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            Exhibit 99.1 to Territorial Resources, Inc. Form 10QSB 
                        for the Quarter ended 09/30/96


                             ARTICLES OF AMENDMENT
                                     TO THE
                           ARTICLES OF INCORPORATION
                                       OF
                          TERRITORIAL RESOURCES, INC.


          (a) The name of the corporation (sometimes referred to hereinafter as
the "corporation") is TERRITORIAL RESOURCES, INC.

          (b) An amendment (the "Amendment") to the Articles of Incorporation of
the corporation was adopted, the text of which Amendment is set forth on Exhibit
A, attached hereto and made a part hereof, and is to be added as an addition to
the end of Article IV of the Articles of Incorporation following the portion of
Article IV thereof entitled, "Remaining Preferred Stock".

          (c) The date the Amendment was adopted was October 23, 1996.

          (d) The Amendment was duly adopted by the Board of Directors of the
corporation.

          Executed this 29th day of October, 1996.


                              TERRITORIAL RESOURCES, INC.

                              By:/s/William C. Penttila
                                 ----------------------
                                 William C. Penttila,
                                 As Its President
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                                   EXHIBIT A
                            TO ARTICLES OF AMENDMENT
                                     TO THE
                           ARTICLES OF INCORPORATION
                                       OF
                          TERRITORIAL RESOURCES, INC.



Series B Preferred Stock

          There is hereby created a series of Preferred Stock of the corporation
consisting of one hundred twelve thousand five hundred (112,500) shares and
designated as "Preferred Stock, Series B" (hereinafter referred to as the
"Series B Preferred Stock").  The Series B Preferred Stock shall have the
following designations, preferences, limitations, and relative rights:

          1.  Dividend Provisions.  The holders of Series B Preferred Stock
shall be entitled to participate with holders of the Common Stock in any
dividends declared and paid with respect to the Common Stock on the basis that
the amount of such dividend paid in respect of each outstanding share of Series
B Preferred Stock will equal the amount of the dividend in respect of each share
of Common Stock times the Conversion Rate (as defined in Paragraph 3 below) as
of the record date for determining stockholders entitled to such dividend.

          2.  Liquidation Provisions.  In the event of any liquidation,
dissolution or winding up of the corporation, whether voluntary or involuntary,
and after the full preferential liquidation amount has been paid to, or
determined and set apart for, all other series of Preferred Stock hereafter
authorized and issued, if any, the remaining assets of the corporation available
for distribution to stockholders shall be distributed ratably to the holders of
Common Stock and the holders of Series B Preferred Stock on the basis that the
amount of such distribution paid in respect of each outstanding share of Series
B Preferred Stock will equal the amount of the distribution in respect of each
share of Common Stock times the Conversion Rate (as defined in Paragraph 3
below) as of the record date for determining stockholders entitled to such
distribution.  In the event the assets of the corporation available for
distribution to its stockholders are insufficient to pay the full preferential
liquidation amount per share required to be paid on the corporation's various
other series of Preferred Stock that may then be outstanding, the entire amount
of assets of the corporation available for distribution to stockholders shall be
paid up to their respective full liquidation amounts first to the such other
series of Preferred Stock with a liquidation preference, which amounts shall be
distributed ratably among holders of each such series of Preferred Stock, and
the holders of Common Stock and the Series B Preferred Stock shall receive
nothing. A reorganization or any other

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consolidation or merger of the corporation with or into any other corporation,
or any other sale of all or substantially all of the assets of the corporation,
shall not be deemed to be a liquidation, dissolution or winding up of the
corporation within the meaning of this Section, and the Series B Preferred Stock
shall be entitled only to (a) the right provided in any agreement or plan
governing the reorganization or other consolidation, merger or sale of assets
transactions, (b) the rights contained in the Colorado Business Corporation Act
and (c) the rights contained in other numbered Paragraphs of this "Series B
Preferred Stock" section.

     3. Conversion Provisions. The Series B Preferred Stock shall be subject to
the following conversion provisions:

        (a)  Conversion.

             (1) Subject to the terms and provisions of this Paragraph 3, each
        share of Series B Preferred Stock shall be convertible and shall be
        deemed to have been converted (the "Conversion"), without further
        action, into five (5) shares of Common Stock (which number of shares of
        Common Stock shall be subject to adjustment as provided in this
        Paragraph 3) of the corporation immediately following the close of
        business on the first day (the "Conversion Date") after March 31, 1997,
        that the corporation shall have a sufficient number of authorized but
        unissued shares of Common Stock so as to permit all shares of Series B
        Preferred Stock then issued to be so converted. For purposes of the
        preceding sentence, the number of shares of authorized but unissued
        shares of Common Stock shall not include any shares of Common Stock that
        are subject to issuance upon either (a) the exercise of any then
        outstanding stock option, warrant or other right to acquire shares of
        Common Stock or (b) the conversion or exchange of any debenture or other
        security (other than the Series B Preferred Stock) convertible into or
        exchangeable for shares of Common Stock. The ratio of the number of
        shares of Common Stock into which each share of Series B Preferred Stock
        shall be convertible is sometimes referred to herein as the "Conversion
        Rate."

             (2) Not later than thirty (30) days following the Conversion Date,
        the corporation shall deliver to each Holder of shares of Series B
        Preferred Stock a written notice (the "Conversion Notice") of such
        conversion, identifying the shares of Series B Preferred Stock (and the
        certificate number or numbers thereof) that have been so converted;
        provided, however, that failure of the corporation to provide such
        notice shall not affect the validity of the Conversion.

             (3) No fractional shares of Series B Preferred Stock may be
        converted. No fractional shares of Common Stock shall be issued upon
        conversion of the Series B Preferred Stock. However, in lieu of the
        corporation's causing or permitting the conversion into fractional
        shares of Common Stock, it shall pay a cash adjustment in respect of
        such fractional interest in an amount equal to such fractional interest
        multiplied 

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        by the then Current Market Value (as defined in Paragraph 6
        below) determined by the corporation as of the Conversion Date.

             (4) The corporation shall pay in cash the cash payment, if any, due
        as provided in clause (a)(3) above, which cash payment shall be due on
        the date that the certificate or certificates representing the shares of
        Common Stock to be issued in connection with such conversion are due to
        be issued.

             (5) The corporation shall have no responsibility to pay any taxes
        with respect to the Series B Preferred Stock or the shares of Common
        Stock into which the Series B Preferred Stock is to be converted.

             (6) The Holder of each certificate representing shares of Series B
        Preferred Stock, following the corporation's delivery of the Conversion
        Notice to such Holder in accordance with the provisions of this
        Paragraph 3, shall promptly return such certificate for cancellation to
        the corporation at its principal place of business (currently located at
        450 Sam Houston Parkway East, Suite 140, Houston, Texas 77060, U.S.A.,
        Attention: Corporate Secretary). Whether or not returned, such
        certificate or certificates shall be deemed canceled, and no longer
        representing outstanding shares of Series B Preferred Stock, effective
        as of the Conversion Date (other than with respect to the right to
        receive accrued and unpaid dividends, if any, on the Series B Preferred
        Stock up to and including the Conversion Date, the right to receive the
        proper number of shares of Common Stock or other consideration upon the
        conversion thereof, and all rights of a holder of Common Stock with
        respect to such shares of Common Stock immediately after the conversion
        of such shares of Series B Preferred Stock). Within thirty (30) days of
        its receipt of such certificate for cancellation, the corporation shall
        complete the issuance of the shares of Common Stock and deliver the same
        to and in the name of the Holder thereof.

        (b) Adjustments to the Conversion Rate.

            (1) If the Common Stock issuable on conversion of the Series B
        Preferred Stock shall be subdivided into a greater number or combined
        into a lesser number of shares of Common Stock, the holders of Series B
        Preferred Stock shall, upon its conversion, be entitled to receive, in
        lieu of the Common Stock which the Holders would have become entitled to
        received but for such change, a number of shares of Common Stock that
        would have been subject to receipt if such shares of Series B Preferred
        Stock had been converted immediately before that change.

            (2) If the Common Stock issuable on conversion of the Series B
        Preferred Stock shall be changed into the same or a different number of
        shares of any other class or classes of stock, whether by capital
        reorganization, reclassification, or otherwise 

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        (other than a subdivision or combination of shares provided for above),
        the holders of Series B Preferred Stock shall, upon its conversion, be
        entitled to receive, in lieu of the Common Stock which the Holders would
        have become entitled to receive but for such change, a number of shares
        of such other class or classes of stock that would have been subject to
        receipt if such shares of Series B Preferred Stock had been converted
        immediately before that change.

            (3) If at any time there shall be a capital reorganization of the
        corporation's Common Stock (other than a subdivision, combination,
        reclassification or exchange of shares provided for elsewhere in this
        subsection (b)) or merger of the corporation into another corporation,
        or the sale of the corporation's properties and assets as, or
        substantially as, an entirety to any other person, then, as a part of
        such reorganization, merger or sale, lawful provision shall be made so
        that the Holders of the Series B Preferred Stock shall thereafter be
        entitled to receive upon conversion of the Series B Preferred Stock, the
        number of shares of stock or other securities or property of the
        corporation, or of the successor corporation resulting from such merger,
        to which holders of the Common Stock deliverable upon conversion of the
        Series B Preferred Stock would have been entitled on such capital
        reorganization, merger or sale if the Series B Preferred Stock had been
        converted immediately before that capital reorganization, merger or sale
        to the end that the provisions of this paragraph (b)(3) (including
        adjustment of the Conversion Rate then in effect and number of shares
        purchasable upon conversion of the Series B Preferred Stock) shall be
        applicable after that event as nearly equivalently as may be
        practicable.

            (4) Any adjustments made pursuant to this paragraph (b) shall become
        effective at the close of business on the day upon which such capital
        reorganization, reclassification, reorganization, merger, consolidation,
        sale of assets or other event becomes effective.

        (c) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Rate for any shares of Series B
Preferred Stock, the corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and prepare and
furnish to each Holder affected thereby a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The corporation shall, upon the written
request at any time of any Holder, furnish or cause to be furnished to such
Holder a like certificate setting forth (i) such adjustment and readjustments,
(ii) the Conversion Rate at the time in effect and (iii) the number of shares of
Common Stock and the amount, if any, of other property which at the time would
be received upon the conversion of such Holder's shares of Series B Preferred
Stock.

        (d) Notices of Record Date.  In the event of the establishment by the
corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof 

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who are entitled to receive any distribution, the corporation shall mail to each
Holder of Series B Preferred Stock at least twenty (20) days prior to the date
specified therein, a notice specifying the date on which any such record is to
be taken for the purposes of such distribution and the amount and character of
such distribution.

     (e) Reservation of Stock Issuable Upon Conversion.  At all times on and
after the Conversion Date, the corporation shall make available, reserve and
keep available out of its authorized but unissued shares of Common Stock solely
for the purpose of effecting the conversion of the shares of Series B Preferred
Stock such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all then outstanding shares of the Series
B Preferred Stock; and if at any such time following the Conversion Date the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of Series B Preferred
Stock, the corporation will take such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.

     (f) Notices.  Any notices required by the provisions of this Paragraph 3 to
be given to the Holders of shares of Series B Preferred Stock shall be deemed
given if deposited in the United States mail, postage prepaid, and addressed to
each Holder at such Holder's address appearing on the books of the corporation.

     4.   Voting Provisions.  The holders of shares of Series B Preferred Stock
shall have the right, voting as a single class together with the holders of
Common Stock, to a number of votes equal to the Conversion Rate for each share
of Series B Preferred Stock held by them on each matter submitted to a vote of
the stockholders of the Corporation.  Except to the extent otherwise expressly
provided or required by law, the Series B Preferred Stock shall not entitle the
holders thereof to any voting rights as a separate class, and the consent of the
Holders thereof as a class shall not be required for the taking of any corporate
action.

     5.   Retired Shares.  Any shares of Series B Preferred Stock converted,
purchased or otherwise acquired by the corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof, and, if
necessary, to provide for the lawful purchase of such shares, the capital
represented by such shares shall be reduced in accordance with the Colorado
Business Corporation Act.  All such shares upon their cancellation shall become
authorized but unissued shares of Preferred Stock, $0.10 par value each, of the
corporation and may be reissued as part of another series of Preferred Stock,
$0.10 par value each, of the corporation.

     6.   Certain Definitions.  For the purposes of this "Series B Preferred
Stock" section, the term "Current Market Value" per share of Common Stock shall
mean either (i) if shares of Common Stock are then traded over-the-counter in
the U.S., the value shall be deemed to be the 

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average of the closing bid prices over the thirty (30) day period ending three
(3) days prior to the Conversion Date, (ii) if shares of Common Stock are then
traded on a U.S. national securities exchange or the NASDAQ's National Market
System, the value shall be deemed to be the average of the closing prices on
such exchange or National Market System over the thirty (30) day period ending
three days prior to the Conversion Date, or (iii) if no such trading as
described in clauses (i) and (ii) above then exists, then the Current Market
Value shall be determined in good faith by the corporation.

     7.   U.S. Currency.  Unless expressly provided herein to the contrary, all
payments of cash referred to herein shall be paid in United States Dollars, and
all dollar (or $) amounts referred to herein refer to United States Dollars.

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<PAGE>
 
                                    ANNEX I
                           FORM OF CONVERSION NOTICE
                             [Please Type or Print]

Territorial Resources, Inc.                        Date:________________________
450 Sam Houston Parkway East, Suite 140
Houston, Texas  77060
USA

     Attention:  Corporate Secretary

Name:     ______________________________________________________
Address:  ______________________________________________________
          ______________________________________________________
          ______________________________________________________
Telephone:  _________________     Telecopier:  _________________
U.S. Taxpayer Identification No. or
Social Security No. (if applicable): ____________________________

     The undersigned holder of the following shares of Series B Preferred Stock
of Territorial Resources, Inc., a Colorado corporation (the "corporation"),
hereby requests that such shares be converted into __________ shares of Common
Stock of the corporation in accordance with the terms of such Series B Preferred
Stock.

               SHARES OF SERIES B PREFERRED STOCK TO BE CONVERTED

Number of Shares of Series B Convertible Preferred Stock to be
Converted:______________

Certificate Number (or Numbers):________________________________________________

Name and Address for Issuance of Shares of Common Stock (if different from
above):

                    _________________________________
                    _________________________________
                    _________________________________
                    _________________________________

Printed or Typed
   Name of Holder:  ________________________________  (Must be signed by
By (execute here):  ________________________________   registered holder)
Title:         ________________________________
(If signature is by a spouse, administrator, guardian, attorney-in-fact, officer
of a corporation or other officer or capacity, please specify such capacity.)

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