<PAGE>

November 20, 1997

Norcen Energia Venezuela, S.A.
Fifth Avenue Place
P.O. Box 2595 STN M
425 -1 Street S. W.
Calgary, AB 
T2P 4V4
CANADA

Attention: Mr. Robert J. Waters

Dear Sirs:

We are pleased to confirm that subject to acceptance by you, we have approved
credit facilities to be provided by CIBC West Indies Offshore Banking
Corporation (the Lender), for the use of Norcen Energia Venezuela, S A. (the
Borrower) on, and subject to, the following terms and conditions:

Borrower:           Norcen Energia Venezuela, S. A.
---------

Lender:             CIBC West Indies Offshore Banking Corporation
-------

Amount/Availment:   US$150,000,000 - (one hundred and fifty million dollars,
-----------------   United States currency)

Type:               Demand loan
-----

Purpose:            To assist the company in its South American exploration and
--------            development activities.


Advances:           Subject to compliance by the Borrower with terms and
---------           conditions of this letter.


Repayment:          The facility is repayable on demand.
----------

                    The Borrower will pay interest quarterly in arrears on March
                    31, June 30, September 30 and December 31 on the basis of a
                    year of 360 days.

Interest Rates:     Interest on the outstanding principal amount, and interest
---------------     on overdue interest compounded monthly, will be payable at
                    the rate of LIBOR plus 70 basis points per annum on the
                    basis of a 360 day year

                    Any interest collected will be net of the Venezuelan


                    withholding or other taxes.

<PAGE>

November 20, 1997                                                         Page 2


Mr. Robert J. Waters
Treasurer 
Norcen Energia Venezuela, S.A.
------------------------------



Fees:               With respect to the first US$50,000,000
-----

                    A negotiation fee of US$25,000.00 (twenty five thousand
                    dollars, United States currency) will be payable to the
                    Lender at first drawdown, with US$9,000 (nine thousand
                    dollars, United States currency) being payable annually
                    thereafter for as long as the agreement is in effect.

                    With respect to the next US$100,000,000

                    A negotiation fee of US$35,000.00 (thirty five thousand
                    dollars, United States currency) will be payable to the
                    Lender at first drawdown, with US$11,000 (eleven thousand
                    dollars, United States currency) being payable annually
                    thereafter for as long as the agreement is in effect.

                    Any fees collected will be net of the Venezuelan withholding
                    or other taxes.

Security:           Norcen Energy Resources (Barbados) Limited will maintain, at
---------           all times, United States dollar cash deposits with the
                    Lender equal to the advances under this facility (the
                    Security). Norcen Energy Resources (Barbados) Limited will
                    execute a Hypothecation Agreement substantially in the form
                    of Exhibit A, and provide the Lender with corporate
                    resolutions consenting to the Hypothecation Agreement

                    Interest will be paid on the Security by the Lender to
                    Norcen Energy Resources (Barbados) Limited at the same rate
                    and on the same terms as interest paid by the Borrower to
                    the Lender on advances under this facility.

Conditions
----------
precedent:          Prior to any advances being made under the facility, the
----------          Lender shall have obtained the Security together with all
                    the necessary documentation, resolutions and legal opinions
                    which shall be satisfactory to the Lender and its counsel.


                    The form of hypothecation [deposits of Norcen Energy
                    Resources (Barbados) Limited being pledged to directly
                    secure loans to the Borrower] will be reviewed by local
                    legal counsel for the Lender and a legal opinion provided to
                    confirm that:

                    I)   Norcen Energy Resources (Barbados) Limited has the


<PAGE>

November 20, 1997                                                         Page 3

Mr. Robert J. Waters
Treasurer
Norcen Energia Venezuela, S.A.
------------------------------


                         necessary powers to pledge assets to secure loans to a
                         third party (and/or) a related company.

                    ii)  The Lender will have the ability to utilize the deposit
                         to retire the loan in the event this should become
                         necessary at some future date.

Covenants:          The Borrower, its subsidiaries, parent company and/or
----------          co-subsidiaries will conduct its business and maintain all
                    the property of the Borrower in compliance with all material
                    local, international, environmental statutes, regulations
                    and by-laws.

                    The Lender reserves the right to off-set the hypothecated
                    deposits against loans drawn, should there be in the
                    Lender's opinion, any perceived risk to its position whether
                    by way of environmental, legal, security, loan default or
                    any other reasonable cause/factor/concern so deemed by the
                    Lender.

                    The Borrower will indemnify and hold harmless each of the
                    Lender or its affiliates and its directors, officers,
                    employees and agents in respect of any costs, losses,
                    damages, expenses, judgments, suits, claims, awards, fines,
                    sanctions and liabilities whatsoever (including costs or
                    expenses of defending or denying the same and including the
                    costs or expenses for preparing any necessary environmental
                    assessment report or other such reports) arising out of, in
                    respect of (1) any release, deposit, discharge or disposal
                    of any hazardous or toxic materials, contaminants, wastes or
                    other substance in connection with the Borrower's property
                    or business, and (ii) the remedial action (if any) taken by
                    the Lender or of its subsidiaries or affiliates in respect
                    of any such release, deposit, discharge or disposal. This

                    facility will survive the repayment or cancellation of any
                    facility or termination of this agreement.

Reporting 
---------
Requirements:       The following statements, reports and information shall be
-------------       provided by the Borrower so long as the facilities remains
                    outstanding:

                    1)   Unaudited financial statements within 90 days of each
                         fiscal year-end

                    2)   Unaudited interim financial statements within 90 days
                         each of the first, second and third quarter-ends.


<PAGE>

November 20, 1997                                                         Page 4

Mr. Robert J. Waters
Treasurer
Norcen Energia Venezuela, S.A.
------------------------------


                    3)   Audited annual consolidated financial statements of the
                         parent company, Norcen Energy Resources Limited; within
                         120 days of each fiscal year-end.

Other:              If the Lender's cost of maintaining the loan described above
------              increases as a result of a change of any applicable law or
                    the interpretation or the enforcement thereof by any court
                    or governmental agency, the Borrower, after having received
                    10 days prior written notice, may either 1) pay the Lender
                    on demand such additional amount sufficient to compensate
                    the Lender for the increased cost calculated effective from
                    the date of such notice; or ii) repay all principle and
                    interest and terminate this agreement without any
                    additional costs.

Judgment Currency:  In order to obtain judgments, the Lender can convert
------------------  currencies to United States Dollars on a customary basis.

Cancellation:       The Borrower has the right to repay the advances outstanding
-------------       under this facility on the giving of 10 days prior notice in
                    writing by the Borrower.

                    The Borrower has the right to cancel the facility described
                    herein at its discretion, provided there are no advances
                    outstanding under the facility to be canceled.

Events of Default:  The following events of default shall apply:
------------------

                    1)   Failure to pay interest, fees and/or principal when due
                         hereunder upon receipt of notice demanding payment.

                    2)   Breach of any material representation, condition or
                         covenant hereunder and if such default or breach is not
                         remedied within 10 business days following receipt of a
                         notice to that effect.

                    3)   Default under any instrument for borrowed money in
                         excess of CDN$25,000,000 (twenty five million dollars,
                         Canadian currency) of the Borrower or any of their
                         wholly-owned or controlled subsidiaries or affiliates
                         and any applicable grace period has expired.

                    4)   If an order is made or an effective resolution passed
                         for the winding-up, liquidation or dissolution of the
                         Borrower.


<PAGE>

November 2O, 1997                                                         Page 5

Mr. Robert J. Waters
Treasurer 
Norcen Energia Venezuela, S.A.
------------------------------


                    5)   If the Borrower becomes insolvent, or institutes
                         proceedings for its winding-up or dissolution, or to be
                         adjudicated a voluntary bankrupt, or files an
                         application seeking reorganization, arrangement,
                         composition or any other similar relief under any
                         bankruptcy, arrangement or other similar law, or makes
                         an arrangement for the benefit of creditors, or applies
                         for the appointment of a receiver or receiver-manager
                         over any of its property, or admits in writing its
                         inability to pay its debts generally as they become
                         due, or suspends transaction of its usual business, or
                         consents to any proceeding in 6) below.

                    6)   Any application is filed or proceeding instituted
                         against the Borrower to have it adjudged a bankrupt or
                         insolvent or seeking reorganization, arrangement,
                         composition or other similar relief under any
                         bankruptcy, arrangement or any other similar law in
                         respect of the Borrower, or seeking the appointment of
                         a receiver or receiver-manager, administrator,
                         liquidator, trustee or assignee in bankruptcy or
                         insolvency of the Borrower or its property, or for the
                         winding-up or dissolution of its affairs, and such
                         application or proceeding remain in force undischarged
                         or unstayed for a period of 30 days or more.

                    7)   If the Borrower cease to carry on the ordinary course
                         of its business or a substantial part thereof.

                    8)   If effective control of the Borrower passes from the
                         person or persons who presently exercise effective
                         control to any other person or persons.

                    9)   If there occurs any material adverse change to the
                         financial condition, operation or capital of the
                         Borrower.

No Waiver;
----------
Remedies:           No failure on the part of the Lender to exercise and no
---------           delay in exercising any right hereunder will operate as a
                    waiver thereof, nor will any single or partial exercise of
                    any right hereunder preclude any other or further exercise
                    thereof or the exercise of any other right. The remedies
                    herein provided are cumulative and not exclusive of any
                    remedies provided by law.

Applicable Law:     This agreement shall be governed by and construed in
---------------     accordance with the laws of Barbados.


<PAGE>

November 2O, 1997                                                         Page 6

Mr. Robert J. Waters
Treasurer 
Norcen Energia Venezuela, S.A.
------------------------------

Severability:       In case any of the provisions of this agreement shall for
-------------       any reason be held to be invalid, illegal or unenforceable,
                    such invalidity, illegality or unenforceability shall not
                    affect any other provisions hereof and this agreement shall
                    be construed as if such invalid, illegal or unenforceable
                    provision had never been contained herein.

Expenses and Legal
------------------
Fees:               All reasonable costs incurred by the Lender, including legal
-----               opinions or any legal fees, in completing or attempting to
                    complete this transaction, plus any costs of subsequent
                    discharges, are for the Borrower's account. 

Review:             The facility is subject to review at any time.
-------

Acceptance:         If the foregoing terms and conditions are acceptable to you,
-----------         please indicate to us your acceptance of this offer by
                    signing and returning to this office the enclosed copy of

                    this letter on or before November 30, 1997. If unaccepted by
                    this date, our offer shall be considered null and void
                    unless extended in writing by the Lender.

CIBC WEST INDIES OFFSHORE BANKING CORPORATION

Per: /s/ Shastrie Ablack
     ------------------------
     Shastrie Ablack
     Director


Per: /s/ Gregory E. Hinkson
     ------------------------
     Gregory E. Hinkson
     General Manager


<PAGE>

November 20, 1997                                                         Page 7

Mr. Robert J. Waters
Treasurer 
Norcen Energia Venezuela, S.A.
------------------------------

We hereby accept the above terms and conditions of financing

NORCEN ENERGIA VENEZUELA, S.A.

Per: /s/ Robert J. Waters
     ------------------------
     Robert J. Waters
     Treasurer

Per: /s/ Doug Palmer
     ------------------------
     Doug Palmer


Date: November 25, 1997
      -----------------------


NORCEN ENERGY RESOURCES (BARBADOS) LIMITED


Per: /s/ 
     ------------------------


Per: /s/ 
     ------------------------



Date: November 25, 1997
      -----------------------

<PAGE>

                                                                       Exhibit A

HYPOTHECATION OF BANK BALANCES
------------------------------

         For Valuable Consideration, Norcen Energy Resources (Barbados) Limited
(Norcen Barbados) hereby authorizes CIBC West Indies Offshore Banking
Corporation (hereinafter called "the Bank") to retain and hold the sum of One
Hundred and Fifty Million Dollars, United States currency (US$150,000,000) now
or hereafter standing to the credit of Norcen Barbados in Deposit Account Number
____________________ or any substitutions therefor as a general and continuing
collateral security for the payment of the present and future indebtedness and
liability of Norcen Energia Venezuela, S.A. (the Borrower) to the Bank
wheresoever and howsoever incurred and any ultimate unpaid balance thereof.

         Norcen Barbados agree(s) with the Bank that:

     (1) That in the event of any default in such payment and with written
notice to Norcen Barbados, the said sum (or any part thereof from time to time)
may, as and when the Bank thinks fit, be appropriated to and applied on such
parts of said indebtedness and liability as to the Bank seems best, without
prejudice to the Bank's claims upon the Borrower for any deficiency;

     (2) That the Bank may grant extensions of time and other indulgences, take
and give up securities, accept compositions, grant releases and discharges and
otherwise deal with the Borrower and with other parties and securities as the
Bank may see fit, without prejudice to the Bank's right to hold and/or deal with
the said sum or any part thereof as herein provided;

     (3) That any loss other than a loss resulting from an act of gross
negligence on the part of the Bank or its agents or representatives of or in
respect of any securities received by the Bank from the Borrower or any other
person, whether occasioned through the fault of the Bank or otherwise, shall not
pro tanto or otherwise limit or lessen the Bank's right to hold and/or deal with
the said sum or any part thereof as herein provided;

     (4) That until the said sum is appropriated and applied by the Bank as
aforesaid, the Bank may refuse to honor any cheque or withdrawal made by Norcen
Barbados or any of them, if more than one, on the said account unless there are
funds to the credit of the said account, in addition to the said sum, sufficient
to pay any such cheque or withdrawal;

     (5) That should the Bank, in its discretion from time to time, permit
Norcen Barbados or any one of them, if more than one, to withdraw by cheque or
otherwise all or any part of the said sum, then any amounts so withdrawn shall
be replaced by further deposits to be made by Norcen Barbados to the credit of
the said account and such deposits shall, to the extent required, replace any

amount or amounts so withdrawn and shall be subject to the provisions of this
agreement so that the amount of the said sum as hereinbefore provided shall be
maintained by Norcen Barbados in the said account;

     (6) To the extent that the said sum retained on deposit at the Bank exceeds
the indebtedness to the Bank, Norcen Barbados shall have the right to either i)
retain the excess funds on deposit with the Bank free from hypothecation, or ii)
withdraw the excess funds at no cost. Excess funds will be subject to prevailing
deposit rates;

     (7) The Bank will pay interest to Norcen Barbados on all amounts retained
on deposit at the Bank. For the equivalent hypothecated deposit, interest will
be paid at a rate of LIBOR plus 70 basis points per annum, payable quarterly in
arrears on March 31, June 30, September 30 and December 31 on the basis of a
year of 360 days;

     (8) This security is in addition and without prejudice to any other
security now or hereafter held by the Bank.

Dated at                        this       day of             , 19   
         ----------------------      -----        ------------    -----

NORCEN ENERGY RESOURCES (BARBADOS) LIMITED 

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

<PAGE>

HYPOTHECATION OF BANK BALANCES
------------------------------

         For Valuable Consideration, Norcen Energy Resources (Barbados) Limited
(Norcen Barbados) hereby authorizes CIBC West Indies Offshore Banking
Corporation (hereinafter called "the Bank") to retain and hold the sum of 0ne
Hundred and Fifty Million Dollars, United States currency (US$150,000,000) now
or hereafter standing to the credit of Norcen Barbados in Deposit Account Number
____________________ or any substitutions therefor as a general and continuing
collateral security for the payment of the present and future indebtedness and
liability of Norcen Energia Venezuela, S.A. (the Borrower) to the Bank
wheresoever and howsoever incurred and any ultimate unpaid balance thereof.

         Norcen Barbados agree(s) with the Bank that:
     (1) That in the event of any default in such payment and with written
notice to Norcen Barbados, the said sum (or any part thereof from time to time)
may, as and when the Bank thinks fit, be appropriated to and applied on such
parts of said indebtedness and liability as to the Bank seems best, without
prejudice to the Bank's claims upon the Borrower for any deficiency;

     (2) That the Bank may grant extensions of time and other indulgences, take
and give up securities, accept compositions, grant releases and discharges and
otherwise deal with the Borrower and with other parties and securities as the
Bank may see fit, without prejudice to the Bank's right to hold and/or deal with
the said sum or any part thereof as herein provided;


     (3) That any loss other than a loss resulting from an act of gross
negligence on the part of the Bank or its agents or representatives of or in
respect of any securities received by the Bank from the Borrower or any other
person, whether occasioned through the fault of the Bank or otherwise, shall not
pro tanto or otherwise limit or lessen the Bank's right to hold and/or deal with
the said sum or any part thereof as herein provided;

     (4) That until the said sum is appropriated and applied by the Bank as
aforesaid, the Bank may refuse to honor any cheque or withdrawal made by Norcen
Barbados or any of them, if more than one, on the said account unless there are
funds to the credit of the said account, in addition to the said sum, sufficient
to pay any such cheque or withdrawal;

     (5) That should the Bank, in its discretion from time to time, permit
Norcen Barbados or any one of them, if more than one, to withdraw by cheque or
otherwise all or any part of the said sum, then any amounts so withdrawn shall
be replaced by further deposits to be made by Norcen Barbados to the credit of
the said account and such deposits shall, to the extent required, replace any
amount or amounts so withdrawn and shall be subject to the provisions of this
agreement so that the amount of the said sum as hereinbefore provided shall be
maintained by Norcen Barbados in the said account;

     (6) To the extent that the said sum retained on deposit at the Bank exceeds
the indebtedness to the Bank, Norcen Barbados shall have the right to either i)
retain the excess funds on deposit with the Bank free from hypothecation, or ii)
withdraw the excess funds at no cost. Excess funds will be subject to prevailing
deposit rates;

     (7) The Bank will pay interest to Norcen Barbados on all amounts retained
on deposit at the Bank. For the equivalent hypothecated deposit, interest will
be paid at a rate of LIBOR plus 70 basis points per annum, payable quarterly in
arrears on March 31, June 30, September 30 and December 31 on the basis of a
year of 360 days;

     (8) This security is in addition and without prejudice to any other
security now or hereafter held by the Bank.

Dated at Calgary and Barbados    this   25th   day of  November      , 1997
         ---------------------        --------        --------------     --

NORCEN ENERGY RESOURCES (BARBADOS) LIMITED

/s/                                            /s/ 
-----------------------------------            ---------------------------------

<PAGE>

                           Deposit Agreement Between
             CIBC West Indies Offshore Banking Corporation ("CIBC")
                                      and
             Norcen Energy Resources (Barbados) Limited ("Norcen")
                               November 25, 1997

Wherein Norcen has agreed to deposit funds with the CIBC pursuant to the

Hypothecation of Bank Balances Agreement dated November 20, 1997 (the
"Hypothecation Agreement"); and

Wherein the CIBC has agreed to lend funds to Norcen Energia Venezuela S.A.
("NEVSA") pursuant to a demand loan agreement dated November 20, 1997 (the "Loan
Agreement"),

The CIBC agrees that, to the extent that Norcen is entitled to withdraw all or
part of its deposit pursuant to the Hypothecation Agreement between Norcen and
CIBC and the CIBC defaults or otherwise fails to return that part of the deposit
to Norcen, then upon the expiry of ten (10) business days from the said default
or failure, Norcen may apply at its discretion, that part of the deposit amount
against the indebtedness and liability to the CIBC by NEVSA pursuant to the Loan
Agreement.

Acknowledged and agreed by:

CIBC West Indies Offshore Banking Corporation ("CIBC")

/s/  Gregory Hinkson
---------------------------------------

/s/
---------------------------------------

date: December 2, 1997
      ------------------


Norcen Energy Resources (Barbados) Limited

/s/
---------------------------------------

/s/
---------------------------------------

date: Nov. 25, 1997
      ------------------