<PAGE>   1
                                                                    EXHIBIT 10.a

                             EXPLORATION AGREEMENT

                                  DINDAL BLOCK
                                   SUB-THRUST

This Exploration Agreement ("Agreement") is hereby entered into on this the 25th
day of January, 2001, by and between GHK Company Colombia ("GHK"), Seven Seas
Petroleum Colombia, Inc. and Petrolinson S.A. (hereinafter referred to
collectively as "Farmees") and Sociedad Internacional Petrolera S.A.
("Sipetrol") and Cimarrona L.L.C. ("Cimarrona") (Sipetrol and Cimarrona are
hereinafter referred to together as "Farmors") The Farmees and the Farmors are
hereinafter sometimes referred to collectively as the "Parties" or individually
as "Party."
                                    RECITALS

Whereas, Empresa Colombiana de Petroleos ("Ecopetrol"), Farmees and Farmors are
the current parties to the Contract covering the Dindal Block in Colombia and,

Whereas, the Parties have jointly sought the On-Top Contract relative to the
Deep Rights underlying the Dindal Block and,

Whereas, the Parties wish to see the Test Well drilled in 2001 and to otherwise
comply with obligations under the On-Top Contract, if granted, and to test the
Deep Rights and,

Whereas, the Parties realize that if the terms of the On-Top Contract are not
met, the Deep Rights could be partially relinquished to Ecopetrol, denying the
Parties any interest in such relinquished Deep Rights and,

Whereas, to preserve such Deep Rights, Farmors are granted an option to elect to
reverse the arrangement with Farmees and assume one hundred percent (100%) of
the Farmees' rights under the On-Top Contract with regard to the Deep Rights, in
exchange for an Overriding Royalty Interest in accordance with the terms stated
herein and,

Whereas, the On-Top Contract may not be granted and the Farmees may proceed to
drill a Test Well, pursuant to the terms hereof and,

Whereas, if the Farmees drill a Test Well as a Producing Well, in accordance
with the terms of this Agreement, Farmees will earn, (A) as to Sipetrol, either
(1) fifty percent (50%) of Sipetrol's



EXPLORATION AGREEMENT -- Page 1 of 22
<PAGE>   2

Participating Interest in the Deep Rights or, at Sipetrol's election, (2) one
hundred percent (100%) of Sipetrol's Participating Interest in the Deep Rights,
less and except an Overriding Royalty Interest, in accordance with the terms as
stated herein and, (B) as to Cimarrona, one hundred percent (100%) of
Cimarrona's Entitlement applicable to the Test Well and the Test Well only,
until the satisfaction of the Contract Penalty applicable thereto and,

Whereas, if the Farmees fail to earn an interest as described above and Farmors
so elect, Farmees will grant the Farmors a reciprocal farmout arrangement in
accordance with the terms as stated herein.

Now, therefore, in consideration of the mutual benefits to both Farmors and
Farmees, the Parties agree as follows:

1.0      DEFINITIONS

         For purposes of this Agreement, the following terms shall have the
         meanings given to them below:

1.1      "Agreement" shall mean this Exploration Agreement.

1.2      "Affiliate" shall mean a company, partnership or other legal entity
         which controls, or is controlled by an entity which controls a Party.
         "Control" in this context means the legal or beneficial ownership
         directly or indirectly of fifty percent (50%) or more of the shares
         conferring upon the holder the right to vote for or appoint the
         directors or officers of such company, partnership or legal entity.

1.3      "Assignment" shall mean, the assignments attached hereto as Exhibits
         "B1," "B2," "C," "D," "H," "I," "N," "O," and "P." Each such Assignment
         shall contain language addressing the depths to be assigned in
         accordance with the Earning Obligations and the other provisions
         hereof. The Parties agree to use their best efforts and to perform all
         reasonable endeavors and required acts in order to obtain Assignment
         Approval. Each Assignor, under any of the Assignments, shall except and
         reserve to itself all rights of usage, ingress and egress reasonable,
         necessary or convenient for the full enjoyment of all rights reserved
         or retained. Should an Assignment be fully executed by the



EXPLORATION AGREEMENT -- Page 2 of 22
<PAGE>   3

         appropriate parties, but not approved by Ecopetrol, the executing
         parties shall treat the Assignment as effective, as among themselves,
         notwithstanding Ecopetrol's refusal to approve such Assignment and the
         executing parties shall replicate investments, costs, deductions,
         revenue sharing, profits, taxes, etc. as if Ecopetrol approved such
         Assignment.

1.4      "Assignment Approval" shall mean any and all necessary or useful formal
         Assignment approvals or authorizations given by the Government.

1.5      "Cambao Fault" shall mean that certain fault believed to underlie the
         Contract Area below the stratigraphic equivalent of the deepest
         producing formation in the Guaduas Field.

1.6      "Confidential Information" shall mean any and all information acquired,
         owned, or held, under the terms of the Operating Agreement.

1.7      "Contract" shall mean the Dindal Association Contract for petroleum
         exploration, dated January 22, 1993, as amended.

1.8      "Contract Area" shall mean the area and the Deep Rights covered under
         the Contract and/or the On-Top Contract.

1.9      "Contract Penalty" shall mean with respect to the Obligatory Well(s)
         (being the Test Well and the second Obligatory Well) the penalty
         provided for an Exploration Well in the Operating Agreement, except the
         one hundred percent (100%) penalty in Article 7.5(A)(5) shall be
         increased to five hundred percent (500%) and the totality of the
         penalties associated with each such operation(s) shall be satisfied
         from the revenues attributable to that specific well bore for which the
         penalty or penalties apply. (For the avoidance of doubt, only revenues
         generated from the Test Well and the Test Well only shall be applied to
         satisfy the penalty associated with the drilling of the Test Well.
         Similarly, only the revenues from the second Obligatory Well and the
         second Obligatory Well only shall be applied to satisfy the penalty
         associated with the drilling of the Second Obligatory Well.) Operations
         which are not associated with the Obligatory Well(s) shall be conducted
         in accordance with the Operating Agreement.



EXPLORATION AGREEMENT -- Page 3 of 22
<PAGE>   4

1.10.    "Deep Rights" shall mean all depths found below the stratigraphic
         equivalent of the deepest producing depth in the Guaduas Field
         underlying the Contract and/or the On-Top Contract.

1.11     "Dindal Block" shall mean the lands and depths covered by the Contract.

1.12     "Earning Obligations" shall mean Farmees' (or in the event of a
         reciprocal election by the Farmors, shall mean the Farmors') payment of
         any and all costs associated with the drilling, logging, testing, and
         abandonment (in the event that the Test Well is not a Producing Well)
         of the Test Well. Such costs shall include, without limitation, all
         pre-spud preparatory operations, planning, permitting, environmental
         surveys and studies, site preparation, security, mobilization, and
         demobilization of the drilling rig and ancillary equipment, drilling,
         sidetracking, fishing, suspending, testing, coring and electric
         wireline operations, standby rig costs incurred while the decision to
         test the well is being made, or plugging and abandoning. Farmees (or in
         the event of a reciprocal election by the Farmors, shall mean Farmors)
         must: (i) spud and complete the Test Well as set forth in Section 2.3
         hereof; (ii) either (a) drill and complete the Test Well as a Producing
         Well at a depth which is at least as deep as the shallower of fifteen
         thousand (15,000) feet or a depth of three thousand (3,000) feet below
         the Cambao Fault, to earn an Assignment of those depths below the
         stratigraphic equivalent of the deepest producing depth in the Guaduas
         Field down to the deepest depth covered in the Contract or On-Top
         Contract, or (b) drill and complete the Test Well as a Producing Well
         at a depth which is below the stratigraphic equivalent of the deepest
         producing formation in the Guaduas Field, but shallower than either
         fifteen thousand (15,000) or three thousand (3,000) feet below the
         Cambao Fault, to earn an Assignment of only such depths below the
         stratigraphic equivalent of the deepest producing depth in the Guaduas
         Field down to the stratigraphic equivalent of one hundred (100) feet
         below the deepest producing perforation in such Test Well; and (iii)
         furnish Farmors with all data and information required by Exhibit "F."
         In addition, earning requires strict adherence to the other terms and
         conditions of this Agreement.

1.13     "Effective Date" shall mean the date first written above.




EXPLORATION AGREEMENT -- Page 4 of 22
<PAGE>   5

1.14     "Government" shall mean, according to the relevant context, the
         government of the Republic of Colombia and Empresa Colombiana de
         Petroleos, also known as "Ecopetrol", as well as any instrumentality
         thereof or enterprise controlled by either of them.

1.15     "Objective Depth" shall, subject to Section 1.12(ii) hereof, mean the
         drilling of a Test Well to the shallower of fifteen thousand (15,000)
         feet or a depth of three thousand (3,000) feet below the Cambao Fault.

1.16     "Obligatory Well(s)" shall mean the obligatory well(s) under the
         On-Top Contract.

1.17     "On-Top Assignment" shall mean the transfer from the Farmees to
         Sipetrol of its Overriding Royalty Interest, and to Cimarrona of a
         working interest subject to the Contract Penalty for production from
         the Test Well and the Test Well only, each as described in Exhibits "B1
         and B2," attached hereto and by reference thereto made a part hereof.
         In the event Sipetrol exercises its right to convert its Overriding
         Royalty Interest into a Participating Interest as provided herein,
         Sipetrol and Farmees shall use Exhibit "A" to Exhibit "B1" for such
         purpose. Should Farmees fail to satisfy any of the Earning Obligations,
         the Assignments described in Exhibits "N" and "O," attached hereto and
         by reference thereto and made a part hereof, shall be applicable.
         Should Farmors fail to satisfy any of the Earning Obligations, the
         Assignment described in Exhibit "P," attached thereto and made a part
         hereof, shall be applicable.

1.18     "On-Top Contract" shall mean an Association Contract to be entered into
         between the Farmees and Ecopetrol. This Association Contract shall at a
         minimum cover the Deep Rights under the area covered by the Dindal
         Contract. This Association Contract is further described as the "Deep
         Exploration Association Contract" in the attached Exhibit "A."

1.19     "On-Top Contract Area" shall mean the contract area covered by the
         On-Top Contract.

1.20     "Operating Agreement" shall mean the Dindal Joint Operating Agreement
         dated August 1, 1994, as amended by the terms hereof.




EXPLORATION AGREEMENT -- Page 5 of 22
<PAGE>   6

1.21     "Overriding Royalty Interest" shall mean, if Sipetrol is the recipient,
         a four point eight six one one five percent (4.86115%) of 8/8ths
         overriding royalty interest in all Hydrocarbons, as defined in the
         Contract or the On-Top Contract, produced from the Contract Area or the
         On-top Contract Area, as applicable. If Farmees are the recipient, the
         Overriding Royalty Interest percentage shall be eight point five two
         five four one percent (8.52541%). Any such Overriding Royalty Interest
         shall not be proportionately reduced for any reason whatsoever, except
         by a Government right to back-in, convert or assume a Participation
         Interest or working interest, pursuant to the Contract or On-Top
         Contract, as applicable.

1.22     "Participating Interest" shall mean, as applicable, the undivided
         working interest in the rights and obligations of a Party in and under
         the Contract, the Contract Area and the Operating Agreement or, as the
         context requires, under the On-Top Contract and the On-Top Contact
         Area, expressed as a percentage.

1.23     "Producing Well" shall mean a Test Well that proves to be capable,
         during testing operations, of producing at least that amount of
         Hydrocarbons sufficient to generate one thousand one hundred and
         seventy five U.S. dollars ($1,175) per day of revenue.

1.24     "Test Well" shall mean an exploratory well (or permitted substitute
         well(s)) that is designed to be drilled to the Objective Depth. The
         Test Well may be drilled in a legal location selected by the Farmees
         (or in the event of a reciprocal election by the Farmors, the Farmors).
         "Test Well" shall also include any substitute well drilled pursuant to
         Section 3.6.

All terms which are used in this Agreement and which are also defined in the
Contract or the Operating Agreement shall have the same meaning as expressed in
the Contract or Operating Agreement unless otherwise defined herein.

2.0      ISSUANCE OF THE ON TOP CONTRACT

2.1      The Parties shall, upon the execution of this Agreement, execute and
         transmit to Ecopetrol the letter attached hereto as Exhibit "A,"
         requesting that the On-Top Contract be granted solely in the name of
         Farmees. Farmees shall have the exclusive authority to



EXPLORATION AGREEMENT -- Page 6 of 22
<PAGE>   7

         negotiate the terms of and execute the On-Top Contract, assuming all
         costs, expenses, obligations, and liabilities associated therewith;
         provided that the terms of the On-Top Contract do not materially vary
         from the terms set forth in Exhibit "M," attached hereto, except that
         the On-Top Contract shall not (1) name Sipetrol or Cimarrona as
         parties, (2) shall not impose any liabilities on Sipetrol or Cimarrona
         whatsoever and (3) contain any bonding or security requirement. Any
         other material variance between the On-Top Contract and the terms of
         Exhibit "M" shall require the approval of the Farmors prior to the
         execution of the On-Top Contract.

2.2      In the event the On-Top Contract becomes effective, then Farmees shall,
         simultaneously with the execution of the On-Top Contract, execute and
         deliver to Sipetrol its On-Top Assignment using Exhibit "B1" and shall,
         upon the Farmees completing the Earning Obligations, execute and
         deliver to Cimarrona its On-Top Assignment using Exhibit "B2".

2.3      Farmees shall have twelve (12) months from the effective date of the
         On-Top Contract to spud the Test Well and up until September 30, 2002
         to complete the Earning Obligations.

2.4      Should the Farmees timely complete the Earning Obligations, Sipetrol
         shall have the right to convert its Overriding Royalty Interest into a
         Participation Interest equal to one half of its original Participation
         Interest (an undivided Participation Interest of sixteen point four
         five percent (16.45%). Sipetrol shall have the option to exercise this
         conversion right within thirty (30) days after it is in possession of
         all data and information described in Exhibit "F" and the conversion
         shall be effective the first (1st) day of the month in which Sipetrol
         exercises such conversion right. The exercise of such option shall
         constitute Sipetrol's agreement to pay its proportionate part of all
         completion costs (except perforation, rig and other costs associated
         with actual testing, if a production test is utilized for the purpose
         of determining if the well is a Producing Well), equipping costs, and
         other costs associated with producing the well. Farmees shall send a
         notice to Farmors informing Farmors that all information described in
         Exhibit "F" has been sent to Farmees.




EXPLORATION AGREEMENT -- Page 7 of 22
<PAGE>   8

2.5      Failure to Earn by the Farmees

         (A) In the event that the On-Top Contract is issued and Farmees fail to
         spud the Test Well under the On-Top Contract in a timely manner or fail
         to complete the Earning Obligations by September 30, 2002, then
         Farmors, at their exclusive election and as the sole consequence of
         such failure, may exercise an option to (i) in the case of Sipetrol,
         terminate its Overriding Royalty Interest and (ii) in the case of
         Cimarrona, accept an assignment of a Participating Interest, in
         exchange for one hundred percent (100%) of the Participating Interest
         under the On-Top Contract being transferred to the Farmors, subject to
         Farmees' Overriding Royalty Interest. In the event the Farmors so
         elect, the parties shall use the form of assignment attached hereto as
         Exhibit "H" to make this transfer effective and shall execute such
         assignment within two (2) days of being requested to do so. Such
         assignment shall be submitted to the Government for approval. Farmors
         shall thereafter assume all costs, expenses, obligations and
         liabilities associated with the On-Top Contract.

         (B) In the event that the Farmors elect to receive the assignments as
         provided in paragraph 2.5(A) above, the Farmors shall appoint a new
         operator to assume operations, under the On-Top Contract only,
         notwithstanding any provision contrary thereto contained in the
         Operating Agreement. The transfer of operations shall be subject to
         Government approval. Should such Government approval not be granted,
         all operations shall be subcontracted to the operator designed by the
         Farmors and the subcontracted operator shall assume all operations,
         under the On-Top Contract only, without any involvement or interference
         by the Farmees, except as necessary to comply with the requirements of
         the On-Top Contract. In addition, Farmors shall be entitled to seek an
         appropriate extension of the term of the On-Top Contract and such
         requested extension shall be supported by Farmees.

         (C) Should the Farmors exercise the option as described in paragraph
         2.5(A) above and satisfy the Earning Obligations of this Agreement,
         Farmees shall have an option to convert their Overriding Royalty
         Interest into one half of their original Participating Interest, or
         into an undivided Participating Interest of a twenty eight point eight
         (28.85%)



EXPLORATION AGREEMENT -- Page 8 of 22
<PAGE>   9

         Participating Interest in the On-Top Contract, as described in Exhibit
         "I." Farmees shall have the option to exercise this conversion right
         within thirty (30) days after they are in possession of all data and
         information described in Exhibit "F" and the conversion shall be
         effective the first (1st ) day of the month in which Farmees exercise
         such conversion right. Farmors shall send a notice to Farmees informing
         Farmees that all information described in Exhibit "F" has been sent to
         Farmees.

         (D) In the event that the Farmees drill the Test Well, but fail to
         complete any of the Earning Obligations in a timely manner, then, as an
         alternative to the assignment described in Section 2.5 (A) above, the
         Farmors shall be entitled to, at their election, to the Assignments
         described in Exhibits "N" and "O." Likewise, if the Farmors drill the
         Test Well as described in Section 2.5 (A) above, but fail to complete
         any of the Earning Obligations, then, as an alternative to the
         assignment described in Section 2.5 (A) and (C) above, the Farmees
         shall be entitled to, at their election, to the Assignment described in
         Exhibit "P."

2.6      The Second Obligatory Well

         In the event any of the Parties owning or entitled to own a
         Participating Interest in the Deep Rights elects to enter into the
         second phase of the On-Top Contract and a second Obligatory Well is
         required, then each other Party shall elect whether or not such other
         Party will participate in the said second well. Such election must be
         made within the earlier of thirty (30) days prior to the commencement
         of the second phase of the On-Top Contract or thirty (30) days from
         such Party's receipt of all the information listed under Exhibit "F."
         In the event all information listed under Exhibit "F" has not been
         received prior to the commencement of the second phase of the On-Top
         Contract, Farmees shall seek an extension from Ecopetrol for the
         commencement of the second phase. If a Party fails to make the election
         in a timely manner, then it shall be deemed to have elected not to
         participate in the second Obligatory Well. Any Party that elects not to
         participate in the second Obligatory Well shall be subject to the
         Contract Penalty. Any Party electing to participate in the second
         Obligatory Well and the second phase of the On-Top Contract (and not
         yet owning a Participating Interest in the Deep Rights) must take the
         necessary



EXPLORATION AGREEMENT -- Page 9 of 22
<PAGE>   10

         steps under this Agreement to convert its Overriding Royalty Interest
         to a Participating Interest.

2.7      Undertaking

         Each Party undertakes that neither it nor any of its Affiliates shall
         submit any offers covering lands to third parties within the original
         Dindal Contract Area (as described on Exhibit "E") either alone or with
         any third parties, except pursuant to the terms of this Agreement. No
         Party or any of its Affiliates shall enter into any other agreement
         with any third party pursuant to which such Party or Affiliate may
         acquire from such third party any such interest in the original Dindal
         Contract Area. Subject to acceptance by the other Parties and without
         prejudice to any other remedies which aggrieved Parties may have, if
         any Party or its Affiliates acquires such an interest in violation of
         this undertaking, such Party shall forthwith notify the other Parties
         and, upon request, assign or cause to be assigned on a pro rata basis
         all of the interest so acquired to the other Parties for the same
         consideration paid by such Party or its Affiliate to the entity from
         whom such interest was acquired. This undertaking shall remain binding
         upon all Parties notwithstanding such termination, assignment, or
         withdrawal for a period of three (3) years after execution of this
         Agreement.

3.0      FAILURE TO SECURE AN ON-TOP CONTRACT

         In the event the On-Top Contract is not granted, Farmees shall have the
         right to earn certain of Farmors' Participating Interests in the Deep
         Rights, pursuant to the following terms and conditions:

3.1      Farmees shall have the right to commence, prior to January 1, 2002, the
         drilling of the Test Well as provided herein, even though the On-Top
         Contract is not granted. Subject to and after performance of the other
         terms and conditions of this Agreement, including without limitation,
         Farmees' performance of and payment for all Earning Obligations Farmors
         agree to execute the assignment attached hereto as Exhibit "C," under
         which (A) Cimarrona shall assign to Farmees all of its Entitlement (as
         that term is defined in the Operating Agreement) produced from the Test
         Well, and such Test Well only, until the



EXPLORATION AGREEMENT -- Page 10 of 22
<PAGE>   11

         Contract Penalty has been recovered by Farmees, (after the Contract
         Penalty has been recovered by the Farmees, Cimarrona shall receive its
         full Entitlement as if it had participated in said Test Well) and (B)
         Sipetrol shall assign to Farmees either, at Sipetrol's sole election,
         (i) an undivided fifty percent (50%) of all of its Participating
         Interest in the Deep Rights, or (ii) all of its Participating Interest
         in the Deep Rights subject to its Overriding Royalty Interest therein.
         For the avoidance of doubt, except as expressly provided herein, the
         Parties agree that Article 7 of the Operating Agreement shall not apply
         to the drilling and completing of the Test Well and the second
         Obligatory Well, as defined in Section 2.6, or any Substitute Well(s).

3.2      The Assignment shall be made thirty (30) days after Farmors are in
         possession of all data and information described in Exhibit "F."
         Farmors shall make a formal request necessary in order to obtain
         Assignment Approval. The exercise of such option shall constitute
         Sipetrol's agreement to pay its proportionate part of all completion
         costs (except perforation, rig and other costs associated with actual
         testing, if a production test is utilized for the purpose of
         determining if the well is a Producing Well), equipping costs, and
         other costs associated with producing the well. Farmors shall not be
         obligated to make any Assignment hereunder unless the Earning
         Obligations have been fully satisfied.

3.3      Should Farmees fail to timely spud the Test Well or complete the
         Earning Obligations by September 30, 2002, Farmees shall, as the sole
         consequence of such failure, lose all rights to earn any interest in
         Farmors' Participation Interest, under this Agreement, and Section 3.4
         shall be applicable.

3.4      Reciprocal Earning Rights

         Should Farmees fail to timely spud the Test Well or complete the
         Earning Obligations by September 30, 2002, Farmors shall have the right
         to acquire a reciprocal farmout arrangement. If the Earning Obligations
         are fulfilled by Farmors, Farmees shall execute the Assignment attached
         hereto as Exhibit "D." In the event that the Farmors elect to exercise
         such right to acquire such reciprocal farm-in right, the Farmors shall
         appoint a new operator to assume operations under the Contract for all
         Deep Right operations, notwithstanding any provision contrary thereto
         contained in the Operating Agreement.



EXPLORATION AGREEMENT -- Page 11 of 22
<PAGE>   12

         The transfer of operatorship shall be subject to Government approval.
         Should such Government approval not be granted, GHK (or the current
         operator at the time) shall subcontract all operations to the operator
         designed by the Farmors and the subcontracted operator shall assume all
         operations under the Contract without any involvement or interference
         by the Farmees, except as necessary to comply with the requirements of
         the Contract.

3.5      Operating Agreement

         The existing operating agreement between the parties (as amended by the
         terms hereof) shall cover and be applicable to the Contract Area.

3.6      Substitute Wells

         If (1) the Test Well is drilled to Objective Depth, in accordance with
         the terms hereof and is completed as a dry hole, or (2) prior to or
         after reaching Objective Depth in the Test Well, Farmee experiences
         mechanical failure resulting in the permanent loss of hole at the point
         where the mechanical failure occurs or Farmee is otherwise unable to
         complete the Test Well, or (3) prior to reaching Objective Depth in the
         Test Well, Farmee encounters heaving shale, domal formations,
         excessively high pressure water sands, cavity or other similar
         formations where returns are lost or other impenetrable formations
         through which Farmee is unable to drill after diligent effort by
         appropriate and customary methods, or (4) the Test Well is completed at
         a depth shallower than the Objective Depth, then in any of such events,
         Farmee may drill successive substitute wells, in lieu of the Test Well,
         at locations of Farmee's choice upon the same terms and conditions as
         for the applicable well, provided that the first such substitute well
         shall be commenced within ninety (90) days after ceasing operation in
         the applicable well and each successive substitute well shall be
         commenced within ninety (90) days after ceasing operation in the
         preceding substitute well. Unless otherwise specifically provided for
         herein, the term "Test Well" as used in this Agreement shall also
         include a well drilled pursuant to this clause. Should the Farmors
         exercise their reciprocal farm-in rights, the Farmees shall have the
         full benefit of this paragraph.




EXPLORATION AGREEMENT -- Page 12 of 22
<PAGE>   13

4.0      WELL INFORMATION

         While conducting operations upon the Contract Area, Farmee shall comply
         with all the drilling, testing, and completion requirements and
         promptly furnish all the information listed on Exhibit "F" attached
         hereto and by reference made a part hereof. Should the Farmors exercise
         their reciprocal farm-in rights, the Farmees shall have the full
         benefit of this paragraph.

5.0      CONDUCT OF OPERATIONS

5.1      All operations by reason of this Agreement, (all such operations being
         hereinafter called "operations hereunder"), shall be at the sole cost,
         risk, liability and expense and under the exclusive control of the
         acting party.

5.2      In the conduct of operations hereunder, the acting party shall employ
         such practices as are consistent with prudent and effective geological
         and engineering principles and oil field safety in accordance with the
         standards of a reasonably prudent operator acting under the same and
         similar circumstances.

5.3      The acting party shall obtain and pay for all permits and licenses, if
         any, required for conducting operations hereunder, and shall strictly
         comply with all applicable laws and ordinances and all applicable
         governmental rules, regulations and orders in connection with
         qualifying for and conducting operations hereunder, including without
         limitation those pertaining to ecology and the environment (as all of
         same have been or may hereafter be amended).

5.4      The acting party agrees to obtain all necessary authorizations from the
         surface owner(s) and other interest owners, if any, for ingress to and
         egress from the well location prior to conducting any operations on
         said leases. The acting party agrees to settle surface damages and
         clean up and restore the premises as nearly as possible to its original
         condition.




EXPLORATION AGREEMENT -- Page 13 of 22
<PAGE>   14

5.5      In the event any well is completed as a dry hole, the acting party
         shall comply with all applicable laws, rules and regulations and the
         provisions of the Contract and the On-Top Contract concerning plugging
         and abandoning of well(s).

6.0      REPRESENTATIONS

         Each of the Parties hereby represents to each other that:

6.1      Each Party is a corporate entity which has been duly formed and
         currently exists with the full power and authority to execute and
         deliver this Agreement and the Assignments; and

6.2      The transactions contemplated by this Agreement will not violate or be
         in conflict with: (i) any provision of its charter, articles of
         incorporation, or other organizational agreement (as the case may be);
         (ii) any present law, agreement, indenture, contract, or instrument by
         which it or its Affiliates are bound; and(iii) any present judgment,
         order or decree applicable to it or its Affiliates; and

6.3      The Contract is valid and in full force and effect and, to the extent
         subject to transfer to another Party hereunder, its Participating
         Interest and the Hydrocarbons derived therefrom will not upon such
         transfer be subject to any contractual obligations to third parties,
         liens, pledges, burdens or encumbrances other than those contained in
         or created under the Contract; and

6.4      To the best of its knowledge, all the obligations contained in the
         Contract requiring performance on or before the Effective Date have
         been fully performed; and

6.5      The Participating Interest of Farmors in the Contract immediately prior
         to the Effective Date is thirty-two point nine percent (32.9%) for
         Sociedad Internacional Petrolera and nine point four percent (9.4%) for
         Cimarrona L.L.C.; and the Participating Interest of Farmees in the
         Contract immediately prior to the Effective Date is ten point four nine
         four four percent (10.944%) for GHK Company Colombia, forty point seven
         five six percent (40.756%) for Seven Seas Petroleum Colombia, Inc. and
         six percent (6%) for Petrolinson S.A.; and




EXPLORATION AGREEMENT -- Page 14 of 22
<PAGE>   15

6.6      To the best of its knowledge, there has been no claim, judgement or
         award given or made by any court, tribunal or governmental agency which
         relates to its Participating Interest, or connected with the conduct of
         operations and which would materially affect its Participating
         Interest.

7.0      INDEMNITY

         IN CONNECTION WITH THEIR RESPECTIVE OPERATIONS PERFORMED HEREUNDER,
         FARMEES AND FARMORS AGREE TO DEFEND, INDEMNIFY AND HOLD THE OTHERS,
         THEIR SUBSIDIARIES AND AFFILIATE COMPANIES, THEIR AGENTS, EMPLOYEES,
         DIRECTORS, OFFICERS, SERVANTS AND INSURERS, HARMLESS FROM AND AGAINST
         ANY AND ALL LOSSES, CLAIMS, DEMANDS, LIABILITIES OR CAUSES OF ACTION OF
         EVERY KIND AND CHARACTER, INCLUDING BUT NOT LIMITED TO GOVERNMENTAL
         AND/OR ENVIRONMENTAL CLAIMS, INCURRED OR ARISING FROM OR AS A RESULT OF
         THEIR RESPECTIVE OPERATIONS HEREUNDER INCLUDING ANY LOSS, CLAIM, DEMAND
         OR LIABILITY OR CAUSES OF ACTION IN FAVOR OF ANY PERSON OR PARTY, FOR
         INJURY TO OR ILLNESS OR DEATH OF ANY OF THEIR RESPECTIVE EMPLOYEES OR
         ANY EMPLOYEE OF THEIR RESPECTIVE SUBCONTRACTORS, SERVICE COMPANIES, OR
         ANY OTHER PERSON HIRED BY THEM, WHICH INJURY, ILLNESS OR DEATH ARISES
         OUT OF OR IS INCIDENT TO THEIR RESPECTIVE OPERATIONS HEREUNDER, AND
         REGARDLESS OF THE CAUSE OF SUCH INJURY, ILLNESS OR DEATH, EVEN CAUSED
         IN WHOLE OR IN PART BY A PRE-EXISTING DEFECT. EACH SHALL FULLY DEFEND
         ANY SUCH CLAIM, DEMAND OR SUIT AT THEIR SOLE EXPENSE, EVEN IF THE SAME
         IS GROUNDLESS.

8.0      INSURANCE

         Farmees agree to carry and maintain or will cause to be carried and
         maintained with an insurance company or companies authorized to do
         business in all areas of operation of this Agreement insurance coverage
         for its operations as set forth on Exhibit "G" hereto. Within thirty
         (30) days prior to the spudding of the Test Well, Farmees shall provide




EXPLORATION AGREEMENT -- Page 15 of 22
<PAGE>   16

         Farmors with a certificate of insurance, shall update the certificate
         of insurance when requested to do so by Farmors and shall name the
         Farmors as additional named co-insured. Should the Farmors exercise
         their reciprocal farm-in rights, the Farmees shall have the full
         benefit of this paragraph.

9.0      FORCE MAJEURE

         If Farmees are rendered unable, wholly or in part, by force majeure to
         carry out its obligations under this Agreement, other than any
         obligation to make money payments, Farmees shall give to Farmors prompt
         written notice of the force majeure with reasonably full particulars
         concerning it; thereupon, Farmees' obligations, so far as they are
         affected by the force majeure, shall be suspended only after the
         existence of the condition of force majeure has been accepted by
         Ecopetrol under the Contract or the On Top Contract, as may be
         applicable. Such suspension shall last as long as Ecopetrol continues
         to accept the existence of the force majeure conditions under the
         Contract or On Top Contract, as applicable. Farmees shall promptly
         commence and continue diligent efforts to remedy such force majeure
         with all reasonable dispatch as quickly as possible. The requirement
         that any force majeure shall be remedied with all reasonable dispatch
         shall not require the settlement of strikes, lockouts, or other labor
         difficulty by Farmees, contrary to Farmees' wishes; how all such
         difficulties shall be handled shall be entirely within Farmees'
         discretion. The term "force majeure" as here employed shall have the
         same meaning as that term is defined in the Contract or the On Top
         Contract as may be applicable. Should the Farmors exercise their
         reciprocal farm-in rights, the Farmors shall have the full benefit of
         the rights granted to Farmees under this paragraph and the Farmees
         shall have the full benefit of the rights granted to the Farmors in the
         preceding sentences of this paragraph.

10.0     RELATIONSHIP OF THE PARTIES

         In the conduct of operations hereunder Farmees act at their own risk.
         Farmees are not acting as Farmors' agent, representative, contractor,
         or partner, nor are operations hereunder a joint enterprise or mining
         partnership between Farmees or Farmors, but Farmees shall conduct all
         operations hereunder as an independent contractor, and



EXPLORATION AGREEMENT -- Page 16 of 22
<PAGE>   17

         Farmors shall not be liable in any way for any expenses, debts, demands
         or claims incurred by or against Farmees in connection with operations
         hereunder. The duties, obligations and liabilities of the parties
         hereto shall be several and not joint or collective, and nothing
         contained in this Agreement or any assignment resulting therefrom shall
         be construed as creating an association, trust, partnership or joint
         venture of any kind. Should the Farmors exercise their reciprocal
         farm-in rights, the Farmees shall have the full benefit of this
         paragraph.

11.0     PROHIBITION AGAINST ASSIGNMENT

         Neither Farmees nor Farmors shall assign or otherwise transfer or
         dispose of all or any portion of their rights, titles or interests
         under relating to this Agreement without first securing the written
         consent of the other, which consent shall not be unreasonably withheld.

12.0     CONFIDENTIALITY

         Confidential Information shall be subject to the terms stated in
         Article 15 of the Operating Agreement which are incorporated herein by
         reference.

13.0     AMENDMENTS TO THE OPERATING AGREEMENTS

         Simultaneous with the execution of this Agreement, the Parties shall
         enter into the Amendment to the Operating Agreements attached hereto as
         Exhibit "J."

14.0     LA DORADA PIPELINE PROJECT

         Simultaneous with the execution of this Agreement, the Parties shall
         enter into the Agreement for the La Dorada Pipeline and Guaduas Field
         Production Facilities attached hereto as Exhibit "K" for the purposes
         of governing their relationship relating to the construction thereof.
         In addition, each party shall demonstrate to the reasonable
         satisfaction of all other parties that it has fully created and funded
         its respective Escrow Agreement attached to the said Exhibit "K."




EXPLORATION AGREEMENT -- Page 17 of 22
<PAGE>   18

15.0     STILLWATER BANK LOAN COMMITMENT

         Simultaneous with the execution of this Agreement, Farmees have
         furnished to the Farmors the loan commitment attached hereto as Exhibit
         "L," together with the written approval by the appropriate Board of
         Directors. In addition, Farmees have furnished to Farmors proof
         satisfactory to Farmors that the said loan commitment has been publicly
         disclosed prior to the execution of this Agreement.

16.0     ACCOUNTING PROCEDURE FOR THE CONTRACT PENALTY

         The terms of the Article 7 of the Operating Agreement and the
         Accounting Procedure attached to the Operating Agreement shall be used
         for the purpose of tracking and determining the point in time when the
         Farmees have recovered the Contract Penalty. When calculating expenses
         under this Clause, only reasonable and necessary expenses shall be
         included in determining the amount of the Contract Penalty to be
         recovered. For the avoidance of doubt, interest charges related to
         expenses and liabilities incurred for the Test Well and/or the Earning
         Obligations shall not be included in the calculation for the payout of
         the Contract Penalty. After production has commenced from the Test
         Well, the Operator shall send to each Party which is subject to a
         Contract Penalty a summary of the payout status of these accounts on a
         quarterly basis.

17.0     GOVERNING LAW AND ARBITRATION

17.1     This Agreement shall be governed by and construed in accordance with
         the laws of the State of Texas, USA without regard to any conflict of
         laws rules or principles which would apply the law of another
         jurisdiction.

17.2     Any and all disputes, controversies, claims or differences between the
         Parties in connection with this Agreement, or relating to this
         Agreement, or the existence, construction, validity, interpretation or
         meaning, performance, non-performance, enforcement, operation, breach,
         continuance or termination of this Agreement which cannot be resolved
         amicably by the Parties through prompt good faith negotiations, shall
         be submitted to and finally resolved through an arbitration proceeding
         in Houston, Texas but otherwise in accordance with the Arbitration
         Provision of the Operating Agreement.




EXPLORATION AGREEMENT -- Page 18 of 22
<PAGE>   19

18.0     NOTICES

         Except as otherwise specifically provided, all notices authorized or
         required between the Parties by any of the provisions of this
         Agreement, shall be in writing, in English and delivered in person or
         by courier service or by any electronic means of transmitting written
         communications and addressed to such Parties as designated below. Oral
         communication does not constitute notice for purposes of this
         Agreement, and telephone numbers for the Parties are listed below as a
         matter of convenience only. The originating notice given under any
         provision of this Agreement shall be deemed delivered only when
         received by the Party to whom such notice is directed, and the time for
         such Party to deliver any notice in response to such originating notice
         shall run from the date the originating notice is received. The second
         or any responsive notice shall be deemed delivered when received.
         "Received" for purposes of this Article 18 shall mean actual delivery
         of the notice to a responsible individual at the address of the Party
         to be notified as provided herein. Each Party shall have the right to
         change its address at any time and/or designate that copies of all such
         notices be directed to another person at another address, by giving
         written notice thereof to all other Parties.

                                   FOR FARMORS
         Sociedad Internacional Petrolera S.A.    Cimarrona L.L.C.
         Attention: Rodolfo Cortes                Attention: Robert L. Cox Jr.
         Email: rcortes@sipetrol.com.com          Email: bcox@mtvassociates.com
         Fax: 57 (1) 621-6988                     Fax: (405) 329-5595
         Calle 93 B, No. 17-25/49                 3600 West Main, Suite 150
         Oficina 410, Chico                       Norman, OK 73073-4636
         Santafe de Bogota, D.C.
         Colombia
                                   FOR FARMEES
         GHK Company Colombia
         Seven Seas Petroleum Colombia Inc.
         Petrolinson S.A.
         Attention:  Larry A. Ray
         Email: lray@GHKc.com.co
         Fax: 57 (1) 629-1764
         Telephone: 57 (1) 629-1580
         Calle 93, No. 17-25/49
         Oficina 410, Chico
         Santafe de Bogota, D.C.
         Colombia




EXPLORATION AGREEMENT -- Page 19 of 22
<PAGE>   20

19.0     TERM

         This Agreement shall continue in effect until all of rights of the
         Parties have been extinguished and obligations of the Parties have
         been fulfilled and discharged. Notwithstanding the foregoing, Articles
         2, 6, 7, 12, 17 and 18 shall survive the termination of this Agreement
         and remain in effect for a period of three (3) years thereafter.

20.0     MISCELLANEOUS

20.1     The captions and headings for the Articles of this Agreement are made
         for convenience only and shall not be interpreted or construed so as to
         limit or in any way change the substantive provisions of any part of
         this Agreement.

20.2     None of the rights, requirements or provisions of this Agreement shall
         be deemed to have been waived by any Party by reason of such Party's
         failure to enforce any right or remedy granted it hereunder or to take
         advantage of any default, and each Party shall at all times hereunder
         have the right to require the strict compliance of the other Parties
         with the provisions of this Agreement.

20.3     It is understood that time is of the essence in this Agreement and that
         upon execution of this Agreement no provisions of this Agreement shall
         be modified, altered or waived except by prior written consent of the
         Parties. This Agreement shall be binding upon the successors and
         assigns of the Parties hereto.

20.4     This Agreement (together with the On-Top Contract, the Contract and the
         Operating Agreement) constitutes the entire understanding of the
         Parties with respect to the specific subject matter hereof and
         supersedes all prior negotiations and agreements pertaining to the
         specific subject matter hereof, whether oral or written, of the
         Parties.




EXPLORATION AGREEMENT -- Page 20 of 22

<PAGE>   21

20.5     As between the Parties, in the case of a conflict, express or implied,
         between the provisions of this Agreement and any other related contract
         or agreement, this Agreement shall control.

20.6     No amendments, changes or modifications to this Agreement shall be
         valid unless they are in writing and signed by a duly authorized
         representative of each of the Parties.

20.7     This Agreement may be executed in counterpart and when executed by all
         parties shall be effective as though all Parties had signed the same
         document.


(The remainder of this page is intentionally left blank).




EXPLORATION AGREEMENT -- Page 21 of 22

<PAGE>   22

This Exploration Agreement shall be effective as of January 25, 2001.

FARMORS                                     FARMEES

SOCIEDAD INTERNACIONAL PETROLERA S.A.       GHK COMPANY COLOMBIA

/s/ ALBERTO HARAMBOUR                       /s/ LARRY A. RAY
-------------------------                   -------------------------
Authorized Agent                            Authorized Agent

Alberto Harambour                           Larry A. Ray
-------------------------                   -------------------------
Print or Type Name                          Print or Type Name

Attorney in Fact                            President
-------------------------                   -------------------------
Title                                       Title

JANUARY 25, 2001                            JANUARY 25, 2001



CIMARRONA L.L.C. BY MTV                     SEVEN SEAS PETROLEUM COLOMBIA, INC.
INVESTMENTS LIMITED PARTNERSHIP,
SOLE MEMBER BY MTV ASSOCIATES, INC.,
MANAGING GENERAL PARTNER P. MARK            /s/ LARRY A. RAY
MOORE, PRESIDENT                            -------------------------
                                            Authorized Agent

/s/ P. MARK MOORE                           Larry A. Ray
-------------------------                   -------------------------
Authorized Agent                            Print or Type Name

P. Mark Moore                               President
-------------------------                   -------------------------
Print or Type Name                          Title

President
-------------------------                   JANUARY 25, 2001
Title

JANUARY 25, 2001                            PETROLINSON S. A.

                                            /s/ LARRY A. RAY
                                            -------------------------
                                            Authorized Agent

                                            Larry A. Ray
                                            -------------------------
                                            Print or Type Name

                                            President
                                            -------------------------
                                            Title

                                            JANUARY 25, 2001




EXPLORATION AGREEMENT -- Page 22 of 22

<PAGE>   23
EXHIBIT "A" to that certain Exploration Agreement dated the 25th day of January
2001, by and between GHK Company Colombia, Seven Seas Petroleum Colombia, Inc.,
 Petrolinson S. A., Sociedad Internacional Petrolera S.A, and Cimarrona L.L.C.


                                                                      VPJ-335-00


Bogota, D.C., January 25, 2001


Mr. Alberto Calderon Zuleta
President
Mr. Victor Eduardo Perez
Exploration and Asociate Operations Vicepresident
Empresa Colombiana de Petroleos
Bogota



Dear Sirs:

GHK Company Colombia, as operator for the DINDAL Association Contract, acting on
its own behalf and representing the companies that make up the ASSOCIATE,
namely: GHK Company Colombia, Seven Seas Petroleum Colombia Inc., Sociedad
Internacional Petrolera S.A., Cimarrona Limited Liability Company and
Petrolinson S.A., ratifies its interest in the proposal submitted by all of us
last September 21st, in order to negotiate a new Association Contract applied to
the formations below the stratigraphic equivalent of the deepest producing
formation in the Guaduas Field underlying the current Dindal Contract Area.

We wish to advise Ecopetrol about the results of an internal negotiation between
the companies making up the Associate, in connection with the new contract.
Firstly, we have decided that the operator for the new Deep Exploration
Association Contract shall be the same company operating the current DINDAL
Contract Area. Consequently, the operator for the deep and shallow contracts
shall be GHK Company Colombia, thus complying also with Ecopetrol's interest of
having the same operator for both contracts.

All the companies have agreed that GHK Company Colombia and its affiliates shall
be solely responsible for the costs and risks related to the first exploratory
phase of the new Deep Exploration Association Contract. The companies that have
agreed to assume the cost and risk for the first exploratory phase in the new
Deep Exploration Association Contract are three, namely: Seven Seas, Petrolinson
and GHK Company Colombia.

Therefore, Sipetrol and Cimarrona, voluntarily state to Ecopetrol that they
expressly waive being parties to the new Deep Exploration Association Contract
and kindly request Ecopetrol to enter the contract with the three remaining
companies mentioned and that make up the Associate. Internal agreements,
including an Exploration Agreement, are in place between all the companies



                                       1
<PAGE>   24

comprising the Associate. The Exploration Agreement allows and foresees the
conditions for Sipetrol and Cimarrona to become parties to the new Deep
Exploration Association Contract in the future, once the first exploratory phase
of the contract is over.

Consequently, we kindly request Ecopetrol to receive the information on the
internal decision by the partners and to enter the new Deep Exploration
Association Contract with Seven Seas Petroleum Colombia Inc., Petrolinson S.A.
and GHK Company Colombia, and the latter shall act as the Operator.

Sincerely,




--------------------------
GHK COMPANY COLOMBIA
Legal Representative



---------------------------------
PETROLINSON S.A.
Legal Representative



----------------------------------------
SEVEN SEAS PETROLEUM COLOMBIA INC.
Legal Representative



---------------------------------------------------------------
 SOCIEDAD INTERNACIONAL PETROLERA, S.A., Legal Representative




                                       2
<PAGE>   25



------------------------------------------
CIMARRONA LIMITED LIABILITY COMPANY
Legal Representative





                                       3
<PAGE>   26
    EXHIBIT "B1" to that certain Exploration Agreement dated the 25th day of
    January, 2001, by and between GHK Company Colombia, Seven Seas Petroleum
  Colombia, Inc., Petrolinson S. A., and Sociedad Internacional Petrolera S.A.

  (Form of Assignment to be used to transfer a convertible Overriding Royalty
   Interest to Sipetrol if Farmees sign the On Top Contract, and satisfy the
                              Earning Obligations)

                                   ASSIGNMENT

         THIS ASSIGNMENT is made and entered effective as of the _____ day of
___________, 2001, by and between:

         GHK Company Colombia, a company incorporated under the laws of
Oklahoma, U.S.A., (hereinafter called "GHK"), and,

         Seven Seas Petroleum Colombia, Inc., a company incorporated under the
laws of the Cayman Islands, (hereinafter called "Seven Seas"), and,

         Petrolinson S. A., a company incorporated under the laws of Panama
(hereinafter called "Petrolinson").

         GHK, Seven Seas, and Petrolinson are hereinafter referred to as
"Assignors," and

         Sociedad Internacional Petrolera S.A., a company incorporated under the
laws of Chile (hereinafter called "Assignee").

         WHEREAS, Empresa Colombiana de Petroleos ("Ecopetrol"), Assignors,
Assignee and Cimarrona L.L.C. severed the exploration and production rights and
obligations below the stratigraphic equivalent of the base of the deepest
producing formation in the Guaduas Field from the Contract Area under the Dindal
Association Contract. Such severed rights and obligations are hereinafter
referred to as "Deep Rights," and,

         WHEREAS, Assignee, Assignors, and Cimarrona L.L.C. entered into that
certain Exploration Agreement dated January 25, 2001, covering the Deep Rights
(hereinafter to as the "Exploration Agreement"); and,




                                       1
<PAGE>   27

         WHEREAS, Assignors and Ecopetrol entered into a new Association
Contract effective on _____________, 2001 ("Contract") covering, among other
things, the exploration and production rights related to the Deep Rights, and,

         WHEREAS, Assignors own one hundred percent (100%) of the Associate's
rights and interests under the Contract; and

         WHEREAS, Assignors and Assignee have agreed that Assignee is entitled
to an Overriding Royalty Interest equal to four point eight six one one five
percent (4.86115%) of 8/8ths of all the Hydrocarbons produced from the Contract
Area under the Contract, without reduction for any purpose, except said interest
shall be proportionately reduced by, any Government right to back-in, convert,
or assume a Participating Interest or working interest, which is exercised by
the Government pursuant to the Contract (the "Assigned Interests").

         NOW, THEREFORE:

         1.       Assignors hereby assign to Assignee the Assigned Interests.

         2.       Assignee shall have the option to convert the Assigned
                  Interests into an undivided equity or working interest, as
                  provided in the Exploration Agreement. In the event that
                  Assignee elects to so convert the Assigned Interests, Sipetrol
                  shall be assigned an undivided sixteen point four five percent
                  (16.45%) of 8/8ths of the Associates' rights, obligations,
                  duties and interests in and under the Contract, thereby
                  vesting in Sipetrol sixteen point four five percent (16.45%)
                  of 8/8ths of the Associates' rights, obligations, duties and
                  interests in and under the Contract. In the event of such
                  election, Assignors and Sipetrol shall enter into the form of
                  Assignment attached hereto as Exhibit "A" in order to give
                  effect to the conversion.

         3.       Assignors warrant to Assignees the title to the
                  above-described Assigned Interests against any person or
                  entity claiming by, through, or under Assignors, but not
                  otherwise.



                                       2
<PAGE>   28

         4.       Assignees hereby accept and assume their respective shares of
                  the Assigned Interests.

         5.       Terms capitalized in this Assignment and not defined herein
                  shall have the meaning given to them in the Exploration
                  Agreement and its exhibits or the relevant Association
                  Contract, as applicable.

         IN WITNESS WHEREOF, the Parties have caused this Assignment to be
executed by their respective duly authorized representatives.

GHK Company Colombia                Seven Seas Petroleum Colombia, Inc.


By:  ___________________________    By: __________________________

Name:  ________________________     Name: _______________________

Title: __________________________   Title: ________________________


Petrolinson S. A.                   Sociedad Internacional Petrolera S.A.


By:  ___________________________    By: __________________________

Name:  ________________________     Name: _______________________

Title: __________________________   Title: ________________________




                                       3
<PAGE>   29

   Exhibit "A" to the Assignment dated _________, _______ between GHK Company
    Colombia, Seven Seas Petroleum Colombia, Inc., and Petrolinson S. A. as
        Assignors and Sociedad Internacional Petrolera S.A. as Assignee.

              ASSIGNMENT TO CONVERT AN OVERRIDING ROYALTY INTEREST

      (This form is to be used to assign an equity interest to Sipetrol if
     Farmees have satisfied the Earning Obligations and Sipetrol elects to
        convert the Overriding Royalty Interest into an equity interest)

         THIS ASSIGNMENT is made and entered effective as of the _____ day of
___________, 2001, by and between:

         GHK Company Colombia, a company incorporated under the laws of
Oklahoma, U.S.A., (hereinafter called "GHK"), and,

         Seven Seas Petroleum Colombia, Inc., a company incorporated under the
laws of the Cayman Islands, (hereinafter called "Seven Seas"), and,

         Petrolinson S. A., a company incorporated under the laws of Panama
(hereinafter called "Petrolinson").

         GHK, Seven Seas, and Petrolinson are herein collectively referred to as
"Assignors," and,

         Sociedad Internacional Petrolera S.A., a company incorporated under the
laws of Chile, (hereinafter called "Assignee").

         WHEREAS, Empressa Colombiana de Petroleos ("Ecopetrol"), Assignors,
Assignee and Cimarrona L.L.C. severed the exploration and production rights and
obligations below the stratigraphic equivalent of the base of the deepest
producing formation in the Guaduas Field from the Contract Area under the Dindal
Association Contract. Such severed rights and obligations are hereinafter
referred to as "Deep Rights," and,



<PAGE>   30

         WHEREAS, Assignee and Assignors entered into that certain Exploration
Agreement dated January 25, 2001, covering the Deep Rights (hereinafter to as
the "Exploration Agreement"); and,

         WHEREAS, Assignors and Ecopetrol entered into a new Association
Contract dated _____________, 2001 ("Contract") covering, among other things,
the exploration and production rights related to the Deep Rights, and,

         WHEREAS, Assignors own one hundred percent (100%) of the Associate's
rights and interests under the Contract, less and except the Overriding Royalty
Interest held by Assignee and a certain interest held by or dedicated to
Cimarrona L.L.C.;

         WHEREAS, Assignors assigned to Assignee an Overriding Royalty Interest
equal to four point eight six one one five percent (4.86115%) of 8/8ths of all
the Hydrocarbons produced from the Contract Area under the Contract, without
reduction for any purpose, except that said interests shall be proportionately
reduced by, any Government right to back-in, convert, or assume a Participating
Interest or working interest, which is exercised by the Government pursuant to
the Contract. Said Overriding Royalty Interest is convertible by the Assignees
into an equity interest, as set forth in said assignment; and

         WHEREAS, Assignors and Assignees have agreed that Assignors have
satisfied the Earning Obligations and Assignee, under the previous Assignment
and holder of the said Overriding Royalty Interest, has elected to convert the
said interests into an equity or working interest equal to an undivided sixteen
point four five percent (16.45%) of 8/8ths of all the rights, obligations,
duties and interests of the Associates under the Contract ("Assigned Interest").

     NOW, THEREFORE:

         1.       Assignors hereby assign to Assignee the Assigned Interest in
                  exchange for Assignee's election, hereby given, to convert
                  (and extinguish) the Overriding Royalty Interest into and in
                  favor of the said Assigned Interest.

         2.       Assignors warrant to Assignee the title to the above-described
                  Assigned Interest against any person or entity claiming by,
                  through, or under Assignors, but not otherwise.




                                       5
<PAGE>   31

         3.       Assignee hereby accepts and assumes the Assigned Interest.

         4.       Terms capitalized in this Assignment and not defined herein
                  shall have the meaning given to them in the Exploration
                  Agreement and its exhibits or the relevant Association
                  Contract, as applicable.

         IN WITNESS WHEREOF, the Parties have caused this Assignment to be
executed by their respective duly authorized representatives.

GHK Company Colombia                Seven Seas Petroleum Colombia, Inc.


By:  ____________________________   By: ___________________________

Name:  __________________________   Name: _________________________

Title: __________________________   Title: ________________________


Petrolinson S. A.                   Sociedad Internacional Petrolera S.A.

By:  ____________________________   By: ___________________________

Name:  __________________________   Name: _________________________

Title: __________________________   Title: ________________________





                                       6
<PAGE>   32

    EXHIBIT "B2" to that certain Exploration Agreement dated the 25th day of
    January, 2001, by and between GHK Company Colombia, Seven Seas Petroleum
            Colombia, Inc., Petrolinson S. A., and Cimarrona L.L.C.

 (Form of Assignment to be used to transfer an interest to Cimarrona if Farmees
         sign the On-Top Contract and satisfy the Earning Obligations)

                                   ASSIGNMENT

         THIS ASSIGNMENT is made and entered effective as of the _____ day of
___________, 2001, by and between:

         GHK Company Colombia, a company incorporated under the laws of
Oklahoma, U.S.A., (hereinafter called "GHK"), and,

         Seven Seas Petroleum Colombia, Inc., a company incorporated under the
laws of the Cayman Islands, (hereinafter called "Seven Seas"), and,

         Petrolinson S. A., a company incorporated under the laws of Panama
(hereinafter called "Petrolinson").

         GHK, Seven Seas, and Petrolinson are hereinafter referred to as
"Assignors", and

         Cimarrona L.L.C., a company incorporated under the laws of Oklahoma,
U.S.A. (hereinafter called "Assignee").

         WHEREAS, Empresa Colombiana de Petroleos ("Ecopetrol"), Assignors,
Assignee, and Sociedad Internacional Petrolera S.A. severed the exploration and
production rights and obligations below the stratigraphic equivalent of the base
of the deepest producing formation in the Guaduas Field from the Contract Area
under the Dindal Association Contract. Such severed rights and obligations are
hereinafter referred to as "Deep Rights," and,

         WHEREAS, Assignee, Assignors, and Sociedad Internacional Petrolera S.A.
entered into that certain Exploration Agreement dated January 25, 2001, covering
the Deep Rights (hereinafter to as the "Exploration Agreement"); and,




                                       7
<PAGE>   33

         WHEREAS, Assignors and Ecopetrol entered into a new Association
Contract effective on _____________, 2001 ("Contract") covering, among other
things, the exploration and production rights related to the Deep Rights, and,

         WHEREAS, Assignors own one hundred percent (100%) of the Associate's
rights and interests under the Contract, less an interest held by or dedicated
to Sipetrol S.A.; and

         WHEREAS, Assignors and Assignee have agreed that Assignors have
completed the Earning Obligations and Cimarrona is entitled to an undivided nine
point four percent (9.4%) of 8/8ths of all the rights, obligations, duties and
interests of the Associates under the Contract, (the "Assigned Interests"). The
Assigned Interests are subject to Assignor's right to recover the Contract
Penalty from the Assignee's Entitlement produced from the Test Well and the Test
Well only, as those terms are defined in the Operating Agreement and the
Exploration Agreement respectively.

         NOW, THEREFORE:

         1.       Assignors hereby assign to Assignees the Assigned Interests,
                  subject to Assignor's right to recover the Contract Penalty
                  from the Assignee's Entitlement produced from the Test Well
                  and the Test Well only, as those terms are defined in the
                  Operating Agreement and the Exploration Agreement
                  respectively.

         2.       Assignors warrant to Assignees the title to the
                  above-described Assigned Interests against any person or
                  entity claiming by, through, or under Assignors, but not
                  otherwise.

         3.       Assignees hereby accept and assume their respective shares of
                  the Assigned Interests.

         4.       Terms capitalized in this Assignment and not defined herein
                  shall have the meaning given to them in the Exploration
                  Agreement and its exhibits or the relevant Association
                  Contract, as applicable.



                                       8
<PAGE>   34

         IN WITNESS WHEREOF, the Parties have caused this Assignment to be
executed by their respective duly authorized representatives.

GHK Company Colombia                Seven Seas Petroleum Colombia, Inc.


By: ___________________________     By: ___________________________

Name: _________________________     Name: _________________________

Title: ________________________     Title: ________________________


Petrolinson S. A.                   Cimarrona L.L.C.


By: ___________________________     By: ___________________________

Name: _________________________     Name: _________________________

Title: ________________________     Title: ________________________



                                       9
<PAGE>   35
EXHIBIT "C" to that certain Exploration Agreement dated the 25th day of January,
2001, by and between GHK Company Colombia, Seven Seas Petroleum Colombia, Inc.,
 Petrolinson S. A., Sociedad Internacional Petrolera S.A., and Cimarrona L.L.C.

    (Form of Assignment to be used if Farmees do not sign the On-Top Contract
                 and Farmees satisfy the Earning Obligations )

                                   ASSIGNMENT

         THIS ASSIGNMENT is made and entered effective as of the _____ day of
___________, 2001, by and between:

         Sociedad Internacional Petrolera S.A., a company incorporated under the
laws of Chile (hereinafter called "Sipetrol"), and

         Cimarrona L.L.C., a company incorporated under the laws of Oklahoma,
U.S.A. (hereinafter called "Cimarrona").

         Sipetrol and Cimarrona are hereinafter referred to as "Assignors."

         GHK Company Colombia, a company incorporated under the laws of
Oklahoma, U.S.A., (hereinafter called "GHK"), and,

         Seven Seas Petroleum Colombia, Inc., a company incorporated under the
laws of the Cayman Islands, (hereinafter called "Seven Seas"), and,

         Petrolinson S. A., a company incorporated under the laws of Panama
(hereinafter called "Petrolinson").

         GHK, Seven Seas, and Petrolinson are hereinafter referred to as
"Assignees."

         WHEREAS, Empresa Colombiana de Petroleos ("Ecopetrol"), Assignors, and
Assignees are the current parties under that certain Dindal Association Contract
dated January 22, 1993, as amended (the "Contract"), which covered the
exploration and production rights and obligations under the Dindal Association
Contract Area, and,

         WHEREAS, Assignees and Assignors entered into that certain Exploration
Agreement dated January 25, 2001, covering the "Deep Rights," as defined
therein; and,




                                       1
<PAGE>   36

         WHEREAS, Assignees have drilled the "Test Well' under the Exploration
Agreement and have earned and are willing to accept an assignment of certain of
Assignor's interests in the Deep Rights under the Dindal Association Contract;
and

         WHEREAS, (A) Sipetrol desires to assign to Assignees [Sipetrol will
elect one of the following choices which will remain in the Assignment and the
other choice not elected will be deleted](i) all of its Participating Interest
subject to an Overriding Royalty Interest equal to four point eight six one one
five percent (4.86115%) of 8/8ths of all the Hydrocarbons produced from the Deep
Rights, without reduction for any purpose, except said interest shall be
proportionately reduced by, any Government right to back-in, convert, or assume
a Participating Interest or working interest, which is exercised by the
Government pursuant to the Contract, or (ii) an undivided fifty percent (50%) of
its Participating Interest in the Deep Rights under the Contract, and (B)
Cimarrona desires to assign its Entitlement (as that term is defined in the
Operating Agreement) in the Deep Rights applicable to the Test Well, and the
Test Well only, until the Assignees, as a group, have recovered the Contact
Penalty, at which time Cimarrona's Entitlement shall revert back to Cimarrona
(together, the "Assigned Interests").

         NOW, THEREFORE:

         1.       Assignors hereby assign to Assignees the Assigned Interests.
                  Said Assigned Interests shall be held by the Assignees as
                  follows:

                  GHK                  18.967% of the Assigned Interests
                  Seven Seas           70.634% of the Assigned Interests
                  Petrolinson          10.399% of the Assigned Interests

         2.       Assignors warrant to Assignees the title to the
                  above-described Assigned Interests against any person or
                  entity claiming by, through, or under Assignors, but not
                  otherwise.

         3.       Assignees hereby accept and assume their respective shares of
                  the Assigned Interests.




                                       2
<PAGE>   37

         4.       Terms capitalized in this Assignment and not defined herein
                  shall have the meaning given to them in the Exploration
                  Agreement and its exhibits or the Contract, as applicable.

         IN WITNESS WHEREOF, the Parties have caused this Assignment to be
executed by their respective duly authorized representatives.

GHK Company Colombia                Seven Seas Petroleum Colombia, Inc.

By: ___________________________     By: ___________________________

Name: _________________________     Name: _________________________

Title: ________________________     Title: ________________________


Petrolinson S. A.                   Sociedad Internacional Petrolera S.A.

By: ___________________________     By: ___________________________

Name: _________________________     Name: _________________________

Title: ________________________     Title: ________________________



Cimarrona L.L.C.

By: ___________________________

Name: _________________________

Title: ________________________




                                       3
<PAGE>   38
EXHIBIT "D" to that certain Exploration Agreement dated January 25, 2001, by and
between GHK Company Colombia, Seven Seas Petroleum Colombia, Inc., Petrolinson
       S.A., Sociedad Internacional Petrolera S.A., and Cimarrona L.L.C.

    (Form of Assignment to be used if Farmees do not sign the On-Top Contract
                  and Farmors satisfy the Earning Obligations)


                                   ASSIGNMENT

         THIS ASSIGNMENT is made and entered effective as of the _____ day of
___________, 2001, by and between:

         GHK Company Colombia, a company incorporated under the laws of
Oklahoma, U.S.A., (hereinafter called "GHK"), and,

         Seven Seas Petroleum Colombia, Inc., a company incorporated under the
laws of the Cayman Islands, (hereinafter called "Seven Seas"), and,

         Petrolinson S. A., a company incorporated under the laws of Panama
(hereinafter called "Petrolinson").

         GHK, Seven Seas, and Petrolinson are hereinafter referred to as
"Assignors."

         Sociedad Internacional Petrolera S.A., a company incorporated under the
laws of Chile (hereinafter called "Sipetrol"), and

         Cimarrona L.L.C., a company incorporated under the laws of Oklahoma,
U.S.A. (hereinafter called "Cimarrona").

         Sipetrol and Cimarrona are hereinafter referred to as "Assignees."


         WHEREAS, Empresa Colombiana de Petroleos ("Ecopetrol"), Assignors, and
Assignees are the current parties under that certain Dindal Association Contract
dated January 22, 1993, as amended (the "Contract"), which covered the
exploration and production rights and obligations under the Dindal Association
Contract Area, and,




                                       1
<PAGE>   39

         WHEREAS, Assignees and Assignors entered into that certain Exploration
Agreement dated January 25, 2001, covering the "Deep Rights," as defined
therein; and,

         WHEREAS, Assignees have drilled the "Test Well' under the Exploration
Agreement and have earned and are willing to accept an assignment of certain of
Assignor's interests in the Deep Rights under the Dindal Association Contract;
and

         WHEREAS, (A) Assignors desire to assign to Assignees [Assignors as a
group will elect one of the following choices which will remain in the
Assignment and the other choice not elected will be deleted](i) all of its
Participating Interest subject to an Overriding Royalty Interest equal to eight
point five two five four one percent (8.52541%) of 8/8ths of all the
Hydrocarbons produced from the Deep Rights, without reduction for any purpose,
except said interest shall be proportionately reduced by any Government right to
back-in, convert, or assume a Participating Interest or working interest, which
is exercised by the Government pursuant to the Contract, or (ii) an undivided
fifty percent (50%) of its Participating Interest in the Deep Rights under the
Contract, (the "Assigned Interests").

         NOW, THEREFORE:

         1.       Assignors hereby assign to Assignees the Assigned Interests.
                  Said Assigned Interests shall be held by the Assignees as
                  follows:

                  Sipetrol          77.778% of the Assigned Interests
                  Cimarrona         22.222% of the Assigned Interests

                  If the Assignors retain an Overriding Royalty Interest, then
                  such retained Overriding Royalty Interest shall be owned by
                  the Assignors in the following manner:

                  GHK               18.967% of the Overriding Royalty Interest
                  Seven Seas        70.634% of the Overriding Royalty Interest
                  Petrolinson       10.399% of the Overriding Royalty Interest



                                       2
<PAGE>   40

         2.       Assignors warrant to Assignees the title to the
                  above-described Assigned Interests against any person or
                  entity claiming by, through, or under Assignors, but not
                  otherwise.

         3.       Assignees hereby accept and assume their respective shares of
                  the Assigned Interests.

         4.       Terms capitalized in this Assignment and not defined herein
                  shall have the meaning given to them in the Exploration
                  Agreement and its exhibits or the Contract, as applicable.

         IN WITNESS WHEREOF, the Parties have caused this Assignment to be
executed by their respective duly authorized representatives.

GHK Company Colombia                Seven Seas Petroleum Colombia, Inc.

By: ___________________________     By: ___________________________

Name: _________________________     Name: _________________________

Title: ________________________     Title: ________________________


Petrolinson S. A.                   Sociedad Internacional Petrolera S.A.

By: ___________________________     By: ___________________________

Name: _________________________     Name: _________________________

Title: ________________________     Title: ________________________


Cimarrona L.L.C.

By: ___________________________

Name: _________________________

Title: ________________________



                                       3
<PAGE>   41
EXHIBIT "E" to that certain Exploration Agreement dated January 25, 2001, by
and between GHK Company Columbia, Seven Seas Petroleum Colombia, Inc.,
Petrolinson S.A., Sipetrol Colombia S. A., and Cimarrona L.L.C.


                                     [MAP]


                               DINDAL ASSOCIATION
                                    CONTRACT
                               BLOCK COORDINATES

<PAGE>   42
EXHIBIT "F" to that certain Exploration Agreement dated the 25th day of January
2001, by and between GHK Company Colombia, Seven Seas Petroleum Colombia, Inc.,
 Petrolinson S. A., Sociedad Internacional Petrolera S.A., and Cimarrona L.L.C.

                                   EXHIBIT "F"

                                WELL REQUIREMENTS


WELL NAME:  Los Libros

OPERATOR:   GHK Company Colombia
            Sub-thrusted and repeated Hoyon & Cimarrona

LOCATION:   New Dindal Association Contract or On-Top Contract
            Cundinamarca Department
            Colombia, S.A.

DAILY DRILLING REPORTS FAXED or E-MAILED TO:

                        Cimarrona L.L.C.
                        Attn: Robert L. Cox Jr.
                        3600 West Main, Suite 150
                        Norman, OK 73072-4636
                        Fax #: 405/329-5595
                        E-Mail: bcox@mtvassociates.com

                        Sociedad Internacional Petrolera S.A.
                        Attn: Rodolfo Cortes
                        Calle 93 B No. 17-25/49
                        Oficina 410, Chico
                        Bogota, Colombia
                        Fax: (571) 621-6988
                        E-Mail: rcortes@sipetrol.com.co
                        And such other parties with Sipetrol as may be
                             hereinafter designated

PARTIES TO BE NOTIFIED IN ADVANCE OF TESTING, CORING, LOGGING, OR
ABANDONMENT OF WELL:

                        Robert L. Cox Jr.
                        Business Phone:   405/419-5104
                        Residence Phone:  405/341-8186
                        Cellular Phone:   405/590-6354
                        Fax Phone:        405/329-5595

                                       1
<PAGE>   43
                        Rodolfo Cortes
                        Business Phone:   (57-1) 621-4900
                        Residence Phone:  (57-1) 624-2821
                        Cellular Phone:   (57-3) 263-2529
                        Fax Phone:        (57-1) 621-6988

PLEASE MAIL THE ITEMS LISTED BELOW TO:

                        MTV Oil & Gas, Limited Partnership
                        Attn: Robert L. Cox Jr.
                        3600 West Main, Suite 150
                        Norman, OK 73072-4636

                        Sipetrol - Colombia
                        Attn: Rodolfo Cortes
                        Calle 93 B No. 17-25/49
                        Oficina 410, Chico
                        Bogota, Colombia

NO. OF COPIES:

      2                 Electric Logs (field prints)
      2                 Electric Logs (final prints)
      1                 Daily Mud Logging and Final Report
      1                 DST, Wireline Tests, Core Analysis
      1                 Directional Surveys
      1                 Oil, Gas and Water Analysis
      1                 Bottom Hole Pressure Tests
      1                 Production Tests
      1                 All Forms filed with Governmental Agencies
      1                 Surveyed Location Plots

                    Note: All the above information in Digital Format

And one copy of such other geological data, of any kind or nature, which the
operator deems necessary and expedient for the evaluation of the test well.
Farmors reserve the right to make recommendations to the operator regarding
additional data to be acquired during the drilling of the proposed test well,
however, the operator shall be under no obligation to accept such
recommendations.

                                       2
<PAGE>   44

EXHIBIT "G" to that certain Exploration Agreement dated the 25th day of January,
2001, by and between GHK Company Colombia, Seven Seas Petroleum Colombia, Inc.,
 Petrolinson S. A., Sociedad Internacional Petrolera S.A., and Cimarrona L.L.C.

                                   EXHIBIT "G"
                                    INSURANCE

Operator shall carry or provide for the benefit of the Joint Account for the
Parties the type and amounts of Insurance as are shown below:

     (1)  Workman's Compensation Insurance of not less than $1,000,000 per
          employee, as well as any benefits equal to those required by law in
          Colombia.

     (2)  Comprehensive General Liability Insurance of not less than $3,000,000
          covering liability to third parties.

     (3)  Excess General Liability of not less than $20,000,000 covering
          liability to third parties.

     (4)  Well Control / Blow out coverage of not less than $25,000,000 covering
          liability for regaining control of a well, plus full replacement value
          of the well.

     (5)  Environmental and pollution coverage of not less than $25,000,000

     (6)  All risk property / equipment insurance - full replacement value.

Operator shall procure and maintain or cause to be procured and maintained all
insurance in the types and amounts required by the Dindal Association Contract
or On-Top Contract and applicable laws, rules and regulations of Colombia.
Additional or other insurance will be governed in accordance with the provisions
of the Operating Agreement covering the Dindal Association Contract or On-Top
Contract and the Farmors' and Farmee's interest therein.

                                   Page 1 of 1
<PAGE>   45
EXHIBIT "H" to that certain Exploration Agreement dated the 25th day of January,
2001, by and between GHK Company Colombia, Seven Seas Petroleum Colombia, Inc.,
 Petrolinson S. A., Sociedad Internacional Petrolera S.A., and Cimarrona L.L.C.

 (Form of Assignment to be used if Farmees sign the On-Top Contract, but fail to
       satisfy the Earning Obligations and Farmors elect to exchange their
                Interests for 100% of the Participating Interest)

                                   ASSIGNMENT

     THIS ASSIGNMENT is made and entered effective as of the _____ day of
___________, 2001, by and between:

     GHK Company Colombia, a company incorporated under the laws of Oklahoma,
U.S.A., (hereinafter called "GHK"), and,

     Seven Seas Petroleum Colombia, Inc., a company incorporated under the laws
of the Cayman Islands, (hereinafter called "Seven Seas"), and,

     Petrolinson S. A., a company incorporated under the laws of Panama
(hereinafter called "Petrolinson").

     GHK, Seven Seas, and Petrolinson are hereinafter referred to as
"Assignors".

     Sociedad Internacional Petrolera S.A., a company incorporated under the
laws of Chile (hereinafter called "Sipetrol"), and

     Cimarrona L.L.C., a company incorporated under the laws of Oklahoma, U.S.A.
(hereinafter called "Cimarrona").

     Sipetrol and Cimarrona are hereinafter referred to as "Assignees", and,

     WHEREAS, Empresa Colombiana de Petroleos ("Ecopetrol") and Assignorsare the
current parties to the On-Top Contract (as defined in the Exploration
Agreement), and,

                                       1
<PAGE>   46
     WHEREAS, Assignees and Assignors entered into that certain Exploration
Agreement ("Exploration Agreement") dated January 25, 2001, covering, inter
alia, the exploration rights and obligations of the Associate under the On-Top
Contract, and,

     WHEREAS, Assignors have failed to drill the Test Well defined in the
Exploration Agreement and the Parties hereto are willing to terminate Sipetrol's
Overriding Royalty Interest and Cimarrona's Contract Penalty in exchange for an
assignment of one hundred percent (100%) of Assignors interests in the On-Top
Contract, less and except an Overriding Royalty Interest equal to eight point
five two five four one percent (8.52541%) of 8/8ths of all the Hydrocarbons
produced under the On-Top Contract, without reduction for any purpose, except
said interest shall be proportionately reduced by any Government right to
back-in, convert, or assume a Participating Interest or working interest, which
is exercised by the Government pursuant to the On-Top Contract ("Assigned
Interests").

     NOW, THEREFORE:

     1.   Assignors hereby assign to Assignees one hundred percent (100%) of
          Assignors interests in the On-Top Contract, less and except the
          Overriding Royalty Interest equal to eight point five two five four
          one percent (8.52541%) of 8/8ths of all the Hydrocarbons produced from
          the On-Top Contract Area, without reduction for any purpose, except
          said interest shall be proportionately reduced by any Government right
          to back-in, convert, or assume a Participating Interest or working
          interest, which is exercised by the Government pursuant to the
          Contract, Said reserved Overriding Royalty Interests shall be held by
          the Assignors as follows:

          GHK           18.967% of the Overriding Royalty Interests

          Seven Seas    70.634% of the Overriding Royalty Interests

          Petrolinson   10.399% of the Overriding Royalty Interests

                                       2
<PAGE>   47
          The Assigned Interests shall be shared by Assignors in the following
          manner:

          Sipetrol      77.778% of the Assigned Interests

          Cimarrona     22.222% of the Assigned Interests

          The parties hereto hereby terminate Sipetrol's Overriding Royalty
          Interest and Cimarrona's Contract Penalty previously conveyed to
          Assignees by Assignors under that certain assignment dated the ____
          day of __________, 2001.

     2.   Assignors warrant to Assignees the title to the above-described
          Assigned Interests against any person or entity claiming by, through,
          or under Assignors, but not otherwise.

     3.   Assignees hereby accept and assume their respective shares of the
          Assigned Interests.

     4.   Terms capitalized in this Assignment and not defined herein shall have
          the meaning given to them in the Exploration Agreement or the relevant
          Association Contract, as applicable.

     IN WITNESS WHEREOF, the Parties have caused this Assignment to be executed
by their respective duly authorized representatives.

GHK Company Colombia                Seven Seas Petroleum Colombia, Inc.

By: _____________________________   By: _______________________________

Name: ___________________________   Name: _____________________________

Title: __________________________   Title: ____________________________

                                       3
<PAGE>   48

Petrolinson S. A.                   Sociedad Internacional Petrolera S.A.

By: _____________________________   By: _______________________________

Name: ___________________________   Name: _____________________________

Title: __________________________   Title: ____________________________



Cimarrona L.L.C.

By: _____________________________

Name: ___________________________

Title: __________________________

                                       4
<PAGE>   49
  Exhibit "I" to the Exploration Agreement dated January 25, 2001 between GHK
Company Colombia, Seven Seas Petroleum Colombia, Inc., and Petrolinson S. A. as
  Farmees and Sociedad Internacional Petrolera S.A. and Cimarrona as Farmors.

              ASSIGNMENT TO CONVERT AN OVERRIDING ROYALTY INTEREST

 (This form is to be used to assign an equity interest to GHK, Seven Seas, and
 Petrolinson if said companies elect to convert the Overriding Royalty Interest
into equity interests after the Farmors have satisfied the Earning Obligations)

THIS ASSIGNMENT is made and entered effective as of the _____ day of
___________, 2000, by and between:

Sociedad Internacional Petrolera S.A., a company incorporated under the laws
of Chile (hereinafter called "Sipetrol"), and

Cimarrona L.L.C., a company incorporated under the laws of Oklahoma, U.S.A.
(hereinafter called "Cimarrona").

Sipetrol and Cimarrona are hereinafter referred to as  "Assignors", and,

GHK Company Colombia, a company incorporated under the laws of Oklahoma,
U.S.A., (hereinafter called "GHK"), and,

Seven Seas Petroleum Colombia, Inc., a company incorporated under the laws of
the Cayman Islands, (hereinafter called "Seven Seas"), and,

Petrolinson S. A., a company incorporated under the laws of Panama
(hereinafter called "Petrolinson").

GHK, Seven Seas, and Petrolinson are hereinafter referred to as "Assignees".

     WHEREAS, Empresa Colombiana de Petroleos ("Ecopetrol") and Assignors are
the current parties to the On-Top Contract (as defined in the Exploration
Agreement), and,

     WHEREAS, Assignees and Assignors entered into that certain Exploration
Agreement ("Exploration Agreement") dated January 25, 2001, covering, inter
alia, the exploration rights and obligations of the Associate under the On-Top
Contract, and,

                                       1
<PAGE>   50

      WHEREAS, Assignors have drilled the Test Well defined in the Exploration
Agreement and Assignees are willing to terminate their Overriding Royalty
Interests in exchange for an assignment of an undivided twenty eight point eight
five percent (28.85%) of the Associate's rights, obligations, liabilities, and
interests in and to the On-Top Contract and an undivided twenty eight point
eight five percent (28.85%) Participating Interest (as that term is defined in
the JOA) under the JOA ("Assigned Interests"), and,

      WHEREAS, Assignors own one hundred percent (100%) of the Associate's
rights and interests under the Contract, and,

      WHEREAS, Assignees under the previous Assignment and holder of the said
Overriding Royalty Interests, have elected to convert the said interests into
the Assigned Interests.

      NOW, THEREFORE:

  1.  Assignors hereby assign to Assignees the Assigned Interest in exchange for
      Assignees election to convert the Overriding Royalty Interests into the
      said Assigned Interests. After the transfer of the Assigned Interests
      hereunder the rights and interests under the On-Top Contract and the JOA
      shall be held by the Assignors and Assignees in the following manner:

      Sipetrol       55.339% of 8/8ths of all the rights, obligations,
                     liabilities, and interests of the Associate under the
                     Contract and the JOA

      Cimarrona      15.811% of 8/8ths of all the rights, obligations,
                     liabilities, and interests of the Associate under the
                     Contract and the JOA

      GHK            5.472% of 8/8ths of all the rights, obligations,
                     liabilities, and interests of the Associate under the
                     Contract and the JOA

      Seven Seas     20.378% of 8/8ths of all the rights, obligations,
                     liabilities, and interests of the Associate under the
                     Contract and the JOA

      Petrolinson    3.000% of 8/8ths of all the rights, obligations,
                     liabilities, and interests of the Associate under the
                     Contract and the JOA

    Assignees hereby terminate the Overriding Royalty Interests previously
    reserved by Assignees under that certain assignment dated the ____ day of
    __________, 200_.

                                       2
<PAGE>   51

   2. Assignors warrant to Assignees the title to the above-described Assigned
      Interest against any person or entity claiming by through, or under
      Assignors, but not otherwise.

   3. Assignees hereby accept and assume the Assigned Interest.

   4. Terms capitalized in this Assignment and not defined herein shall have the
      meaning given to them in the Exploration Agreement and the exhibits
      attached thereto or the relevant Association Contract, as applicable.


      IN WITNESS WHEREOF, the Parties have caused this Assignment to be executed
by their respective duly authorized representatives.


GHK Company Colombia                Seven Seas Petroleum Colombia, Inc.

By: _____________________________   By: _______________________________

Name: ___________________________   Name: _____________________________

Title: __________________________   Title: ____________________________



Petrolinson S. A.                   Sociedad Internacional Petrolera S.A.

By: _____________________________   By: _______________________________

Name: ___________________________   Name: _____________________________

Title: __________________________   Title: ____________________________



Cimarrona L.L.C.

By: _____________________________

Name: ___________________________

Title: __________________________


                                       3
<PAGE>   52
                          EXHIBIT "L" TO THAT CERTAIN

                          EXPLORATION AGREEMENT DATED

                           JANUARY 25, 2001, BY AND

                         BETWEEN GHK COMPANY COLOMBIA,

                       SEVEN SEAS PETROLEUM COLOMBIA, INC.

                               PETROLINSON S.A.,

                            SIPETROL COLOMBIA., AND

                                CIMARRONA L.L.C




<PAGE>   53




                                 LOAN AGREEMENT

                                     BETWEEN

                            SEVEN SEAS PETROLEUM INC.

                                       AND

                            STILLWATER NATIONAL BANK
                             AND TRUST COMPANY, N.A.















                                DECEMBER 20, 2000



                           SELF, GIDDENS & LEES, INC.
                            ATTORNEYS AND COUNSELORS
   2725 OKLAHOMA TOWER o 210 PARK AVENUE o OKLAHOMA CITY, OKLAHOMA 73102-5604
              TELEPHONE (405) 232-3001 o TELECOPIER (405) 232-5553


<PAGE>   54






                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                             Page
                                                                             ----

<S>                                                                            <C>
1. Definition of Terms ....................................................... 1
   1.1      Change of Control ................................................ 1
   1.2      Closing Date ..................................................... 2
   1.3      Collateral ....................................................... 2
   1.4      Default .......................................................... 2
   1.5      Guarantees ....................................................... 2
   1.6      Guarantor Collateral ............................................. 2
   1.7      Guarantors ....................................................... 2
   1.8      Guarantor Security Agreement ..................................... 2
   1.9      Loan ............................................................. 3
   1.10     Loan Documents ................................................... 3
   1.11     Note ............................................................. 3
   1.12     Obligations ...................................................... 3
   1.13     Person ........................................................... 3
   1.14     Pledged Stock .................................................... 3
   1.15     Reference Rate ................................................... 4
   1.16     Stock Pledge Agreement ........................................... 4
   1.17     Subsidiaries ..................................................... 4

2. Lending Agreement ......................................................... 4

3. Loan ...................................................................... 4
   3.1      Term ............................................................. 5
   3.2      Interest ......................................................... 5
   3.3      Payments ......................................................... 5
   3.4      Voluntary Prepayment ............................................. 5

4. Advances; Payments ........................................................ 5
   4.1      Use of Proceeds .................................................. 5
   4.2      Request for Advance .............................................. 5
   4.3      Place of Advances and Payments ................................... 5

5. Collateral Security ....................................................... 6

6. Conditions of Lending ..................................................... 6
   6.1      Loan Documents ................................................... 6
   6.2      Authority ........................................................ 6
   6.3      No Default ....................................................... 6
   6.4      Opinion of Counsel ............................................... 6
   6.5      Arrangement Fee .................................................. 6
</TABLE>


                                      -i-
<PAGE>   55

<TABLE>


<S>                                                                          <C>
   6.6      Other Information ................................................ 6
   6.7      Prohibitive Orders ............................................... 7
   6.8      Information and Consents ......................................... 7
   6.9      Assignments ...................................................... 7

7. Representations ........................................................... 7
   7.1      Existence ........................................................ 7
   7.2      Authorized Capital Stock ......................................... 7
   7.3      Financial Condition .............................................. 7
   7.4      Liabilities ...................................................... 8
   7.5      Ownership ........................................................ 8
   7.6      Permits .......................................................... 8
   7.7      Taxes ............................................................ 8
   7.8      Litigation ....................................................... 8
   7.9      No Default ....................................................... 9
   7.10     Full Disclosure .................................................. 9
   7.11     Survival of Representations ...................................... 9
   7.12     Solvency ......................................................... 9

8. Affirmative Covenants ..................................................... 9
   8.1      Performance of Obligations ....................................... 9
   8.2      Notifications .................................................... 9
   8.3      Records Inspections ..............................................10
   8.4      Financial Information ............................................10
            8.4.1 Financial Statements .......................................10
            8.4.2 Other Information ..........................................10
   8.5      Accounts .........................................................11
   8.6      Additional Documents .............................................11
   8.7      Governmental Approvals ...........................................11
   8.8      Taxes ............................................................11
   8.9      Access ...........................................................11
   8.10     Operation ........................................................11
   8.11     Qualification; Licenses ..........................................11
   8.12     Insurance ........................................................11
   8.13     Operation, Title, Pledge .........................................12
   8.14     Compliance with Applicable Law ...................................12
   8.15     Legal Existence ..................................................12

9. Negative Covenants ........................................................12
   9.1      Creation of Liens ................................................12
   9.2      Liquidation, Merger or Sale of Assets ............................12
   9.3      Creation of Debt .................................................12
   9.4      Loans and Guaranties .............................................13
   9.5      Transfers ........................................................13
   9.6      Other Agreements .................................................13
</TABLE>

                                      -ii-

<PAGE>   56

<TABLE>


<S>                                                                            <C>
     9.7      Limitation on Distributions and Redemptions ......................13
     9.8      Transactions with Affiliates .....................................13
     9.9      Subsidiaries .....................................................13

10.  Default ...................................................................13
     10.1     Nonpayment of Note ...............................................14
     10.2     Other Nonpayment .................................................14
     10.3     Breach of Agreement ..............................................14
     10.4     Lien Filings .....................................................14
     10.5     Other Agreements .................................................14
     10.6     Representations ..................................................14
     10.7     Bankruptcy .......................................................14
     10.8     Judgment .........................................................14
     10.9     Maturity of Other Debt ...........................................14
     10.10    Failure of Liens .................................................15
     10.11    Indenture ........................................................15
     10.12    Change of Control ................................................15
     10.13    Opportunity to Cure ..............................................15

11.  Remedies ..................................................................15
     11.1     Acceleration of Note .............................................15
     11.2     Selective Enforcement ............................................15
     11.3     Performance by Bank ..............................................15
     11.4     Waiver of Default ................................................16
     11.5     Deposits; Setoff .................................................16

12.  Miscellaneous .............................................................16
     12.1     Participating Banks ..............................................16
     12.2     Cumulative Remedies ..............................................16
     12.3     Survival of Representations ......................................16
     12.4     Expenses .........................................................17
     12.5     Notices ..........................................................17
     12.6     Construction .....................................................17
     12.7     Binding Effect ...................................................18
     12.8     No Third Party Beneficiaries .....................................18
     12.9     Assignment .......................................................18
     12.10    Time .............................................................18
     12.11    Severability .....................................................18
     12.12    Verbal Change ....................................................18
     12.13    No Waiver ........................................................18
     12.14    Acknowledgments and Admissions ...................................18
     12.15    JOINT ACKNOWLEDGMENT .............................................19
     12.16    INDEMNITY ........................................................19
     12.17    WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. .....................20
</TABLE>

                                     -iii-

<PAGE>   57

Schedule "1.5"             -        Guaranty Agreement
Schedule "1.8"             -        Guarantor Security Agreement
Schedule "1.11"            -        Promissory Note
Schedule "1.14"            -        Subsidiaries and Pledged Stock
Schedule "1.16"            -        Stock Pledge Agreement
Schedule "9.9"             -        Other Subsidiaries

                                      -iv-
<PAGE>   58


                                 LOAN AGREEMENT


         THIS LOAN AGREEMENT (this "Agreement") is made effective the 20th day
of December, 2000, between SEVEN SEAS PETROLEUM INC., a Yukon Territory, Canada
corporation (the "Borrower"), and STILLWATER NATIONAL BANK AND TRUST COMPANY,
N.A. (the "Bank").

                                  WITNESSETH:

         WHEREAS, the Borrower has requested that the Bank loan the Borrower
funds to provide a working capital line of credit, which the Bank is willing to
do subject to the terms and conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the funds to be advanced by the Bank under the Note (as
hereinafter defined) and other good and valuable consideration, the receipt and
sufficiency of all of which are hereby acknowledged, the Borrower and the Bank
hereby agree as follows:

1. Definition of Terms. All terms defined in this Agreement will have the
defined meaning when used in any of the Loan Documents (as hereinafter defined)
unless the context otherwise requires. Each accounting term not defined herein,
and each accounting term partly defined herein to the extent not defined, will
have the meaning given to it under generally accepted accounting principles. As
used in this Agreement, the following terms will have the meanings indicated:

     1.1  Change of Control . The occurrence of any of the following events: (a)
          any Person other than the Borrower or one of the Borrower's
          wholly-owned Subsidiaries acquires or holds any legal or beneficial
          ownership of any Subsidiary; (b) any Person or two or more Persons
          acting as a group acquires beneficial ownership (within the meaning of
          Rule 13d-3 of the SEC under the Securities Exchange Act of 1934, as
          amended, and including holding proxies to vote for the election of
          directors other than proxies held by the Borrower's management or
          their designees to be voted in favor of Persons nominated by the
          Borrower's Board of Directors) of fifty percent (50%) or more of the
          outstanding voting securities of the Borrower, measured by voting
          power (including both common stock and any preferred stock or other
          equity securities entitling the holders thereof to vote with the
          holders of common stock in elections for directors of the Borrower);
          (c) one-third or more of the directors of the Borrower consists of
          Persons not nominated by the Borrower's Board of Directors (not
          including as Board nominees any directors which the Board is obligated
          to nominate pursuant to shareholders agreements, voting trust
          arrangements or similar arrangements); or (d) the merger or
          consolidation of the Borrower with or into another Person or the
          merger or consolidation of another Person into the Borrower, or the
          sale of all or substantially all of the assets of the Borrower and the
          Subsidiaries to another Person (other than a Person that is controlled
          by the Borrower or one or more of





<PAGE>   59



          the Subsidiaries), and, in the case of any such merger or
          consolidation, the securities of the Borrower that are outstanding
          immediately prior to such transaction and which represent one hundred
          percent (100%) of the aggregate voting power of the voting stock of
          the Borrower are changed into or exchanged for cash, securities or
          property, unless pursuant to such transaction such securities are
          changed into or exchanged for, in addition to any other consideration,
          securities of the surviving corporation that represent immediately
          after such transaction, at least a majority of the aggregate voting
          power of the voting stock of the surviving corporation.

     1.2  Closing Date. The date upon which the Loan Documents are signed by
          the Borrower and the Guarantors and accepted by the Bank at the Bank's
          office in Oklahoma City, Oklahoma, all in form and substance
          satisfactory to the Bank.

     1.3  Collateral. All of the Borrower's and the Guarantors' right, title
          and interest in and to the property described in the Loan Documents
          whether now owned or hereafter acquired including without limitation:
          (a) the Guarantor Collateral; (b) the Pledged Stock; and (c) all
          additions and accessions to, replacements of, substitutions for,
          dividends on and proceeds from any of the items listed in the
          foregoing parts (a) and (b).

     1.4  Default. The occurrence of any of the events specified in paragraph
          10 of this Agreement.

     1.5  Guarantees. The agreement to be executed by the Guarantors in favor
          of the Bank in substantially the form of Schedule "1.5" attached
          hereto as a part hereof, whereby the Guarantors unconditionally
          guarantee to the Bank payment of all Obligations now or hereafter
          owing to the Bank by the Borrower in connection with the Loan
          Documents and the full and complete performance by the Borrower of the
          Loan Documents.

     1.6  Guarantor Collateral. The certificates of deposit or government
          securities in form and substance satisfactory to the Bank owned by one
          or more of the Guarantors and pledged to the Bank to secure payment of
          the Obligations.

     1.7  Guarantors. The joint and several reference to (a) Robert A. Hefner
          III, an individual ("Hefner"), (b) The GHK Company L.L.C., an Oklahoma
          limited liability company ("GHK"), and (c) Ramiiilaj A Limited
          Partnership, a Texas limited partnership ("Ramiiilaj").

     1.8  Guarantor Security Agreement . The instrument and all extensions,
          renewals and modifications thereof, executed and delivered to the Bank
          by the Guarantors granting to the Bank a first perfected security
          interest in and to the Guarantor Collateral in substantially the form
          of Schedule "1.8" attached hereto as a part hereof.




                                      -2-
<PAGE>   60

     1.9  Loan. The loan by the Bank to the Borrower evidenced by the Note in
          the principal amount not to exceed TEN MILLION DOLLARS
          ($10,000,000.00).

     1.10 Loan Documents. This Agreement, the Guarantees, the Guarantor
          Security Agreement, the Note, the Stock Pledge Agreement and all other
          instruments executed and delivered by the Borrower, the Guarantors or
          any other Person or entity in connection with the Loan contemplated by
          this Agreement, all instruments issued pursuant to the foregoing
          documents and all extensions, renewals, modifications and amendments
          thereof.

     1.11 Note. The promissory note and all extensions, renewals,
          modifications, consolidations and increases thereof executed by the
          Borrower and delivered to the Bank pursuant to this Agreement to
          evidence the Loan and advances thereunder contemplated by this
          Agreement in the principal amount of TEN MILLION DOLLARS
          ($10,000,000.00). The Note will be payable on the terms stated in
          paragraph 3 of this Agreement and will be in substantially the form of
          Schedule "1.11" attached hereto as a part hereof.

     1.12 Obligations. The obligation of the Borrower to: (a) pay the principal
          of and interest on the Note in accordance with the terms thereof and
          to satisfy all of the Borrower's other liabilities to the Bank,
          whether under this Agreement or otherwise, whether now existing or
          hereafter incurred, matured or unmatured, direct or contingent, joint
          or several, including any extensions, modifications, renewals, or
          increases thereof and substitutions therefor; (b) repay to the Bank
          all amounts advanced by the Bank under this Agreement or otherwise on
          behalf of the Borrower including, without limitation, overdrafts and
          advances for principal or interest payments to other secured parties,
          mortgagees, lessors or lienors, or for taxes, levies, insurance, rent,
          repairs to or maintenance or storage of any of the Collateral; (c)
          reimburse the Bank, on demand, for all of the Bank's expenses and
          costs including reasonable fees and expenses of the Bank's counsel in
          connection with the preparation, negotiation, amendment, modification,
          or enforcement of this Agreement and the Loan Documents including,
          without limitation, any proceeding brought or threatened to enforce
          payment of any of the obligations referred to in this paragraph 1.12;
          and (d) perform all other obligations of the Borrower under the Loan
          Documents.

     1.13 Person. An individual, corporation, partnership, limited liability
          company, association, joint stock company, trust or trustee thereof,
          estate or executor thereof, unincorporated organization or joint
          venture, tribunal, or any other legally recognizable entity.

     1.14 Pledged Stock. All of the issued and outstanding capital stock of the
          Subsidiaries owned by the Borrower and certain of the Borrower's
          Subsidiaries as set forth at Schedule "1.14" attached hereto as a part
          hereof.

                                      -3-
<PAGE>   61

     1.15 Reference Rate. The national prime fluctuating rate of interest
          published from time to time in The Wall Street Journal (whether or not
          charged or published by the Bank). It is a rate recognized by the Bank
          based on various factors, including the Bank's costs and desired
          return, general economic conditions and other factors and is used as a
          reference point by the Bank for pricing some loans. The Bank may price
          loans at, above or below the Reference Rate. Any change in the
          Reference Rate will take effect, without notice (which notice is
          hereby waived), on the day such change is published in The Wall Street
          Journal.

     1.16 Stock Pledge Agreement. The instrument and all extensions, renewals
          and modifications thereof, executed and delivered to the Bank by the
          Borrower and certain of the Borrower's Subsidiaries granting to the
          Bank a first perfected security interest in and to the Pledged Stock
          in substantially the form of Schedule "1.16" attached hereto as a part
          hereof.

     1.17 Subsidiaries. The wholly owned subsidiaries of the Borrower listed at
          Schedule "1.14" attached hereto as a part hereof.

2. Lending Agreement. Subject to the terms and conditions of this Agreement, the
Bank agrees to lend to the Borrower and the Borrower agrees to borrow from the
Bank up to the principal amount of the Note which represents the total amount of
the Loan. Notwithstanding any other provision of the Loan Documents, any advance
herein provided for will not be required to be made by the Bank if since the
Closing Date and up to the date of such requested advance: (a) any event of
Default, or any event which, with notice or passage of time, would constitute an
event of Default, has occurred and has not been cured by the Borrower or waived
by the Bank; (b) Hefner has died or has been judicially declared incompetent;
(c) the Borrower's right to do business has been suspended by Yukon Territory,
Canada, and has not been continued in the Cayman Islands; (d) the Borrower
requests such additional advance for any purpose other than the purposes set
forth at paragraph 4.1 of this Agreement; (e) there has been, in the reasonable
opinion of the Bank, a material adverse change in the financial condition of any
Guarantor from that shown by the financial statements referenced in this
Agreement; (f) any litigation or governmental proceeding has been instituted
involving the Collateral which, in the opinion of the Bank will, to a material
extent, adversely affect the value of the Collateral; or (g) if, since the date
of this Agreement and up to the date of the advance request, any liens, claims
or encumbrances against the Collateral have been made or filed and have not been
removed or settled to the satisfaction of the Bank. On the Bank's request, prior
to the making of any such advance, the Borrower will furnish to the Bank a
certificate dated the requested date of such advance and signed by the Borrower
to the effect that no change or event referred to in clauses (a), (b), (c), (d),
(e), (f) and (g) of this paragraph has occurred.

3. Loan. The Borrower and the Bank specifically agree that the aggregate of
advances made during the term of the Note may exceed the face amount thereof,
but the unpaid principal balance at any time will not exceed such face amount.
The Loan will be evidenced by the Note and will be payable as follows:



                                      -4-
<PAGE>   62

     3.1  Term. The term of the Note will be for the period commencing on the
          Closing Date and ending on December 31, 2001 (the "Maturity Date").

     3.2  Interest. Prior to Default, advances under the Note will bear
          interest from the date of advance at the per annum rate equal to the
          Reference Rate plus 75/100 percent (.75%). After Default, all amounts
          due under the Note will bear interest at the greater of: (a) fifteen
          percent (15%) per annum; or (b) the Reference Rate plus five percent
          (5%) per annum. All interest will be computed for the actual number of
          days elapsed at a per diem charge based on a year consisting of three
          hundred sixty (360) days.

     3.3  Payments. Provided that no event of Default has occurred or is
          continuing under any of the Loan Documents, there will be no required
          principal payments on the Note until the Maturity Date. Commencing on
          January 31, 2001, and on the last day of each successive month
          thereafter until the Note is paid in full, the Borrower will pay to
          the Bank all accrued unpaid interest on the Note. The entire unpaid
          principal balance of the Note plus all accrued and unpaid interest
          thereon will be due and payable on the Maturity Date.

     3.4  Voluntary Prepayment. The Borrower will have the right at any time to
          prepay the Note in whole or in part, without premium or penalty, but
          with interest accrued to the date of prepayment.

4. Advances; Payments. Advances under the Note will be made by the Bank for the
following purposes and subject to the following limitations:

     4.1  Use of Proceeds. All proceeds of each advance under the Note will be
          used solely for: (a) working capital purposes; and (b) payment of
          costs incurred by the Borrower or the Bank in connection with the
          preparation, administration and enforcement of the Loan Documents.

     4.2  Request for Advance. Not later than 11:00 a.m. on the date of
          advance, the Borrower will notify the Bank in writing of the total
          amount of the requested advance under the Note.

     4.3  Place of Advances and Payments. Advances under the Note will be made
          at the Bank's office or by wire transfer of immediately available
          funds to a bank account designated by the Borrower in the advance
          request. All payments and prepayments of principal or interest on the
          Note will be made to the Bank in collected and freely transferable
          funds at or before 11:00 a.m. Oklahoma City, Oklahoma time on the date
          due at the Bank's office at 6305 Waterford Boulevard, Suite 205,
          Oklahoma City, Oklahoma. All payments will be paid in full without set
          off or counterclaim and without reduction for, and free from, any and
          all taxes, levies, imposts, duties, fees, charges, deductions,
          withholdings, restrictions or conditions of any nature imposed by any
          government or any political subdivision



                                      -5-
<PAGE>   63


          or taxing authority thereof. If any payment under the Note or this
          Agreement becomes due and payable on a day other than a business day,
          the maturity thereof will be extended to the next succeeding business
          day and such extension of time will in such case be included in the
          computation of payments of interest.

5. Collateral Security. Payment and performance of the Obligations will be
secured by the Guarantees, all of the Collateral and such other or additional
property as is agreed to by the Borrower and the Bank.

6. Conditions of Lending. The obligation of the Bank to perform this Agreement
to make the initial or any future advances under the Note is subject to the
satisfaction and continued performance by the Borrower and the Guarantors of the
following conditions precedent:

     6.1  Loan Documents. The execution, acknowledgment (where appropriate) and
          delivery by the appropriate parties of the Loan Documents, all in form
          and substance satisfactory to the Bank, and delivery of possession to
          the Bank of any Collateral the possession of which is necessary to
          perfect the Bank's security interest including, without limitation,
          any certificates evidencing the Pledged Stock.

     6.2  Authority. The Bank will have received: (a) certified copies of the
          instruments creating the Borrower, GHK and Ramiiilaj and/or governing
          the operation of the Borrower, GHK and Ramiiilaj, complete with all
          amendments thereto and certificates to be filed in connection
          therewith; and (b) certified copies of resolutions and other documents
          reasonably required to authorize the execution, delivery and
          performance of the Loan Documents, all in form and substance
          satisfactory to the Bank.

     6.3  No Default. The representations and warranties set forth in paragraph
          7 of this Agreement will be true and correct on and as of the date of
          the initial advance of funds under the Note and each additional
          advance with the same effect as if such representations and warranties
          had been made on and as of such date and there will have occurred and
          be continuing no Default.

     6.4  Opinion of Counsel. The Bank will have received the opinion or
          opinions of the Borrower's and the Guarantors' counsel in form and
          substance reasonably acceptable to the Bank and the Bank's counsel.

     6.5  Arrangement Fee. The Bank will have received a non-refundable
          arrangement fee from the Borrower in the amount of Twelve Thousand
          Five Hundred Dollars ($12,500.00) as reimbursement to the Bank for
          processing the Loan.

     6.6  Other Information. The Bank will have received current financial
          statements for the Borrower and the Guarantors and such other
          information, documents and





                                      -6-
<PAGE>   64


          instruments concerning the Borrower, the Subsidiaries, the Guarantors
          and the Collateral, as the Bank reasonably requests.

     6.7  Prohibitive Orders. No order, writ or injunction of any court or
          administrative agency is in effect or is being sought prohibiting the
          transactions contemplated by this Agreement or the other Loan
          Documents.

     6.8  Information and Consents. The Borrower and the Guarantors will have
          furnished to the Bank any consents of third parties to the
          transactions contemplated by this Agreement which may be required
          under any other agreements binding on the Borrower, any of the
          Subsidiaries or the Guarantors.

     6.9  Assignments. With respect to any secured indebtedness being paid off
          out of an advance under the Note, the Bank will have received an
          assignment, in form and substance satisfactory to the Bank, of all
          liens, encumbrances and security interests securing such indebtedness.

7. Representations. The Borrower represents and warrants to the Bank that the
following circumstances exist on the date of this Agreement and will continually
exist throughout the term of the Loan:

     7.1  Existence. The Borrower is and will continue to be a corporation duly
          organized and validly existing under the laws of Yukon Territory,
          Canada until such corporate existence is duly and validly continued in
          the Cayman Islands. Each of the Subsidiaries is and will continue to
          be a corporation duly organized and validly existing under the laws of
          the jurisdiction under which such Subsidiary was formed. GHK is and
          will continue to be a limited liability company duly organized and
          validly existing under the laws of the State of Oklahoma. Ramiiilaj is
          and will continue to be a limited partnership duly organized and
          validly existing under the laws of the State of Texas. The Borrower,
          GHK and Ramiiilaj and have adequate power, authority and legal right
          to enter into and carry out the provisions of the Loan Documents, to
          borrow money and to give security for borrowings as required by this
          Agreement and to consummate the transactions hereby contemplated. The
          Loan Documents, upon their execution and delivery, will constitute
          valid, legal and binding obligations of the Borrower and the
          Guarantors, enforceable in accordance with their terms, subject only
          to applicable bankruptcy, insolvency or similar laws generally
          affecting the enforcement of creditor's rights.

     7.2  Authorized Capital Stock. The authorized capital stock and
          outstanding capital stock of each of the Subsidiaries is as set forth
          at Schedule "1.14" attached hereto as a part hereof and there are no
          outstanding options, warrants or other convertible securities issued
          or outstanding with respect to any of the Subsidiaries.

     7.3  Financial Condition. The Borrower's consolidated financial statements
          dated as of September 30, 2000, and the Guarantors' financial
          statements dated as of June



                                      -7-
<PAGE>   65



          30,2000, copies of which have been furnished to the Bank, are correct
          and complete and fairly reflect the financial condition of the
          Borrower, the Subsidiaries and the Guarantors as of the date thereof
          and have been prepared in conformity with accounting principles
          applied on a basis consistent with that of preceding periods. There
          has occurred no material adverse change in the financial condition of
          the Borrower, any of the Subsidiaries or the Guarantors from the date
          of such financial statements to the date of execution of this
          Agreement.

     7.4  Liabilities. Neither the Borrower, any of the Subsidiaries nor any
          Guarantor has any material liabilities, direct or contingent, except
          those disclosed in the financial statements referred to in paragraph
          7.3 of this Agreement.

     7.5  Ownership. The Borrower has good and marketable title to the Pledged
          Stock, free and clear of all liens, security interest, claims or
          encumbrances, except for liens and security interests in favor of the
          Bank. The Guarantors have good and marketable title to the Guarantor
          Collateral, free and clear of all liens, security interest, claims or
          encumbrances, except for liens and security interests in favor of the
          Bank

     7.6  Permits. The Borrower and each of the Subsidiaries has, or will
          obtain, all governmental and private permits, certificates, consents
          and franchises which are material to the business, property, assets,
          operations or condition, financial or otherwise, of the Borrower or
          the Subsidiaries, to carry on their respective businesses as now being
          conducted and to own or lease and operate their respective properties
          as now owned or leased. All such governmental and private permits,
          certificates, consents and franchises are, or will be, valid and
          subsisting, and, to the best knowledge of the Borrower and the
          Guarantors, there is no existing violation thereof.

     7.7  Taxes. The Borrower, each of the Subsidiaries and the Guarantors have
          filed all Canadian, foreign, federal, state and local tax returns
          which are required to be filed and has paid or made provisions for
          payment of all taxes which have or may become due pursuant to said
          returns or pursuant to any assessment, except such taxes as are being
          contested in good faith and as to which adequate reserves have been
          provided. Neither the Borrower nor the Guarantors know of any basis
          for the assessment of any deficiency taxes.

     7.8  Litigation. There is no action, suit, proceeding or investigation
          pending, or, to their knowledge, threatened against the Borrower, any
          of the Subsidiaries, any Guarantor or the Collateral which will: (a)
          materially and adversely affect the Borrower, the Guarantors or the
          Collateral; (b) impair the ability of the Borrower or the Subsidiaries
          to carry on their respective businesses as presently contemplated; or
          (c) result in any substantial liability not adequately covered by
          insurance.



                                      -8-
<PAGE>   66

     7.9  No Default. The execution, delivery and performance by the Borrower
          and the Guarantors of this Agreement and the Loan Documents will not
          violate any provision or constitute a default under any indenture,
          agreement or instrument to which the Borrower, any of the Subsidiaries
          or any Guarantor is a party or by which the Borrower, any of the
          Subsidiaries, any Guarantor or the Collateral is bound or affected.

     7.10 Full Disclosure. Neither this Agreement nor any statement or
          instrument referred to herein nor any other information, report or
          statement delivered to the Bank by the Borrower or the Guarantors
          contains any untrue statement or omits to state a material fact
          necessary to make the statements herein or therein not misleading.

     7.11 Survival of Representations. All representations and warranties made
          by the Borrower and the Guarantors herein will survive the delivery of
          the Loan Documents and the making of the Loan evidenced thereby, and
          any investigation at any time made by or on behalf of the Bank will
          not diminish the Bank's right to rely thereon. All statements
          contained in any certificate or other instrument delivered by or on
          behalf of the Borrower or the Guarantors under or pursuant to this
          Agreement or in connection with the transactions contemplated hereby
          will constitute representations and warranties made by the Borrower
          and the Guarantors hereunder.

     7.12 Solvency. Upon giving effect to the issuance of the Note, the
          execution of the Loan Documents by the Borrower and the Guarantors and
          the consummation of the transactions contemplated hereby, the Borrower
          and the Guarantors will be solvent (as such term is used in applicable
          bankruptcy, liquidation, receivership, insolvency or similar laws).

8. Affirmative Covenants. Until the expiration of the Bank's obligation to
advance funds under this Agreement and the payment in full of the Obligations,
unless the Bank otherwise consents in writing, the Borrower agrees to perform or
cause to be performed the following:

     8.1  Performance of Obligations. The Borrower will pay and perform all
          Obligations under the Loan Documents. The Borrower and the
          Subsidiaries will perform all obligations under all material contracts
          and agreements relating to their respective businesses, and will
          enforce the performance of the obligations of the other parties
          thereto.

     8.2  Notifications. The Borrower will give prompt written notice to the
          Bank of: (a) any event of Default; (b) any change of management of the
          Borrower; (c) all material litigation affecting the Borrower, the
          Subsidiaries, the Guarantors or the Collateral; and (d) any other
          matter which has resulted in, or might result in (i) a material
          adverse change in the consolidated financial condition of the
          Borrower, the Subsidiaries or the Guarantors or (ii) a material
          adverse change in the ability




                                      -9-
<PAGE>   67


          of the Borrower to perform the Obligations, warranties, covenants and
          conditions of the Loan Documents.

     8.3  Records Inspections. The Borrower and the Subsidiaries will maintain
          full and accurate accounts and records of operations on a basis
          consistent with prior periods. The Borrower will permit the Bank and
          the Bank's designated representatives to have access to the records
          and accounts of the Borrower and the Subsidiaries at all reasonable
          times to perform such inspections, audits and examinations as the Bank
          might reasonably request from time to time.

     8.4  Financial Information. The Borrower and the Guarantors will furnish to
          the Bank:

          8.4.1   Financial Statements. Accurate books and records of account
                  will be kept by the Borrower and the Guarantors in accordance
                  with accounting principles consistently applied. The Bank will
                  have the right to examine and copy such books and records and
                  the Canadian, foreign, federal and state income tax returns of
                  the Borrower and the Guarantors, to discuss the affairs,
                  finances and accounts of the Borrower and the Guarantors, and
                  to be informed as to the same at such times and intervals as
                  the Bank might reasonably request. The Borrower will furnish
                  to the Bank no later than ninety (90) days after the close of
                  the Borrower's fiscal year, year end annual audited
                  consolidated financial statements of the Borrower. The annual
                  audited financial statements of the Borrower will be prepared
                  by an independent certified public accounting firm selected by
                  the Borrower and approved by the Bank, will be prepared in
                  accordance with generally accepted accounting principles
                  consistently applied and will be certified to the Bank. The
                  Guarantors will furnish to the Bank annual year end financial
                  statements. The financial statements of the Guarantors will be
                  certified to the Bank, will be prepared in accordance with
                  generally accepted accounting principles consistently applied
                  and will be in form and substance satisfactory to the Bank.
                  Within thirty (30) days after request by the Bank, the
                  Borrower and the Guarantors will furnish to the Bank complete
                  copies of all Canadian, foreign, federal and state income tax
                  returns for the preceding year with all schedules attached.

          8.4.2   Other Information. At the Bank's request from time to time,
                  the Borrower and the Guarantors will provide the Bank with
                  such other information as the Bank may reasonably request
                  regarding the business affairs and financial condition of the
                  Borrower, the Subsidiaries and the Guarantors and the Borrower
                  and the Guarantors will provide access to the Bank at all
                  reasonable times to all documents and information relating to
                  the Collateral.



                                      -10-
<PAGE>   68

     8.5  Accounts. The Borrower will maintain the Borrower's primary accounts
          on deposit with a financial institution approved by the Bank which
          approval will not be unreasonably withheld.

     8.6  Additional Documents. The Borrower and the Guarantors will promptly,
          on demand by the Bank, perform or cause to be performed such actions
          and execute or cause to be executed all such additional agreements,
          contracts, indentures, documents and instruments as might be
          reasonably requested by the Bank to satisfy the requirements of this
          Agreement and the disbursement of funds hereunder.

     8.7  Governmental Approvals. The Borrower will obtain and continuously
          maintain and will cause each of the Subsidiaries to obtain and
          continuously maintain all permits, licenses, easements, rights-of-way
          and governmental authorities necessary for the proper operation of
          their respective businesses.

     8.8  Taxes. All taxes, assessments, governmental charges and levies
          imposed on the Borrower, the Subsidiaries or the Guarantors or the
          assets, income or profits of the Borrower, the Subsidiaries or the
          Guarantors, will be paid prior to the date on which penalties attach
          thereto, provided that neither the Borrower, the Subsidiaries nor the
          Guarantors will be required to pay any such charge which is being
          contested in good faith by proper proceedings and for which adequate
          reserves have been established under generally accepted accounting
          principles.

     8.9  Access. Any representative of the Bank will have reasonable access to
          the Collateral and any other business property owned by the Borrower
          or the Guarantors.

     8.10 Operation. The Borrower agrees to operate its business and to cause
          each of the Subsidiaries to operate their respective businesses in a
          prudent and efficient manner consistent with normal industry
          practices.

     8.11 Qualification; Licenses. The Borrower will take such actions or cause
          such actions to be taken as might be required to maintain the
          existence of the Borrower and each of the Subsidiaries and all
          governmental and private permits, licenses and authorities of the
          Borrower and the Subsidiaries necessary or desirable to the
          continuation of their respective businesses and will comply with all
          statutes and governmental regulations.

     8.12 Insurance. Policies of insurance will be maintained by the Borrower
          and the Subsidiaries with companies, in amounts, and against
          reasonable risks satisfactory to the Bank. The Borrower and the
          Guarantors will furnish the Bank with a schedule of all insurance
          policies in effect and, upon request of the Bank, evidence of payment
          of the premium for each insurance policy.

                                      -11-
<PAGE>   69

     8.13 Operation, Title, Pledge. The Borrower agrees to grant to the Bank
          first perfected security interests covering all of the Collateral and
          to promptly deliver to the Bank such security documents and other
          instruments as might be required by the Bank to subject the Collateral
          to liens in favor of the Bank. The Borrower will maintain and defend
          good and marketable title to the Collateral free and clear of all
          claims, liens or encumbrances except those in favor of the Bank.

     8.14 Compliance with Applicable Law. The Borrower and the Guarantors will
          continuously comply with all applicable regulations, rules, ordinances
          or orders of the United States of America, any state, or any other
          jurisdiction, or of any agency of federal state and local taxing
          authority or other agency which might materially and adversely affect
          the business, operations or financial condition of the Borrower.

     8.15 Legal Existence. The Borrower will take such actions or cause such
          actions to be taken as might be required to maintain the legal
          existence of the Borrower and each of the Subsidiaries and the right
          to conduct their respective businesses in those countries and states
          in which the nature of the business requires qualification to do
          business therein, will comply with and will cause each of the
          Subsidiaries to comply with all valid and applicable statutes, rules
          and regulations and will continue to conduct the respective businesses
          of the Borrower and the Subsidiaries in substantially the same manner
          and field as such businesses are now conducted.

9. Negative Covenants. The Borrower agrees that until the expiration of the
obligation of the Bank to advance funds under this Agreement and payment in full
of the Obligations, unless the Bank waives compliance in writing:

     9.1  Creation of Liens. Neither the Borrower, any of the Subsidiaries nor
          the Guarantors will create, assume or suffer to exist any pledge,
          security interest, encumbrance or other lien (including the lien of an
          attachment, judgment or execution) securing a charge or obligation
          affecting any or all of the Collateral, excluding only the liens
          granted to the Bank.

     9.2  Liquidation, Merger or Sale of Assets. Neither the Borrower nor any
          of the Subsidiaries will liquidate, dissolve or convey, sell, assign
          or otherwise dispose of any substantial part of their respective
          assets, except for sales in the ordinary course of business. None of
          the Subsidiaries will enter into any consolidation, merger,
          partnership, syndicate, pool or other combination, except with the
          Borrower or another Subsidiary.

     9.3  Creation of Debt. The Borrower will not incur, create or suffer to
          exist any indebtedness for borrowed money, or issue, discount or sell
          any obligation of the Borrower, excluding only: (a) the indebtedness
          to the Bank contemplated by this Agreement; (b) current accounts
          payable arising in the ordinary course of the Borrower's business; (c)
          indebtedness outstanding as of the Closing Date; and (d)




                                      -12-
<PAGE>   70


          other indebtedness of the Borrower and the Subsidiaries not to exceed
          Twenty-five Million Dollars ($25,000,000.00) in the aggregate.

     9.4  Loans and Guaranties. The Borrower will not make any loans, advances
          or extensions of credit to any Person, firm or corporation nor become
          a guarantor or surety directly or indirectly, except loans, advances
          and extensions of credit to or among the Borrower and the Subsidiaries
          and loans to employees relating to their employment.

     9.5  Transfers. The Borrower will not transfer or permit to be transferred
          voluntarily or by operation of law any interest in the Collateral and
          the Borrower will not sell, transfer or otherwise dispose of or
          create, assume or suffer to exist any pledge, lien, security interest,
          charge or encumbrance on any interest in any of the Subsidiaries owned
          by the Borrower.

     9.6  Other Agreements. The Borrower will not enter into any agreement that
          limits or restricts the ability of the Borrower to comply with the
          terms of the Loan Documents.

     9.7  Limitation on Distributions and Redemptions. The Borrower will not:
          (a) declare, pay or make any dividends or other distributions in
          respect of any class of capital stock or other interest in the
          Borrower; or (b) enter into any management agreement with any
          affiliate or other Person except in the ordinary course of business.
          Excluding any such items by, between or among the Borrower and the
          Subsidiaries, neither the Borrower nor any of the Subsidiaries will
          directly or indirectly make any capital contribution to or purchase,
          redeem, acquire or retire any of the capital stock of the Borrower or
          the Subsidiaries (whether such capital stock is now or hereafter
          issued, outstanding or created).

     9.8  Transactions with Affiliates. The Borrower will not engage in any
          material transaction with any affiliate of the Borrower on terms which
          are less favorable to the Borrower than those which would have been
          obtainable at the time in arm's-length dealing with Persons other than
          such affiliates.

     9.9  Subsidiaries. The Borrower will not create or own any subsidiaries
          other than the Subsidiaries and subsidiaries listed on Schedule "9.9"
          attached hereto as a part hereof. The Borrower will not permit any of
          the Subsidiaries to issue any additional capital stock of any class or
          series or incur any secured indebtedness without the Bank's written
          consent.

10. Default. The Bank may terminate all obligations of the Bank to make further
disbursements under the Note and the Bank may declare the Note and all other
indebtedness and Obligations of the Borrower owing to the Bank to be due and
payable if any of the following events occur and are not remedied by the
Borrower or waived by the Bank in writing:


                                      -13-
<PAGE>   71

      10.1  Nonpayment of Note. A default in payment when due of any interest on
            or principal of the Note; or

      10.2  Other Nonpayment. A default in payment when due of any other amount
            payable to the Bank under the terms of any of the Loan Documents; or

      10.3  Breach of Agreement. A default by the Borrower or the Guarantors in
            the performance or observance of any agreement contained in the Loan
            Documents, or under the terms of any other instrument delivered to
            the Bank in connection with this Agreement; or

      10.4  Lien Filings. The existence of any lien on the Collateral without
            indemnification therefor satisfactory to the Bank; or

      10.5  Other Agreements. The rescission, abandonment, disclaimer or breach
            of the Guarantees or other agreement affecting any part of the
            Collateral or the Guarantees; or

      10.6  Representations. Any representation, statement, certificate,
            schedule or report made or furnished to the Bank by the Borrower or
            the Guarantors proves to be false or erroneous in any material
            respect at the time of the making thereof or any representation or
            warranty ceases to be complied with in any material respect; or

      10.7  Bankruptcy. The Borrower, any of the Subsidiaries or any Guarantor
            becomes bankrupt or makes a general assignment for the benefit of
            creditors; or the Borrower, any of the Subsidiaries or any Guarantor
            applies for, or consents to, the appointment of a trustee, receiver
            or liquidator or authorizes such application or consent, or if
            proceedings seeking such appointment are commenced against the
            Borrower, any of the Subsidiaries or any Guarantor and remain
            undismissed and unstayed for ninety (90) days; or the Borrower, any
            of the Subsidiaries or any Guarantor authorizes or files a voluntary
            petition in bankruptcy or applies for or consents to the application
            of any bankruptcy, reorganization, readjustment of debt, insolvency,
            dissolution, liquidation or other similar law of any jurisdiction;
            or

      10.8  Judgment. Entry by any court of judgment against the Borrower, any
            of the Subsidiaries or any Guarantor in excess of One Million
            Dollars ($1,000,000.00) which is not adequately covered by insurance
            or secured by a supersedes bond, or any attachment of any material
            portion of the assets of the Borrower, any of the Subsidiaries or
            any Guarantor which is not discharged to the satisfaction of the
            Bank within thirty (30) days thereof; or

      10.9  Maturity of Other Debt. The occurrence of an event of default under
            or the acceleration of the maturity of the indebtedness of the
            Borrower or any Guarantor



                                      -14-
<PAGE>   72


            to any other Person in an amount in excess of One Million Dollars
            ($1,000,000.00); or

      10.10 Failure of Liens. Failure of the Bank's liens and security interests
            covering the Collateral to constitute a first and prior lien on any
            material portion of the Collateral; or

      10.11 Indenture. The occurrence of an event of default under the
            Borrower's Indenture covering the Borrower's $110,000,000 12.5%
            Senior Notes due 2005 or any action by the holders of such Senior
            Notes to amend the Borrower's Indenture; or

      10.12 Change of Control. Any Change of Control occurs.

      10.13 Opportunity to Cure. In the event the Borrower cures or causes to be
            cured such Default within thirty (30) days after receipt of written
            notice thereof, the parties will be restored to their respective
            rights and obligations under this Agreement as if no Default had
            occurred, except that no right to cure or notice of Default will be
            given as to events of Default in paragraphs 10.1, 10.4, 10.5, 10.7,
            10.8, 10.10, 10.11 or 10.12. The Borrower's opportunity to cure will
            be applicable as herein set forth notwithstanding any contrary
            provisions contained in any of the other Loan Documents.

11. Remedies. In the event of Default, the Bank will have the following
remedies:

      11.1  Acceleration of Note. The Bank may, at the Bank's option, declare
            the Note and all other Obligations to be immediately due and
            payable, and the Bank will be entitled to proceed to selectively and
            successively enforce the Bank's rights under the Loan Documents or
            any one or more of them.

      11.2  Selective Enforcement. In the event the Bank elects to selectively
            and successively enforce the Bank's rights under any one or more of
            the instruments securing payment of the Obligations, such action
            will not be deemed a waiver or discharge of any other lien or
            encumbrance securing payment of the Obligations until such time as
            the Bank has been paid in full all sums owing to the Bank.

      11.3  Performance by Bank. In the event the Borrower fails to cure any
            Default in the time provided, the Bank will at any time thereafter
            have the right (but not the obligation) to: (a) take possession of
            the Collateral and dispose of the Collateral in such manner as the
            Bank determines in the Bank's sole discretion (subject to the Bank's
            obligations to make a rights offering); (b) make such payments and
            perform such acts as might be determined by the Bank to be necessary
            or appropriate to perform or to cure any default in performance by
            the Borrower under all agreements affecting the Collateral; and (c)
            make advances under the Note without the consent of the Borrower to
            pay interest accrued thereon and all costs of such operation. If the
            Bank exercises such option, all costs will be paid




                                      -15-
<PAGE>   73


            to the Bank by the Borrower. The Borrower and the Guarantors hereby
            authorize the Bank to increase the indebtedness owing by the
            Borrower to the Bank by such costs and agrees that the Loan
            Documents will evidence and secure payment of such costs whether or
            not the total funds advanced exceed the face amount of the Loan
            Documents.

      11.4  Waiver of Default. The Bank may, by an instrument in writing signed
            by the Bank, waive any Default which has occurred and any of the
            consequences of such Default, and in such event, the Bank, the
            Borrower and the Guarantors will be restored to their respective
            former positions, rights and obligations hereunder. Any Default so
            waived will, for the purposes of this Agreement, be deemed to have
            been cured and not to be continuing; but no such waiver will extend
            to any subsequent or other Default or impair any consequence of such
            subsequent or other Default.

      11.5  Deposits; Setoff. Regardless of the adequacy of any other collateral
            security held by the Bank, any deposits or other sums credited by or
            due from the Bank to the Borrower or the Guarantors (excluding any
            funds held in escrow by the Bank pursuant to a written escrow
            agreement) will at all times constitute collateral security for all
            indebtedness and obligations of the Borrower and the Guarantors to
            the Bank and may be set off against any and all liabilities of the
            Borrower and the Guarantors to the Bank. The rights granted by this
            paragraph are in addition to the rights of the Bank under any
            statutory banker's lien now or hereafter in effect.

12. Miscellaneous. It is further agreed as follows:

      12.1  Participating Banks. The Borrower and the Guarantors agree that
            although the Loan Documents name the Bank as the holder thereof, the
            Bank is authorized to sell participation interests in the Loan to
            other financial institutions (a "Participating Bank") and the
            Borrower and the Guarantors agree that, subject to the terms of the
            agreements of participation, each Participating Bank will be
            entitled to rely on the terms of the Loan Documents as if the
            Participating Bank had been named as an original party to the Loan
            Documents.

      12.2  Cumulative Remedies. No failure on the part of the Bank to exercise
            and no delay in exercising any right hereunder will operate as a
            waiver thereof, nor will any single or partial exercise by the Bank
            of any right hereunder preclude any other or further right of
            exercise thereof or the exercise of any other right.

      12.3  Survival of Representations. All representations and warranties made
            herein will survive the making of the Loan hereunder and the
            delivery of the Loan Documents.


                                      -16-
<PAGE>   74

      12.4  Expenses. On the Closing Date, the Borrower will (except where
            prohibited by applicable law) pay all reasonable fees, costs,
            expenses (including legal expenses and attorneys' fees) and
            disbursements of the Bank incident to: (a) the preparation,
            negotiation, amendment, modification, or enforcement of this
            Agreement and the Loan Documents or the protection of the rights of
            the Bank in connection with the Loan Documents and the transactions
            contemplated thereby; and (b) the collection or enforcement of the
            Loan Documents whether by judicial proceedings, proceedings under
            Chapter 7 or 11 of the Bankruptcy Code or any successor statute
            thereto, or otherwise.

      12.5  Notices. Any notice, demand or communication required or permitted
            to be given by any provision of this Agreement will be in writing
            and will be deemed to have been given and received when delivered
            personally or by telefacsimile to the party designated to receive
            such notice, or on the date following the day sent by overnight
            courier, or on the third (3rd) business day after the same is sent
            by certified mail, postage and charges prepaid, directed to the
            following addresses or to such other or additional addresses as any
            party might designate by written notice to the other parties:

            The Bank:         Stillwater National Bank and Trust Company, N.A.
                              Attention: Mr. G.P. Johnson Hightower
                              6305 Waterford Blvd., Suite 205
                              Oklahoma City, Oklahoma 73118

            with copy to:     C. Ray Lees, Esquire
                              Self, Giddens & Lees, Inc.
                              210 Park Avenue, Suite 2725
                              Oklahoma City, Oklahoma 73102

            The Borrower:     Seven Seas Petroleum Inc.
                              Attention: Larry A. Ray, President
                              5555 San Felipe, Suite 1700
                              Houston, Texas 77056

            with copy to:     Gary F. Fuller, Esquire
                              McAfee & Taft
                              211 North Robinson, 10th Floor
                              Oklahoma City, Oklahoma 73102

      12.6  Construction. The Loan Documents are intended to constitute
            contracts made under the laws of the State of Oklahoma and to be
            construed in accordance with the internal laws of said state.
            Nothing in this Agreement will be construed to constitute the Bank
            as a joint venturer with the Borrower or to constitute a
            partnership. The descriptive headings of the paragraphs of this
            Agreement (except the terms defined at paragraph hereof) are for
            convenience only and are not to




                                      -17-
<PAGE>   75


            be used in the construction of the content of this Agreement. This
            Agreement may be executed in multiple counterparts, each of which
            will constitute one agreement.

      12.7  Binding Effect. This Agreement will be binding on and will inure to
            the benefit of the Bank, the Borrower and their respective heirs,
            successors and assigns.

      12.8  No Third Party Beneficiaries. Nothing in this Agreement, express or
            implied, is intended to confer upon any Person, other than the
            parties hereto and their respective heirs, successors and assigns,
            any rights or remedies under or by reason of this Agreement or to
            constitute such Person a third party beneficiary of this Agreement.

      12.9  Assignment. Neither this Agreement, the Loan Documents nor the
            proceeds from the Loan will be assigned without the Bank's prior
            written consent, and without such consent, there will be no right to
            designate a payee of the proceeds from the Loan.

      12.10 Time. Time is of the essence of this Agreement and each provision of
            the other Loan Documents.

      12.11 Severability. In case any one or more of the provisions contained in
            the Loan Documents should be invalid, illegal or unenforceable in
            any respect in any jurisdiction, the validity, legality and
            enforceability of such provision or provisions will not in any way
            be affected or impaired thereby in any other jurisdiction; and the
            validity, legality and enforceability of the remaining provisions
            contained herein and therein will not in any way be affected or
            impaired thereby.

      12.12 Verbal Change. The Loan Documents may not be amended, altered,
            modified or changed verbally, but only by an agreement in writing
            signed by the party against whom enforcement of any amendment,
            waiver, change, modification or discharge is sought.

      12.13 No Waiver. No advance of the proceeds from the Loan under any of the
            Loan Documents will constitute a waiver of any of the
            representations, warranties, conditions or covenants of the Borrower
            or the Guarantors under the Loan Documents. In the event the
            Borrower or any Guarantor is unable to satisfy any warranty,
            condition or covenant contained in the Loan Documents, no advance of
            the proceeds from the Loan will preclude the Bank from thereafter
            declaring such inability to be an event of Default.

      12.14 Acknowledgments and Admissions. The Borrower and the Guarantors
            hereby represent, warrant, acknowledge and admit that: (a) each of
            them has made an independent decision to enter into this Agreement
            and the other Loan Documents to which it is a party, without
            reliance on any representation, warranty, covenant




                                      -18-
<PAGE>   76


            or undertaking by the Bank, whether written, oral or implicit, other
            than as expressly set out in this Agreement or in another Loan
            Document delivered on or after the date hereof; (b) there are no
            representations, warranties, covenants, undertakings or agreements
            by the Bank as to the Loan Documents except as expressly set out in
            this Agreement or in another Loan Document delivered on or after the
            date hereof; (c) the Bank has no fiduciary obligation toward the
            Borrower or the Guarantors with respect to any Loan Document or the
            transactions contemplated thereby; (d) the relationship pursuant to
            the Loan Documents between the Borrower and the Guarantors, on the
            one hand, and the Bank, on the other hand, is and will be solely
            that of debtor and creditor, respectively; (e) no partnership or
            joint venture exists with respect to the Loan Documents between the
            Borrower or the Guarantors and the Bank; (f) should a Default occur
            or exist, the Bank will determine in its sole discretion and for its
            own reasons what remedies and actions it will or will not exercise
            or take at the time; (g) without limiting any of the foregoing,
            neither the Borrower nor any Guarantor is relying upon any
            representation or covenant by the Bank, or any representative
            thereof, and no such representation or covenant has been made, that
            the Bank will, at the time of an event of Default, or at any other
            time, waive, negotiate, discuss or take or refrain from taking any
            action permitted under the Loan Documents with respect to any such
            event of Default or any other provision of the Loan Documents; and
            (h) the Bank has relied upon the truthfulness of the acknowledgments
            in this paragraph in deciding to execute and deliver this Agreement
            and to become obligated hereunder.

      12.15 JOINT ACKNOWLEDGMENT. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
            DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
            NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
            SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN
            ORAL AGREEMENTS BETWEEN THE PARTIES.

      12.16 INDEMNITY. THE BORROWER AND THE GUARANTORS AGREE TO INDEMNIFY THE
            BANK, UPON DEMAND, FROM AND AGAINST ANY AND ALL LIABILITIES,
            OBLIGATIONS, CLAIMS, LOSSES, DAMAGES, PENALTIES, FINES, ACTIONS,
            JUDGMENTS, SUITS, SETTLEMENTS, COSTS, EXPENSES OR DISBURSEMENTS
            (INCLUDING REASONABLE FEES OF ATTORNEYS, ACCOUNTANTS, EXPERTS AND
            ADVISORS) OF ANY KIND OR NATURE WHATSOEVER (IN THIS PARAGRAPH
            COLLECTIVELY CALLED "LIABILITIES AND COSTS") WHICH TO ANY EXTENT (IN
            WHOLE OR IN PART) MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED
            AGAINST THE BANK GROWING OUT OF, RESULTING FROM OR IN ANY OTHER WAY
            ASSOCIATED WITH THE COLLATERAL, THE LOAN DOCUMENTS AND THE
            TRANSACTIONS AND EVENTS



                                      -19-
<PAGE>   77

            (INCLUDING THE ENFORCEMENT OR DEFENSE THEREOF) AT ANY TIME
            ASSOCIATED THEREWITH OR CONTEMPLATED THEREIN (WHETHER ARISING IN
            CONTRACT OR TORT OR OTHERWISE AND INCLUDING ANY VIOLATION OR
            NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAWS BY THE BORROWER, THE
            GUARANTORS OR THE BANK OR ANY LIABILITIES OR DUTIES OF THE BORROWER,
            THE GUARANTORS OR THE BANK WITH RESPECT TO HAZARDOUS MATERIALS FOUND
            IN OR RELEASED INTO THE ENVIRONMENT).

            THE FOREGOING INDEMNIFICATION WILL APPLY WHETHER OR NOT SUCH
            LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE
            OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY, OR ARE
            CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY
            KIND BY THE BANK, PROVIDED ONLY THAT THE BANK WILL NOT BE ENTITLED
            UNDER THIS PARAGRAPH TO RECEIVE INDEMNIFICATION FOR THAT PORTION, IF
            ANY, OF ANY LIABILITIES AND COSTS WHICH IS PROXIMATELY CAUSED BY ITS
            OWN INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS DETERMINED
            IN A FINAL JUDGMENT OR WHICH RELATES TO ACTIONS TAKEN BY THE BANK
            AFTER THE BANK HAS TAKEN TITLE TO THE COLLATERAL. IF ANY PERSON
            (INCLUDING THE BORROWER, ANY OF ITS AFFILIATES OR ANY GUARANTOR)
            EVER ALLEGES SUCH GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY THE
            BANK, THE INDEMNIFICATION PROVIDED FOR IN THIS PARAGRAPH WILL
            NONETHELESS BE PAID UPON DEMAND, SUBJECT TO LATER ADJUSTMENT OR
            REIMBURSEMENT, UNTIL SUCH TIME AS A COURT OF COMPETENT JURISDICTION
            ENTERS A FINAL JUDGMENT AS TO THE EXTENT AND EFFECT OF THE ALLEGED
            GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. AS USED IN THIS PARAGRAPH
            THE TERM "BANK" WILL REFER NOT ONLY TO THE PERSON DESIGNATED AS SUCH
            BUT ALSO TO EACH DIRECTOR, OFFICER, AGENT, ATTORNEY, EMPLOYEE,
            PARTICIPATING BANK, REPRESENTATIVE AND AFFILIATE OF THE BANK.

      12.17 WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. EACH OF THE BORROWER,
            THE GUARANTORS AND THE BANK HEREBY KNOWINGLY, VOLUNTARILY,
            INTENTIONALLY AND IRREVOCABLY (A) WAIVES, TO THE MAXIMUM EXTENT NOT
            PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY A JURY IN
            RESPECT OF ANY LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY AT
            ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN
            DOCUMENTS OR



                                      -20-
<PAGE>   78

            ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH, BEFORE
            OR AFTER MATURITY, (B) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED
            BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
            LITIGATION ANY "SPECIAL DAMAGES," AS DEFINED BELOW, (C) CERTIFIES
            THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR COUNSEL FOR ANY PARTY
            HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH
            PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
            FOREGOING WAIVERS, AND (D) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
            ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE
            TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS,
            THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS PARAGRAPH.
            AS USED IN THIS PARAGRAPH, "SPECIAL DAMAGES" INCLUDES ALL SPECIAL,
            CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (REGARDLESS OF HOW
            NAMED), BUT DOES NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY
            HERETO HAS EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY
            HERETO.

            IN WITNESS WHEREOF, the parties have executed this Agreement
effective the date first above written.

                              SEVEN SEAS PETROLEUM INC., a Yukon
                              Territory, Canada corporation


                              By /s/ LARRY A. RAY
                                ---------------------------------------
                                Larry A. Ray, President

                              (the "Borrower")


                              STILLWATER NATIONAL BANK AND TRUST COMPANY, N.A.


                              By /s/ G.P. JOHNSON HIGHTOWER
                                ---------------------------------------
                                G.P. Johnson Hightower, Senior Vice President

                                (the "Bank")



                                      -21-

<PAGE>   79
                               GUARANTY AGREEMENT

         THIS GUARANTY AGREEMENT is made effective the 20th day of December,
2000, by ROBERT A. HEFNER III, an individual, THE GHK COMPANY L.L.C., an
Oklahoma limited liability company, and RAMIIILAJ A LIMITED PARTNERSHIP, a Texas
limited partnership (jointly and severally referred to herein as the
"Guarantors"), each having a mailing address at c/o The GHK Company L.L.C., 6305
Waterford Boulevard, Suite 470, Oklahoma City, Oklahoma 73118, in favor of
STILLWATER NATIONAL BANK AND TRUST COMPANY, N.A. (the "Lender"), having a
mailing address at 6305 Waterford Boulevard, Suite 205, Oklahoma City, Oklahoma
73118.

                                   WITNESSETH:

         WHEREAS, Seven Seas Petroleum Inc., a Yukon Territory, Canada
corporation (the "Borrower"), and the Lender have entered into that certain Loan
Agreement of even date herewith (the "Loan Agreement"), pursuant to which the
Lender has agreed to extend certain credit (the "Loan") to the Borrower
evidenced by that certain Promissory Note of even date herewith in the principal
amount of Ten Million Dollars ($10,000,000.00); and

         WHEREAS, this Agreement is executed by the Guarantors and delivered to
the Lender to induce the Lender to make the Loan and in satisfaction of a
material condition precedent to such extension of credit by the Lender.

         NOW, THEREFORE, in consideration of the Loan by the Lender to the
Borrower and the benefits to be derived by the Guarantors therefrom, it is
agreed as follows:

1. Definitions. Except as otherwise defined herein, all terms defined in the
Loan Agreement will have the same meanings herein as therein defined unless the
context otherwise requires. All references herein to any Loan Document, or other
document or instrument refer to the same as from time to time amended,
supplemented or restated. As used in this Agreement, "Obligors" means, jointly
and severally, the Borrower, the Guarantors and any other endorsers, guarantors
or obligors, primary or secondary, of any or all of the Obligations.

2. Guaranty. The Guarantors jointly and severally irrevocably and
unconditionally guarantee to the Lender the payment of the Obligations of the
Borrower contained in the Loan Documents including, without implied limitation,
the payment of all principal, interest, attorneys' fees, expenses of collection
and other sums now or hereafter owing by the Borrower to the Lender thereunder.
The obligation of the Guarantors hereunder is an absolute, unconditional,
irrevocable and continuing guaranty of payment and performance and will not
terminate until the Borrower has paid in full all amounts owing to the Lender
under the Loan Documents and has performed all of the Borrower's Obligations
under the Loan Documents. Without limiting the generality of the foregoing, each
Guarantor's liability hereunder will extend to and include all post-petition
interest, expenses and other duties and liabilities of the Borrower described
above in this paragraph which would be owed by the Borrower but for the fact
that such Obligations are unenforceable or not allowable due to the existence of
a bankruptcy, reorganization, or similar proceeding involving the Borrower. If
the Borrower for any reason fails to pay any Obligation,



<PAGE>   80

as and when such Obligation will become due and payable, whether at its stated
maturity, as a result of the exercise of any power to accelerate, or otherwise,
the Guarantors will, upon demand by the Lender, pay such Obligation in full to
the Lender. If the Borrower for any reason fails to perform promptly any
Obligation, the Guarantors will, upon demand by the Lender, cause such
Obligation to be performed or, if specified by the Lender, provide sufficient
funds, in such amount and manner as the Lender determines in good faith, for the
prompt, full and faithful performance of such Obligation by the Lender or such
other Person as the Lender designates. As between each of the Guarantors and the
Lender, this Agreement will be considered a primary and liquidated liability of
each Guarantor.

3. Unconditional Guaranty. No action which the Lender may take or omit to take
in connection with any of the Loan Documents, any of the Obligations (or any
other indebtedness owing by the Borrower to the Lender), or any Collateral, and
no course of dealing of the Lender with any Obligor or any other Person, will
release or diminish any Guarantor's obligations, liabilities, agreements or
duties hereunder, affect this Agreement in any way, or afford any Guarantor any
recourse against the Lender, regardless of whether any such action or inaction
may increase any risks to or liabilities of the Lender or any Obligor or
increase any risk to or diminish any safeguard of any Collateral. Without
limiting the foregoing, each of the Guarantors hereby expressly agrees that the
Lender may, from time to time, without notice to or the consent of such
Guarantor, do any or all of the following: (a) amend, change or modify, in whole
or in part, any one or more of the Loan Documents and give or refuse to give any
waivers or other indulgences with respect thereto; (b) neglect, delay, fail, or
refuse to take or prosecute any action for the collection or enforcement of any
of the Obligations, to foreclose or take or prosecute any action in connection
with any Collateral or Loan Document, to bring suit against any Obligor or any
other Person, or to take any other action concerning the Obligations or the Loan
Documents; (c) accelerate, change, rearrange, extend or renew the time, rate,
terms or manner for payment or performance of any one or more of the Obligations
(whether for principal, interest, fees, expenses, indemnifications, affirmative
or negative covenants, or otherwise); (d) compromise or settle any unpaid or
unperformed Obligation or any other obligation or amount due or owing, or
claimed to be due or owing, under any one or more of the Loan Documents; (e)
take, exchange, amend, eliminate, surrender, release, or subordinate any or all
Collateral for any or all of the Obligations, accept additional or substituted
Collateral therefor, and perfect or fail to perfect the Lender's rights in any
or all Collateral; (f) discharge, release, substitute or add Obligors; or (g)
apply all monies received from Obligors or others, or from any Collateral for
any of the Obligations, as the Lender may determine to be in the Lender's best
interest, without in any way being required to marshall Collateral or assets or
to apply all or any part of such monies upon any particular Obligations. No
action or inaction of any Obligor or any other Person, and no change of law or
circumstances, will release or diminish any Guarantor's obligations,
liabilities, agreements or duties hereunder, affect this Agreement in any way,
or afford any Guarantor any recourse against the Lender.

4. No Release. The Guarantors agree that the Guarantors' liability hereunder
will not be released, reduced, impaired or affected by the occurrence of any one
or more of the following events: (a) the Lender obtaining collateral from the
Borrower or any other Obligor to secure payment or performance under the Loan
Documents; (b) the assumption of liability by any other Person (whether as
guarantor or otherwise) for payment or performance under the Loan Documents; (c)
the release, surrender, exchange, loss, termination, waiver or other discharge
of




                                      -2-
<PAGE>   81
any collateral securing payment or performance under the Loan Documents; (d)
the subordination, relinquishment or discharge of the Lender's rights relating
to the Loan Documents or any collateral described therein; (e) the dissolution,
insolvency, bankruptcy, reorganization or disability of the Borrower, any other
Obligor or any other Person now or hereafter liable for payment or performance
under the Loan Documents; (f) the increase, renewal, consolidation, extension,
modification, rearrangement or amendment from time to time of the Loan or of the
terms of any one or more of the Loan Documents; (g) the sale, encumbrance,
transfer or other modification of the ownership of the Borrower or the
Borrower=s assets or the change in the financial condition or management of the
Borrower; (h) the invalidity, unenforceability or insufficiency of any one or
more of the Loan Documents or any collateral securing payment or performance
thereunder; or (i) the release of any Person from any personal liability with
respect to all or part of the guaranteed Obligations.

5. Enforcement. The Lender may invoke the benefits of this Agreement and any
Collateral pledged by the Guarantors before pursuing any remedies against any
Obligor or any other Person and before proceeding against any other Collateral
now or hereafter existing for the payment or performance of any of the
Obligations. The Lender may maintain an action against any Guarantor on this
Agreement or the Guarantor Security Agreement without joining any other Obligor
therein and without bringing a separate action against any other Obligor. If any
payment to the Lender by any Obligor is held to constitute a preference or a
voidable transfer under applicable state or federal laws, or if for any other
reason the Lender is required to refund such payment to the payor thereof or to
pay the amount thereof to any other Person, such payment to the Lender will not
constitute a release of any Guarantor from any liability hereunder, and each
Guarantor agrees to pay such amount to the Lender on demand and agrees and
acknowledges that this Agreement will continue to be effective or will be
reinstated, as the case may be, to the extent of any such payment or payments.
Any transfer by subrogation which is made as contemplated in this Agreement
prior to any such payment or payments will (regardless of the terms of such
transfer) be automatically voided upon the making of any such payment or
payments, and all rights so transferred will thereupon revert to and be vested
in the Lender. This is a continuing guaranty and will apply to and cover all
Obligations and renewals and extensions thereof and substitutions therefor from
time to time.

6. Waiver of Rights. The Guarantors waive notice of the incurrence of any
Obligation by the Borrower, and notice of any kind concerning the assets,
liabilities, financial condition, creditworthiness, businesses, prospects, or
other affairs of the Borrower (it being understood and agreed that: (a) each
Guarantor will take full responsibility for informing itself of such matters,
(b) the Lender will not have any responsibility of any kind to inform any
Guarantor of such matters, and (c) the Lender is hereby authorized to assume
that each Guarantor, by virtue of its relationships with the Borrower which are
independent of this Agreement, has full and complete knowledge of such matters
whenever the Lender extends credit to the Borrower or take any other action
which may change or increase such Guarantor's liabilities or losses hereunder).
The Guarantors waive diligence, presentment, protest, notice of dishonor, notice
of acceptance of this Agreement and all other notices of any nature except as
provided in the Loan Documents or this Agreement. Performance by the Guarantors
hereunder will not entitle the Guarantors to any payment by the Borrower or any
other Obligor of the Obligations of the Borrower whether under the Loan
Documents or otherwise by reason of any claim for contribution, indemnification,
reimbursement, subrogation or otherwise, until such time as the Borrower and any
other Obligor





                                      -3-
<PAGE>   82


of the Obligations of the Borrower under the Loan Documents have paid in full
all amounts owing to the Lender and have performed all of the Borrower's
Obligations under the Loan Documents. Notwithstanding anything herein to the
contrary, except as specifically provided herein, the Guarantors hereby waive
all rights of subrogation, contribution, reimbursement or indemnity against the
Borrower (but not against any other party). If any Guarantor makes payment to
the Lender of all or any portion of the Obligations and if all of the
Obligations will be finally paid in full, the Lender will, at such Guarantor's
request and expense, execute and deliver to such Guarantor (without recourse,
representation or warranty) appropriate documents necessary to evidence the
transfer by subrogation to such Guarantor of an interest in the Obligations
resulting from such payment by such Guarantor; provided that such transfer will
be subject to the provisions of this Agreement and the rights of any other
Obligor (excluding the Borrower) paying a portion of the Obligations.

7. Expenses of Collection. The Guarantors agree that in any action brought to
enforce this Agreement, the Guarantors will pay to the Lender the reasonable
attorneys' fees, court costs and other litigation expenses incurred by the
Lender.

8. Cumulative Remedies. On the occurrence of any event of Default under the Loan
Documents or this Agreement, the Lender will be entitled to selectively and
successively enforce any one or more of the rights held by the Lender, and such
action will not be deemed a waiver of any other right held by the Lender. Except
as provided herein or in the Loan Documents, all of the remedies of the Lender
under this Agreement and the Loan Documents are cumulative and not alternative.
Each Guarantor will be liable to the Lender hereunder for any deficiency
resulting from the exercise by the Lender of any rights or remedies even though
any rights which the Guarantors may have against the Borrower or others may be
destroyed or diminished by exercise of any such right or remedy. No failure on
the part of the Lender to exercise, and no delay in exercising, any right
hereunder or under any other Loan Document will operate as a waiver thereof; nor
will any single or partial exercise of any right preclude any other or further
exercise thereof or the exercise of any other right. The rights, powers and
remedies of the Lender provided herein and in the other Loan Documents are
cumulative and are in addition to, and not exclusive of, any other rights,
powers or remedies provided by law or in equity. The rights of the Lender
hereunder are not conditional or contingent on any attempt by the Lender to
exercise any of its rights under any other Loan Document against any Obligor or
any other Person.

9. Successors and Assigns. No Guarantor's rights or obligations hereunder may be
assigned or delegated, but this Agreement and such obligations will pass to and
be fully binding upon the successors of each Guarantor, as well as each
Guarantor. This Agreement will apply to and inure to the benefit of the Lender
and the Lender's successors or assigns. Without limiting the generality of the
immediately preceding sentence, the Lender may assign, grant a participation in,
or otherwise transfer any Obligation held by it or any portion thereof, and the
Lender may assign or otherwise transfer its rights or any portion thereof under
any Loan Document, to any other Person, and such other Person will thereupon
become vested with all of the benefits in respect thereof granted to the Lender
hereunder unless otherwise expressly provided by the Lender in connection with
such assignment or transfer.

10. Subordination. Each Guarantor hereby subordinates and makes inferior to the
Obligations any and all indebtedness now or at any time hereafter owed by the
Borrower to any



                                      -4-
<PAGE>   83


Guarantor except for services actually rendered by the Guarantors, or any of
them, to the Borrower or reimbursement of expenses Lender actually paid by the
Guarantors, or any of them. Each Guarantor agrees that after the occurrence of
any event of Default such Guarantor will neither permit the Borrower to repay
such indebtedness or any part thereof nor accept payment from the Borrower of
such indebtedness or any part thereof without the prior written consent of the
Lender. If any Guarantor receives any such payment without the prior written
consent of the Lender, the amount so paid will be held in trust for the benefit
of the Lender, will be segregated from the other funds of such Guarantor, and
will forthwith be paid over to the Lender to be held by the Lender as collateral
for, or then or at any time thereafter applied in whole or in part by the Lender
against, all or any portions of the Obligations, whether matured or unmatured,
in such order as the Lender elects.

11. Representations and Warranties. Each Guarantor hereby represents and
warrants to the Lender as follows: (a) the recitals at the beginning of this
Agreement are true and correct in all respects; (b) each Guarantor which is not
a natural Person is a limited partnership, limited liability company or
corporation duly organized, validly existing and in good standing under the laws
of the state of its organization or incorporation and such Guarantor has all
requisite partnership, limited liability company or corporate power and
authority to execute, deliver and perform this Agreement and pledge the
Guarantor Collateral; (c) the execution, delivery and performance by each
Guarantor of this Agreement have been duly authorized by all necessary
partnership, limited liability company or corporate action and do not and will
not contravene its certificate of limited partnership or limited partnership
agreement, articles of organization or operating agreement or certificate or
articles of incorporation or bylaws; (d) the execution, delivery and performance
by each Guarantor of this Agreement do not and will not contravene any law or
governmental regulation or any contractual restriction binding on or affecting
such Guarantor, or any of its affiliates or properties including, without
limitation, the Guarantor Collateral, and do not and will not result in or
require the creation of any lien, security interest or other charge or
encumbrance upon or with respect to the Guarantor Collateral or any other
properties; (e) no authorization or approval or other action by, and no notice
to or filing with, any governmental authority or other regulatory body or third
party is required for the due execution, delivery and performance by any
Guarantor of this Agreement or the Guarantor Security Agreement; (f) this
Agreement is a legal, valid and binding obligation of each Guarantor,
enforceable against such Guarantor in accordance with its terms except as
limited by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights; (g) there is no action, suit
or proceeding pending or, to the knowledge of any Guarantor, threatened against
or otherwise affecting any Guarantor or any of the Guarantor Collateral before
any court, arbitrator or governmental department, commission, board, bureau,
agency or instrumentality which may materially and adversely affect any
Guarantor's financial condition or its ability to perform its obligations
hereunder; (h) the direct or indirect value of the consideration received and to
be received by each Guarantor in connection herewith and the incurrence of such
liability and obligations in return for such consideration may reasonably be
expected to benefit such Guarantor, directly or indirectly; (i) no Guarantor is
"insolvent" on the date hereof (that is, the sum of such Guarantor's absolute
and contingent liabilities, including the Obligations, does not exceed the fair
market value of such Guarantor's assets), each Guarantor's capital is adequate
for the businesses in which such Guarantor is engaged and intends to be engaged
and no Guarantor has incurred (whether hereby or otherwise), nor does any
Guarantor intend to incur or believe that it will incur, debts which will be
beyond its ability to pay as such



                                      -5-
<PAGE>   84


debts mature; and (j) all balance sheets, earning statements, financial data and
other information concerning the Guarantors which have been furnished to the
Lender to induce the Lender to accept this Agreement (or otherwise furnished to
the Lender in connection with the transactions contemplated hereby or associated
herewith) fairly represent the financial condition of each Guarantor as of the
dates and the results of such Guarantor's operations for the periods for which
the same are furnished. None of such balance sheets, earnings and cash flow
statements, financial data and other information contains any untrue statement
of a material fact or omits to state any material fact which is necessary to
make any statements contained therein not misleading.

12. Loan Agreement Provisions. Each of the Guarantors hereby represents,
warrants, acknowledges and agrees that: (a) such Guarantor has reviewed and is
familiar with all of the terms and conditions of the Loan Agreement and all of
the other Loan Documents; (b) all of the representations and warranties set
forth in the Loan Agreement pertaining to the Guarantors are true and correct;
(c) the Loan Agreement contains covenants and conditions relating to the
Guarantors and binding on the Guarantors; and (d) such Guarantor will comply
with all of the terms, covenants, conditions and agreements set forth in the
Loan Agreement applicable to such Guarantor in the same manner and to the same
extent as if such Guarantor was an original party to the Loan Agreement.

13. Acknowledgments and Admissions. The Guarantors hereby represent, warrant,
acknowledge and admit that: (a) each of them has made an independent decision to
enter into this Agreement and the other Loan Documents to which it is a party,
without reliance on any representation, warranty, covenant or undertaking by the
Lender, whether written, oral or implicit, other than as expressly set out in
this Agreement or in another Loan Document delivered on or after the date
hereof; (b) there are no representations, warranties, covenants, undertakings or
agreements by the Lender as to the Loan Documents except as expressly set out in
this Agreement or in another Loan Document delivered on or after the date
hereof; (c) the Lender has no fiduciary obligation toward the Borrower or the
Guarantors with respect to any Loan Document or the transactions contemplated
thereby; (d) the relationship pursuant to the Loan Documents between the
Borrower and the Guarantors, on the one hand, and the Lender, on the other hand,
is and will be solely that of debtor and creditor, respectively; (e) no
partnership or joint venture exists with respect to the Loan Documents between
the Borrower or the Guarantors and the Lender; (f) should a Default occur or
exist, the Lender will determine in its sole discretion and for its own reasons
what remedies and actions it will or will not exercise or take at the time; (g)
without limiting any of the foregoing, no Guarantor is relying upon any
representation or covenant by the Lender, or any representative thereof, and no
such representation or covenant has been made, that the Lender will, at the time
of an event of Default, or at any other time, waive, negotiate, discuss or take
or refrain from taking any action permitted under the Loan Documents with
respect to any such event of Default or any other provision of the Loan
Documents; and (h) the Lender has relied upon the truthfulness of the
acknowledgments in this paragraph in deciding to execute and deliver the Loan
Documents and to become obligated hereunder.

14. JOINT ACKNOWLEDGMENT. THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR,






                                      -6-
<PAGE>   85


CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

15. INDEMNITY. THE GUARANTORS AGREE TO INDEMNIFY THE LENDER, UPON DEMAND, FROM
AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, CLAIMS, LOSSES, DAMAGES,
PENALTIES, FINES, ACTIONS, JUDGMENTS, SUITS, SETTLEMENTS, COSTS, EXPENSES OR
DISBURSEMENTS (INCLUDING REASONABLE FEES OF ATTORNEYS, ACCOUNTANTS, EXPERTS AND
ADVISORS) OF ANY KIND OR NATURE WHATSOEVER (IN THIS PARAGRAPH COLLECTIVELY
CALLED "LIABILITIES AND COSTS") WHICH TO ANY EXTENT (IN WHOLE OR IN PART) MAY BE
IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE LENDER GROWING OUT OF,
RESULTING FROM OR IN ANY OTHER WAY ASSOCIATED WITH THE COLLATERAL, THE LOAN
DOCUMENTS AND THE TRANSACTIONS AND EVENTS (INCLUDING THE ENFORCEMENT OR DEFENSE
THEREOF) AT ANY TIME ASSOCIATED THEREWITH OR CONTEMPLATED THEREIN (WHETHER
ARISING IN CONTRACT OR TORT OR OTHERWISE AND INCLUDING ANY VIOLATION OR
NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAWS BY THE BORROWER, THE GUARANTORS OR THE
LENDER OR ANY LIABILITIES OR DUTIES OF THE BORROWER, THE GUARANTORS OR THE
LENDER WITH RESPECT TO HAZARDOUS MATERIALS FOUND IN OR RELEASED INTO THE
ENVIRONMENT).

THE FOREGOING INDEMNIFICATION WILL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY THE LENDER, PROVIDED ONLY THAT THE
LENDER WILL NOT BE ENTITLED UNDER THIS PARAGRAPH TO RECEIVE INDEMNIFICATION FOR
THAT PORTION, IF ANY, OF ANY LIABILITIES AND COSTS WHICH IS PROXIMATELY CAUSED
BY ITS OWN INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS DETERMINED IN A
FINAL JUDGMENT OR WHICH RELATES TO ACTIONS TAKEN BY THE LENDER AFTER THE LENDER
HAS TAKEN TITLE TO THE COLLATERAL. IF ANY PERSON (INCLUDING THE BORROWER, ANY OF
ITS AFFILIATES OR ANY GUARANTOR) EVER ALLEGES SUCH GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT BY THE LENDER, THE INDEMNIFICATION PROVIDED FOR IN THIS PARAGRAPH
WILL NONETHELESS BE PAID UPON DEMAND, SUBJECT TO LATER ADJUSTMENT OR
REIMBURSEMENT, UNTIL SUCH TIME AS A COURT OF COMPETENT JURISDICTION ENTERS A
FINAL JUDGMENT AS TO THE EXTENT AND EFFECT OF THE ALLEGED GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT. AS USED IN THIS PARAGRAPH THE TERM "LENDER" WILL REFER NOT
ONLY TO THE PERSON DESIGNATED AS SUCH BUT ALSO TO EACH DIRECTOR, OFFICER, AGENT,
ATTORNEY, EMPLOYEE, PARTICIPATING LENDER, REPRESENTATIVE AND AFFILIATE OF THE
LENDER.

16. WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. EACH OF THE GUARANTORS AND THE
LENDER HEREBY KNOWINGLY, VOLUNTARILY,







                                      -7-
<PAGE>   86


INTENTIONALLY AND IRREVOCABLY (A) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED
BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY A JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY OR
ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY, (B) WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
SUCH LITIGATION ANY "SPECIAL DAMAGES," AS DEFINED BELOW, (C) CERTIFIES THAT NO
PARTY HERETO NOR ANY REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (D)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS PARAGRAPH.
AS USED IN THIS PARAGRAPH, "SPECIAL DAMAGES" INCLUDES ALL SPECIAL,
CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES
NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS EXPRESSLY PROMISED
TO PAY OR DELIVER TO ANY OTHER PARTY HERETO.

17. Miscellaneous. This Agreement has been negotiated, executed and delivered in
Oklahoma City, Oklahoma County, Oklahoma, and is intended to be construed in
accordance with the laws of the State of Oklahoma. All actions relating to or
arising under this Agreement, whether filed by the Lender or the Guarantors,
will be instituted only in a state court sitting in Oklahoma County, Oklahoma,
or a federal court sitting in Oklahoma City, Oklahoma. If any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect or
application for any reason, such invalidity, illegality or unenforceability will
not affect any other provisions herein contained and such other provisions will
remain in full force and effect. This Agreement cannot be amended except by an
agreement in writing signed by the Guarantors and the Lender.

                  IN WITNESS WHEREOF, the Guarantors and the Lender have
executed this Agreement effective the date first above written.




                                          --------------------------------------
                                          ROBERT A. HEFNER III, individually




                                      -8-
<PAGE>   87



                                      THE GHK COMPANY L.L.C., an Oklahoma
                                      limited liability company


                                      By
                                        ----------------------------------------
                                         Robert A. Hefner III, Manager



                                      RAMIIILAJ A LIMITED PARTNERSHIP, a Texas
                                      limited partnership

                                      By Hefner Investment Company, a Texas
                                         corporation, its General Partner


                                         By
                                           -------------------------------------
                                           Robert A. Hefner III, President

                                      (the "Guarantors")



                                      STILLWATER NATIONAL BANK AND TRUST
                                      COMPANY, N.A.


                                      By
                                        ----------------------------------------
                                        G.P. Johnson Hightower, Senior Vice
                                          President

                                      (the "Lender")



                                      -9-
<PAGE>   88
                             STOCK PLEDGE AGREEMENT

         THIS STOCK PLEDGE AGREEMENT is executed effective the 20th day of
December, 2000, by SEVEN SEAS PETROLEUM INC., a Yukon Territory, Canada
corporation (the "Borrower"), SEVEN SEAS PETROLEUM HOLDINGS INC., a Cayman
Islands corporation ("SSPH"), and SEVEN SEAS PETROLEUM COLUMBIA INC., a Cayman
Islands corporation ("SSPC" and jointly and severally with the Borrower and
SSPH, the "Debtors"), each having a notice address at 5555 San Felipe, Suite
1700, Houston, Texas 77056, in favor of STILLWATER NATIONAL BANK AND TRUST
COMPANY, N.A. (the "Secured Party"), having a notice address at 6305 Waterford
Boulevard, Suite 205, Oklahoma City, Oklahoma 73118.

                                   WITNESSETH:

         WHEREAS, the Borrower is liable to the Secured Party under that certain
Promissory Note of even date herewith in the principal amount of Ten Million
Dollars ($10,000,000.00) (the "Note"), in connection with that certain Loan
Agreement of even date herewith between the Borrower and the Secured Party (the
"Loan Agreement"); and

         WHEREAS, each of SSPH and SSPC is a direct or indirect wholly owned
subsidiary of the Borrower and the Debtors have agreed to secure payment of the
Note and all other Obligations of the Borrower to the Secured Party by granting
the Secured Party a lien, security interest and pledge covering certain assets
of the Debtors.

         NOW, THEREFORE, in consideration of the premises and the agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of all of which are hereby acknowledged, the Debtors hereby agree
with the Secured Party as follows:

1. Definitions. Unless otherwise defined herein, all terms used herein which are
defined in the Loan Agreement will have the same meanings herein unless the
context otherwise requires and all terms used herein which are defined in the
Oklahoma Uniform Commercial Code (the "UCC") will have the same meanings herein
unless the context otherwise requires.

2. Security Interest. Each of the Debtors hereby grants to the Secured Party a
first and prior security interest in the stock currently owned by the Debtors
described in Schedule "A" attached hereto as a part hereof (the "Pledged
Stock"), together with all additions and substitutions of shares of the Pledged
Stock or certificates, all of the Debtors' interest and rights in the Pledged
Stock, whether now owned or hereafter acquired, all cash and stock dividends
attributable to the Pledged Stock, all increases relating to the Pledged Stock
as a result of stock splits, mergers or any other reorganization, all monies and
claims for monies due and to become due to the Debtors as dividends or arising
under accounts, contracts, agreements and general intangibles relating to the
Pledged Stock and all proceeds and products thereof (the Pledged Stock and the
foregoing items are hereafter called the "Collateral"). This Agreement is
intended for security only and is to secure the Obligations of the Debtors owing
to the Secured Party as herein described. It is understood that the Secured
Party does not hereby assume any of the obligations of the Debtors in connection
with the Collateral.



<PAGE>   89





     2.1  Voting Rights. Absent an event of Default (as hereinafter defined)
          under this Agreement or the other Loan Documents, the Debtors will
          retain all voting rights with respect to the Pledged Stock. On or
          after the occurrence of an event of Default and without further notice
          to the Debtors, the Secured Party will have the right to exercise all
          voting rights, all conversion, exchange, subscription and other rights
          pertaining to the Pledged Stock, whether or not the Pledged Stock has
          been registered in the Secured Party's name. Each of the Debtors
          hereby appoints the Secured Party as such Debtor's lawful
          attorney-in-fact and proxy to exercise the foregoing rights after the
          occurrence of an event of default. Each of the Debtors agrees that the
          foregoing proxy is coupled with an interest and is irrevocable.

     2.2  Cash Dividends. Absent an event of Default, the Debtors will have the
          right to receive and retain for the Debtors' use all cash dividends
          paid on the Pledged Stock. On or after the occurrence of an event of
          Default and without further notice to the Debtors, the Secured Party
          will have the right to receive such cash dividends and to apply the
          same toward satisfaction of the Secured Indebtedness (as hereinafter
          defined) or hold the same as part of the Collateral under this
          Agreement.

     2.3  Stock Dividends. In the event any stock dividends are paid on the
          Pledged Stock, or if any stock or other securities are delivered to
          the Debtors in connection with any stock split, merger or
          reorganization affecting the Pledged Stock, the Debtors will
          immediately deliver to the Secured Party the certificates representing
          such stock dividends, other stock or securities, together with
          executed endorsements or appropriate powers. Any such stock dividend,
          other stock or securities will be held by the Secured Party as part of
          the Collateral under the terms of this Agreement.

3. Secured Indebtedness. The security interest granted hereby in the Pledged
Stock is given to secure the Borrower's payment of: (a) the Note together with
interest thereon; (b) any and all other or additional Obligations of the
Borrower to the Secured Party; (c) all extensions, renewals, amendments,
modifications, substitutions and changes in form to the Note; (d) all costs and
expenses incurred in connection with the collection of the Note and any other
Obligations and enforcement of the Loan Documents and the Secured Party's rights
under this Agreement and all other Loan Documents including, without limitation,
the collection or enforcement of the Loan Documents whether by judicial
proceedings, proceedings under Chapter 7 or 11 of the Bankruptcy Code or any
successor statute thereto, or otherwise, and including attorneys' fees and
expenses; (e) all advances made by the Secured Party to protect the security
hereof, including advances made for or on account of levies, taxes and for
maintenance or recovery of the Pledged Stock, together with interest thereon at
the Default rate specified in the Note; (f) all future advances and any and all
other indebtedness, liabilities and obligations of the Borrower to the Secured
Party (whether primary, secondary, direct or indirect, absolute or contingent,
sole, joint, or several) whether now owing or hereafter incurred; and (g)
performance of the agreements herein set forth (the foregoing items (a) through
(g) are collectively referred to herein as the "Secured Indebtedness").




<PAGE>   90

4. Debtors' Agreements. Until payment in full of the Secured Indebtedness, the
Debtors jointly and severally will perform or cause to be performed the
following agreements:

     4.1  Possession of Collateral. The Debtors agree to deliver the Pledged
          Stock to the Secured Party, appropriately endorsed to the Secured
          Party or with stock powers in form and substance satisfactory to the
          Secured Party in favor of the Secured Party. The Debtors will provide
          the name and address of the stock transfer agent to the Secured Party.
          Regardless of the form of any endorsement to the Secured Party, the
          Debtors waive presentment, demand, notice of dishonor, protest, notice
          of protest and all other notices with respect thereto.

     4.2  Additional Documents. The Debtors agree to execute and deliver any
          documents which are necessary in the judgment of the Secured Party to
          obtain, maintain and perfect a security interest under this Agreement
          and to enable the Secured Party to comply with any foreign, federal or
          state law to obtain or perfect the Secured Party's security interest
          in the Collateral or otherwise applicable to the Secured Party.

     4.3  Creation of Liens. The Debtors will not create, assume or suffer to
          exist any claim, pledge, security interest, encumbrance or other lien
          (including the lien of an attachment, judgment or execution) affecting
          any or all of the Collateral, excluding only liens held by the Secured
          Party.

5. Debtors' Representations and Covenants. The Debtors jointly and severally
hereby warrant, represent and agree as follows:

     5.1  Principal Place of Business. The principal place of business in the
          United States of each of the Debtors is 5555 San Felipe, Suite 1700,
          Houston, Texas 77056.

     5.2  Title. Each of the Debtors has absolute title to the Pledged Stock
          owned by such Debtor free and clear of all liens, encumbrances and
          security interests except for the security interest hereby granted to
          the Secured Party and such other rights, if any, of the Secured Party,
          and each of the Debtors warrants and will defend the same unto the
          Secured Party against the claims and demands of all persons and
          parties whomsoever. The Debtors are not in default in the performance
          of any obligation or the payment of any sum owing with respect to the
          Pledged Stock. The Debtors will take all steps necessary to cause or
          permit the Secured Party to cause the Pledged Stock to be registered
          in the name of the Secured Party and new share certificates to be
          issued.

6. Default. As used herein "Default" means the occurrence of any event of
Default under the Loan Agreement or the failure by any of the Debtors to keep,
observe, comply with and perform all of the obligations and undertakings under
this Agreement or any of the other Loan Documents or failure to pay any
principal or interest on the Note when due and, in any such event, the Secured
Party may, at its option and without notice to any party, declare all or any
portion of the Secured Indebtedness to be immediately due and payable and may
proceed to





                                       -3-
<PAGE>   91


enforce payment of the same, to exercise any or all rights and remedies provided
herein, in the other Loan Documents, and by the UCC and otherwise available at
law or in equity. All remedies hereunder are cumulative, and any indulgence or
waiver by the Secured Party will not be construed as an abandonment of any other
right hereunder or of the power to enforce the same or another right at a later
time.

7. Remedies. On the occurrence of an event of Default, the Secured Party may
take the following actions:

     7.1  Remedy. The Secured Party may (a) exercise in respect of the
          Collateral or any portion thereof all of the rights and remedies of a
          secured party under the UCC, or (b) at any time and from time to time
          sell, resell, assign and deliver, in the Secured Party's discretion,
          all or any part of the Collateral, in one or more parcels at the same
          or different times, and all right, title and interest, claim and
          demand therein and right of redemption thereof, at public or private
          sale on commercially reasonable terms. In connection therewith, the
          Secured Party may bid on such Collateral for its own account and each
          of the Debtors hereby waives and releases any and all equity or right
          of redemption. To effect any sale, transfer or other disposal of any
          of the Collateral, the Secured Party has the right, for and in the
          name, place and stead of the Debtors, to execute endorsements,
          assignments or other instruments of conveyance or transfer with
          respect to all or any of the Collateral.

     7.2  Sale Procedure. Except as expressly provided for herein, no demand or
          advertisement, all of which are hereby expressly waived by the
          Debtors, will be required in connection with any sale or other
          disposition of any part of the Collateral which threatens to decline
          speedily in value or which is of a type customarily sold on a
          recognized market. In all other events, the Secured Party will give
          the Debtors, at least ten (10) days prior notice of the time and place
          of any public sale and of the time after which any private sale or
          other disposition is to be made, which notice the Debtors agree is
          reasonable, all other demands and advertisements being hereby waived.
          The Secured Party will not be obligated to make any sale of
          Collateral, regardless of the fact that notice of sale may have been
          given. The Secured Party may adjourn any public or private sale or
          cause the same to be adjourned from time to time by announcement at
          the time and place fixed for sale, and such sale may be made at the
          time and place to which the same was so adjourned. Upon each public or
          private sale of Collateral, the Secured Party or any holder of the
          Note, or any of their respective affiliates, may purchase all or any
          of the Collateral being sold, free from any equity or right of
          redemption, which is hereby waived and released by the Debtors, and
          may make payment therefor in cash or, at the Secured Party's or such
          holder's option (by endorsement without recourse), by tendering or
          releasing principal or accrued and unpaid interest on the Note, in
          lieu of cash, in a face amount equal to the amount of the purchase
          price. The Debtors agree to pay all reasonable costs and expenses of
          every kind for sale or delivery, including brokers' and attorneys'
          fees, and after deducting such costs and expenses from the proceeds of
          sale, the Secured Party will apply any residue to the payment of the
          Secured Indebtedness and the Debtors will continue to be liable for
          any deficiency in accordance with the Loan




                                       -4-
<PAGE>   92


          Documents. The balance, if any, remaining after payment in full of all
          of the Secured Indebtedness will be paid to the Debtors or as
          otherwise directed by any court having appropriate jurisdiction.

     7.3  Private Sales. The Debtors recognize that the Secured Party may be
          unable to effect a public sale of all or part of the Collateral by
          reason of certain prohibitions contained in the Securities Act of
          1933, as amended, as now or hereafter in effect, or in applicable blue
          sky or other state securities laws, as now or hereafter in effect, but
          may be compelled to resort to one or more private sales to a
          restricted group of purchasers who will be obliged to agree, among
          other things, to acquire such Collateral for their own account, for
          investment and not with a view to the distribution or resale thereof.
          The Debtors agree that private sales so made may be at prices and
          other terms less favorable to the Debtors than if such Collateral were
          sold at public sales, and that the Secured Party has no obligation to
          delay sale of any such Collateral for the period of time necessary to
          permit the issuer of such Collateral, even if such issuer would agree,
          to register such Collateral for public sale under such applicable
          securities laws. The Debtors agree that private sales, absent other
          adverse circumstances, will not be deemed to have been made in a
          commercially unreasonable manner. In connection with the foregoing,
          the Secured Party may, at the Debtors' expense, consult with counsel
          to determine whether a public or private sale of Collateral is
          necessary or appropriate.

8. Miscellaneous. It is further agreed as follows:

     8.1  Time. Time is of the essence of this Agreement and each provision of
          this Agreement.

     8.2  Notices. Any notice required or permitted to be given by this
          Agreement will be deemed to have been given on the date such notice is
          delivered personally or by telefacsimile to the party designated to
          receive such notice, on the date sent by overnight courier or on the
          date deposited in the United States mail, postage prepaid, and
          directed to the notice address specified in the initial paragraph of
          this Agreement, the Loan Agreement or otherwise provided to the
          Secured Party in writing.

     8.3  Cumulative Remedies. No failure on the part of the Secured Party to
          exercise, and no delay in exercising any right under this Agreement
          will operate as a waiver thereof, nor will any single or partial
          exercise by the Secured Party of any right under this Agreement
          preclude any other or further right of exercise thereof or the
          exercise of any other right except as provided in the Loan Documents.

     8.4  Construction. This Agreement is to be construed according to the
          internal laws of the State of Oklahoma. All actions with respect to
          this Agreement may be instituted in the Courts of the State of
          Oklahoma or the United States District Court sitting in Oklahoma
          County, Oklahoma and each of the Debtors hereby consents to the
          jurisdiction and venue of any such courts.

                                       -5-
<PAGE>   93

     8.5  Amendment. Neither this Agreement nor any of the provisions hereof can
          be changed, waived, discharged or terminated, except by an instrument
          in writing signed by the party against whom enforcement of the change,
          waiver, discharge or termination is sought.

     8.6  Severability. The provisions of this Agreement are severable, and if
          any clause or provision is held invalid, illegal or unenforceable in
          any respect in any jurisdiction, the validity, legality and
          enforceability of the remaining provisions contained herein will not
          be in any way affected or impaired thereby.

     8.7  Binding Effect. This Agreement will be binding on the Debtors and the
          Debtors' successors and permitted assigns, and will inure to the
          benefit of the Secured Party and the Secured Party's successors and
          assigns.

     8.8  Continuing Agreement. This is a continuing Agreement and the grant of
          a security interest hereunder will remain in full force and effect and
          all the rights, powers and remedies of the Secured Party hereunder
          will continue to exist until all of the Secured Indebtedness is paid
          in full as the same becomes due and payable and until the Secured
          Party, upon request of the Debtors, has executed a written termination
          statement, reassigned to the Debtors, without recourse, the Collateral
          and all rights conveyed hereby and returned possession of any
          Collateral in the Secured Party's possession to the Debtors.

          IN WITNESS WHEREOF, the Debtors and the Secured Party have executed
and delivered this Agreement effective the date first above written.

                                     SEVEN SEAS PETROLEUM INC., a Yukon
                                       Territory, Canada corporation


                                     By
                                       -----------------------------------------
                                        Larry A. Ray, President



                                     SEVEN SEAS PETROLEUM HOLDINGS INC., a
                                       Cayman Islands corporation


                                     By
                                       -----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------


                                      -6-
<PAGE>   94



                             SEVEN SEAS PETROLEUM COLOMBIA INC., a
                             Cayman Islands corporation


                             By
                               ---------------------------------------------
                             Name:
                                  ------------------------------------------
                             Title:
                                   -----------------------------------------

                             (jointly and severally, the "Debtors")


                             STILLWATER NATIONAL BANK AND TRUST COMPANY, N.A.


                             By
                               ----------------------------------------------
                               G.P. Johnson Hightower, Senior Vice President

                               (the "Secured Party")




                                      -7-
<PAGE>   95

                                 PROMISSORY NOTE


$10,000,000.00                                           Oklahoma City, Oklahoma
                                                               December 20, 2000


         FOR VALUE RECEIVED, the undersigned, SEVEN SEAS PETROLEUM INC., a Yukon
Territory, Canada corporation (the "Borrower"), promises to pay to the order of
STILLWATER NATIONAL BANK AND TRUST COMPANY, N.A. (the payee, its successors and
assigns are hereinafter called the "Lender"), at 6305 Waterford Boulevard, Suite
205, Oklahoma City, Oklahoma 73118, or at such other place as may be designated
in writing by the Lender, the principal sum of TEN MILLION DOLLARS
($10,000,000.00), or so much thereof as is disbursed hereunder, together with
interest thereon at the rates hereinafter stated:

         Prior to Default, advances under this Note will bear interest from the
         date of advance at the per annum rate equal to the Reference Rate plus
         75/100 percent (.75%). All interest will be computed for the actual
         number of days elapsed at a per diem charge based on a year consisting
         of three hundred sixty (360) days.

         Provided that no event of Default has occurred or is continuing under
         any of the Loan Documents, there will be no required principal payments
         on this Note until December 31, 2001. Commencing on January 31, 2001,
         and on the last day of each successive month thereafter until this Note
         is paid in full, the Borrower will pay to the Bank all accrued unpaid
         interest on this Note. The entire unpaid principal balance of this Note
         plus all accrued and unpaid interest thereon will be due and payable on
         December 31, 2001.

         Unless otherwise defined herein, all terms defined or referenced in
that certain Loan Agreement of even date herewith between the Borrower and the
Lender (the "Loan Agreement") will have the same meanings herein as therein.

         This Note is executed and delivered in connection with the Loan
Agreement. Advances and payments hereunder may, at the option of the Lender, be
recorded on this Note or on the books and records of the Lender and will be
prima facie evidence of said advances, payments and unpaid balance of this Note.
It is specifically agreed that the aggregate of advances made during the term of
this Note may exceed the face amount hereof, but the unpaid principal balance
outstanding at any time will not exceed such face amount. All payments will
first be applied to the payment of accrued interest and the balance will be
applied in reduction of the principal balance hereof provided that no payment
will be applied to this Note until received





<PAGE>   96


by the Lender in collected funds. All advances made or to be made under this
Note will be made subject to the terms and conditions stated in the Loan
Agreement.

         The Borrower will have the right at any time to prepay this Note in
whole or in part, without premium or penalty, but with interest accrued to the
date of prepayment.

         The Borrower agrees that if, and as often as, this Note is placed in
the hands of an attorney for collection or to defend or enforce any of the
Lender's rights hereunder or under any instrument securing payment of this Note,
the Borrower will pay the Lender's reasonable attorneys' fees, all court costs
and all other expenses incurred by the Lender in connection therewith.

         Any sum not paid when due, by acceleration or otherwise, will bear
interest at the per annum rate equal to the greater of (a) fifteen percent
(15%), or (b) the Reference Rate plus five percent (5%), and such interest which
has accrued will be paid at the time of and as a condition precedent to curing
any Default hereunder. During the existence of any such Default, the Lender may
apply any payments received on any amount due hereunder or under the terms of
any instrument now or hereafter evidencing or securing this indebtedness as the
Lender determines from time to time.

         This Note is issued by the Borrower and accepted by the Lender pursuant
to a lending transaction negotiated, consummated and to be performed in Oklahoma
City, Oklahoma. Payment of this Note is secured by and subject to the terms and
conditions of the Loan Documents. This Note is to be construed according to the
internal laws of the State of Oklahoma. All actions with respect to this Note,
the Loan Documents or any other instrument securing payment of this Note may be
instituted in the courts of the State of Oklahoma sitting in Oklahoma County,
Oklahoma, or the United States District Court sitting in Oklahoma City,
Oklahoma, as the Lender may elect, and by execution and delivery of this Note,
the Borrower irrevocably and unconditionally submits to the jurisdiction (both
subject matter and personal) of each such court and irrevocably and
unconditionally waives: (a) any objection the Borrower might now or hereafter
have to the venue in any such court; and (b) any claim that any action or
proceeding brought in any such court has been brought in an inconvenient forum.

         On the occurrence of an event of Default or the breach of any provision
of this Note, any of the Loan Documents or any other instrument securing payment
of this Note, at the option of the Lender, the entire indebtedness evidenced by
this Note will become immediately due, payable and collectible then or
thereafter as the Lender might elect, regardless of the date of maturity hereof.
Failure by the Lender to exercise such option will not constitute a waiver of
the right to exercise the same in the event of any subsequent Default.

         The makers, endorsers, sureties, guarantors and all other persons who
may become liable for all or any part of this obligation severally waive
presentment for payment, protest and notice of nonpayment. Said parties consent
to any extension of time (whether one or more) of payment hereof, release of all
or any part of the security for the payment hereof or release of any party
liable for the payment of this obligation. Any such extension or release may be
made without notice to any such party and without discharging such party's
liability hereunder.


                                      -2-
<PAGE>   97



         IN WITNESS WHEREOF, the Borrower has executed this instrument effective
the date first above written.

                                   SEVEN SEAS PETROLEUM INC., a Yukon
                                   Territory, Canada corporation


                                   By
                                     -------------------------------------------
                                     Larry A. Ray, President

                                     (the "Borrower")




                                      -3-
<PAGE>   98

                          GUARANTOR SECURITY AGREEMENT

         THIS GUARANTOR SECURITY AGREEMENT is executed effective the 20th day of
December, 2000, among ROBERT A. HEFNER III, an individual ("Hefner"), THE GHK
COMPANY L.L.C., an Oklahoma limited liability company ("GHK"), RAMIIILAJ A
LIMITED PARTNERSHIP, a Texas limited partnership ("Ramiiilaj" and jointly and
severally with Hefner and GHK, the "Debtors"), each having a notice address at
c/o The GHK Company L.L.C., 6305 Waterford Boulevard, Suite 470, Oklahoma City,
Oklahoma 73118, and STILLWATER NATIONAL BANK AND TRUST COMPANY, N.A. (the
"Secured Party"), having a notice address at 6305 Waterford Boulevard, Suite
205, Oklahoma City, Oklahoma 73118.

                                   WITNESSETH:

         WHEREAS, Seven Seas Petroleum Inc., a Yukon Territory, Canada
corporation (the "Borrower"), is liable to the Secured Party under that certain
Promissory Note of even date herewith in the principal amount of Ten Million
Dollars ($10,000,000.00) (the "Note") in connection with that certain Loan
Agreement of even date herewith (the "Loan Agreement") between the Borrower and
the Secured Party which Note is unconditionally guaranteed by the Debtors
pursuant to that certain Guaranty Agreement of even date herewith; and

         WHEREAS, as a material condition precedent to the Secured Party
entering into the Loan Agreement, the Debtors have agreed to secure payment of
the Note and all other Obligations of the Borrower to the Secured Party by
granting the Secured Party a lien, security interest and pledge covering certain
assets of the Debtors.

         NOW, THEREFORE, (i) in order to comply with the terms and conditions of
the Loan Agreement; (ii) for and in consideration of the premises and the
agreements herein contained; and (iii) for other good and valuable
consideration, the receipt and sufficiency of all of which are hereby
acknowledged, the Debtors hereby agree with the Secured Party as follows:

1. Definitions. Unless otherwise defined herein, all terms which are defined in
the Loan Agreement will have the same meanings herein as therein unless the
context otherwise requires, and all terms used herein which are defined in the
Oklahoma Uniform Commercial Code (the "UCC") will have the same meanings herein
unless the context otherwise requires.

2. Security Interest. The Debtors hereby grant to the Secured Party a security
interest in, an assignment of, a general lien upon and a right of set-off
against the following described property (the "Property"):

     2.1  all of the Debtors' right, title and interest in and to the
          certificates of deposit and government securities described in
          Schedule "A" attached hereto as a part hereof and all additions and
          accessions to, replacements of, substitutions for, dividends on and
          proceeds therefrom and any other deposits, certificated or
          uncertificated securities, treasury notes, bonds or other similar
          items;



<PAGE>   99

     2.2  any additional assets or property from time to time delivered to or
          deposited with the Secured Party as security for the Obligations or
          otherwise pursuant to the terms of this Agreement; and

     2.3  all proceeds, products, additions to, replacements of, substitutions
          for and accessions of any and all Property described in subparagraphs
          2.1 and 2.2 in this paragraph 2.

3. Secured Indebtedness. The security interest granted hereby in the Property is
given to secure the Borrower's payment of: (a) the Note together with interest
thereon; (b) any and all other or additional Obligations of the Borrower to the
Secured Party; (c) all extensions, renewals, amendments, modifications,
substitutions and changes in form to the Note; (d) all costs and expenses
incurred in connection with the collection of the Note and any other Obligations
and enforcement of the Loan Documents and the Secured Party's rights under this
Agreement and all other Loan Documents including, without limitation, the
collection or enforcement of the Loan Documents whether by judicial proceedings,
proceedings under Chapter 7 or 11 of the Bankruptcy Code or any successor
statute thereto, or otherwise, and including attorneys' fees and expenses; (e)
all advances made by the Secured Party to protect the security hereof, including
advances made for or on account of levies, insurance, repairs, taxes and for
maintenance or recovery of the Property, together with interest thereon at the
Default rate specified in the Note; (f) any and all other indebtedness,
liabilities and obligations of the Borrower to the Secured Party whether now
owing or hereafter incurred; and (g) performance of the agreements herein set
forth (the foregoing items (a) through (g) are collectively referred to herein
as the "Secured Indebtedness").

4. Debtors' Representations and Covenants. The Debtors hereby warrant, represent
and agree as follows:

     4.1  Principal Place of Business. Hefner and GHK's principal place of
          business is in the State of Oklahoma. Ramiiilaj's principal place of
          business is in the State of Texas.

     4.2  Title. The Debtors have absolute title to the Property free and clear
          of all liens, encumbrances and security interests except the security
          interest hereby granted to the Secured Party and such other rights, if
          any, of the Secured Party, and the Debtors warrant and will defend the
          same unto the Secured Party against the claims and demands of all
          persons and parties whomsoever.

     4.3  Transfers. Without the prior written consent of the Secured Party, the
          Debtors agree that the Debtors will not: (a) sell, exchange, lease or
          in any manner dispose of any of the Property or any interest therein;
          or (b) permit any lien, encumbrance or security interest to attach
          thereto except those contemplated herein.

     4.4  Value of Property. The Debtors will not, in any event, permit anything
          to be done that may impair the value of the Property or the security
          intended to be afforded by this Agreement.



                                      -2-

<PAGE>   100

     4.5  Secured Party's Security Interest. This Agreement creates a valid and
          binding security interest in the Property securing the Secured
          Indebtedness. All filings and other actions necessary or appropriate
          (other than notation on any certificate of title or title
          registration) to perfect or protect such security interest will be or
          have been duly taken. No further or subsequent filing, recording,
          registration or other public notice of such security interest (other
          than notation on any certificate of title or title registration) is
          necessary in any office or jurisdiction in order to perfect such
          security interest or to continue, preserve or protect such security
          interest except for continuation statements.

     4.6  Inspection of Records. The Secured Party may from time to time, upon
          request, inspect all of the Debtors' records concerning the Property.

     4.7  Further Assurances. The Debtors will from time to time: (a) sign,
          execute, deliver and file, alone or with the Secured Party, any
          financing statements, security agreements or other documents; (b)
          procure any instruments or documents as may be reasonably requested by
          the Secured Party; and (c) take all further action that may be
          necessary or desirable, or that the Secured Party may request, to
          confirm, perfect, preserve and protect the security interests intended
          to be granted hereby. In addition, the Debtors hereby authorize the
          Secured Party to execute and deliver on behalf of the Debtors and file
          such financing statements, security agreements and other documents
          without the signature of the Debtors either in the Secured Party's
          name or in the name of the Debtors and as agent and attorney-in-fact
          for the Debtors. The Debtors will do all such additional and further
          acts or things, give such assurances and execute such documents or
          instruments as the Secured Party requires to vest more completely in
          and assure to the Secured Party its rights under this Agreement
          including, without limiting the generality of the foregoing, marking
          conspicuously each of its records pertaining to the Property with a
          legend, in form and substance satisfactory to the Secured Party,
          indicating that such Property is subject to the security interest
          granted by this Agreement.

     4.8  Filing Reproductions. At the option of the Secured Party, a carbon,
          photographic or other reproduction of this Agreement or of a financing
          statement covering the Property will be sufficient as a financing
          statement and may be filed as a financing statement.

     4.9  Financing Statement Filings; Notifications. The Debtors will
          immediately notify the Secured Party of any condition or event that
          may change the proper location for the filing of any financing
          statements or other public notice or recordings for the purpose of
          perfecting a security interest in the Property. Without limiting the
          generality of the foregoing, the Debtors will: (a) immediately notify
          the Secured Party of any change to a jurisdiction other than the
          States of Oklahoma or Texas in the location of the Debtors' principal
          place of business; (b) notify the Secured Party monthly of any change
          in the location any of the Property to another state; and (c)
          immediately notify the Secured Party of any change in any Debtor's
          name or identity. In any notice furnished pursuant to this paragraph
          4.9, the Debtors will expressly state that the notice is required by
          this Agreement and contains



                                      -3-
<PAGE>   101


          facts that will or may require additional filings of financing
          statements or other notices for the purpose of continuing perfection
          of the Secured Party's security interest in the Property.

50 Secured Party's Expenditures. If the Debtors fail to make any expenditure or
pay any sum necessary to discharge any lien, encumbrance, levy, security
interest or other charge on the Property, the Secured Party may but will not be
required to make any expenditure for such purpose or purposes and all sums so
expended will be payable on demand, will bear interest at the rate specified in
the Note and all such sums and interest will additionally be secured hereby. The
Debtors will pay all costs of filing any financing, continuation or termination
statements with respect to the security interest granted hereby in the Property.

60 Default; Remedies. On the occurrence of any event of Default or if the
Borrower or the Debtors fail to keep, observe, comply with and perform all of
the obligations and undertakings under this Agreement or any of the other Loan
Documents or fail to pay any principal or interest on the Note when due, then,
and in any such event, the Secured Party may, at its option and without notice
to any party, declare all or any portion of the Secured Indebtedness to be
immediately due and payable and may proceed to enforce payment of the same, to
exercise any or all rights and remedies provided herein, in the other Loan
Documents, and by the UCC and otherwise available at law or in equity. The
Secured Party may at any time and from time to time sell, resell, assign and
deliver, in the Secured Party's discretion, all or any part of the Property, in
one or more parcels at the same or different times, and all right, title and
interest, claim and demand therein and right of redemption thereof, at public or
private sale. Whenever an event of Default exists, the Debtors on demand by the
Secured Party, will assemble any part of the Property in the Debtors' control
and make it available to the Secured Party at a place reasonably convenient to
the parties hereto. All remedies hereunder are cumulative, and any indulgence or
waiver by the Secured Party will not be construed as an abandonment of any other
right hereunder or of the power to enforce the same or another right at a later
time. Whether the Secured Party elects to exercise any other rights or remedies
under this Agreement or applicable law, the Secured Party will be entitled to
have a receiver appointed to take possession of any part of the Property in the
Debtors' control without notice, which notice the Debtors hereby waive,
notwithstanding anything contained in this Agreement or any law heretofore or
hereafter enacted.

70 Power of Attorney. The Secured Party is hereby fully authorized and empowered
(without the necessity of any further consent or authorization from the Debtors)
and the right is expressly granted to the Secured Party, and the Debtors hereby
constitute, appoint and make the Secured Party as the Debtors' true and lawful
attorney-in-fact and agent for the Debtors and in the Debtors' name, place and
stead with full power of substitution, in the Secured Party's name or the
Debtors' name or otherwise, for the Secured Party's sole use and benefit, but at
the Debtors' cost and expense, to exercise, without notice, all or any of the
following powers at any time with respect to all or any of the Property after
the occurrence of any Default under this Agreement or any of the other Loan
Documents: (a) to liquidate all of the Property and collect, receive and give
acquittance for any and all monies due or to become due by virtue thereof and
otherwise deal with proceeds; (b) to receive, take, endorse, assign and deliver
any and all checks, notes, drafts, documents and other negotiable and
non-negotiable instruments and chattel paper taken or received by the Secured
Party in connection therewith; (c) to sell, transfer, assign or

                                      -4-

<PAGE>   102

otherwise deal in or with the Property or the proceeds or avails thereof, as
fully and effectively as if the Secured Party were the absolute owner thereof;
and (d) to exercise any and all rights and remedies available to the Secured
Party under the Loan Documents and applicable law and apply all collected
proceeds from the Property to the Secured Indebtedness in such order and amounts
as the Secured Party determines in the Secured Party's sole discretion;
provided, however, the Secured Party will be under no obligation or duty to
exercise any of the powers hereby conferred upon it and will be without
liability for any act or failure to act in connection with the collection of, or
the preservation of any rights under, any Property.

80 Sale Procedure. Except as expressly provided for herein, no demand or
advertisement, all of which are hereby expressly waived by the Debtors, will be
required in connection with any sale or other disposition of any part of the
Property which threatens to decline speedily in value or which is of a type
customarily sold on a recognized market. In all other events, the Secured Party
will give the Debtors, at least ten (10) days prior notice of the time and place
of any public sale and of the time after which any private sale or other
disposition is to be made, which notice the Debtors agree is reasonable, all
other demands and advertisements being hereby waived. The Secured Party will not
be obligated to make any sale of Property, regardless of the fact that notice of
sale may have been given. The Secured Party may adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement at the
time and place fixed for sale, and such sale may be made at the time and place
to which the same was so adjourned. Upon each public or private sale of
Property, the Secured Party or any holder of the Note, or any of their
respective affiliates, may purchase all or any of the Property being sold, free
from any equity or right of redemption, which is hereby waived and released by
the Debtors, and may make payment therefor in cash or, at the Secured Party's or
such holder's option (by endorsement without recourse), by tendering or
releasing principal or accrued and unpaid interest on the Note, in lieu of cash,
in a face amount equal to the amount of the purchase price. The Debtors agree to
pay all reasonable costs and expenses of every kind for sale or delivery,
including brokers' and attorneys' fees, and after deducting such costs and
expenses from the proceeds of sale, the Secured Party will apply any residue to
the payment of the Secured Indebtedness and the Debtors will continue to be
liable for any deficiency in accordance with the Loan Documents. The balance, if
any, remaining after payment in full of all of the Secured Indebtedness will be
paid to the Debtors or as otherwise directed by any court having appropriate
jurisdiction.

90 Secured Party's Duties. The powers conferred upon the Secured Party by this
Agreement are solely to protect its interest in the Property and will not impose
any duty upon the Secured Party to exercise any such powers. The Secured Party
will be under no duty whatsoever to make or give any presentment, demand for
performance, notice of nonperformance, protest, notice of protest, notice of
dishonor, or other notice or demand in connection with any of the Property or
the Secured Indebtedness, or to take any steps necessary to preserve any rights
against other parties. The Secured Party will not be liable for failure to
collect or realize upon any or all of the Secured Indebtedness or Property, or
for any delay in so doing, nor will the Secured Party be under any duty to take
any action whatsoever with regard thereto.

100 Continuing Agreement. This is a continuing agreement and the grant of a
security interest hereunder will remain in full force and effect and all the
rights, powers and remedies of the Secured Party hereunder will continue to
exist until all of the Secured Indebtedness is paid in full as the same becomes
due and payable and until the Secured Party, upon written request of


                                       -5-

<PAGE>   103


the Debtors, has executed a written termination statement, reassigned to the
Debtors, without recourse, the Property and all rights conveyed hereby and
returned possession of any Property in the Secured Party's possession to the
Debtors.

110 Preservation of Liability. Neither this Agreement nor the exercise by the
Secured Party of (or the failure to so exercise) any right, power or remedy
conferred herein or by law will be construed as relieving any person liable on
the Secured Indebtedness from liability on the Secured Indebtedness and for any
deficiency thereon.

120 Notices. Any notice or demand under this Agreement or in connection with
this Agreement may be given at the addresses set forth in the initial paragraph
of this Agreement or by telefacsimile, but actual notice, however given or
received, will always be effective.

130 Successors and Assigns. The covenants and agreements herein contained by or
on behalf of the Debtors will bind the Debtors, and the Debtors' legal
representatives, successors and assigns and will inure to the benefit of the
Secured Party and the Secured Party's successors and assigns.

140 Invalidity. If any provision hereof will for any reason be held to be
invalid or unenforceable, such invalidity or unenforceability will not affect
any other provision hereof.

150 Construction. This Agreement will be construed and interpreted in accordance
with the laws of the State of Oklahoma.

         IN WITNESS WHEREOF, this Agreement is executed effective the date first
above written.


                                         ---------------------------------------
                                         ROBERT A. HEFNER III, individually



                                         THE GHK COMPANY L.L.C., an Oklahoma
                                         limited liability company


                                         By
                                           -------------------------------------
                                           Robert A. Hefner III, Manager


                                      -6-

<PAGE>   104



                                         RAMIIILAJ A LIMITED PARTNERSHIP, a
                                         Texas limited partnership

                                         By Hefner Investment Company, a Texas
                                            corporation, its General Partner


                                            By
                                               ---------------------------------
                                               Robert A. Hefner III, President

                                         (jointly and severally, the "Debtors")



                                         STILLWATER NATIONAL BANK AND TRUST
                                         COMPANY, N.A.


                                         By
                                           -------------------------------------
                                           G.P. Johnson Hightower, Senior Vice
                                           President

                                         (the "Secured Party")




                                      -7-
<PAGE>   105
EXHIBIT "N" to that certain Exploration Agreement dated the 25th day of January,
2001, by and between GHK Company Colombia, Seven Seas Petroleum Colombia, Inc.,
 Petrolinson S. A., Sociedad Internacional Petrolera S.A. and Cimarrona L.L.C.

(Form of Assignment to be used to transfer an interest to Cimarrona if Farmees
sign the On-Top Contract, drill the Test Well, but fail to satisfy any of the
                              Earning Obligations)

                                   ASSIGNMENT

         THIS ASSIGNMENT is made and entered effective as of the _____ day of
___________, 2001, by and between:

         GHK Company Colombia, a company incorporated under the laws of
Oklahoma, U.S.A., (hereinafter called "GHK"), and,

         Seven Seas Petroleum Colombia, Inc., a company incorporated under the
laws of the Cayman Islands, (hereinafter called "Seven Seas"), and,

         Petrolinson S. A., a company incorporated under the laws of Panama
(hereinafter called "Petrolinson").

         GHK, Seven Seas, and Petrolinson are hereinafter referred to as
"Assignors", and

         Cimarrona L.L.C., a company incorporated under the laws of Oklahoma,
U.S.A. (hereinafter called "Assignee").

         WHEREAS, Empresa Colombiana de Petroleos ("Ecopetrol"), Assignors,
Assignee, and Sociedad Internacional Petrolera S.A. severed the exploration and
production rights and obligations below the stratigraphic equivalent of the base
of the deepest producing formation in the Guaduas Field from the Contract Area
under the Dindal Association Contract. Such severed rights and obligations are
hereinafter referred to as "Deep Rights", and,

         WHEREAS, Assignee, Assignors, and Sociedad Internacional Petrolera S.A.
entered into that certain Exploration Agreement dated January 25, 2001, covering
the Deep Rights (hereinafter to as the "Exploration Agreement"); and,




                                       1
<PAGE>   106

         WHEREAS, Assignors and Ecopetrol entered into a new Association
Contract effective on _____________, 2001 ("Contract") covering, among other
things, the exploration and production rights related to the Deep Rights, and,

         WHEREAS, Assignors own one hundred percent (100%) of the Associate's
rights and interests under the Contract, less an interest held by or dedicated
to Sipetrol Columbia S.A.; and

         WHEREAS, Assignors and Assignee have agreed that Assignors have drilled
the Test Well, but have failed to satisfy the Earning Obligations under the
Exploration Agreement in a timely manner, and,

         WHEREAS, Assignee has elected to receive and is entitled to an
undivided nine point four percent (9.4%) of 8/8ths of all the rights,
obligations, duties and interests of the Associates under the Contract (the
"Assigned Interests"), pursuant to Section 2.5 (D) of the Exploration Agreement.

         NOW, THEREFORE:

         1.       Assignors hereby assign to Assignees the Assigned Interests.

         2.       Assignors warrant to Assignees the title to the
                  above-described Assigned Interests against any person or
                  entity claiming by, through, or under Assignors, but not
                  otherwise.

         3.       Assignees hereby accept and assume their respective shares of
                  the Assigned Interests.

         4.       Terms capitalized in this Assignment and not defined herein
                  shall have the meaning given to them in the Exploration
                  Agreement and its exhibits or the relevant Association
                  Contract, as applicable.




                                       2
<PAGE>   107

         IN WITNESS WHEREOF, the Assignors and Assignees have caused this
Assignment to be executed by their respective duly authorized representatives.

GHK Company Colombia                Seven Seas Petroleum Colombia, Inc.

By: ___________________________     By: ___________________________

Name: _________________________     Name: _________________________

Title: ________________________     Title: ________________________


Petrolinson S. A.                   Cimarrona L.L.C.

By: ___________________________     By: ___________________________

Name: _________________________     Name: _________________________

Title: ________________________     Title: ________________________




                                       3
<PAGE>   108
EXHIBIT "O" to that certain Exploration Agreement dated the 25th day of January,
2001, by and between GHK Company Colombia, Seven Seas Petroleum Colombia, Inc.,
 Petrolinson S. A., Sociedad Internacional Petrolera S.A., and Cimarrona L.L.C.

(Form of Assignment to be used to transfer an interest to Sipetrol if Farmees
sign the On Top Contract, drill the Test Well, but fail to satisfy any of the
                              Earning Obligations)

                                   ASSIGNMENT

         THIS ASSIGNMENT is made and entered effective as of the _____ day of
___________, 2001, by and between:

         GHK Company Colombia, a company incorporated under the laws of
Oklahoma, U.S.A., (hereinafter called "GHK"), and,

         Seven Seas Petroleum Colombia, Inc., a company incorporated under the
laws of the Cayman Islands, (hereinafter called "Seven Seas"), and,

         Petrolinson S. A., a company incorporated under the laws of Panama
(hereinafter called "Petrolinson").

         GHK, Seven Seas, and Petrolinson are hereinafter referred to as
"Assignors", and

         Sociedad Internacional Petrolera S.A., a company incorporated under the
laws of Chile, (hereinafter called "Assignee").

         WHEREAS, Empresa Colombiana de Petroleos ("Ecopetrol"), Assignors,
Assignee, and Cimarrona L.L.C. severed the exploration and production rights and
obligations below the stratigraphic equivalent of the base of the deepest
producing formation in the Guaduas Field from the Contract Area under the Dindal
Association Contract. Such severed rights and obligations are hereinafter
referred to as "Deep Rights", and,

         WHEREAS, Assignee, Assignors, and Cimarrona L.L.C. entered into that
certain Exploration Agreement dated January 25, 2001, covering the Deep Rights
(hereinafter to as the "Exploration Agreement"); and,



                                       1
<PAGE>   109

         WHEREAS, Assignors and Ecopetrol entered into a new Association
Contract effective on _____________, 2001 ("Contract") covering, among other
things, the exploration and production rights related to the Deep Rights, and,

         WHEREAS, Assignors own one hundred percent (100%) of the Associate's
rights and interests under the Contract, less an interest held by or dedicated
to Cimarrona L.L.C.; and

         WHEREAS, Assignors and Assignee have agreed that Assignors have drilled
the Test Well, but have failed to satisfy the Earning Obligations under the
Exploration Agreement in a timely manner, and,

         WHEREAS, Assignee is entitled to an undivided thirty-two point nine
percent (32.9%) of 8/8ths of all the rights, obligations, duties and interests
of the Associates under the Contract (the "Assigned Interests"), pursuant to
Section 2.5 (D) of the Exploration Agreement, and,

         WHEREAS, Assignee agrees to terminate the Overriding Royalty Interest
previously conveyed to it by Assignors in that certain assignment dated the ____
day of ____________, 2001.

         NOW, THEREFORE:

         1.   Assignors hereby assign to Assignees the Assigned Interests.

         2.   Assignors warrant to Assignees the title to the above-described
              Assigned Interests against any person or entity claiming by,
              through, or under Assignors, but not otherwise.

         3.   Assignees hereby accept and assume their respective shares of the
              Assigned Interests.

         4.   Terms capitalized in this Assignment and not defined herein shall
              have the meaning given to them in the Exploration Agreement and
              its exhibits or the relevant Association Contract, as applicable.



                                       2
<PAGE>   110

         IN WITNESS WHEREOF, the Assignors and Assignees have caused this
Assignment to be executed by their respective duly authorized representatives.

GHK Company Colombia                 Seven Seas Petroleum Colombia, Inc.

By:  ____________________________    By: ___________________________

Name:  __________________________    Name: _________________________

Title: __________________________    Title: ________________________


Petrolinson S.A.                     Sociedad Internacional Petrolera S.A.

By:  ____________________________    By: ___________________________

Name:  __________________________    Name: _________________________

Title: __________________________    Title: ________________________




                                       3
<PAGE>   111
EXHIBIT "P" to that certain Exploration Agreement dated the 25th day of January,
2001, by and between GHK Company Colombia, Seven Seas Petroleum Colombia, Inc.,
 Petrolinson S. A., Sociedad Internacional Petrolera S.A., and Cimarrona L.L.C.

(Form of Assignment to be used to transfer an interest to GHK, Seven Seas, and
Pertolinson if Farmors drill the Test Well under the On-Top Contract, but fail
                   to satisfy any of the Earning Obligations)

                                   ASSIGNMENT

         THIS ASSIGNMENT is made and entered effective as of the _____ day of
___________, 2001, by and between:

         Sociedad Internacional Petrolera S.A., a company incorporated under the
laws of Colombia, (hereinafter called, individually, "Sipetrol"), and,

         Cimarrona L.L.C., a company incorporated under the laws of Oklahoma,
U.S.A., (hereinafter called, individually, "Cimarrona").

Both Sipetrol and Cimarrona shall hereinafter collectively be called
"Assignees", and,

         GHK Company Colombia, a company incorporated under the laws of
Oklahoma, U.S.A., (hereinafter called "GHK"), and,

         Seven Seas Petroleum Colombia, Inc., a company incorporated under the
laws of the Cayman Islands, (hereinafter called "Seven Seas"), and,

         Petrolinson S. A., a company incorporated under the laws of Panama
(hereinafter called "Petrolinson").

GHK, Seven Seas, and Petrolinson are hereinafter referred to as "Assignees".

         WHEREAS, Empresa Colombiana de Petroleos ("Ecopetrol"), Assignors, and
Assignees severed the exploration and production rights and obligations below
the stratigraphic equivalent of the base of the deepest producing formation in
the Guaduas Field from the Contract Area under the Dindal Association Contract.
Such severed rights and obligations are hereinafter referred to as "Deep
Rights", and,




                                       1
<PAGE>   112

         WHEREAS, Assignees and Assignors entered into that certain Exploration
Agreement dated January 25, 2001, covering the Deep Rights (hereinafter to as
the "Exploration Agreement"); and,

         WHEREAS, Assignees and Ecopetrol entered into a new Association
Contract effective on _____________, 2001 ("Contract") covering, among other
things, the exploration and production rights related to the Deep Rights, and,

         WHEREAS, Assignors now own one hundred percent (100%) of the
Associate's rights and interests under the Contract, less an interest held by or
dedicated to the Assignees; and

         WHEREAS, Assignors and Assignees have agreed that Assignors have
drilled the Test Well, but have failed to satisfy any of the Earning Obligations
under the Exploration Agreement, and,

         WHEREAS, Assignees are entitled to an undivided fifty-seven point seven
percent (57.7%) of 8/8ths of all the rights, obligations, duties and interests
of the Associates under the Contract (the "Assigned Interests"), pursuant to
Section 2.5 (D) of the Exploration Agreement, and,

         WHEREAS, the Assignees agree to terminate the Overriding Royalty
Interest previously conveyed to it by Assignors in that certain assignment dated
the ____ day of ____________, 200_.

         NOW, THEREFORE:

         1.   Assignors hereby assign to Assignees the Assigned Interests in the
              following manner:

              GHK          18.967% of the Assigned Interests
              Seven Seas   70.634% of the Assigned Interests
              Petrolinson  10.399% of the Assigned Interests




                                       2
<PAGE>   113

         2.   Assignors warrant to Assignees the title to the above-described
              Assigned Interests against any person or entity claiming by,
              through, or under Assignors, but not otherwise.

         3.   Assignees hereby accept and assume their respective shares of the
              Assigned Interests.

         4.   Terms capitalized in this Assignment and not defined herein shall
              have the meaning given to them in the Exploration Agreement and
              its exhibits or the relevant Association Contract, as applicable.

         IN WITNESS WHEREOF, the Assignors and Assignees have caused this
Assignment to be executed by their respective duly authorized representatives.

GHK Company Colombia                Seven Seas Petroleum Colombia, Inc.

By: _____________________________   By: ____________________________

Name: ___________________________   Name: __________________________

Title: __________________________   Title: _________________________


Petrolinson S. A.                   Sociedad Internacional Petrolera S.A.

By: _____________________________    By: ___________________________

Name: ___________________________    Name: _________________________

Title: __________________________    Title: ________________________


Cimarrona L.L.C.

By: _____________________________

Name: ___________________________

Title: __________________________




                                       3