EXHIBIT 4.21

                                STOCK OPTION PLAN






                                      -86-

<PAGE>




                              HILTON PETROLEUM LTD.


                             2003 STOCK OPTION PLAN


                        Effective Date: November 12, 2003















Approved by the Board of
Directors on October 6, 2003.

Approved by the
Shareholders on November 12, 2003.




                                      -87-

<PAGE>


                                TABLE OF CONTENTS
                                                                            Page
SECTION 1 DEFINITIONS AND INTERPRETATION.......................................1
   1.1   Definitions...........................................................1
   1.2   Choice of Law.........................................................5
   1.3   Headings..............................................................5
   1.4   Effective Date........................................................5
SECTION 2 GRANT OF OPTIONS.....................................................5
   2.1   Grant of Options......................................................5
   2.2   Record of Option Grants...............................................5
   2.3   Effect of Plan........................................................5
SECTION 3 PURPOSE AND PARTICIPATION............................................6
   3.1   Purpose of Plan.......................................................6
   3.2   Participation in Plan.................................................6
   3.3   Limits on Option Grants...............................................6
   3.4   Notification of Grant.................................................7
   3.5   Copy of Plan..........................................................7
   3.6   Limitation on Service.................................................7
   3.7   No Obligation to Exercise.............................................7
   3.8   Agreement.............................................................7
   3.9   Notice................................................................8
   3.10  Representation to TSX VN..............................................8
SECTION 4 NUMBER OF SHARES UNDER PLAN..........................................8
   4.1   Board to Approve Issuance of Shares...................................8
   4.2   Number of Shares......................................................8
   4.3   Fractional Shares.....................................................8
SECTION 5 TERMS AND CONDITIONS OF OPTIONS......................................8
   5.1   Exercise Period of Option.............................................8
   5.2   Number of Shares Under Option.........................................8
   5.3   Exercise Price of Option..............................................9
   5.4   Termination of Option.................................................9
   5.5   Vesting of Option and Acceleration...................................10
   5.6   Additional Terms.....................................................10
SECTION 6 TRANSFERABILITY OF OPTIONS..........................................10
   6.1   Non-transferable.....................................................10
   6.2   Death of Option Holder...............................................10
   6.3   Disability of Option Holder..........................................10
   6.4   Disability and Death of Option Holder................................11
   6.5   Vesting..............................................................11
   6.6   Deemed Non-Interruption of Engagement................................11
SECTION 7 EXERCISE OF OPTION..................................................11
   7.1   Exercise of Option...................................................11
   7.2   Issue of Share Certificates..........................................11
   7.3   No Rights as Shareholder.............................................11
SECTION 8 ADMINISTRATION......................................................12
   8.1   Board or Committee...................................................12
   8.2   Appointment of Committee.............................................12
   8.3   Quorum and Voting....................................................12
   8.4   Powers of Committee..................................................12
   8.5   Administration by Committee..........................................13
   8.6   Interpretation.......................................................13



                                      -88-

<PAGE>


SECTION 9 APPROVALS AND AMENDMENT.............................................13
   9.1   Shareholder Approval of Plan.........................................13
   9.2   Amendment of Option or Plan..........................................13

SECTION 10 CONDITIONS PRECEDENT TO ISSUANCE OF OPTIONS AND SHARES.............14
   10.1  Compliance with Laws.................................................14
   10.2  Obligation to Obtain Regulatory Approvals............................14
   10.3  Inability to Obtain Regulatory Approvals.............................14
SECTION 11 ADJUSTMENTS AND TERMINATION........................................14
   11.1  Termination of Plan..................................................14
   11.2  No Grant During Suspension of Plan...................................14
   11.3  Alteration in Capital Structure......................................14
   11.4  Triggering Events....................................................15
   11.5  Notice of Termination by Triggering Event............................15
   11.6  Determinations to be Made By Committee...............................15


                                      -89-

<PAGE>


                                STOCK OPTION PLAN

                                    SECTION 1
                         DEFINITIONS AND INTERPRETATION



1.1           DEFINITIONS

As used  herein,  unless  there is  something  in the subject  matter or context
inconsistent  therewith,  the following  terms shall have the meanings set forth
below:

(a)  "Administrator"  means such  Executive or Employee of the Company as may be
     designated as Administrator by the Committee from time to time, if any.

(b)  "Associate" means, where used to indicate a relationship with any person:

     (i)  any  relative,  including  the spouse of that  person or a relative of
          that  person's  spouse,  where the  relative  has the same home as the
          person;

     (ii) any partner, other than a limited partner, of that person;

     (iii)any trust or estate in which such person has a substantial  beneficial
          interest or as to which such person  serves as trustee or in a similar
          capacity; and

     (iv) any  corporation of which such person  beneficially  owns or controls,
          directly or indirectly,  voting  securities  carrying more than 10% of
          the voting rights attached to all outstanding voting securities of the
          corporation.

(c)  "Black-Out" means a restriction imposed by the Company on all or any of its
     directors,   officers,   employees,   insiders  or  persons  in  a  special
     relationship  whereby  they are to refrain  from  trading in the  Company's
     securities until the restriction has been lifted by the Company.

(d)  "Board" means the board of directors of the Company.

(e)  "Change of Control" means an occurrence when either:

     (i)  a Person or Entity,  other than the  current  "control  person" of the
          Company  (as that term is defined in the  Securities  Act),  becomes a
          "control person" of the Company; or

     (ii) a majority  of the  directors  elected at any annual or  extraordinary
          general  meeting of  shareholders  of the Company are not  individuals
          nominated by the Company's then-incumbent Board.

(f)  "Committee"  means a committee of the Board  appointed in  accordance  with
     this Plan or if no such committee is appointed, the Board itself.

(g)  "Company" means Hilton Petroleum Ltd.

(h)  "Consultant" means an individual who:

     (i)  is engaged to provide,  on a bona fide basis,  consulting,  technical,
          management or other  services to the Company or any  Subsidiary  other
          than:

          A.   services  provided in relation to a "distribution"  (as that term
               is described in the Securities Act); and

          B.   unless the Shares are listed on the TSX, American Stock Exchange,
               the New York Stock  Exchange  or the London  Stock  Exchange,  or
               quoted on the  Nasdaq  National  Market or the  Nasdaq  Small Cap
               Market, other than:

                                      -90-

<PAGE>



               (1)  the services of a  "registrant"  (as that term is defined in
                    the Securities Act); or

               (2)  services that include investor relations activities;

     (ii) provides the services under a written  contract between the Company or
          any Subsidiary  and the individual or a Consultant  Entity (as defined
          in clause (h)(v) below);

     (iii)in the  reasonable  opinion  of the  Company,  spends or will  spend a
          significant  amount of time and  attention on the affairs and business
          of the Company or any Subsidiary; and

     (iv) has a relationship with the Company or any Subsidiary that enables the
          individual to be  knowledgeable  about the business and affairs of the
          Company,

     and includes:

     (v)  a corporation of which the individual is an employee or shareholder or
          a  partnership  of which the  individual  is an employee or partner (a
          "Consultant Entity"); or

     (vi) an RRSP or RRIF established by or for the individual under which he or
          she is the beneficiary.

(i)  "Disability" means a medically  determinable  physical or mental impairment
     expected to result in death or to last for a continuous  period of not less
     than 12 months,  and which causes an  individual  to be unable to engage in
     any substantial gainful activity, or any other condition of impairment that
     the Committee, acting reasonably, determines constitutes a disability.

(j)  "Effective Date" means November 12, 2003.

(k)  "Employee" means:

     (i)  an individual who works  full-time or part-time for the Company or any
          Subsidiary  and such other  individuals  as may, from time to time, be
          permitted  by  applicable  Regulatory  Rules to be granted  Options as
          employees or as an equivalent thereto; or

     (ii) an  individual  who works for the  Company  or any  Subsidiary  either
          full-time or on a continuing and regular basis for a minimum amount of
          time per week providing  services normally provided by an employee and
          who is subject to the same control and direction by the Company or any
          Subsidiary  over the details and methods of work as an employee of the
          Company or any Subsidiary,  but for whom income tax deductions are not
          made at source,

     and includes:

     (iii)a corporation wholly-owned by such individual; and

     (iv) any RRSP or RRIF  established by or for such individual under which he
          or she is the beneficiary.

(l)  "Executive" means an individual who is a director or officer of the Company
     or a Subsidiary, and includes:

     (i)  a corporation wholly-owned by such individual; and

     (ii) any RRSP or RRIF  established by or for such individual under which he
          or she is the beneficiary.

(m)  "Exercise Notice" means the written notice of the exercise of an Option, in
     the form set out as  Schedule  "B"  hereto,  duly  executed  by the  Option
     Holder.

(n)  "Exercise  Period" means the period during which a particular Option may be
     exercised  and is the period from and  including  the Grant Date through to
     and including the Expiry Time on the Expiry Date provided, however, that no
     Option can be exercised unless and until all necessary Regulatory Approvals
     have been obtained.

                                      -91-

<PAGE>


(o)  "Exercise  Price"  means the price at which an  Option  is  exercisable  as
     determined in accordance with section 5.3.

(p)  "Expiry  Date"  means the date the Option  expires as set out in the Option
     Certificate  or as otherwise  determined in  accordance  with sections 5.4,
     6.2, 6.3, 6.4 or 11.4.

(q)  "Expiry Time" means the time the Option  expires on the Expiry Date,  which
     is 5:00 p.m. local time in Vancouver, British Columbia on the Expiry Date.

(r)  "Grant  Date"  means the date on which the  Committee  grants a  particular
     Option,  which is the date the Option  comes into effect  provided  however
     that no Option can be exercised  unless and until all necessary  Regulatory
     Approvals have been obtained.

(s)  "Insider" means:

     (i)  an insider as that term is defined in the Securities Act; and

     (ii) an  Associate  of any  person  who is an  insider  by virtue of clause
          1.1(s)(i) above.

(t)  "Market  Value"  means the  market  value of the  Shares as  determined  in
     accordance with section 5.3.

(u)  "Option" means an incentive share purchase option granted  pursuant to this
     Plan entitling the Option Holder to purchase Shares of the Company.

(v)  "Option  Certificate" means the certificate,  in substantially the form set
     out as Schedule "A" hereto, evidencing the Option.

(w)  "Option  Holder"  means a Person or Entity  who  holds an  unexercised  and
     unexpired Option or, where applicable,  the Personal Representative of such
     person.

(x)  "Outstanding  Issue" means the number of Shares that are  outstanding (on a
     non-diluted  basis)  immediately  prior to the Share  issuance  or grant of
     Option in question.

(y)  "Person  or  Entity"  means an  individual,  natural  person,  corporation,
     government or political  subdivision  or agency of a government,  and where
     two or more persons act as a partnership, limited partnership, syndicate or
     other  group  for  the  purpose  of  acquiring,  holding  or  disposing  of
     securities of an issuer, such partnership,  limited partnership,  syndicate
     or group shall be deemed to be a Person or Entity.

(z)  "Personal Representative" means:

     (i)  in the case of a deceased Option Holder, the executor or administrator
          of the deceased  duly  appointed by will, a court or public  authority
          having jurisdiction to do so; and

     (ii) in the case of an Option Holder who for any reason is unable to manage
          his or her  affairs,  the person  entitled  by law to act on behalf of
          such Option Holder.

(aa) "Plan" means this stock option plan as from time to time amended.

(bb) "Regulatory  Approvals"  means any  necessary  approvals of the  Regulatory
     Authorities  as may be required  from time to time for the  implementation,
     operation or amendment of this Plan or for the Options granted from time to
     time hereunder.

(cc) "Regulatory  Authorities"  means all organized trading  facilities on which
     the Shares are listed, and all securities commissions or similar securities
     regulatory bodies having  jurisdiction  over the Company,  this Plan or the
     Options granted from time to time hereunder.

(dd) "Regulatory  Rules" means all corporate and securities  laws,  regulations,
     rules,  policies,  notices,  instruments  and  other  orders  of  any  kind
     whatsoever  which  may,  from  time to time,  apply to the  implementation,
     operation

                                      -92-

<PAGE>


     or  amendment  of  this  Plan  or the  Options  granted  from  time to time
     hereunder including, without limitation, those of the applicable Regulatory
     Authorities.

(ee) "Securities  Act" means the Securities Act (British  Columbia),  RSBC 1996,
     c.418 as from time to time amended.

(ff) "Share" or "Shares"  means,  as the case may be, one or more common  shares
     without par value in the capital stock of the Company.

(gg) "Share Compensation Arrangement" means any stock option, stock option plan,
     employee  stock  purchase  plan  or any  other  compensation  or  incentive
     mechanism involving the issuance or potential issuance of Shares, including
     a share purchase from treasury which is financially assisted by the Company
     by way of a loan, guarantee or otherwise.

(hh) "Subsidiary" means a wholly-owned or controlled  subsidiary  corporation of
     the Company.

(ii) "Triggering Event" means:

     (i)  the proposed dissolution, liquidation or wind-up of the Company;

     (ii) a proposed merger, amalgamation,  arrangement or reorganization of the
          Company  with  one  or  more   corporations  as  a  result  of  which,
          immediately following such event, the shareholders of the Company as a
          group, as they were  immediately  prior to such event, are expected to
          hold less than a  majority  of the  outstanding  capital  stock of the
          surviving corporation;

     (iii)the proposed  acquisition  of all or  substantially  all of the issued
          and  outstanding  shares  of the  Company  by one or more  Persons  or
          Entities;

     (iv) a proposed Change of Control of the Company;

     (v)  the proposed sale or other  disposition of all or substantially all of
          the assets of the Company; or

     (vi) a proposed material alteration of the capital structure of the Company
          which, in the opinion of the Committee, is of such a nature that it is
          not practical or feasible to make  adjustments  to this Plan or to the
          Options  granted  hereunder  to permit  the Plan and  Options  granted
          hereunder to stay in effect.

(jj) "TSX" means The Toronto Stock Exchange.

(kk) "TSX VN" means the TSX Venture Exchange.

1.2           CHOICE OF LAW

The Plan is established  under,  and the provisions of the Plan shall be subject
to and interpreted and construed in accordance with, the laws of the Province of
British  Columbia.  The  Company  and each Option  Holder  hereby  attorn to the
jurisdiction of the Courts of British Columbia.

1.3           HEADINGS

The  headings  used  herein are for  convenience  only and are not to affect the
interpretation of the Plan.

1.4           EFFECTIVE DATE

The Plan will be effective  from and after the Effective Date and will terminate
in accordance with provisions hereof.



                                      -93-
<PAGE>


                                    SECTION 2
                                GRANT OF OPTIONS

2.1           GRANT OF OPTIONS

The Committee shall, from time to time in its sole discretion,  grant Options to
such Persons or Entities and on such terms and conditions as are permitted under
this Plan.

2.2           RECORD OF OPTION GRANTS

The Committee  shall be responsible to maintain a record of all Options  granted
under this Plan and such record shall contain, in respect of each Option:

(a)  the name and address of the Option Holder;

(b)  the category (Executive, Employee or Consultant) under which the Option was
     granted to him, her or it;

(c)  the Grant Date and Expiry Date of the Option;

(d)  the number of Shares  which may be acquired  on the  exercise of the Option
     and the Exercise Price of the Option;

(e)  the vesting and other additional terms, if any, attached to the Option; and

(f)  the particulars of each and every time the Option is exercised.

2.3           EFFECT OF PLAN

All  Options  granted  pursuant  to this Plan  shall be subject to the terms and
conditions of this Plan  notwithstanding  the fact that the Option  Certificates
issued in respect thereof do not expressly contain such terms and conditions but
instead incorporate them by reference to this Plan.

                                    SECTION 3
                            PURPOSE AND PARTICIPATION

3.1           PURPOSE OF PLAN

The purpose of the Plan is to provide the Company with a share-related mechanism
to attract, retain and motivate qualified Executives, Employees and Consultants,
to incent  such  individuals  to  contribute  toward  the long term goals of the
Company,  and to encourage such  individuals to acquire Shares of the Company as
long term investments.

3.2           PARTICIPATION IN PLAN

The Committee  shall,  from time to time and in its sole  discretion,  determine
those Executives,  Employees and Consultants,  if any, to whom Options are to be
granted.

3.3           LIMITS ON OPTION GRANTS

If the Company is listed on TSX VN as a Tier 1 issuer, the following limitations
shall apply to the Plan and all Options  thereunder so long as such  limitations
are required by the TSX VN:

(a)  the maximum number of Shares which may be reserved for issuance to Insiders
     pursuant to Options under the Plan shall be 10% of the Outstanding Issue;

(b)  the maximum  number of Options  which may be granted to Insiders  under the
     Plan within any 12 month period shall be 10% of the Outstanding Issue;

(c)  the maximum number of Options which may be granted to any one Option Holder
     under the Plan within any

                                      -94-

<PAGE>



     12 month period shall be 5% of the Outstanding Issue;

(d)  with respect to section 5.1, the Expiry Date of an Option shall be no later
     than the tenth anniversary of the Grant Date of such Option;

(e)  the maximum  number of Options  which may be granted to any one  Consultant
     within any 12 month period must not exceed 2% of the Outstanding Issue; and

(f)  the  maximum  number of Options  which may be  granted  within any 12 month
     period to Employees or Consultants engaged in investor relations activities
     must not exceed 2% of the  Outstanding  Issue and such options must vest in
     stages over 12 months  with no more than 25% of the options  vesting in any
     three month period,

and such  limitation  will not be an amendment to this Plan requiring the Option
Holders consent under section 9.2 of this Plan.

If the Company is listed on TSX VN as a Tier 2 issuer, the following limitations
shall apply to the Plan and all Options  thereunder so long as such  limitations
are required by the TSX VN:

(a)  the maximum number of Shares which may be reserved for issuance to Insiders
     pursuant to Options under the Plan shall be 10% of the Outstanding Issue;

(b)  the maximum  number of Options  which may be granted to Insiders  under the
     Plan within any 12 month period shall be 10% of the Outstanding Issue;

(c)  the maximum number of Options which may be granted to any one Option Holder
     under the Plan within any 12 month  period  shall be 5% of the  Outstanding
     Issue;

(d)  with respect to section 5.1, the Expiry Date of an Option shall be no later
     than the fifth anniversary of the Grant Date of such Option;

(e)  where the number of Shares under the Plan set out in section 4.2 is greater
     than 10% of the Outstanding Issue, all Options must vest no earlier than as
     to 25% upon the  Grant  Date,  and as to a further  25%  after  each of the
     following three six-month periods;

(f)  the maximum  number of Options  which may be granted to any one  Consultant
     within any 12 month period must not exceed 2% of the Outstanding Issue; and

(g)  the  maximum  number of Options  which may be  granted  within any 12 month
     period to Employees or Consultants engaged in investor relations activities
     must not exceed 2% of the Outstanding  Issue and such options must vest and
     such  options  must vest in stages  over 12 months with no more than 25% of
     the  options  vesting in any three  month  period,  and such  options  must
     terminate within 30 days after the Option Holder ceases to perform investor
     relations activities for the Company,

and such  limitation  will not be an amendment to this Plan requiring the Option
Holders consent under section 9.2 of this Plan.

3.4           NOTIFICATION OF GRANT

Following  the  granting  of  an  Option,  the  Administrator  shall,  within  a
reasonable  period of time, notify the Option Holder in writing of the grant and
shall enclose with such notice the Option Certificate representing the Option so
granted.  In no  case  will  the  Company  be  required  to  deliver  an  Option
Certificate  to an Option Holder until such time as the Company has obtained all
necessary Regulatory Approvals for the grant of the Option.

3.5           COPY OF PLAN

Each  Option  Holder,  concurrently  with the notice of the grant of the Option,
shall be provided  with a copy of the Plan. A copy of any  amendment to the Plan
shall be promptly provided by the Administrator to each Option Holder.

                                      -95-


<PAGE>


3.6           LIMITATION ON SERVICE

The Plan does not give any Option Holder that is an Executive the right to serve
or continue to serve as an Executive of the Company or any Subsidiary,  nor does
it give any Option Holder that is an Employee or  Consultant  the right to be or
to continue to be employed or engaged by the Company or any Subsidiary.

3.7           NO OBLIGATION TO EXERCISE

Option  Holders shall be under no obligation to exercise  Options  granted under
this Plan.

3.8           AGREEMENT

The Company and every Option Holder granted an Option  hereunder  shall be bound
by and subject to the terms and  conditions of this Plan. By accepting an Option
granted hereunder, the Option Holder has expressly agreed with the Company to be
bound by the terms and  conditions  of this  Plan.  In the event that the Option
Holder receives his, her or its Options pursuant to an oral or written agreement
with the  Company or a  Subsidiary,  whether  such  agreement  is an  employment
agreement,  consulting  agreement  or any other  kind of  agreement  of any kind
whatsoever,   the  Option  Holder   acknowledges   that  in  the  event  of  any
inconsistency  between the terms  relating to the grant of such  Options in that
agreement  and the terms  attaching to the Options as provided for in this Plan,
the terms provided for in this Plan shall prevail and the other  agreement shall
be deemed to have been amended accordingly.

3.9           NOTICE

Any  notice,  delivery  or other  correspondence  of any kind  whatsoever  to be
provided by the Company to an Option Holder will be deemed to have been provided
if provided to the last home address,  fax number or email address of the Option
Holder  in the  records  of the  Company  and the  Company  shall  be  under  no
obligation to confirm receipt or delivery.

3.10          REPRESENTATION TO TSX VN

As a condition  precedent to the issuance of an Option, the Company must be able
to  represent  to TSX VN as of the Grant Date that the  Option  Holder is a bona
fide Executive, Employee or Consultant of the Company or any Subsidiary.

                                    SECTION 4
                           NUMBER OF SHARES UNDER PLAN

4.1           BOARD TO APPROVE ISSUANCE OF SHARES

The Board shall approve by resolution the issuance of all Shares to be issued to
Option  Holders upon the exercise of Options,  such  authorization  to be deemed
effective as of the Grant Date of such Options regardless of when it is actually
done.  The Board shall be entitled to approve the  issuance of Shares in advance
of the Grant Date,  retroactively after the Grant Date, or by a general approval
of this Plan.

4.2           NUMBER OF SHARES

Subject to adjustment as provided for herein, the number of Shares which will be
available for purchase  pursuant to Options  granted  pursuant to this Plan will
not exceed 10% of the number of Shares which are issued and  outstanding  on the
particular Grant Date, including the existing 84,400 Shares currently subject to
outstanding  Options  as of the date of this Plan which  were  granted  prior to
implementation  of this Plan and, which, by the  implementation of this Plan are
grandfathered under this Plan. If any Option expires or otherwise terminates for
any  reason  without  having  been  exercised  in full,  the number of Shares in
respect of such expired or  terminated  Option shall again be available  for the
purposes of granting Options pursuant to this Plan.

4.3           FRACTIONAL SHARES

No fractional  shares shall be issued upon the exercise of any Option and, if as
a result  of any  adjustment,  an  Option  Holder  would  become  entitled  to a
fractional  share,  such Option Holder shall have the right to purchase only the
next lowest  whole number of Shares and no payment or other  adjustment  will be
made for the fractional interest.

                                      -96-

<PAGE>

                                    SECTION 5
                         TERMS AND CONDITIONS OF OPTIONS

5.1           EXERCISE PERIOD OF OPTION

Subject to sections 5.4,  6.2, 6.3, 6.4 and 11.4,  the Grant Date and the Expiry
Date of an Option  shall be the  dates  fixed by the  Committee  at the time the
Option is  granted  and  shall be set out in the  Option  Certificate  issued in
respect of such Option, provided that the Expiry Date shall be no later than the
tenth anniversary of the Grant Date of the Option.

5.2           NUMBER OF SHARES UNDER OPTION

The  number of Shares  which may be  purchased  pursuant  to an Option  shall be
determined  by the  Committee  and  shall be set out in the  Option  Certificate
issued in respect of the Option.

5.3           EXERCISE PRICE OF OPTION

The  Exercise  Price at which an Option  Holder  may  purchase  a Share upon the
exercise of an Option shall be  determined by the Committee and shall be set out
in the Option  Certificate  issued in respect of the Option.  The Exercise Price
shall not be less than the Market Value of the Shares as of the Grant Date.  The
Market Value of the Shares for a particular  Grant Date shall be  determined  as
follows:

(a)  for each organized trading facility on which the Shares are listed,  Market
     Value  will  be the  closing  trading  price  of  the  Shares  on  the  day
     immediately  preceding the Grant Date, less any discounts  permitted by the
     applicable Regulatory Authorities;

(b)  if the  Company's  Shares  are  listed on more than one  organized  trading
     facility,  the Market  Value  shall be the Market  Value as  determined  in
     accordance with  subparagraph (a) above for the primary  organized  trading
     facility on which the Shares are listed,  as determined  by the  Committee,
     subject to any  adjustments  as may be  required  to secure  all  necessary
     Regulatory Approvals;

(c)  if the  Company's  Shares  are  listed  on one or  more  organized  trading
     facilities  but have not traded  during the ten  trading  days  immediately
     preceding  the Grant Date,  then the Market  Value will be,  subject to any
     adjustments  as  may  be  required  to  secure  all  necessary   Regulatory
     Approvals, such value as is determined by the Committee; and

(d)  if the Company's  Shares are not listed for trading on a stock  exchange or
     over the counter market,  the value which is determined by the Committee to
     be the fair value of the Shares, taking into consideration all factors that
     the Committee deems appropriate, including, without limitation, recent sale
     and offer prices of the Shares in private transactions  negotiated at arms'
     length.

Notwithstanding anything else contained herein, in no case will the Market Value
be less than the minimum  prescribed by each of the organized trading facilities
that would apply to the Company on the Grant Date in question.

5.4           TERMINATION OF OPTION

Subject  to such  other  terms or  conditions  that may be  attached  to Options
granted  hereunder,  an Option Holder may exercise an Option in whole or in part
at any time and from time to time during the Exercise Period. Any Option or part
thereof not  exercised  within the Exercise  Period shall  terminate  and become
null, void and of no effect as of the Expiry Time on the Expiry Date. The Expiry
Date of an Option shall be the earlier of the date so fixed by the  Committee at
the time the Option is granted as set out in the Option Certificate and the date
established, if applicable, in paragraphs (a) or (b) below or sections 6.2, 6.3,
6.4 or 11.4 of this Plan:

(a)  Ceasing to Hold Office - In the event that the Option  Holder  holds his or
     her  Option as an  Executive  and such  Option  Holder  ceases to hold such
     position  other than by reason of death or  Disability,  the Expiry Date of
     the Option shall be, unless otherwise  expressly provided for in the Option
     Certificate,  the 90th day  following  the date the Option Holder ceases to
     hold such position unless the Option Holder ceases to hold such position as
     a result of:

                                      -97-

<PAGE>


     (i)  ceasing  to  meet  the  qualifications  set  forth  in  the  corporate
          legislation applicable to the Company;

     (ii) a special  resolution  having been passed by the  shareholders  of the
          Company removing the Option Holder as a director of the Company or any
          Subsidiary; or

     (iii)an order made by any Regulatory  Authority  having  jurisdiction to so
          order;

     in which case the Expiry Date shall be the date the Option Holder ceases to
     hold such position; OR

(b)  Ceasing to be  Employed  or  Engaged - In the event that the Option  Holder
     holds his or her Option as an Employee or Consultant and such Option Holder
     ceases to hold such position  other than by reason of death or  Disability,
     the Expiry Date of the Option shall be, unless otherwise expressly provided
     for in the Option  Certificate,  the 30th day following the date the Option
     Holder  ceases to hold such  position,  unless the Option  Holder ceases to
     hold such position as a result of:

     (i)  termination for cause;

     (ii) resigning or terminating his or her position; or

     (iii)an order made by any Regulatory  Authority  having  jurisdiction to so
          order;

     in which case the Expiry Date shall be the date the Option Holder ceases to
     hold such position.

In the event that the Option  Holder  ceases to hold the position of  Executive,
Employee or Consultant for which the Option was originally granted, but comes to
hold a different  position as an Executive,  Employee or Consultant prior to the
expiry of the  Option,  the  Committee  may, in its sole  discretion,  choose to
permit the Option to stay in place for that Option  Holder with such Option then
to be treated as being held by that Option Holder in his or her new position and
such  will not be  considered  to be an  amendment  to the  Option  in  question
requiring  the  consent of the Option  Holder  under  section  9.2 of this Plan.
Notwithstanding  anything else  contained  herein,  in no case will an Option be
exercisable later than the Expiry Date of the Option.

5.5           VESTING OF OPTION AND ACCELERATION

The vesting schedule for an Option, if any, shall be determined by the Committee
and shall be set out in the Option  Certificate issued in respect of the Option.
The Committee may elect, at any time, to accelerate the vesting  schedule of one
or more Options including,  without limitation,  on a Triggering Event, and such
acceleration  will not be  considered  an  amendment  to the Option in  question
requiring the consent of the Option Holder under section 9.2 of this Plan.

5.6           ADDITIONAL TERMS

Subject  to  all  applicable  Regulatory  Rules  and  all  necessary  Regulatory
Approvals, the Committee may attach additional terms and conditions to the grant
of a particular  Option,  such terms and  conditions to be set out in a schedule
attached to the Option Certificate.

                                    SECTION 6
                           TRANSFERABILITY OF OPTIONS

6.1           NON-TRANSFERABLE

Except as provided  otherwise in this Section 6, Options are  non-assignable and
non-transferable.

6.2           DEATH OF OPTION HOLDER

In the event of the Option  Holder's  death,  any  Options  held by such  Option
Holder shall pass to the Personal  Representative of the Option Holder and shall
be exercisable by the Personal Representative on or before the date which is the
earlier of 12 months following the date of death and the applicable Expiry Date.

                                      -98-

<PAGE>


6.3           DISABILITY OF OPTION HOLDER

If the employment or engagement of an Option Holder as an Employee or Consultant
or the position of an Option Holder as a director or officer of the Company or a
Subsidiary  is  terminated  by the  Company  by reason of such  Option  Holder's
Disability,  any Options held by such Option Holder shall be exercisable by such
Option Holder or by the Personal  Representative  on or before the date which is
the earlier of 12 months following the termination of employment,  engagement or
appointment as a director or officer and the applicable Expiry Date.

6.4           DISABILITY AND DEATH OF OPTION HOLDER

If an Option  Holder  has  ceased to be  employed,  engaged  or  appointed  as a
director  or officer of the  Company or a  Subsidiary  by reason of such  Option
Holder's  Disability  and such Option  Holder  dies within six months  after the
termination  of such  engagement,  any Options  held by such Option  Holder that
could have been  exercised  immediately  prior to his or her death shall pass to
the Personal  Representative  of such Option Holder and shall be  exercisable by
the  Personal  Representative  on or before the date which is the  earlier of 12
months following the death of such Option Holder and the applicable Expiry Date.

6.5           VESTING

Unless the Committee determines  otherwise,  Options held by or exercisable by a
Personal  Representative  shall,  during the period prior to their  termination,
continue to vest in accordance  with any vesting  schedule to which such Options
are subject.

6.6           DEEMED NON-INTERRUPTION OF ENGAGEMENT

Employment  or  engagement  by the Company  shall be deemed to  continue  intact
during  any  military  or sick  leave or other bona fide leave of absence if the
period of such leave  does not exceed 90 days or, if longer,  for so long as the
Option  Holder's  right to  re-employment  or  re-engagement  by the  Company is
guaranteed either by statute or by contract. If the period of such leave exceeds
90  days  and the  Option  Holder's  re-employment  or  re-engagement  is not so
guaranteed,  then his or her  employment or  engagement  shall be deemed to have
terminated on the ninety-first day of such leave.

                                    SECTION 7
                               EXERCISE OF OPTION

7.1           EXERCISE OF OPTION

An  Option  may  be  exercised  only  by  the  Option  Holder  or  the  Personal
Representative   of  any  Option  Holder.  An  Option  Holder  or  the  Personal
Representative  of any Option  Holder may exercise an Option in whole or in part
at any time and from time to time  during the  Exercise  Period up to the Expiry
Time on the Expiry Date by delivering to the Administrator the required Exercise
Notice,  the applicable Option  Certificate and a certified cheque or bank draft
payable to the Company in an amount equal to the aggregate Exercise Price of the
Shares  then  being   purchased   pursuant  to  the   exercise  of  the  Option.
Notwithstanding  anything else  contained  herein,  Options may not be exercised
during Black-Out unless the Committee determines otherwise.

7.2           ISSUE OF SHARE CERTIFICATES

As soon as reasonably  practicable following the receipt of the Exercise Notice,
the Administrator shall cause to be delivered to the Option Holder a certificate
for the Shares so  purchased.  If the number of Shares so purchased is less than
the  number  of  Shares  subject  to the  Option  Certificate  surrendered,  the
Administrator  shall also  provide a new Option  Certificate  for the balance of
Shares available under the Option to the Option Holder  concurrent with delivery
of the Share Certificate.

7.3           NO RIGHTS AS SHAREHOLDER

Until the date of the  issuance  of the  certificate  for the  Shares  purchased
pursuant to the exercise of an Option,  no right to vote or receive dividends or
any other  rights as a  shareholder  shall  exist with  respect to such  Shares,
notwithstanding  the  exercise of the Option,  unless the  Committee  determines
otherwise.  In the event of any  dispute  over the date of the  issuance  of the
certificates,  the  decision of the  Committee  shall be final,  conclusive  and
binding.

                                      -99-

<PAGE>


                                    SECTION 8
                                 ADMINISTRATION

8.1           BOARD OR COMMITTEE

The Plan  shall be  administered  by the  Board,  by a  Committee  of the  Board
appointed in accordance with section 8.2 below, or by an Administrator appointed
in accordance with subsection 8.4(b).

8.2           APPOINTMENT OF COMMITTEE

The Board may at any time appoint a Committee,  consisting  of not less than two
of its members, to administer the Plan on behalf of the Board in accordance with
such terms and conditions as the Board may prescribe, consistent with this Plan.
Once appointed,  the Committee shall continue to serve until otherwise  directed
by the  Board.  From  time to  time,  the  Board  may  increase  the size of the
Committee and appoint additional members, remove members (with or without cause)
and appoint new members in their place, fill vacancies however caused, or remove
all members of the Committee and thereafter directly administer the Plan.

8.3           QUORUM AND VOTING

A majority  of the  members of the  Committee  shall  constitute  a quorum  and,
subject to the limitations in this Section 8, all actions of the Committee shall
require  the  affirmative  vote of members  who  constitute  a majority  of such
quorum.  Members  of the  Committee  may  vote  on  any  matters  affecting  the
administration  of the Plan or the grant of Options pursuant to the Plan, except
that no such  member  shall act upon the  granting  of an Option to  himself  or
herself (but any such member may be counted in  determining  the  existence of a
quorum at any meeting of the Committee during which action is taken with respect
to the granting of Options to that member). The Committee may approve matters by
written resolution signed by a majority of the quorum.

8.4           POWERS OF COMMITTEE

The  Committee  (or the  Board  if no  Committee  is in  place)  shall  have the
authority to do the following:

(a)  administer the Plan in accordance with its terms;

(b)  appoint or replace the Administrator from time to time;

(c)  determine all  questions  arising in  connection  with the  administration,
     interpretation  and  application  of  the  Plan,  including  all  questions
     relating to the Market Value of the Shares;

(d)  correct any defect,  supply any information or reconcile any  inconsistency
     in the Plan in such manner and to such extent as shall be deemed  necessary
     or advisable to carry out the purposes of the Plan;

(e)  prescribe,  amend,  and  rescind  rules  and  regulations  relating  to the
     administration of the Plan;

(f)  determine the duration and purposes of leaves of absence from employment or
     engagement  by the Company which may be granted to Option  Holders  without
     constituting  a termination of employment or engagement for purposes of the
     Plan;

(g)  do the following with respect to the granting of Options:

     (i)  determine the  Executives,  Employees or  Consultants  to whom Options
          shall be granted,  based on the  eligibility  criteria set out in this
          Plan;

     (ii) determine  the terms of the Option to be  granted to an Option  Holder
          including,  without limitation,  the Grant Date, Expiry Date, Exercise
          Price and vesting schedule (which need not be identical with the terms
          of any other Option);

     (iii)subject to any necessary  Regulatory  Approvals and section 9.2, amend
          the terms of any Options;

                                      -100-

<PAGE>


     (iv) determine when Options shall be granted; and

     (v)  determine the number of Shares subject to each Option;

(h)  accelerate the vesting schedule of any Option previously granted; and

(i)  make  all  other  determinations   necessary  or  advisable,  in  its  sole
     discretion, for the administration of the Plan.

8.5           ADMINISTRATION BY COMMITTEE

All  determinations  made  by the  Committee  in  good  faith  shall  be  final,
conclusive  and binding upon all persons.  The  Committee  shall have all powers
necessary or appropriate to accomplish its duties under this Plan.

8.6           INTERPRETATION

The interpretation by the Committee of any of the provisions of the Plan and any
determination by it pursuant thereto shall be final,  conclusive and binding and
shall not be subject to dispute by any Option Holder. No member of the Committee
or any person acting  pursuant to authority  delegated by it hereunder  shall be
personally  liable for any action or  determination  in connection with the Plan
made or taken in good  faith  and each  member  of the  Committee  and each such
person shall be entitled to  indemnification  with respect to any such action or
determination in the manner provided for by the Company.

                                    SECTION 9
                             APPROVALS AND AMENDMENT

9.1           SHAREHOLDER APPROVAL OF PLAN

If required by a Regulatory Authority or by the Committee, this Plan may be made
subject  to the  approval  of a  majority  of the votes cast at a meeting of the
shareholders  of the  Company  or by a majority  of votes cast by  disinterested
shareholders at a meeting of  shareholders  of the Company.  Any Options granted
under  this Plan  prior to such time will not be  exercisable  or binding on the
Company unless and until such shareholder approval is obtained.

9.2           AMENDMENT OF OPTION OR PLAN

Subject to any required  Regulatory  Approvals,  the  Committee may from time to
time amend any existing  Option or the Plan or the terms and  conditions  of any
Option thereafter to be granted provided that where such amendment relates to an
existing Option and it would:

(a)  materially decrease the rights or benefits accruing to an Option Holder; or

(b)  materially increase the obligations of an Option Holder;

then,  unless otherwise  excepted out by a provision of this Plan, the Committee
must also  obtain the written  consent of the Option  Holder in question to such
amendment.  If at the time the Exercise Price of an Option is reduced the Option
Holder is an Insider of the Company, the Insider must not exercise the option at
the reduced  Exercise  Price  until the  reduction  in  Exercise  Price has been
approved by the disinterested shareholders of the Company.

                                   SECTION 10
             CONDITIONS PRECEDENT TO ISSUANCE OF OPTIONS AND SHARES

10.1          COMPLIANCE WITH LAWS

An Option  shall not be granted  or  exercised,  and Shares  shall not be issued
pursuant to the  exercise of any Option,  unless the grant and  exercise of such
Option and the issuance and delivery of such Shares  comply with all  applicable
Regulatory  Rules, and such Options and Shares will be subject to all applicable
trading restrictions in effect pursuant to such Regulatory Rules and the Company
shall be  entitled  to  legend  the  Option  Certificates  and the  certificates
representing such Shares accordingly.


                                      -101-

<PAGE>


10.2          OBLIGATION TO OBTAIN REGULATORY APPROVALS

In  administering  this Plan, the Committee  will seek any Regulatory  Approvals
which may be required.  The Committee  will not permit any Options to be granted
without first obtaining the necessary  Regulatory  Approvals unless such Options
are granted  conditional  upon such Regulatory  Approvals  being  obtained.  The
Committee  will make all filings  required with the  Regulatory  Authorities  in
respect of the Plan and each grant of Options hereunder.  No Option granted will
be  exercisable  or  binding  on the  Company  unless  and until  all  necessary
Regulatory  Approvals  have been  obtained.  The Committee  shall be entitled to
amend  this  Plan and the  Options  granted  hereunder  in order to  secure  any
necessary  Regulatory Approvals and such amendments will not require the consent
of the Option Holders under section 9.2 of this Plan.

10.3          INABILITY TO OBTAIN REGULATORY APPROVALS

The  Company's  inability  to obtain  Regulatory  Approval  from any  applicable
Regulatory Authority, which Regulatory Approval is deemed by the Committee to be
necessary  to complete  the grant of Options  hereunder,  the  exercise of those
Options or the lawful  issuance and sale of any Shares pursuant to such Options,
shall  relieve  the  Company of any  liability  with  respect to the  failure to
complete such transaction.

                                   SECTION 11
                           ADJUSTMENTS AND TERMINATION

11.1          TERMINATION OF PLAN

Subject to any necessary  Regulatory  Approvals,  the Committee may terminate or
suspend the Plan. Unless earlier  terminated as provided in this Section 11, the
Plan shall  terminate  on, and no more Options  shall be granted  under the Plan
after, the tenth anniversary of the Effective Date of the Plan.

11.2          NO GRANT DURING SUSPENSION OF PLAN

No Option may be granted during any  suspension,  or after  termination,  of the
Plan.  Suspension or termination  of the Plan shall not,  without the consent of
the Option Holder,  alter or impair any rights or  obligations  under any Option
previously granted.

11.3          ALTERATION IN CAPITAL STRUCTURE

If there is a material  alteration  in the capital  structure of the Company and
the Shares are consolidated,  subdivided,  converted, exchanged, reclassified or
in any way substituted  for, the Committee  shall make such  adjustments to this
Plan and to the  Options  then  outstanding  under  this  Plan as the  Committee
determines to be appropriate and equitable under the circumstances,  so that the
proportionate  interest of each Option Holder shall, to the extent  practicable,
be  maintained  as before the  occurrence of such event.  Such  adjustments  may
include, without limitation:

(a)  a change in the  number or kind of shares of the  Company  covered  by such
     Options; and

(b)  a change in the Exercise Price payable per Share  provided,  however,  that
     the  aggregate  Exercise  Price  applicable to the  unexercised  portion of
     existing  Options  shall  not  be  altered,  it  being  intended  that  any
     adjustments  made with  respect  to such  Options  shall  apply only to the
     Exercise Price per Share and the number of Shares subject thereto.

For purposes of this section 11.3, and without limitation, neither:

(c)  the  issuance of  additional  securities  of the  Company in  exchange  for
     adequate consideration (including services); nor

(d)  the conversion of  outstanding  securities of the Company into Shares shall
     be  deemed to be  material  alterations  of the  capital  structure  of the
     Company.

Any  adjustment  made to any Options  pursuant to this section 11.3 shall not be
considered an amendment  requiring the Option Holder's  consent for the purposes
of Section 9.2 of this Plan.


                                      -102-

<PAGE>



11.4          TRIGGERING EVENTS

Subject to the Company complying with section 11.5 and any necessary  Regulatory
Approvals,  and  notwithstanding any other provisions of this Plan or any Option
Certificate,  the  Committee  may cause  all or a  portion  of all or any of the
Options  granted under the Plan to terminate upon the occurrence of a Triggering
Event  without the  consent of the Option  Holder or Holders in  question.  Such
termination  shall not be considered an amendment  requiring the Option Holder's
consent for the purpose of section 9.2 of this Plan.

11.5          NOTICE OF TERMINATION BY TRIGGERING EVENT

In the event that the  Committee  wishes to cause all or a portion of any of the
Options  granted under this Plan to terminate on the  occurrence of a Triggering
Event,  it must give written  notice to the Option  Holders in question not less
than 10 days prior to the consummation of a Triggering Event. Upon the giving of
such notice and subject to any necessary  Regulatory  Approvals,  all Options or
portions  thereof granted under the Plan which the Company proposes to terminate
shall become  immediately  exercisable  notwithstanding  any contingent  vesting
provision to which such Options may have otherwise been subject.

11.6          DETERMINATIONS TO BE MADE BY COMMITTEE

Adjustments  and  determinations  under  this  Section  11  shall be made by the
Committee,  whose  decisions as to what  adjustments or  determination  shall be
made, and the extent thereof, shall be final, binding, and conclusive.



                                      -103-

<PAGE>

                                  SCHEDULE "A"

Without prior written  approval of the TSX Venture  Exchange and compliance with
all  applicable  securities  legislation,  the  securities  represented  by this
certificate may not be sold, transferred, hypothecated or otherwise traded on or
through the facilities of the TSX Venture  Exchange or otherwise in Canada or to
or for the benefit of a Canadian  resident until 12:01 a.m. on _______[date four
months and one day after Grant Date].

                              HILTON PETROLEUM LTD.

                     STOCK OPTION PLAN - OPTION CERTIFICATE

This Option Certificate is issued pursuant to the provisions of the Stock Option
Plan (the "Plan") of Hilton  Petroleum  Ltd. (the  "Company") and evidences that
______[Name of Option  Holder] is the holder (the "Option  Holder") of an option
(the  "Option") to purchase up to _______  common  shares (the  "Shares") in the
capital stock of the Company at a purchase price of Cdn.$_______  per Share (the
"Exercise  Price").  This Option may be  exercised  at any time and from time to
time from and including the following  Grant Date through to and including up to
5:00 p.m. local time in Vancouver,  British  Columbia (the "Expiry Time") on the
following Expiry Date:

     (a)  the Grant Date of this Option is _____, 200__; and

     (b)  subject to  sections  5.4,  6.2,  6.3,  6.4 and 11.4 of the Plan,  the
          Expiry Date of this Option is ____,200__.

To exercise this Option,  the Option Holder must deliver to the Administrator of
the Plan,  prior to the Expiry Time on the Expiry Date, an Exercise  Notice,  in
the form  provided  in the  Plan,  together  with the  original  of this  Option
Certificate  and a certified  cheque or bank draft  payable to the Company in an
amount equal to the aggregate of the Exercise  Price of the Shares in respect of
which this Option is being exercised.

This  Option  Certificate  and the Option  evidenced  hereby is not  assignable,
transferable  or negotiable  and is subject to the detailed terms and conditions
contained in the Plan which are  incorporated by reference  herein.  This Option
Certificate is issued for  convenience  only and in the case of any dispute with
regard to any  matter in  respect  hereof,  the  provisions  of the Plan and the
records of the Company shall  prevail.  This Option is also subject to the terms
and conditions contained in the schedules, if any, attached hereto.

Any share certificates issued pursuant to an exercise of the Option before 12:01
a.m. on  _____[date  four months and one day after Grant Date] will  contain the
following legend:

          "Without  prior  written  approval  of the TSX  Venture  Exchange  and
          compliance with all applicable securities legislation,  the securities
          represented  by  this  certificate  may  not  be  sold,   transferred,
          hypothecated  or otherwise  traded on or through the facilities of the
          TSX Venture  Exchange or  otherwise in Canada or to or for the benefit
          of a Canadian resident until 12:01 a.m. on ______[date four months and
          one day after Grant Date]."

If the Option Holder is a resident or citizen of the United States of America at
the time of the  exercise of the Option,  the  certificate(s)  representing  the
Shares will be endorsed with the following or a similar legend:

          "The  securities   represented  by  this  certificate  have  not  been
          registered under the Securities Act of 1933, as amended, of the United
          States of  America  (the  "Act") or the  securities  laws of any state
          ("State")  of the  United  States  of  America  and may  not be  sold,
          transferred,   pledged,  hypothecated  or  distributed,   directly  or
          indirectly,  to a U.S.  person (as defined in  Regulation S adopted by
          the U.S.  Securities and Exchange  Commission under the Act) or within
          the United States unless such securities are (i) registered  under the
          Act and any applicable  State  securities act (a "State Act"), or (ii)
          exempt from  registration  under the Act and any applicable  State Act
          and the  Company  has  received  an opinion of counsel to such  effect
          reasonably  satisfactory  to it,  or  (iii)  sold in  accordance  with
          Regulation  S and the  Company  has  received an opinion of counsel to
          such effect reasonably satisfactory to it."

This  Option  was  granted  to the  Option  Holder in his or her  capacity  as a
_________[pick one: Director,  Officer,  Advisor,  Employee,  Consultant] of the
Company  ________ ,[and shall continue in effect should his or her status change
and he or she  continue  in a new  capacity  as a  Director,  Officer,  Advisor,
Employee or Consultant of the Company].

                                      -104-

<PAGE>



HILTON PETROLEUM LTD.

Per:

         _______________, Administrator,
         Stock Option Plan

The Option Holder  acknowledges  receipt of a copy of the Plan and represents to
the Company that the Option Holder is familiar with the terms and  conditions of
the  Plan,  and  hereby  accepts  this  Option  subject  to all of the terms and
conditions of the Plan. The Option Holder agrees to execute,  deliver,  file and
otherwise assist the Company in filing any report,  undertaking or document with
respect to the  awarding of the Option and  exercise  of the  Option,  as may be
required by the Regulatory  Authorities.  The Option Holder further acknowledges
that if the Plan has not been approved by the shareholders of the Company on the
Grant  Date,  this  Option  is not  exercisable  until  such  approval  has been
obtained.


Signature of Optionee:

                                         Date signed:
-------------------------------                       --------------------------
Signature


-------------------------------
Print Name


-------------------------------
Address






                                      -105-

<PAGE>



                          OPTION CERTIFICATE - SCHEDULE



The additional terms and conditions  attached to the Option  represented by this
Option Certificate are as follows:

1.   vest as to:

     (a)  -------- Shares on ------------- [date];

     (b)  -------- Shares on ------------- [date];

     (c)  -------- Shares on ------------- [date]; and

     (d)  -------- Shares on ------------- [date].

2.

3.

4.

5.








                                      -106-

<PAGE>


                                  SCHEDULE "B"

                              HILTON PETROLEUM LTD.
                                STOCK OPTION PLAN

                          NOTICE OF EXERCISE OF OPTION




TO:           The Administrator, Stock Option Plan
              HILTON PETROLEUM LTD.
              Suite 1305, 1090 West Georgia Street
              Vancouver, BC  V6E 3V7
              (or such other address as the Company may advise)


The undersigned  hereby  irrevocably gives notice,  pursuant to the Stock Option
Plan (the "Plan") of Hilton Petroleum Ltd. (the  "Company"),  of the exercise of
the Option to acquire and hereby subscribes for (cross out inapplicable item):

(a)  all of the Shares; or

(b)  __________ of the Shares;

which are the subject of the Option  Certificate  attached  hereto  (attach your
original Option Certificate).

The undersigned  tenders  herewith a certified cheque or bank draft (circle one)
payable to "Hilton Petroleum Ltd." in an amount equal to the aggregate  Exercise
Price of the aforesaid  Shares and directs the Company to issue the  certificate
evidencing  said  Shares  in the name of the  undersigned  to be  mailed  to the
undersigned at the following address (provide full complete address):


              ___________________________________

              ___________________________________

              ___________________________________

              ___________________________________


The undersigned  acknowledges  the Option is not validly  exercised  unless this
Notice is completed  in strict  compliance  with this form and  delivered to the
required  address with the  required  payment  prior to 5:00 p.m.  local time in
Vancouver, B.C. on the Expiry Date of the Option.


DATED the ___________day of _______________, 20___.




                                                --------------------------------
                                                Signature of Option Holder

                                      -107-
<PAGE>