts paid in settlement) arising directly or indirectly as a
         consequence of such matter.

         "MATERIAL TITLE DEFECT" means an actual or potential defect,
         deficiency, discrepancy or adverse claim in or affecting the title of
         the Vendor or its interests in and to any of the Assets which:

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<PAGE>   4

         (a)      is made apparent from the inability of the Purchaser,
                  following a reasonable title review process, to confirm the
                  title of the Vendor or the extent to which interests of the
                  Vendor may be subject to encumbrances, with respect to any of
                  the Assets, as the title and interests are disclosed herein or
                  in Schedule "A"; and

         (b)      is or would be sufficiently material and adverse to the
                  enforcement or defence of title and interests or confirmation
                  of encumbrances that it would not be acceptable to a
                  knowledgeable, prudent purchaser buying similar oil and gas
                  properties, acting reasonably, and

         (c)      with respect to Rights of First Refusal, any Rights of First
                  Refusal that are not disclosed in Schedule "A" to the
                  Purchaser with respect to any of the Assets.

         For the purposes of this definition, lack of evidence held by Vendor of
         payment of delay rentals or royalties under leases shall not be deemed
         to be a "Material Title Defect".

         "MISCELLANEOUS INTERESTS" means, subject to the exclusions and
         limitations provided in this definition, the interest of Vendor in all
         property, assets and rights (other than the Petroleum and Natural Gas
         Rights and Tangibles) pertaining or ancillary to either the Petroleum
         and Natural Gas Rights or Tangibles to which Vendor is entitled
         including, but not limited to, the following:

         (a)      contracts and agreements relating to the Petroleum and Natural
                  Gas Rights, or Tangibles including, without limitation,
                  Production Purchase Contracts, operating agreements,
                  processing agreements, transportation agreements;

         (b)      Surface Rights;

         (c)      Leased Substances produced from the Lands except those that
                  are beyond the wellhead at the Effective Date or sales
                  proceeds in respect of such Leased Substances if title has
                  passed to the purchaser thereof;

         (d)      the Wells, including the wellbores and casing; and

         (e)      all records, books, files, data, documents, licenses, permits
                  or authorizations relating directly to the Petroleum and
                  Natural Gas Rights or Tangibles.

      Notwithstanding the foregoing, unless otherwise agreed in writing by the
      Parties, the Miscellaneous Interests shall not include agreements,
      documents or data to the extent that: (i) they comprise the Vendor's tax
      or financial records; (ii) they comprise the Vendor's economic
      evaluations; (iii) they comprise the Vendor's geophysical data or
      geological data; (iv) they pertain to the Vendor's proprietary technology
      or interpretations; (v) they are





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<PAGE>   5

         owned or licensed by third parties with restrictions on their
         disclosure by Vendor or they are otherwise confidential or privileged;
         or (vi) they are referred to specifically as exclusions in Schedule
         "A";

         "OPERATOR" means Vendor in its capacity as operator of any of the
         Assets as designated under agreements governing the ownership and
         operation of the Assets;

         "PARTY" means a legal entity which is bound by this Agreement;

         "PERMITTED ENCUMBRANCES" means:

         (a)      any preferential rights of purchase, encumbrances, overriding
                  royalties, liens, adverse claims, reductions in interest and
                  other burdens set out in Schedule "A";

         (b)      agreements for the sale of Leased Substances, that are
                  terminable on 30 days notice or less (without penalty);

         (c)      easements, rights of way, road use agreements, crossing
                  agreements, servitudes and other similar rights in land
                  including, without limitation, rights of way and servitudes
                  for highways and other roads, railways, sewers, drains, gas
                  and oil pipelines, gas and water mains, electric light, power,
                  telephone, telegraph or cable television conduits, poles,
                  wires or cables;

         (d)      the right reserved to or vested in any governmental or other
                  public authority by the terms of any lease, licence,
                  franchise, grant or permit or by any statutory provision to
                  terminate any such lease, licence, franchise, grant or permit,
                  or to require annual or other periodic payments as a condition
                  of the continuance of them;

         (e)      rights of general application reserved to or vested in any
                  governmental authority to levy taxes on Leased Substances or
                  the income therefrom, and governmental requirements and
                  limitations of general applications as to production rates or
                  the operations of any property;

         (f)      the Production Purchase Contracts and any agreements or plans
                  relating to pooling or unitization which are binding on Vendor
                  as well as agreements respecting the processing, treating or
                  transmission of Leased Substances or the operation of Wells by
                  contract field operators;

         (g)      liens incurred or created in the ordinary course of business
                  as security in favour of the person who is conducting the
                  development or operation of any of the





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<PAGE>   6

                  Assets, for Vendor's proportionate share of the costs and
                  expenses thereof for which payment is not past due;

         (h)      the reservations, limitations, provisos and conditions in any
                  grants or transfers from the Crown of any of the Lands or
                  interests in them and statutory exceptions to title;

         (i)      liens for taxes, assessments or governmental charges that are
                  not due, or the validity of which is being contested in good
                  faith by Vendor (which latter liens are set forth in Schedule
                  "A");

         (j)      mechanics', builders' or materialmen's liens in respect of
                  services rendered or goods supplied for which payment is not
                  due;

         (k)      provisions for penalties and forfeitures under agreements as a
                  consequence of non-participation in operations, provided that
                  any such penalties or forfeitures which are operative as of
                  the Effective Date are identified in Schedule "A";

         (l)      any security held by any third party encumbering Vendor's
                  interest in and to the Assets or any part or portion thereof,
                  a discharge in respect of which Vendor delivers to Purchaser
                  on the Closing Date;

         "PETROLEUM AND NATURAL GAS RIGHTS" means all rights to and in the Title
         Documents and the Leased Substances, including without limitation the
         interests set out in Schedule "A";

         "PETROLEUM SUBSTANCES" means any of petroleum, natural gas and related
         hydrocarbons, whether gaseous, liquid or solid, and whether
         hydrocarbons or not (including, but not limited to, sulphur) that may
         be produced in association with them;

         "PRIME RATE" means an annual rate of interest equal to the annual rate
         of interest announced from time to time of the main branch of the
         Canadian Imperial Bank of Commerce in Calgary, Alberta, as a reference
         rate then in effect for determining interest rates on Canadian dollar
         commercial loans;

         "PURCHASE PRICE" means the sum of money first set out in clause 2.2
         hereof;



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<PAGE>   7

         "REGULATIONS" means all statutes, laws, orders, directives and
         regulations in effect from time to time and made by governments or
         governmental boards or agencies having jurisdiction over the Assets or
         the Parties;

         "SPECIFIC CONVEYANCES" means all conveyances, assignments, transfers,
         novations and other documents or instruments that are required to
         convey, assign and transfer the Assets to Purchaser and to novate
         Purchaser in the place and stead of Vendor with respect to the Assets;

         "SURFACE RIGHTS" means all rights to enter upon, use and occupy the
         surface of the Lands or lands with which the Lands have been pooled or
         unitized or any lands to be traversed in order to gain access to any of
         the Lands, Tangibles or Wells and any and all rights of egress and
         ingress, licenses, leases and instruments, including rights of entry
         orders to gain access to the Lands, Wells and Tangibles;

         "TANGIBLES" means the interests of the Vendor in and to all tangible
         depreciable property and assets including, without limitation,
         facilities located within or upon the lands, or off the lands, intended
         to be used in producing, processing, gathering, treating, measuring,
         making marketable, transporting, transmitting, delivering, feeding or
         injecting Leased Substances or any of them or in connection with water
         injection or removal operations that pertain to the Petroleum and
         Natural Gas Rights, or are otherwise used or intended to be used in
         exploiting the Petroleum and Natural Gas Rights;

         "THIS AGREEMENT", "HEREIN", "HERETO", "HEREOF" and similar expressions
         mean and refer to this Agreement of Purchase and Sale and any agreement
         amending this Agreement of Purchase and Sale or any agreement or
         instrument which is supplemental or ancillary to this Agreement of
         Purchase and Sale;

         "TITLE DOCUMENTS" means, collectively, any and all leases,
         reservations, permits, licenses, unit agreements, assignments, trust
         declarations, operating agreements, royalty agreements, gross
         overriding royalty agreements, participation agreements, farm-in
         agreements, sale and purchase agreements, pooling agreements and any
         other documents and agreements granting, reserving or otherwise
         conferring rights to: (i) explore for, drill for, produce, take, use or
         market Petroleum Substances; (ii) share in production of Petroleum
         Substances; (iii) share in the proceeds from, or measured or calculated
         by reference to the value or quantity of, Petroleum Substances which
         are produced; and (iv) rights to acquire any of the rights described in
         items (i) to (iii) of this definition; including without limitation
         those, if any, set out in Schedule "A", but only to the extent that the
         foregoing items (i) through (iv) pertain to Petroleum Substances
         within, upon or under the Lands or lands with which the Lands have been
         pooled or unitized;




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<PAGE>   8

         "VENDOR'S COUNSEL" means Bennett Jones LLP, Barristers and Solicitors;
         and

         "WELLS" the wells set out in Schedule "B".

1.2      SCHEDULES

         The following schedules are attached to and form part of this
         Agreement.

<TABLE>
<S>                        <C>
      Schedule "A"-        Title Documents, Lands, Petroleum and Natural Gas Rights, certain Permitted Encumbrances
      Schedule "B"-        Wells, Outstanding AFE's
      Schedule "C"-        Production Purchase Contracts
      Schedule "D"-        General Conveyance
      Schedule "E"-        Form of Officer's Certificate
</TABLE>

1.3      HEADINGS

         The insertion of headings in this Agreement is for convenience of
         reference only and shall not affect the construction or interpretation
         of this Agreement.

1.4      INCLUDED WORDS AND GENDER

         When the context reasonably permits, words suggesting the singular
         shall be construed as the plural and vice versa and words suggesting
         gender or gender neutrality shall be construed as suggesting the
         masculine, feminine and neutral gender.

1.5      TIME

         In this Agreement all times are Mountain Standard Time or Daylight
         Saving Time, whichever is in effect pursuant to the Daylight Saving
         Time Act (Alberta).

1.6      CONFLICTS

         If there is any conflict or inconsistency between a provision of the
         body of this Agreement and that of a schedule or a conveyance document,
         the provision of the body of this Agreement shall prevail.




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<PAGE>   9

                                    ARTICLE 2
                                PURCHASE AND SALE

2.1      AGREEMENT OF PURCHASE AND SALE

         Vendor hereby agrees to sell and Purchaser hereby agrees to purchase
         from Vendor the entire right, title, estate and interest of Vendor in
         and to the Assets, subject to the Permitted Encumbrances. If the
         transactions contemplated by this Agreement is completed, risk
         associated with the Assets shall pass to Purchaser as of the Effective
         Date.

2.2      PURCHASE PRICE

         (a)      The consideration to be paid by Purchaser to Vendor for
                  Vendor's interest in and to the Assets shall be One Million
                  and Nine Thousand Dollars ($1,009,000.00) (the "Purchase
                  Price").

         (b)      Upon execution of this Agreement by the parties, Purchaser
                  shall pay to Vendor a deposit in the amount of Ten percent
                  (10%) of the total Purchase Price payable to the Vendor's
                  Counsel to be held by Vendor's Counsel in an interest bearing
                  trust account. If the deposit is not paid as required herein,
                  then this Agreement may be terminated by the Vendor in its
                  sole discretion and the parties shall have no further rights
                  or obligations to each other whatsoever, in connection with
                  this Agreement or the transactions contemplated hereby. In the
                  event that Closing does not occur for any reason other than
                  the failure by the Purchaser to comply with the terms of this
                  Agreement or the termination of this Agreement by the Vendor
                  for the Purchaser's breach of this Agreement, the Deposit and
                  interest earned thereon shall be immediately returned to the
                  Purchaser.

         (c)      At Closing, Purchaser shall pay to Vendor: (i) the Purchase
                  Price ii) less the adjustments, if any, resulting from clause
                  10.3, iii)less the deposit and accrued interest, iv) plus
                  accrued interest to the Closing Date on the Purchase Price in
                  accordance with clause 2.3 and any further adjustments
                  contemplated in Article 7.

         (d)      The parties shall jointly elect at Closing pursuant to Section
                  167 of the Excise Tax Act (Canada) to have the provisions
                  thereof applied to the subject transaction by completing the
                  GST Form 44 and the Purchaser undertakes to file such election
                  with the Canada Customs and Revenue Agency in a timely and
                  proper fashion. The Vendor's GST Number is 102994191 RC.




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<PAGE>   10

2.3      INTEREST

         At Closing, Purchaser shall pay to Vendor an amount equal to the
         interest that would have accrued on the adjusted Purchase Price less
         the Deposit at the Prime Rate plus One (1.0%) per cent, calculated
         daily and not compounded, during the Interim Period.

2.4      FORM OF PAYMENT

         All payments to be made at Closing shall be made by certified cheque or
         bank draft.

2.5      ALLOCATION OF PURCHASE PRICE

         The parties shall allocate the Purchase Price as follows:

<TABLE>
<S>                                              <C>                  <C>
         (a) To Petroleum and Natural Gas Rights (70%)                $      706,300.00
         (b) To Tangibles                        (30% less $1.00)     $      302,699.00
         (c) To Miscellaneous Interests          ($1.00)              $            1.00

                                                 TOTAL                $    1,009,000.00
                                                                      =================
</TABLE>

         The Parties have taken into account Purchaser's assumption of
         responsibility for the future abandonment, reclamation costs and
         environmental responsibilities associated with the Assets and Vendor's
         release of responsibility therefor when they determined the Purchase
         Price.

2.6      SPECIFIC CONVEYANCES

         Vendor shall prepare the Specific Conveyances at its cost, none of
         which shall confer or impose upon a Party any greater right or
         obligation than contemplated in this Agreement. All Specific
         Conveyances that are prepared and circulated to Purchaser a reasonable
         time prior to the Closing Date shall be executed and delivered by the
         Parties at Closing. At Closing, Vendor shall deliver all Specific
         Conveyances to Purchaser.

2.7      TITLE DOCUMENTS AND MISCELLANEOUS INTERESTS

         Vendor shall deliver to Purchaser at Closing copies of the Title
         Documents and any other agreements and documents to which the Assets
         are subject and copies of contracts, agreements, records, books,
         documents, licenses, reports and data comprising Miscellaneous
         Interests which are now in the possession of Vendor or of which it
         gains possession prior to Closing.



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<PAGE>   11

                                    ARTICLE 3
                                   COMPLETION

3.1      CLOSING AND ADJUSTMENTS

         (a)      The closing shall take place at the offices of Vendor at 2700,
                  530 - 8th Avenue SW, Calgary, Alberta on the Closing Date.

         (b)      On the Closing Date, Vendor and Purchaser shall execute and
                  deliver the General Conveyance in the form attached hereto as
                  Schedule "C" subject to the parties completion of their
                  respective obligations contained herein, and to the extent
                  practicable, adjust and settle accounts pertaining to the
                  Assets in the manner contemplated by Article 7.

3.2      PURCHASER'S CONDITIONS PRECEDENT

         The obligation of Purchaser to purchase Vendor's interest in and to the
         Assets is subject to the following conditions precedent, which are for
         the exclusive benefit of Purchaser and may be waived by Purchaser in
         the manner herein provided for notice under clauses 11.1(a)(i) or (ii):

         (a)      from the date of this Agreement to the Closing Date, there
                  shall have been no material, adverse damage or change to the
                  Assets;

         (b)      the representations and warranties of Vendor shall be true and
                  correct in all material respects when made and as of the
                  Closing Date and a Certificate to that effect shall have been
                  delivered by Vendor to Purchaser at Closing; and

         (c)      all obligations of Vendor contained in this Agreement to be
                  performed prior to or at Closing shall have been timely
                  performed in all material respects and a Certificate to that
                  effect shall have been delivered by Vendor to Purchaser at
                  Closing.

         (d)      Vendor shall have delivered to Purchaser the General
                  Conveyance, the Specific conveyances, and all other documents
                  required to be delivered at Closing as specified herein.

         (e)      Vendor shall have delivered to Purchaser, at no cost to
                  Purchaser, registrable discharges of all security interests
                  affecting the Assets or "no interest" letters, acceptable to
                  Purchaser, with respect to

         (f)      Rights of First Refusal: All Rights of First Refusal will have
                  been exercised, been waived or lapsed by the effluxion of time
                  at or prior to the Closing Date.




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<PAGE>   12

      If any one or more of the preceding conditions precedent is not satisfied
      or waived by Purchaser in the manner provided for herein for waiver at or
      before the Closing, Purchaser may rescind this Agreement by written notice
      to Vendor and, in such event, Purchaser and Vendor shall be released and
      discharged from all obligations hereunder except as provided in clause
      10.2.

3.3      VENDOR'S CONDITIONS PRECEDENT

         The obligation of Vendor to sell its interest in and to the Assets is
         subject to the following conditions precedent, which are for the
         exclusive benefit of the Vendor and may be waived by Vendor in the
         manner herein provided for notice under clauses 11.1(a)(i) or (ii):

         (a)      all amounts to be paid by Purchaser to Vendor at Closing shall
                  have been paid by Purchaser in the manner stipulated in this
                  Agreement;

         (b)      the representations and warranties of Purchaser shall be true
                  and correct in all material respects when made and as of the
                  Closing Date and a Certificate to that effect shall have been
                  delivered by Purchaser to Vendor at Closing; and

         (c)      all obligations of Purchaser contained in this Agreement to be
                  performed prior to or at Closing shall have been timely
                  performed in all material respects and a Certificate to that
                  effect shall have been delivered by Purchaser to Vendor at
                  Closing.

         If any one or more of the foregoing conditions precedent has or have
         not been complied with or waived by Vendor in the manner provided for
         herein for waiver, at or before Closing, Vendor may, in addition to any
         other remedies which it may have available to it, rescind this
         Agreement by written notice to Purchaser and, in such event, Purchaser
         and Vendor shall be released and discharged from all obligations
         hereunder except as provided in clause 10.2.

3.4      EFFORTS TO FULFIL CONDITIONS PRECEDENT

         Purchaser and Vendor shall proceed diligently and in good faith and use
         all reasonable efforts to fulfil and assist in the fulfilment of the
         conditions precedent. If there is a condition precedent that is to be
         met prior to or at the Closing Date, and if, by the time the condition
         precedent is to be met the Party for whose benefit the condition
         precedent exists fails to notify the other Party if the condition
         precedent has not been met, the condition precedent shall be deemed
         conclusively to have been met.



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<PAGE>   13

                                    ARTICLE 4
                         REPRESENTATIONS AND WARRANTIES

4.1      VENDOR'S REPRESENTATIONS

         Purchaser acknowledges that it is purchasing Vendor's interest in and
         to the Assets on an "as is, where is" basis, without representation or
         warranty and without reliance on any information provided to or on
         behalf of Purchaser by Vendor, except for the following representations
         and warranties, which are made (unless otherwise indicated below in
         writing) as of the Effective Date and the Closing Date by the Vendor to
         the Purchaser:

         (a)      Standing: it is a corporation duly incorporated and validly
                  existing under the laws of its jurisdiction of incorporation
                  and is authorized to carry on business in all jurisdictions in
                  which the Assets are located;

         (b)      Requisite Authority: it has the corporate capacity, power and
                  authority to execute and deliver this Agreement, to sell the
                  Assets on the terms set out in this Agreement and to perform
                  its obligations under this Agreement;

         (c)      No Conflict: the execution and delivery of this Agreement and
                  the completion of the sale of the Assets in accordance with
                  the terms of this Agreement do not and will not violate or
                  conflict with any provision of:

                  (i)      the charter, bylaws or equivalent governing documents
                           relating to it or any Regulations applicable to it;
                           or

                  (ii)     any agreement or instrument to which it is a party or
                           by which it is bound and of which it has knowledge or
                           any judgment, decree or order applicable to it;

         (d)      Execution and Enforceability: subject to the conditions set
                  forth in this Agreement, as at the date hereof and the Closing
                  Date, this Agreement and all documents executed and delivered
                  pursuant to this Agreement are and will be duly authorized,
                  executed and delivered by it and are legal, valid and binding
                  obligations of it enforceable against it in accordance with
                  their terms except to the extent limited by bankruptcy,
                  insolvency, liquidation, reorganization, moratorium or other
                  laws of general application affecting creditors' rights
                  generally or by general equitable principles;

         (e)      Authorizations: subject to the conditions set forth in this
                  Agreement, no authorization or approval or other action by, or
                  notice to or filing with, any governmental authority or
                  regulatory body exercising jurisdiction over the Assets is



                                                                              12
<PAGE>   14

                  required for the due execution, delivery and performance by it
                  of this Agreement, other than authorizations, approvals or
                  exemptions previously obtained and currently in force or
                  regulatory consents or approvals to the transfer of well and
                  pipeline licences and permits and other similar licences and
                  permits available only after the Closing Date in the ordinary
                  course;

         (f)      Encumbrances, No Cancellation or Reduction: other than
                  Permitted Encumbrances, (i) Vendor has not alienated or
                  encumbered the Assets or any part or portion thereof, (ii)
                  Vendor has not committed and is not aware of there having been
                  committed any act or omission whereby the interest of the
                  Vendor in and to the Assets or any part or portion thereof may
                  be cancelled or determined, (iii) the Assets are now free and
                  clear of all liens, royalties, conversions, rights and other
                  claims of third parties created by, through or under Vendor or
                  of which Vendor has knowledge, and (iv) the interests of the
                  Vendor in the Assets are not subject to reduction by reference
                  to payout of a well or change to an interest of any other size
                  or nature whatsoever by virtue of any right or interest
                  granted by, through or under the Vendor or of which the Vendor
                  is otherwise actually aware of, except for such rights and
                  interests identified in Schedule "A";

         (g)      Adverse Claims: Vendor has not received notice from any third
                  party claiming an interest in and to the Assets adverse to the
                  interest of Vendor, other than Permitted Encumbrances, and
                  Vendor has no reason to believe that any such claim may be
                  made;

         (h)      Authorized Expenditures: in respect of the Assets, except
                  those described on Schedule "B", there are no financial
                  commitments of Vendor which are due as of the Effective Date
                  or which may become due by virtue of matters occurring or
                  arising prior to the Effective Date, other than usual
                  operating expenses incurred in the ordinary course of
                  operations or to which Purchaser has rendered its consent for
                  which Purchaser shall assume responsibility;

         (i)      No Default Notices: it has not received any notice of default
                  under any Title Document or Regulation pertaining to the
                  Assets, which default has not been rectified or waived as of
                  the date of this Agreement;

         (j)      Lawsuits and Claims: to the best of its knowledge, no suit,
                  action or other proceeding before any court or governmental
                  agency has been commenced or threatened against Vendor which
                  might result in impairment or loss of the interest of the
                  Vendor in and to the Assets or which might otherwise adversely
                  affect the Assets;




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<PAGE>   15


         (k)      Payment of Royalties and Taxes: in respect of those portions
                  of the Assets where Vendor is Operator and, in respect of
                  other portions of the Assets to the best of its knowledge, all
                  ad valorem, property, production, severance and similar taxes
                  and assessments based on, or measured by, the ownership of the
                  Assets or the production of Petroleum Substances from the
                  Assets, or the receipt of proceeds from them, and all
                  royalties and rentals accruing prior to Effective Date, that
                  are payable by it will be or will have been properly paid and
                  discharged;

         (l)      Residency For Tax Purposes: it is not a non-resident of Canada
                  within the meaning of section 116 of the Income Tax Act
                  (Canada) and the interest of Vendor in and to the Assets does
                  not constitute all or substantially all of the property of the
                  Vendor;

         (m)      Take or Pay Obligations: there are no take or pay obligations
                  relating to the Assets;

         (n)      Tangibles: (i) the Tangibles are free and clear of all liens,
                  encumbrances and adverse claims or other interests created by,
                  through or under Vendor, except for the Permitted
                  Encumbrances, (ii) to the best of its knowledge where Vendor
                  is not the Operator thereof, and where it is the Operator
                  thereof, the Tangibles have been maintained and operated in
                  accordance with usual oilfield practice, are in good and
                  operable condition, reasonable wear and tear excluded, and
                  (iii) none of the Tangibles are leased or rented or subject to
                  a title retention agreement;

         (o)      Broker's Fees: Vendor has not incurred any obligation or
                  liability, contingent or otherwise, for broker's or finder's
                  fees in respect of this Agreement or the transaction to be
                  effected by it for which Purchaser shall have any liability or
                  obligation;

         (p)      Operations: in respect of those portions of the Assets where
                  Vendor is Operator and, in respect of other portions of the
                  Assets to the best of its knowledge, the Assets have been
                  managed and operated in accordance with usual oilfield
                  practice and in accordance with the Regulations;

         (q)      Environmental Matters: Vendor:

                  (i)      is not aware of and has not received any written
                           orders or directions under the Regulations relating
                           to environmental matters or abandonment and
                           reclamation obligations requiring any work, repairs,
                           construction or




                                                                              14
<PAGE>   16

                           capital expenditures with respect to the Assets,
                           which order or direction has not been complied with
                           in all material respects by the Closing Date; and

                  (ii)     it is not aware of and has not received any written
                           demand or notice under the Regulations from any third
                           party or regulatory body relating to the breach of
                           any environmental, health or safety law applicable to
                           the Assets, including any law relating to the use,
                           storage, treatment, shipping or disposition of
                           environmental contaminants, which demand or notice
                           remains outstanding on the Closing Date;

                  (iii)    is not aware of any particular circumstance that it
                           reasonably believes to be a material and reportable
                           event under the Regulations.

         (r)      Production Purchase Contracts: except for the Production
                  Purchase Contracts; (i) it is not obligated to sell or deliver
                  Petroleum Substances produced from the Lands to any person
                  pursuant to agreements which cannot be terminated on 30 days'
                  notice or less and it has not assigned or in any way
                  restricted its right to receive the proceeds from the sale of
                  Petroleum Substances produced from the Lands nor are the
                  Leased Substances dedicated or reserved under contracts or
                  arrangements for the sale of Petroleum Substances, except
                  where Permitted Encumbrances would apply; and (ii) there are
                  no gas balancing or similar agreements pertaining to the
                  Leased Substances or any of them or agreements for the
                  transportation or disposal of the Leased Substances or any of
                  them or substances produced in connection with the Leased
                  Substances or any of them or agreements for the contract
                  operation by a third party of the Assets or any of them.

         (s)      Abandonment of Wells: in respect of those portions of the
                  Assets where Vendor is Operator and in respect of other
                  portions of the Assets to the best of Vendor's knowledge, all
                  Wells located on the Lands or lands with which the Lands have
                  been pooled or unitized which have been abandoned have been
                  properly plugged and abandoned and the wellsite therefore
                  properly restored in accordance with good oilfield practice
                  and in material compliance with the Regulations;

         (t)      Surface Rights Vendor has obtained or acquired or holds all
                  necessary Surface Rights for legal and authorized access to
                  the Lands (or lands with which the Lands have been pooled or
                  unitized), Wells and Tangibles, is not in material default
                  under any such Surface Rights nor has received notice from any
                  person as to default thereunder;

         (u)      Quiet Enjoyment Subject at all times to Vendor's other
                  representations and warranties made pursuant to this clause,
                  the Permitted Encumbrances and any




                                                                              15
<PAGE>   17

                  agreements pertaining to the Assets and on the lessee's or
                  holder's part to be paid, performed or observed, the Purchaser
                  may enter into and upon, hold and enjoy the Assets for the
                  residue of their respective terms for Purchaser's own use and
                  benefit without any lawful interruption of or by the Vendor or
                  any person claiming by, through or under the Vendor.

         (v)      Regulatory Production Allowables: To the Vendor's knowledge,
                  no notice has been received under the Regulations that a well
                  has produced in excess of regulatory production allowables,
                  and there is no pending change in those production allowables,
                  other than as may generally be applicable under the
                  Regulations.

4.2      LIMITATION

         (a)      Vendor makes no representations or warranties with respect to
                  the Assets, except as contained in clause 4.1. Except to the
                  extent provided in Clause 4.1, Vendor disclaims any liability
                  or responsibility for any representation or warranty that may
                  have been made or alleged to have been made and contained in
                  any document or statement made or communicated to Purchaser
                  including, but not limited to, any opinion, information or
                  advice provided to Purchaser by any shareholder, director,
                  officer, employee, agent, consultant or representative of
                  Vendor in respect of:

                  (i)      the quantity, quality or recoverability of Petroleum
                           Substances within or under the Lands;

                  (ii)     estimates of prices or future cash flows arising from
                           the sale of Petroleum Substances produced from the
                           Lands or estimates of other revenues attributable to
                           the Assets or the availability or continued
                           availability of transportation to sell those
                           Petroleum Substances;

                  (iii)    any engineering, geological or other interpretations
                           or economic evaluations respecting the Assets; and

                  (iv)     the quality, condition, fitness or suitability for
                           purpose or merchantability of any of the Assets.

         (b)      Purchaser acknowledges it has made, and will continue prior to
                  Closing Date to make, its own independent examination,
                  investigation, analysis, evaluation and verification of the
                  Assets, including Purchaser's own estimate and appraisal of
                  the extent and value of the Petroleum Substances attributable
                  to the Lands and it has relied solely on same as to its
                  assessment of the condition (environmental or otherwise),
                  quantum and value of the Assets;




                                                                              16
<PAGE>   18

         (c)      Except with respect to the representations and warranties in
                  clause 4.1, Purchaser forever releases and discharges Vendor
                  and its directors, officers, servants, agents and employees
                  from any claims and all liability to Purchaser or Purchaser's
                  assigns and successors, as a result of the use or reliance
                  upon advice, information or materials pertaining to the Assets
                  which was delivered or made available to Purchaser by Vendor
                  or its directors, officers, servants, agents or employees
                  prior to or pursuant to this Agreement, including, without
                  limitation, any evaluations, projections, reports and
                  interpretive or non-factual materials prepared by or for
                  Vendor, or otherwise in Vendor's possession.

4.3      PURCHASER'S REPRESENTATIONS

         Purchaser makes the following representations and warranties to Vendor,
         which are made (unless otherwise indicated below in writing) as of the
         Effective Date and the Closing Date :

         (a)      Standing: it is a corporation duly incorporated under the laws
                  of its jurisdiction of formation and is authorized to carry on
                  business in all jurisdictions in which the Assets are located;

         (b)      Requisite Authority: it has the capacity, power and authority
                  to execute and deliver this Agreement and to purchase and pay
                  for the Assets the terms set out in this Agreement and to
                  perform its other obligations under this Agreement;

         (c)      No Conflict: the execution and delivery of this Agreement and
                  the completion of the purchase of the Assets in accordance
                  with the terms of this Agreement do not and will not violate
                  or conflict with any provision of:

                  (i)      the charter, bylaws or equivalent governing documents
                           relating to it or any Regulations applicable to it;
                           or

                  (ii)     any agreement or instrument to which it is a party or
                           by which it is bound and of which it has knowledge or
                           any judgment, decree or order applicable to it;

         (d)      Execution and Enforceability: subject to the conditions set
                  forth in this Agreement, as at the date hereof and the Closing
                  Date, this Agreement and all documents executed and delivered
                  pursuant to this Agreement are and will be duly authorized,
                  executed and delivered by it and are legal, valid and binding
                  obligations of it enforceable against it in accordance with
                  their terms except to the extent limited by bankruptcy,
                  insolvency, liquidation, reorganization, moratorium or other
                  laws of




                                                                              17
<PAGE>   19

                  general application affecting creditors' rights generally or
                  by general equitable principles;

         (e)      Investment Canada Act: it is not a "non-Canadian" for the
                  purposes of the Investment Canada Act (Canada);

         (f)      Authorizations: subject to the conditions set forth in this
                  Agreement, no authorization or approval or other action by, or
                  notice to or filing with, any governmental authority or
                  regulatory body exercising jurisdiction over the Assets is
                  required for the due execution, delivery and performance by it
                  of this Agreement, other than authorizations, approvals or
                  exemptions previously obtained and currently in force or
                  regulatory consents or approvals to the transfer of well
                  licences and other similar licences and permits available only
                  after the Closing Date in the ordinary course; and

         (g)      Purchaser as Principal: it is acquiring the Assets in its
                  capacity as a principal and is not purchasing the Assets as
                  agent for a third party or for the purpose of resale or
                  distribution to a third party immediately following the
                  closing of this transaction.

4.4      ENFORCEMENT LIMITATION

         (a)      The representations and warranties set forth in clause 4.1
                  shall survive the Closing; however, Purchaser may not enforce
                  any claim for breach of a representation and warranty
                  contained in clause 4.1 unless it has given Vendor notice of
                  the claim within 12 months from the Closing Date, including
                  particulars of the representation and warranty alleged to have
                  been breached.

         (b)      The representations and warranties set forth in clause 4.3
                  shall survive the Closing; however, Vendor may not enforce any
                  claim for breach of a representation and warranty contained in
                  clause 4.3 unless it has given Purchaser notice of the claim
                  within 12 months from the Closing Date, including particulars
                  of the representation and warranty alleged to have been
                  breached.

                                    ARTICLE 5
                                 INDEMNITIES FOR
                          REPRESENTATIONS & WARRANTIES

5.1      VENDOR'S INDEMNITIES FOR REPRESENTATIONS AND WARRANTIES

         Vendor shall be liable to Purchaser for and shall, in addition,
         indemnify and hold harmless the Purchaser from and against, all Losses
         suffered, sustained, paid or incurred by Purchaser as a result of
         Vendor's breech of the representations and warranties contained in
         section 4.1.




                                                                              18
<PAGE>   20

5.2      LIMITATION

         In no event shall the total of Vendor's liabilities and indemnities
         hereunder exceed the Purchase Price.

5.3      PURCHASER'S INDEMNITIES FOR REPRESENTATIONS AND WARRANTIES

         Purchaser shall be liable to Vendor for and shall, in addition,
         indemnify and hold harmless the Vendor from and against, all Losses
         suffered, sustained, paid or incurred by Vendor as a result of
         Purchaser's breech of the representations and warranties contained in
         section 4.3 been accurate and truthful, provided however that nothing
         in this section 5.3 shall be construed so as to cause Purchaser to be
         liable to or indemnify Vendor in connection with any representation or
         warranty contained in section 4.3 if and to the extent that Vendor did
         not rely upon such representation or warranty.

5.4      TIME LIMITATION

         No claim under this Article 5 shall be made or be enforceable by a
         party unless written notice of such claim, with reasonable particulars,
         is given by such party to the party against whom the claim is made
         within a period of 12 months from the Closing Date.



                                                                              19
<PAGE>   21



                                    ARTICLE 6
                             PURCHASER'S INDEMNITIES

6.1      GENERAL INDEMNITY

         Purchaser shall:

         (a)      be liable to Vendor for all Losses, (including legal costs on
                  a solicitor/client basis) whatsoever which Vendor may suffer,
                  sustain, pay or incur; and, in addition

         (b)      indemnify and save Vendor and its directors, officers,
                  servants, agents and employees harmless from and against all
                  Losses (including legal costs on a solicitor/client basis)
                  whatsoever which may be brought against or suffered by Vendor
                  or its directors, officers, servants, agents or employees or
                  which it may suffer, sustain, pay or incur;

         by reason of any matter or thing arising out of, resulting from,
         attributable to or connected with the Assets and occurring or accruing
         on or after the Effective Date, except any Losses to the extent that
         the same are caused by the gross negligence or wilful or wanton
         misconduct of Vendor or are caused by a breech of the Vendor's
         representations and warranties contained in Section 4.1. The
         responsibility prescribed by this clause, however, does not provide an
         extension of any representation or warranty under Section 4.1 or any
         additional remedy for the Purchaser's breech thereof..

6.2      ABANDONMENT AND RECLAMATION

         Subject to the representations and warranties of Vendor contained in
         clause 4.1 hereof, Purchaser shall see to the timely performance of all
         abandonment and reclamation obligations pertaining to the Assets which
         in the absence of this Agreement would be the responsibility of Vendor.
         Purchaser shall be liable to Vendor and shall, in addition, indemnify
         Vendor from and against all Losses suffered, sustained, paid or
         incurred by Vendor should Purchaser fail to timely perform such
         obligations, subject to Vendor's representations and warranties in
         clause 4.1.

6.3      ASSETS ACQUIRED ON "AS IS" BASIS

         Notwithstanding the foregoing provisions of this clause, but subject to
         the representations and warranties of Vendor contained in clause 4.1
         (q), it is understood and agreed that Purchaser is acquiring the Assets
         on an "as is, where is" basis as of the Effective Date. Purchaser
         agrees that it is familiar with the condition and use of the Assets and
         the wells located on the Lands (or lands with which the Lands have been
         pooled or unitized), that







                                                                              20
<PAGE>   22

         Vendor has provided Purchaser with a reasonable opportunity to inspect
         the Assets and the Lands (or lands with which the Lands have been
         pooled or unitized) at the sole cost, risk and expense of Purchaser
         (insofar as Vendor could reasonably provide such access) and that it is
         not relying upon any representation or warranty from Vendor as to the
         condition, environmental or otherwise, of the Assets except as is
         specifically made pursuant to clause 4.1 (q). Purchaser further agrees
         that on and after the Effective Date it shall:

         (i)      be solely liable and responsible for any and all Losses
                  (including legal costs on a solicitor/client basis) whatsoever
                  which Vendor may suffer, sustain, pay or incur; and, in
                  addition

         (ii)     indemnify and save Vendor and its directors, officers,
                  servants, agents and employees harmless from and against any
                  and all Losses (including legal costs on a solicitor/client
                  basis) whatsoever which may be brought against or suffered by
                  Vendor or its directors, officers, servants, agents or
                  employees or which it may suffer, sustain, pay or incur;

         by reason of any matter or thing arising out of, resulting from,
         attributable to or connected with any environmental damage or
         contamination or other environmental problems pertaining to the Assets
         or to any well located on the Lands, or any of them, whether occurring
         or accruing before, on or after the Effective Date including, without
         limitation, surface, underground, air, ground water or surface water
         contamination, damage from or removal of hazardous or toxic substances,
         spills of any nature whatsoever, clean-up, plugging, well abandonment
         and reclamation or failure to perform any or all of the foregoing and
         the breach of applicable Regulations in effect at any time. Purchaser
         hereby releases Vendor from any claims Purchaser may have against
         Vendor and, in addition, Purchaser hereby waives any rights it may have
         to name Vendor as a third party to any action commenced against
         Purchaser with respect to all such liabilities and responsibilities,
         except for any claims which Purchaser may have for the breach of a
         representation or warranty made by Vendor pursuant to clause 4.1.

6.4      APPLICATION TO OTHER DOCUMENTATION

         The liabilities and indemnities contained in Article 6 shall be deemed
         to apply to, and shall not merge in, any conveyances, transfers,
         assignments, novation agreements and other documents or instruments
         conveying the Assets to Purchaser or otherwise provided with respect to
         the transactions herein, despite the actual terms of such agreements,
         notwithstanding any rule of law, equity or statute to the contrary, and
         all such rules are hereby waived. Any claim by a Party must be made by
         notice to the other Party and include particulars of the claim and of
         the facts giving rise to it.





                                                                              21
<PAGE>   23

6.5      SUBSTITUTION AND SUBROGATION

         On a best efforts basis, Vendor shall convey the Assets to Purchaser,
         with, to the extent it is able, full right of substitution and
         subrogation of Purchaser in the position of Vendor with respect to the
         benefit of all covenants and warranties previously given by others for
         the Assets or any part of them.

                                    ARTICLE 7
                              OPERATING ADJUSTMENTS

7.1      ADJUSTMENTS

         (a)      Five (5) Business Days before the Closing Date, Vendor shall
                  prepare and submit to Purchaser an interim statement of
                  adjustments effective as of the Effective Date for approval by
                  Purchaser. At Closing Date the Parties shall, to the extent
                  practicable, adjust and settle accounts pertaining to the
                  Assets. The Purchase Price shall be adjusted to reflect the
                  adjustments and settlements shown on the interim statement of
                  adjustments.

         (b)      All benefits and obligations of any kind and nature accruing
                  payable, paid, received or receivable with respect to the
                  Assets, prior to the Effective Date, including without
                  limitation operating costs, capital costs, lease rentals,
                  royalty obligations, GST and the proceeds from the sale of
                  production from the Lands that is beyond the wellhead prior to
                  the Effective Date are for Vendor's account.

         (c)      All benefits and obligations of any kind and nature accruing
                  payable, paid, received or receivable with respect to the
                  Assets on and after the Effective Date, including without
                  limitation operating costs, capital costs, lease rentals,
                  royalty obligations, GST and the proceeds from the sale of
                  production from the Lands that is beyond the wellhead on and
                  after the Effective Date are for Purchaser's account

         (d)      The following provisions will apply to the apportionment of
                  the revenues, costs, expenses and other relevant charges
                  referred to in subclauses (b) and (c):

                  (i)      all prepaid rentals and similar payments required to
                           preserve any of the Title Documents, whether paid
                           before or after the Effective Date for the Assets,
                           shall be apportioned between Vendor and Purchaser on
                           a per diem basis as of the Effective Date, unless and
                           to the extent that such allocation is waived by
                           Vendor;

                  (ii)     operating, capital cost advances and similar
                           prepayments made by Vendor for the Assets prior to
                           Closing Date and relating to benefits accruing after
                           the Effective Date are the responsibility of
                           Purchaser and an amount equal to such prepayments
                           shall be credited to Vendor at Closing Date;




                                                                              22
<PAGE>   24

                  (iii)    there will be no adjustments for Alberta Royalty Tax
                           Credits; and

                  (iv)     Purchaser will be credited with an amount equal to:

                A) the proceeds from the sale of production from the Lands or
                   lands with which the Lands have been pooled or unitized for
                   the Interim Period; less

                B) all royalties (net of gas cost allowances) and operating
                   expenses (excluding transporting and marketing fees),for the
                   Interim Period; less

                C) field office overhead pertaining to the Assets for the
                   Interim Period; plus

                D) interest calculated on the amount in (A) less the sum of the
                   amounts in (B), and (C) for the Interim Period at a rate of
                   Prime plus one percent (1.0%) per annum

         (e)      Within the 90 day period following the Closing Date, the
                  Vendor will prepare on the basis of information available at
                  the time and with input from the Purchaser, a written final
                  statement of all adjustments and payments to be made under
                  this Agreement.

         (f)      Notwithstanding the foregoing provisions, the Purchaser shall
                  have the right, for a one (1) year period following the
                  Closing Date, to audit the books, records and accounts of the
                  Vendor respecting the Assets, for the purpose of affecting
                  adjustments pursuant to this Article. Such audit shall be
                  conducted upon reasonable notice to the Vendor at the Vendor's
                  offices during the Vendor's normal business hours, and shall
                  be conducted at the sole expense of the Purchaser. Any claims
                  or discrepancies disclosed by such audit shall be made in
                  writing to the Vendor within two (2) months following the
                  completion of such audit, and the Vendor shall respond in
                  writing to any claims of discrepancies within six (6) months
                  of the receipt of such claims. To the extent that the Parties
                  are unable to resolve any outstanding claims of discrepancies
                  disclosed by such audit within two (2) months of the Vendor's
                  response thereto such matter will be resolved pursuant to
                  Article 11 hereto.

         (g)      All adjustments shall be settled by payment by the Party
                  required to make payment hereunder within 30 days of being
                  given notice of the determination of the amount owing, failing
                  which interest shall accrue from the expiry of the 30 day
                  period on such outstanding amounts at the rate of 1% per annum
                  above the Prime Rate regardless of whether such Party has been
                  given prior notice of the accrual of interest hereunder.



                                                                              23
<PAGE>   25

         (h)      Vendor shall make payment of all rentals and royalties
                  required under the Title Documents for the three (3) month
                  period following the Closing Date, which payments shall be for
                  Purchaser's account (provided such payments accrue to the
                  period on or after the Effective Date) and shall be included
                  in the Interim Statement of Adjustments under Article 7
                  hereof.

         (i)      Nothwithstanding subclause (f) hereto, further adjustments on
                  the basis indicate in this Article, will be made as in the
                  following circumstances:

                  (1)      adjustments pursuant to joint venture audits or
                           adjustments by the operator of the Assets conducted
                           within 36 months after the Closing Date provided a
                           notice requesting adjustments pursuant to such audits
                           or adjustments shall be forwarded by a Party to the
                           other Party within 30 days of receipt of the final
                           report from which that adjustment arises from.

                  (2)      adjustments relating to an audit conducted pursuant
                           to the Regulations or the provisions of the Leases
                           with respect to the payment of royalties conducted
                           within five years following the Closing Date provided
                           a notice requesting adjustments pursuant to such
                           audits or adjustments shall be forwarded by a Party
                           to the other Party within 30 days of receipt of the
                           final report from which that adjustment arises from.

         (j)      Subject to Article 11 and the timing restrictions in this
                  Article 7, the Parties agree that the period for seeking a
                  remedial order under Section 3(1)(a) of the Limitations Act
                  (Alberta) is extended from two (2) years to four (4) years for
                  all claims that may arise under this Article 7 respecting
                  adjustments and audits


                                                                              24

<PAGE>   26


                                    ARTICLE 8
                              MAINTENANCE OF ASSETS

8.1      POST-COMPLETION ADMINISTRATION

         Following Closing until Purchaser becomes the recognized holder of the
         Assets in the place of Vendor, the provisions of clause 8.2 shall apply
         to the Assets and Vendor shall, to the extent its interest permits and,
         subject to the Title Documents and other agreements to which the Assets
         are subject:

         (a)      within thirty days of Vendor's receipt, deliver to Purchaser
                  all revenues, proceeds and other benefits received by Vendor
                  for the Assets after deduction of any amounts owing by
                  Purchaser to Vendor with respect to the Assets; and

         (c)      in a timely manner deliver to Purchaser all third party
                  notices and communications received by Vendor for the Assets;
                  and

         (d)      in a timely manner deliver to third parties all notices and
                  communications as Purchaser may reasonably request and all
                  monies and other items Purchaser reasonably provides for the
                  Assets;

         (e)      as agent of Purchaser, do and perform all acts and things, and
                  execute and deliver all agreements, notices and other
                  documents and instruments, that Purchaser reasonably requests
                  for the purpose of facilitating the exercise of rights
                  incidental to the ownership of the Assets.

8.2      AGENCY

         From the execution hereof until the date that Purchaser becomes the
         recognized holder of the Assets in place of Vendor, Vendor shall, using
         usual oil field practices, as agent of Purchaser, do and perform all
         acts and things, and execute and deliver all agreements, notices and
         other documents and instruments, that Purchaser reasonably requests,
         using usual oil field practices, for the purpose of maintaining and
         operating the Assets. All instructions from Purchaser hereunder which
         require a capital expenditure in excess of $10,000 shall be in writing.


8.3      INDEMNITY

         Vendor shall not be liable to Purchaser for any loss or damage suffered
         by Purchaser in connection with the arrangement established by clauses
         8.1 and 8.2, except to the extent that the loss or damage is caused by
         Vendor's gross negligence or its wilful misconduct.






                                                                              25
<PAGE>   27

         Purchaser shall indemnify and save Vendor and its directors, officers,
         servants, agents and employees harmless from and against any Losses
         (including legal costs on a solicitor/client basis) which may be
         brought against or suffered by any of them arising out of the
         performance by Vendor of its obligations under clauses 8.1 or 8.2. An
         action or omission of Vendor or its directors, officers, servants,
         agents or employees shall not be regarded as gross negligence or wilful
         misconduct to the extent it was done or omitted to be done in
         accordance with the instructions of or with the concurrence of
         Purchaser. Nothing in clauses 8.1 or 8.2 shall be construed as
         extending or restricting or limiting in any manner any of the other
         representations, warranties or other obligations of the parties under
         this Agreement.

         The Vendor may retain or subsequently obtain from Purchaser copies or
         photocopies of any of the documents included in the Miscellaneous
         Interests that it considers necessary to enable it to comply with any
         laws or the requirements of any authority.

8.4      CONSENT OF PURCHASER

         Notwithstanding clause 8.1, Vendor shall not, without the written
         consent of Purchaser, which consent shall not be unreasonably withheld
         by Purchaser and which, if provided, shall be provided in a timely
         manner:

         (a)      make any commitment or propose, initiate or authorize any
                  capital expenditure with respect to the Assets of which
                  Vendor's share is in excess of $10,000.00, except in case of
                  an emergency or in respect of amounts which Vendor may be
                  committed to expend or be deemed to authorize for expenditure
                  without its consent;

         (b)      surrender or abandon any of the Assets;

         (c)      amend or terminate any Title Document or any other agreement
                  or document to which the Assets are subject, or enter into any
                  new agreement or commitment relating to the Assets; or

         (d)      sell, encumber or otherwise dispose of any of the Assets or
                  any part or portion thereof excepting sales of the Leased
                  Substances or any of them in the normal course of business.

         Notwithstanding the foregoing, Vendor may assume such obligations or
         commitments and propose or initiate such operations or the exercise of
         any such right or option without the prior consent of Purchaser, if
         Vendor reasonably determines that such expenditures or actions are
         necessary for the protection of life, property, or income, in which
         case Vendor shall promptly notify Purchaser of such intentions or
         actions and Vendor's estimate of the costs and expenses associated
         therewith.





                                                                              26
<PAGE>   28

                                    ARTICLE 9
                             PRE-CLOSING INFORMATION

9.1      TITLE EXAMINATION

         At all reasonable times from the date hereof until the Closing Date,
         Vendor shall, if and as requested by Purchaser, make available to
         Purchaser and Purchaser's Counsel in Vendor's offices in Calgary all
         information pertaining to the Assets, and any title opinions regarding
         the Assets, which Vendor has possession or to which it has access,
         subject to any applicable confidentiality agreements, all of the Title
         Documents and any other agreements and documents to which the Assets
         are subject, subject to the limitations contained in Miscellaneous
         Interests.

9.2      ACCESS TO THE ASSETS

         At Purchaser's cost, risk and expense and upon reasonable notice,
         Vendor shall permit Purchaser physical access to the Assets to the
         extent Vendor has or can reasonably obtain access.

                                   ARTICLE 10
                    TITLE DEFECTS AND RIGHTS OF FIRST REFUSAL

10.1     NOTICE OF MATERIAL TITLE DEFECTS

         From time to time, as soon as reasonably practicable after
         determination, and in any event no later than 7 Business Days before
         the Closing Date, Purchaser shall notify Vendor in writing of Material
         Title Defects. Such notice shall include a description of each Material
         Title Defect and the interests affected thereby, the value allocated by
         Purchaser acting reasonably to each affected interest and the amount,
         in Purchaser's opinion acting reasonably, by which the value of each
         affected interest has been reduced by the Material Title Defect.
         Failure to include a Material Title Defect in a written notice shall be
         deemed to be a waiver of such Material Title Defect for the purposes of
         this section.

10.2     RECTIFICATION BY VENDOR

         Prior to the Closing Date, Vendor shall use all reasonable efforts to
         cure or rectify the Material Title Defects which Purchaser gives notice
         of pursuant to clause 10.1. If any such Material Title Defects are not
         cured or removed at or prior to the Closing Date:

         (a)      where the cumulative amount by which the value of the affected
                  interests has been reduced is, less than 5% of the Purchase
                  Price (as set out in clause 2.2), Purchaser





                                                                              27
<PAGE>   29

                  shall complete the purchase of Vendor's interest in and to the
                  Assets without adjustment of the Purchase Price on account of
                  such Material Title Defects;

         (b)      where the cumulative amount by which the value of the affected
                  interests has been reduced is, in Purchaser's opinion acting
                  reasonably, 5% or more of the Purchase Price (as set out in
                  clause 2.2):

                  (i)      the Parties may delay Closing to a mutually agreeable
                           time and date which in no event shall be later than
                           30 days after the Closing Date, in which case:

                           (A)      Vendor shall make further attempts to cure
                                    or remove the uncured Material Title
                                    Defects; and

                           (B)      when such mutually agreeable time and date
                                    arrives, the elections pursuant to this
                                    subsection 10.2(b) shall once again be made;
                                    or

                  (ii)     Purchaser may waive the uncured Material Title
                           Defects, in which case all of Vendor's interest in
                           and to the Assets shall be purchased by Purchaser
                           without an adjustment to the Purchase Price; or

                  (iii)    Purchaser may purchase Vendor's interest in and to
                           the Assets including Vendor's interest in and to the
                           Assets that are affected by the uncured Material
                           Title Defects, in which case the Purchase Price shall
                           be adjusted by the value mutually agreed upon by the
                           Vendor and the Purchaser for each affected interest,
                           acting reasonably, provided that in reaching this
                           decision, the Parties shall take into account the
                           probability of the Material Title Defect actually
                           materializing having regard to the particular
                           circumstances;

         (c)      where the cumulative amount by which the value of the
                  interests affected by the Material Title Defects has been
                  reduced is, in Purchaser's opinion acting reasonably, 20% or
                  more of the Purchase Price (as set out in clause 2.2), in
                  addition to the elections set out in subsection 10.2(b),
                  either Vendor or Purchaser may terminate this Agreement upon
                  written notice to the other Party, in which case the Parties
                  shall have no further obligation to each other hereunder,
                  except for obligations arising pursuant to clause 10.2.




                                       28
<PAGE>   30



10.3  RIGHTS OF FIRST REFUSAL

         (a)      If all or any portion of the Assets is subject to Rights of
                  First Refusal, then Vendor shall, upon receipt of Purchaser's
                  bona fide allocations of value, promptly serve all notices as
                  are required under the applicable Rights of First Refusal
                  provisions.

         (b)      If any of such Rights of First Refusal is exercised, Purchaser
                  shall purchase that portion of the Assets which are not
                  subject to such Rights of First Refusal that have been
                  exercised. In such event, the Purchase Price shall be adjusted
                  downward according to the amounts allocated to such of the
                  Assets which are subject to Rights of First Refusal which have
                  been exercised as determined pursuant to clause 3.3 (a) and
                  the sale of the balance of the Assets to Purchaser
                  contemplated hereby shall be completed on the Closing Date and
                  all reference herein to Assets shall be deemed to refer only
                  to the balance of the Assets. Provided if a Right of First
                  Refusal is considered a Material Title Defect in accordance
                  with subclause 1.1 and if such Right of First Refusal is
                  exercised then the value of such Right of first Refusal shall
                  be included in the calculation of the thresholds described in
                  Clause 10.2 hereto.

                                   ARTICLE 11
                               DISPUTE RESOLUTION

11.1     DISPUTES INITIALLY REFERRED TO MEDIATION

         The Parties will attempt to resolve any dispute arising hereunder
         through consultation and negotiation in good faith. If those attempts
         fail, a Party may, by notice to the other Party at any time during
         those negotiations, request the other Party to attempt to resolve that
         dispute through mediation, including with that notice sufficient detail
         to enable the other Party to understand the issues that remain in
         dispute. The Parties will attempt to agree on the selection of the
         mediator within 5 Business Days of receipt of that notice, unless a
         Party give notice to the other Party within that period that it is not
         prepared to proceed with mediation respecting that dispute. If the
         Parties are proceeding with a mediation and are unable to select a
         mediator within that period, either Party may thereafter deliver a
         written request to The Canadian Foundation for Dispute Resolution to
         attempt to select, within 2 Business Days of the receipt of that
         request, a mediator, qualified by education and experience to resolve
         that dispute, and the parties agree that the person so selected will be
         the mediator for the dispute. Unless otherwise agreed, the Parties will
         commence a mediation within 15 Business Days of the selection of the
         mediator, and the mediation process will continue until the dispute is
         resolved, a Party serves notice to the other Party that it wishes to
         terminate the mediation or the mediator makes a written determination
         that the dispute cannot be resolved through mediation, whichever first
         occurs. The Parties will each bear their own costs associated with a





                                                                              29
<PAGE>   31

         mediation, but will share the common costs of a mediation equally,
         including, without limitation, the cost of the mediator.

11.2     ARBITRATION PROCEEDINGS

         A Party that wishes to pursue further proceedings after a failed or
         terminated mediation under Clause 11.1 must refer the dispute to
         binding arbitration for final resolution if the dispute pertains to (i)
         adjustments under Article 7; ii) the value or allocation to be use in a
         Right of First Refusal notice or iii) the value of Assets for which
         Title Defects remain uncured under Clause 10.2. Any such arbitration,
         and any other arbitration the Parties may agree to conduct hereunder,
         will be conducted under the Commercial Arbitration Rules of the
         Canadian Foundation for Dispute Resolution. Except as otherwise
         provided in this Clause, a Party may commence a court action with
         respect to any other dispute after a failed or terminated mediation.

11.3     LIMITATION PERIODS AND INTERIM RELIEF

         All limitation periods respecting the commencement of an action will be
         stayed during the period that the Parties are attempting to resolve a
         dispute under Clause 11.1 or 11.2. A Party may, at any time it believes
         it necessary to prtect its interest during that period, seek interim or
         provisional relief, in the form of a temporary restraining order,
         preliminary injunction or other interim equitable relief concerning a
         dispute under this Agreement, notwithstanding anything to the contrary
         in this Article.

                                   ARTICLE 12
                                     GENERAL

12.1     NOTICES

         (a)      All notices, waivers and other communications permitted or
                  required hereunder shall be in writing and shall be delivered
                  as follows:

                  (i)      by personal service on a party at the address of such
                           party set out below, in which case the item so served
                           shall be deemed to have been received by that party
                           when personally served;

                  (ii)     by facsimile transmission to a party to the fax
                           number of such party set out below, in which case the
                           item so transmitted shall be deemed to have been
                           received by that party when transmitted;




                                                                              30
<PAGE>   32



                  (iii)    except in the event of an actual or threatened postal
                           strike or other labour disruption that may affect
                           mail service, by mailing first class registered post,
                           postage prepaid, to a party at the address of such
                           party set out below, in which case the item so mailed
                           shall be deemed to have been received by that party
                           on the 3rd Business Day following the date of
                           mailing.

         A party may from time to time change its address for service or its fax
         number or both by giving written notice of such change to the other
         party.

         (b)      For the purposes of this clause 12.1, the address for service
                  of the Parties shall be as follows:

            VENDOR:        Equatorial Energy Inc.
                           2700, 530 - 8th Avenue SW
                           Calgary, AB     T2P 3S8

                           Attention:       Land Manager

                           Telephone:       (403) 264-5592
                           Facsimile:       (403) 234-0322

            PURCHASER:     Geocan Energy Inc.
                           800, 717- 7th Avenue SW
                           Calgary, AB   T2P 0Z3

                           Attention:  Land Manager

                           Telephone:       (403)  261-3851
                           Facsimile:       (403)  261-3834

12.2     ENUREMENT

         A Party may not assign its interest in this Agreement without the prior
         written consent of the other Party, which consent will not be
         unreasonable withheld. This Agreement enures to the benefit of and is
         binding upon the Parties and their respective successors and permitted
         assigns.

12.3     TIME OF ESSENCE

         Time is of the essence in this Agreement.





                                                                              31
<PAGE>   33

12.4     GOVERNING LAW

         This Agreement shall in all respects be governed by, interpreted and
         construed in accordance with the laws of the Province of Alberta and
         the laws of Canada applicable therein and shall in every regard be
         treated as a contract made in the Province of Alberta. The Parties
         irrevocably attorn to the jurisdiction of the courts of the Province of
         Alberta and courts of appeal therefrom in respect of all matters
         arising out of this Agreement.

12.5     FURTHER ASSURANCES

         Each Party will, from time to time and at all times after Closing,
         without further consideration, do such further acts and deliver all
         such further assurances, deeds and documents as shall be reasonably
         required in order to fully perform and carry out the terms of this
         Agreement.

12.6     OPERATORSHIP

         Purchaser acknowledges that Vendor is unable to assign to Purchaser
         operatorship of the Assets, if any, operated by Vendor and in respect
         of which Vendor does not have a 100% working interest. Vendor shall,
         however, use reasonable best efforts to assist Purchaser in its attempt
         to obtain operatorship.

12.7     WAIVER

         A waiver by either Party is not effective unless in writing and a
         waiver affects only the matter and its occurrence specifically
         identified in the writing granting the waiver and does not extend to
         any other matter or occurrence.

12.8     NO-MERGER

         The covenants, representations, warranties and indemnities contained in
         this Agreement shall be deemed to be restated in any and all
         assignments, conveyances, transfers and other documents conveying the
         interests of Vendor in and to the Assets to Purchaser, subject to any
         and all time and other limitations contained in this Agreement. There
         shall not be any merger of any covenant, representation, warranty or
         indemnity in such assignments, conveyances, transfers and other
         documents notwithstanding any rule of law, equity or statute to the
         contrary and such rules are hereby waived.

12.9     NO AMENDMENT EXCEPT IN WRITING

         No amendment shall be made to this Agreement unless in writing,
         executed by the Parties.




                                                                              32
<PAGE>   34

12.10    SUPERSEDES PRIOR AGREEMENTS

         This Agreement supersedes all other agreements (verbal or written)
         between the Parties with respect to the purchase and sale of the
         Assets, including without limitation the Offer to Purchase between the
         Parties dated March 12, 2001 which the Parties agree is hereby
         terminated and of no further force or effect and expresses the entire
         agreement of the Parties with respect to the transactions contained
         herein.

11.11    COUNTERPART

         This Agreement may be executed in as many counterparts as are necessary
         and all executed counterparts together shall constitute one agreement.

11.12    INVALIDITY

         In case any provisions of this Agreement should be invalid, illegal or
         unenforceable in any respect, the validity, legality or enforceability
         of the remaining provisions contained herein shall not in any way be
         affected or impaired thereby.

IN WITNESS WHEREOF the Parties have duly executed this Agreement as of the date
first above written.


                      EQUATORIAL ENERGY INC.


                      Per:
                           -------------------------------
                           Chris Soby, Vice President, Land
                           and Business Development


                      GEOCAN ENERGY INC.

                      Per:
                           -------------------------------


                      Per:
                           -------------------------------

          Execution page to an Agreement of Purchase and Sale effective
          March 1, 2001 between Equatorial Energy Inc., as Vendor, and
                        Geocan Energy Inc., as Purchaser.




                                                                              33
<PAGE>   35



                                  SCHEDULE "A"
      ATTACHED TO AN AGREEMENT OF PURCHASE AND SALE EFFECTIVE MARCH 1, 2001
 BETWEEN EQUATORIAL ENERGY INC., AS VENDOR, AND GEOCAN ENERGY INC., AS PURCHASER


            TITLE DOCUMENTS, LANDS, PETROLEUM AND NATURAL GAS RIGHTS,
                         CERTAIN PERMITTED ENCUMBRANCES






                                                                               1

<PAGE>   36



                                  SCHEDULE "B"
      ATTACHED TO AN AGREEMENT OF PURCHASE AND SALE EFFECTIVE MARCH 1, 2001
 BETWEEN EQUATORIAL ENERGY INC., AS VENDOR, AND GEOCAN ENERGY INC., AS PURCHASER

                                      WELLS



                        NAME                                           LOCATION

                  As Attached











                                      AFE'S

                                      NONE



<PAGE>   37


                                  SCHEDULE "C"
      ATTACHED TO AN AGREEMENT OF PURCHASE AND SALE EFFECTIVE MARCH 1, 2001
 BETWEEN EQUATORIAL ENERGY INC., AS VENDOR, AND GEOCAN ENERGY INC., AS PURCHASER

                          PRODUCTION PURCHASE CONTRACTS

                                      NONE



<PAGE>   38




                                  SCHEDULE "D"
      ATTACHED TO AN AGREEMENT OF PURCHASE AND SALE EFFECTIVE MARCH 1, 2001
 BETWEEN EQUATORIAL ENERGY INC., AS VENDOR, AND GEOCAN ENERGY INC., AS PURCHASER

                               GENERAL CONVEYANCE

                                 (________ Area)



     THIS GENERAL CONVEYANCE made as of the ____ day of ____________, 2001.


BETWEEN:


                  [COMPANY NAME], a body corporate, having offices in Calgary,
                  Alberta ("Vendor")

                                     - and -

                  [COMPANY NAME], a body corporate, having offices in Calgary,
                  Alberta ("Purchaser")


         WHEREAS Vendor and Purchaser have entered into an Agreement of Purchase
and Sale effective _______________ (the "Agreement");

         AND WHEREAS pursuant to the Agreement, Vendor has agreed to sell and
convey to Purchaser and Purchaser has agreed to purchase and accept from Vendor
the Assets;

         AND WHEREAS all of the conditions precedent to the obligations of the
parties hereto to close the Agreement have been fulfilled or waived in
compliance with the Agreement;

         NOW THEREFORE for the consideration provided for in the Agreement and
in consideration of the premises hereto and the covenants and agreements
hereinafter set forth, the Parties agree as follows:

1.       CONVEYANCE

         Vendor hereby sells, assigns, transfers, conveys and sets over to
         Purchaser and Purchaser hereby purchases from Vendor all of Vendor's
         right, title, estate and interest in and to the Assets TO HAVE AND TO
         HOLD the same, together with all benefit and advantage to be derived
         therefrom, absolutely, subject to the terms of the Agreement.


                                                                               1
<PAGE>   39

2.       COVENANTS

         The covenants, representations, warranties and indemnities in the
         Agreement are incorporated herein as fully and effectively as if they
         were set out herein and there shall not be any merger of any covenant,
         representation, warranty or indemnity contained in the Agreement by the
         execution and the delivery hereof, any rule of law, equity or statute
         notwithstanding.

3.       SUBORDINATE DOCUMENT

         This General Conveyance is executed and delivered by the Parties
         pursuant to the Agreement for the purposes of the provisions of the
         Agreement and the terms and conditions hereof shall be read in
         conjunction with the terms of the Agreement. The provisions of the
         Agreement shall prevail if there is a conflict between the provisions
         of the Agreement and this General Conveyance.

4.       SUBSTITUTION

         The assignment and conveyance effected by this Agreement is made with
         full right of substitution of Purchaser in and to all covenants,
         representations, warranties and indemnities by others for the benefit
         of Vendor heretofore given or made in respect of the Assets or any part
         thereof.

5.       ENUREMENT

         This General Conveyance enures to the benefit of and is binding upon
         the Parties and their respective successors and permitted assigns.

6.       FURTHER ASSURANCES

         Each Party shall, after the date of this General Conveyance, at the
         request of the other Party and without further consideration, do all
         further acts and execute and deliver all further documents which are
         reasonably required to perform and carry out the terms of this General
         Conveyance.

7.       INTERPRETATION

         This Agreement shall in all respects be subject to and interpreted,
         construed and enforced in accordance with and under the laws of the
         Province of Alberta and shall in every regard be treated as a contract
         made in the Province of Alberta. The parties hereto irrevocably attorn
         and submit to the jurisdiction of the courts of the Province of Alberta
         in respect of all matters arising out of or in connection with this
         Agreement.





                                                                               2
<PAGE>   40

8.       DEFINED TERMS

         Capitalized terms used herein shall have the respective meanings
         ascribed thereto in the Agreement, unless otherwise defined herein.

9.       COUNTERPART

         This General Conveyance may be executed in as many counterparts as are
         necessary and all executed counterparts together shall constitute one
         agreement.


         IN WITNESS WHEREOF the Parties have duly executed this General
         Conveyance.


                          [COMPANY NAME]


                          PER:
                              ----------------------------------------



                          [COMPANY NAME]


                          PER:
                              ----------------------------------------

                          PER:
                              ----------------------------------------






Execution page to a General Conveyance dated the ____ day of ____________, 2001
between ____________________, as Vendor, and _________________________, as
Purchaser.


                                       3
<PAGE>   41




                                                            Page 1 of Schedule E

                                  SCHEDULE "E"
      ATTACHED TO AN AGREEMENT OF PURCHASE AND SALE EFFECTIVE MARCH 1, 2001
 BETWEEN EQUATORIAL ENERGY INC., AS VENDOR, AND GEOCAN ENERGY INC., AS PURCHASER

                              OFFICER'S CERTIFICATE

RE: Article 4 of the Agreement of Purchase and Sale dated ____________________
between ____________________, as Vendor and ______________________, as Purchaser
("Agreement").

         Unless Otherwise stated, the definitions provided for in the Agreement
are adopted in this Certificate.

         I, (name), (position) of (name of party) ("Vendor" or "Purchaser")
hereby certify for and on behalf of _______________ that:

1.       the representations and warranties of _______________ contained in
         Article 4 of the Agreement were true and correct in all material
         respects when made and are true and correct in all material respects as
         of the date hereof.

2.       all obligations of _______________ contained in the Agreement to be
         performed prior to closing have been performed in all material
         respects.

3.       this Certificate is made for and on behalf of _______________ and is
         binding upon it, and the deponent herein is not and will not incur any
         personal liability whatsoever with respect to it.


IN WITNESS WHEREOF, the undersigned has executed this Certificate the ___ day of
________, 200_.


                          [COMPANY NAME]


                          PER:
                              ----------------------------------------
                                          (name/title)



                                                                               2

<PAGE>   42


                                                            Page 2 of Schedule E

                              OFFICER'S CERTIFICATE


RE: Article 4 of the Agreement of Purchase and Sale dated ____________________
between ____________________, as Vendor and ______________________, as Purchaser
("Agreement").

         Unless Otherwise stated, the definitions provided for in the Agreement
are adopted in this Certificate.

         I, (name), (position) of (name of party) ("Vendor" or "Purchaser")
hereby certify for and on behalf of _______________ that:

1.       the representations and warranties of _______________ contained in
         Article 4 of the Agreement were true and correct in all material
         respects when made and are true and correct in all material respects as
         of the date hereof.

2.       all obligations of _______________ contained in the Agreement to be
         performed prior to closing have been performed in all material
         respects.

3.       this Certificate is made for and on behalf of _______________ and is
         binding upon it, and the deponent herein is not and will not incur any
         personal liability whatsoever with respect to it.


IN WITNESS WHEREOF, the undersigned has executed this Certificate the ___ day of
________, 200_.


                                       ------------------------


                                       Per:
                                            -------------------------------

                                            -------------------------------
                                            (print name and title)



                                                                               2

<PAGE>   43

                               AMENDING AGREEMENT
                             (PEMBINA/TOMAHAWK AREA)


         THIS AMENDING AGREEMENT made as of the 17th day of April, 2001.

BETWEEN:

                  EQUATORIAL ENERGY INC., a body corporate, having an office and
                  carrying on business in the City of Calgary, in the Province
                  of Alberta ("Vendor")

                                     - and -

                  GEOCAN ENERGY INC., a body corporate, having an office and
                  carrying on business in the City of Calgary, in the Province
                  of Alberta ("Purchaser")


         WHEREAS Vendor and Purchaser are parties to an Agreement of Purchase
and Sale (Pembina/Tomahawk Area) made as of the 1st day of March, 2001 (the
"Agreement");

         AND WHEREAS Vendor and Purchaser have agreed to make the following
amendments to the Agreement;

         NOW THEREFORE in consideration of the premises and mutual covenants and
warranties in this Amending Agreement, the Parties covenant and agree as
follows:

1.       Except as otherwise stated in this Amending Agreement, words and
         phrases defined in the Agreement shall have the same meaning herein as
         in the Agreement.

2.       Clause 2.2(a) of the Agreement is hereby amended by deleting therefrom
         "One Million and Nine Thousand Dollars ($1,009,000.00)" and by adding
         the following in its place:

                  "Eight Hundred and Ninety-Nine Thousand Dollars ($899,000.00)"





<PAGE>   44


                                        2



3.       Clause 2.5 of the Agreement is hereby amended by deleting therefrom the
         following:

                  "        $   706,300.00
                           $   302,699.00
                           $         1.00

         TOTAL:            $ 1,009,000.00"
                           ==============

         and by adding the following in its place:

                  "        $   629,300.00
                           $   269,699.00
                           $         1.00

         TOTAL:            $   899,000.00"
                           ==============

4.       Clause 3.2 of the Agreement is amended by adding thereto, after
         sub-clause (f) thereof, the following:

         "(g)     Vendor shall have executed and delivered to and in favour of
                  Purchaser a quit claim and release, substantially in the form
                  of Schedule "F", and Vendor shall have paid to Purchaser, by
                  way of certified cheque, the sum of Fifty-Five Thousand
                  Dollars ($55,000.00) together with applicable GST thereon, in
                  connection therewith."

5.       Clause 3.3 of the Agreement is amended by adding thereto, after
         sub-clause (c) thereof, the following:

         "(d)     Purchaser shall have executed and delivered to and in favour
                  of Vendor a quit claim and release, substantially in the form
                  of Schedule "F"

6.       Schedule "A" to the Agreement is amended by deleting therefrom all
         references to Twp 53, Rge 8, W5M: Sections 4, 5 and 8.

7.       Clause 1.2 of the Agreement is hereby amended by adding to the end
         thereof the following:

                  "Schedule "F" - Quit Claim and Release"



<PAGE>   45


                                        3

         and the Agreement is further amended by adding thereto as Schedule "F"
         the form of quit claim and release set forth in Schedule "A" to this
         Amending Agreement.

8.       The amendments provided for herein shall be effective as of the 1st day
         of March, 2001.

9.       In all other respects, the provisions of the Agreement are hereby
         confirmed.

         IN WITNESS WHEREOF the Parties have duly executed this Amending
Agreement as of the date first above written.

                             EQUATORIAL ENERGY INC.

                             Per:
                                 ---------------------------------------------


                             GEOCAN ENERGY INC.


                             Per:
                                 ---------------------------------------------

                             Per:
                                 ---------------------------------------------



<PAGE>   46






                                  SCHEDULE "A"

                                       TO

                          AMENDING AGREEMENT MADE AS OF
                           THE 17TH DAY OF APRIL, 2001



<PAGE>   47




3                                 SCHEDULE "F"
      ATTACHED TO AN AGREEMENT OF PURCHASE AND SALE EFFECTIVE MARCH 1, 2001
BETWEEN EQUATORIAL ENERGY INC., AS VENDOR, AND GEOCAN ENERGY INC., AS PURCHASER



                             QUIT CLAIM AND RELEASE


         THIS AGREEMENT made as of the ____________ day of April, 2001.

BETWEEN:

                  GEOCAN ENERGY INC., a body corporate, having an office in the
                  City of Calgary, in the Province of Alberta

                           (hereinafter referred to as the "Grantor")

                                     - and -

                  EQUATORIAL ENERGY INC., a body corporate, having an office in
                  the City of Calgary, in the Province of Alberta

                           (hereinafter referred to as the "Grantee")


         WHEREAS Grantor holds an interest in the said lands and leases
described and set forth on Schedule "A" attached hereto;

         AND WHEREAS the Grantor has agreed to release and quit claim unto the
Grantee its said interest in the lands, agreements, documents of title and the
wells and equipment appurtenant hereto, on the terms and conditions hereinafter
set forth;

         NOW THEREFORE in consideration of the premises hereto, and the
agreement hereinafter set forth and contained, the parties hereto agree as
follows:

1.       (a)      "said interest" means the interest held by the Grantor which
                  is set forth and described in Schedule "A" attached hereto.

         (b)      "said lands" means the lands set forth and described in
                  Schedule "A" attached hereto.



<PAGE>   48


                                        2


2.       CONVEYANCE

         The Grantor, in consideration of the sum of FIFTY-FIVE THOUSAND DOLLARS
($55,000.00) and other valuable consideration now paid by the Grantee to the
Grantor (receipt of which is hereby acknowledged), does hereby assign, transfer,
grant, release and quit claim unto the Grantee, without warranty of the title
all of the Grantor's right, title, claim and demand whatsoever, both at law and
in equity or otherwise howsoever, and whether in possession or expectancy of, in
and to the said interest and the said lands and unto the use of the Grantee, and
the Grantor hereby acknowledges that it has no further interest whatsoever
therein and thereto.

3.       FURTHER ACTS

         The Grantor hereby covenants and agrees with the Grantee that it will
do such further acts and execute all such further assurances as may be required
to give effect to this Agreement.

4.       MUTUAL RELEASE

         Each of the Grantor and the Grantee hereby releases the other from and
against any matter, all claims, demands, proceedings, losses, damages,
liabilities, deficiencies, costs, penalties, fines and expenses arising directly
or indirectly out of any matter of thing relating to the said interest and the
said lands.

5.       MISCELLANEOUS

         The Schedule "A" attached hereto is incorporated herein by reference as
fully as through contained in the body hereof. Whenever any term or condition,
expressed or implied, of such Schedule "A" conflicts or is at variance with any
term or condition of this Agreement, such term or condition of this Agreement
shall prevail.



<PAGE>   49


                                        3

6.       EFFECTIVE DATE

         The effective date of this agreement shall be March 1, 2001.

         IN WITNESS WHEREOF the parties hereto have caused this agreement to be
executed under corporate seal by their respective officers as of the first day
and year above written.

GEOCAN ENERGY INC.                        EQUATORIAL ENERGY INC.


Per:                                      Per:
    ------------------------------------      --------------------------------

Per:                                      Per:
    ------------------------------------      --------------------------------



<PAGE>   50



THIS IS SCHEDULE "A" TO A QUIT CLAIM AND RELEASE DATED APRIL ________, 2001
BETWEEN GEOCAN


ENERGY INC. AND EQUATORIAL ENERGY INC.




<TABLE>
<CAPTION>
  LEASES                    LANDS                    RIGHTS               INTEREST           ENCUMBRANCES
  ------                    -----                    ------               --------           ------------
<S>                      <C>                     <C>                      <C>               <C>

Alberta Crown            38-07-W4M from          All P&NG from              18.75%           Alberta Crown
P&NG Lease No.           the base of Lsds        base of Viking to                           Royalty
0488110342               14, 15, 16 of           base of Mannville
                         Section 29              Group

Alberta Crown            38-07-W4M               All P&NG from              18.75%           Alberta Crown
P&NG Lease No.           S1/2and NW1/432         base of Viking to                           Royalty
0488110346                                       base of Mannville
                                                 Group
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